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Chinese university to open Budapest campus as Orban tilts to Beijing

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Hungary is to host the only Chinese university operating inside the EU in a sign of deepening ties between the government of Viktor Orban and Beijing. 

The Hungarian government will donate €2.2m to the Shanghai-based Fudan University for its new Budapest campus, which the authorities said would start operating in 2024. 

The announcement comes a year and a half after Central European University, founded by the billionaire philanthropist George Soros and previously the top-ranked institution in the country, was forced into exile by Mr Orban’s nationalist regime, after almost 30 years in the Hungarian capital.

In October, the European Court of Justice said the move against CEU violated Hungary’s commitments under the World Trade Organization, and infringed the provisions of the EU Charter of Fundamental Rights relating to academic freedom.

Agnes Szunomar, a researcher at the Hungarian Academy of Sciences, said the government’s accord with Fudan “is about unconditional love between Hungary and China”.

“Quite a lot of countries in Europe have different agreements with Chinese universities, and many European universities collaborate with Chinese counterparts,” Ms Szunomar said.

However, she added that the agreement to bring Fudan to Budapest was evidence that Hungary is willing to undercut its own education system by bringing in a foreign competitor with greater global prestige and more resources than any domestic institution. Fudan, Ms Szunomar said, with its enormous budget and capacity to issue dual degrees, could lure away top academic talent from Hungarian universities, causing a “brain drain”.

Fudan, which is ranked 34th in the QS Global World University Rankings, will offer programmes in international relations, economics, medicine and technical sciences to up to 6,000 students. Until the Budapest campus opens, joint degree programmes with four Hungarian universities will be offered.

“When it comes to prestige, I would have expected [Fudan] to settle down in London, Berlin, Paris,” or a similar global capital, said Tamas Matura, founder of the Central and Eastern European Centre for Asian Studies and an assistant professor at Corvinus University in Budapest.

But today’s Hungary, in which Mr Orban’s allies have steadily consolidated control over the media and many of the country’s institutions, is “politically a very safe environment,” he said. 

“In western Europe, they [Fudan] may face political turmoil or scrutiny, but in Hungary, they don’t have to be afraid of anything.”

Central European University, founded by philanthropist George Soros, was forced out of Hungary in 2019 © Zsolt Szigetvary/EPA-EFE

Ties between Hungary and China have grown since Mr Orban returned to power in 2010. Hungary hosts telecom group Huawei’s largest supply centre outside China. The company accounts for 0.5 per cent of the country’s employment, 0.4 per cent of Hungary’s total gross domestic product and 0.4 per cent of its total tax revenue, according to a study by Oxford Economics, a British marketing and consulting firm. 

Last year, Hungary took a 20-year, $1.9bn loan from Beijing to build a railway link with the Serbian capital Belgrade. In April, as the Hungarian parliament voted to give the government extraordinary emergency powers, the legislature also voted to classify all details regarding the project, saying it would be necessary to secure the loan from the Chinese ExIm Bank. 

Hungary also hosts five Confucius Institutes, which China says help promote language learning and foster friendship between peoples. Critics in the US and Europe say the institutes facilitate the spread of pro-Chinese propaganda and are a mechanism for spying on students and faculty.

A spokesman for the Hungarian government said Fudan’s “Budapest campus will considerably facilitate the creation of high-quality education infrastructure and raise the standard of education”. He also said that he expected the opening of the campus to “give a boost to further Chinese investment, especially the establishment of research and development centres of Chinese enterprises in Hungary”.

In the wake of the departure of CEU, many observers have criticised attacks on academic freedom in Hungary. In 2018, the government removed “gender studies” from the list of degrees that could be issued in the country. Some critics worry about the effect that Fudan’s presence in the country could have.

In 2019, in the midst of wider crackdowns on Chinese academics, Fudan removed a commitment to “freedom of thought” from its charter, sparking protests at the university. It added a clause stating that Fudan “adheres to the leadership of the Chinese Communist party and will fully implement the party’s educational policy”. 

Mr Matura noted that as the Chinese crackdown has continued, “those who tried to be a little bit even constructively critical about China and its affairs” were being penalised. “That is indeed a concern to us too,” he said. 



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Putin and Lukashenko’s ski fun shows cold shoulder to EU

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As news of new EU sanctions against Russia began to leak out of a meeting of bloc foreign ministers on Monday afternoon, Vladimir Putin and his Belarusian counterpart Alexander Lukashenko were discussing a different challenge to the Russian president.

“You can try to compete with Vladimir Vladimirovich,” Lukashenko, in ski gear, said to his son, Nikolai. “But you probably won’t catch up,” he added, with a smile to Putin as the Russian leader pushed off down the slope.

Putin and Lukashenko are the men behind Europe’s two repressive crackdowns over the past six months, who have both jailed or exiled their most prominent opponents and seen their security forces violently assault and detain thousands of peaceful protesters.

But in a summit in the snow-covered mountains of Sochi, on Russia’s southern coast, they revelled in their twosome of leaders shunned and sanctioned by Brussels, in a calibrated message to the EU that the cold-shoulder was mutual.

For foreign policy experts there were few details to digest, despite the complex negotiations going on behind the scenes as the two post-Soviet states seek to recalibrate their future relationship.

Putin is keen to deepen integration on Moscow’s terms. Lukashenko is desperate for Russian investment and trade co-operation but is loath to relinquish sovereignty. Yet in place of diplomatic negotiations and policy pronouncements, photographs and video footage of the two leaders enjoying each other’s company were in full display.

At the outset, Putin, in jeans and an open-collar shirt and blazer, greeted his guest with a handshake and a hug. “Even our appearance, clothes and so on, suggest that these are serious negotiations in ordinary clothes,” Lukashenko quipped. “It suggests that we are close people.”

Pleasantries exchanged, it was time for the salopettes and ski boots, and a shared chairlift to the summit. Putin, pushing off confidently, set off down the gentle slope, Lukashenko in his wake.

After a short ride on snowmobiles back to their chalets, discussions continued over more than six hours — and what appeared to be three different sized wine glasses.

“The optics for the international audience is that they have been able to maintain their positions and nothing can be done against them,” said Maryia Rohava, a research fellow at Oslo university specialising in post-Soviet relations.

“Now we’re talking not just about sanctions against Belarus but also against Russia,” she added. “And it seems like they look at that like, ‘Well, we don’t care . . . We’re just enjoying our winter break like autocrats do.’”

To be sure, the fun on the slopes was not wholly without power games. Putin was clear to underscore he was the senior partner, from wrongfooting his guest at the top of the ski lift to releasing photographs of their meeting showing Lukashenko scribbling notes as his host spoke.

But the mood music was in sharp contrast to Lukashenko’s last visit to Russia in September. Then, with protests raging and the Belarusian leader’s position looking shaky, Putin reprimanded his guest for mishandling the unrest and risking the toppling of an ageing post-Soviet regime that could weaken his own.

Then, in a businesslike and cold atmosphere, Lukashenko pleaded with Putin that “a friend is in trouble” and was granted a $1.5bn loan from Moscow — but not before his host remarked that Belarusian people should be given a chance to “sort this situation out”.

The absence of such language on Monday also sent a subtle signal to other illiberal regimes, particularly those on the outer rim of Europe who, like Belarus in the past, find themselves lured towards Brussels by economic opportunities but repelled by the reforms and democratic standards demanded in exchange.

The message to the likes of Georgia, Moldova, Armenia and Turkey is that Putin, whose relations with the EU are at rock bottom, is always ready to talk.



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Mitsubishi Motors set to reverse move to withdraw from Europe

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Mitsubishi Motors is set to reverse its decision to withdraw from Europe and build cars in France after months of pressure from Renault and Nissan, in a sign of fresh rifts within the alliance.

Mitsubishi will formally consider the move at a board meeting on Thursday, according to three people with direct knowledge of the matter, following months of fractious discussions with its alliance partners.

A framework agreement between the three carmakers was reached on Monday during an alliance meeting, two of the people said. They added that the deal may still fall apart.

The decision to have Renault produce Mitsubishi cars at its French factories in a manufacturing deal, if finalised, would force the Japanese company to justify the U-turn — and face down accusations it yielded to a Renault campaign to protect French jobs.

The coalition between the three car groups is held together by Renault’s 43 per cent stake in Nissan, which owns 34 per cent of Mitsubishi, the smallest of the companies.

The French government’s 15 per cent stake in Renault has fed longstanding fears at the two Japanese carmakers that alliance strategy would be heavily influenced by French industrial politics.

In July Mitsubishi announced plans to in effect pull out of its lossmaking operations in Europe by cancelling model launches and running down its current line-up. This would lead to the end of all car sales in European markets as early as this year.

Following the announcement, some dealerships have already sold operations in preparation for Mitsubishi’s exit, while others are preparing to become repair garages for the brand instead.

An agreement to build Mitsubishi cars in France would be held up internally as a sign the Renault-Nissan-Mitsubishi Alliance was working under new management teams installed after the arrest and ousting of former boss Carlos Ghosn in 2018.

But people within both Mitsubishi and Nissan have expressed concern about such a deal that would mean Renault building Mitsubishi cars — increasing work for its French plants and providing a political boost in the country, where it is cutting jobs. 

Executives were particularly worried about a potential repetition of Renault’s 2001 decision to move the Nissan Micra from the Japanese group’s Sunderland plant to its own underperforming Flins factory outside Paris. This was seen as a political move by the French group to shore up union support.

Mitsubishi said there was no change in its policy to halt development of new models in Europe.

Nissan and Renault said they would not comment “on speculation”. Renault added the alliance always “aims to enhance competitiveness and enable more effective resource-sharing for the benefit of all three companies” and that there “are always ongoing discussions between the three companies”.

Last month, Renault chief executive Luca de Meo suggested in an interview with the Financial Times that a deal could be done, saying: “We have space in our plants; we have platforms.”

De Meo also suggested that Renault could end up building more cars for Nissan in its French plants, something that was resisted by Nissan, according to people familiar with the discussions. That led to pressure being applied to Mitsubishi by both sides of the alliance, the people said.

Before last year announcing its withdrawal, Mitsubishi sold just 120,000 cars in Europe in 2019, giving it less than 1 per cent market share.

The tentative agreement reached on Monday is the first big deal between de Meo, who joined Renault as CEO last summer, and the heads of Nissan and Mitsubishi, and a test of the relationship between the three sides.

Nissan and Renault are focusing on turning round their own businesses as well as repairing the alliance, which came near collapse in the wake of the turmoil that followed Ghosn’s ouster.

De Meo announced a scheme to save €3bn by cutting factory capacity as part of a company overhaul last month, while Nissan aims to save ¥300bn ($2.85bn) through its own turnround plan.



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What Mario Draghi’s appointment as Italian PM means for fintech

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Mario Draghi’s surprise appointment to lead a national unity government in Italy was welcomed by financial markets and political experts alike last week. The former European Central Bank chief has promised an ambitious programme of reforms, and fintech is expected to be a key part of the plans.

In his first address to parliament on Wednesday, Draghi pledged to invest a large share of the money Italy receives from the EU Recovery Fund in digital infrastructure and technological upgrades. Vittorio Colao, the former chief executive of Vodafone, has been appointed minister for innovation and digital transition.

Last year, Italy was one of the worst performers in the EU’s Digital Economy and Society Index, which tracks the digital competitiveness of member states — with only Romania, Greece and Bulgaria further behind.

Colao has yet to unveil the details of his plans, but he is expected to focus on extending high speed internet access across the country and passing legislation to encourage the use of digital payment methods. He outlined similar priorities last year in a 53-page recovery and resilience plan that was ultimately ignored by the previous government.

“Draghi’s focus on innovation . . . is undoubtedly good news for the fintech sector and the appointment of minister Colao is a clear message of a strong push on the [tech and innovation] agenda,” said Corrado Passera, chief executive of digital bank Illimity and a minister in Italy’s last technocratic government.

Digital payments have long been seen as a way to combat tax evasion in Italy, where an estimated €130bn, or 8 per cent of GDP, escapes tax authorities each year.

Successive governments have encouraged the shift from cash to cards, and payments companies have been among the country’s most successful within Italy’s fintech sector, with companies like Nexi becoming continental players. 

Less than 40 per cent of all payments in Italy were digital before the coronavirus pandemic, but experts believe that the combined impact of Covid, plus the arrival of the EU funds, will drive further change.

The pandemic caused some strain for Italian banks and insurers whose relationships with customers are still often based on branches, according to a recent report by PwC. Sudden lockdowns and prolonged working from home “forced experimentation of new ways of collaborating remotely through digital solutions”, encouraging traditional institutions to try more partnerships and strengthen collaboration with younger tech-focused companies. 

However, the sector has continued to face challenges despite regulatory support and favourable legislation in the past.

Illimity, which specialises in small business loans and distressed debt, grew its assets to €4bn by the end of 2020, its first full year of operations. It posted a return on equity of 5.5 per cent despite the impact of the pandemic and said it expects to increase it further this year.

Such rapid growth, however, is not the norm. Out of the 278 Italian fintech companies analysed by PwC, only 37 had an annual turnover above €1m, and 70 per cent employ 10 people or less.

The consultancy says low levels of investment and a focus on more mature companies, as opposed to start-ups, have been key challenges. In 2018, for example, a single deal — a €100m investment in insurance company Prima Assicurazioni — accounted for a third of all the money invested in Italian fintech start-ups. The rest trickled down to 34 other companies.

The lack of investments in the Italian ecosystem has encouraged several larger fintechs like Moneyfarm, Soldo and OvalMoney to move their headquarters abroad.

Still, Illimity’s Passera remains optimistic, highlighting progress on initiatives like open banking, which forces institutions to share customer data, enabling new competitors or collaboration with third-party developers to build new services. “Digitalisation is changing the entire banking sector, innovation will play a significant role in its future . . . increasingly, [fintech] banks will act as disrupters for the sector and will emerge as new winners,” said Passera, who previously ran Italy’s largest bank Intesa Sanpaolo.

“Without inferiority complexes toward other countries, [while] trying to follow their best practices, there’s a great potential in Italy.”

Quick fire Q&A

What’s your name? SeedFi

When were you founded? March 2019

Where are you based? San Francisco and New York

Who are your founders? Chief executive Jim McGinley, chief operating officer Eric Burton, chief technology officer Rodrigo Menezes, head of marketing Greg Berman and head of product Bernardo Menezes.

What do you sell, and who do you sell it to? SeedFi is a financial health start-up helping underserved Americans build credit, save money, access funds and plan for the future.

How did you get started? The founding team wanted to help underserved communities after spending years working together at mission-driven start-ups and big banks.

How much money have you raised so far? $69m ($19m equity and $50m debt)

What’s your most recent valuation? N/A

Who are your major shareholders? Founders, Andreessen Horowitz, Flourish Ventures, Core Innovation Capital, and Quiet Capital

There are lots of fintechs out there — what makes you so special? We’re helping struggling consumers escape cycles of debt and build long-term financial health, which is more important in today’s economy than ever.

Fintech fascination 

Mark Carney joins Stripe: Speaking of high-profile former central bankers, Mark Carney, former Bank of England governor, has added to his growing list of post-BoE jobs by joining the board of payments group Stripe. Carney is already head of impact investing at Brookfield Asset Management, and he has been active in pushing finance firms to do more to fight climate change. Carney said he wanted Stripe’s payments infrastructure to help encourage “strong and inclusive economic growth”.

More bad news for Ant Group: Anyone hoping Jack Ma’s Ant Group would be able to put its recent travails behind it after reaching a restructuring deal with Chinese authorities last month are likely to have been disappointed this week. At the weekend, regulators confirmed new rules governing how platforms like Ant fund their loans, which analysts say could hit Ant’s valuation. Pressure on the company has boosted rivals who charge much higher interest rates, raising fears that a drive that was officially intended to reduce credit risk in the economy could actually spur more defaults. An investigation by the Wall Street Journal sheds some light on why authorities may be willing to put up with such an outcome.

Transferwho? TransferWise has become one of the best-known names in fintech over the past decade, but co-founder Kristo Käärmann says the name doesn’t suit it any more. As of Monday, it will just be “Wise”. The change reflects the company’s efforts to expand beyond its roots as a simple money transfer service into a broader platform for internationally-minded consumers and, especially, businesses. 

Wirecard fallout: The Wirecard saga continues to produce new ways to shock even the most jaded of financial journalists. This week it emerged that a senior investment banker at UniCredit continued to moonlight for now-disgraced Wirecard CEO Markus Braun until just before the payments company collapsed. Jana Hecker, who had worked with Wirecard in a previous role at Deutsche Bank, ran up around €800,000 of invoices with Braun, who is currently in police custody after being accused of being the linchpin of a criminal racket that conducted “fraud in the billions”.





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