Eurozone growth picks up speed; Solar Impulse completes longest non-stop flight ever; South Africa consumer confidence at 14-year low

1 Eurozone growth picks up speed (BBC) Eurozone business activity rose at its fastest pace in four years in June, boosted by higher spending by consumers and businesses, a survey has indicated. The final Markit composite eurozone Purchasing Manages’ Index (PMI), which combines manufacturing and services activity, rose to 54.2, its highest reading since May 2011. Any reading above 50 indicates growth, while below 50 points to contraction.

It comes despite concerns over the possibility of a messy Greek exit from the euro. Speculation that Athens would miss a €1.6bn repayment to the International Monetary Fund held back manufacturing activity in the month, Markit said.

But the European Central Bank’s (ECB) massive €1 trillion bond-buying programme announced in March was beginning to help the service sector, with activity running at its fastest rate since mid-2011. Price discounting helped drive up the PMI covering the service industry, which makes up the bulk of the eurozone economy. It rose to 54.4 from May’s 53.8.

2 Solar Impulse completes longest non-stop flight ever (Emma Howard in The Guardian) A solar plane attempting the world’s first flight around the globe has landed in Hawaii, after breaking the record for the longest non-stop solo flight in history.

Solar Impulse 2, piloted by the Swiss pilot André Borschberg, took off from Nagoya in Japan at 3am on Monday, for the five-day crossing of the Pacific Ocean, the riskiest leg of its journey. At 72 hours into the eighth leg of its 22,000-mile circumnavigation, Borschberg broke the endurance record for a solo flight.

“The next leg is what I call the moment of truth,” he said before departing. “The first time we fly many days, many nights with a solar-powered airplane, the first time that we fly over the ocean, the first time that one pilot flies alone for so long. We are exploring new territories.”

Borschberg is sharing the round-the-world attempt, completing alternate legs with his co-pilot Bertrand Piccard, who will now fly the single-seater plane on a 100-hour leg to Phoenix, Arizona, in the US. Saving power is key to the journey’s success, as the plane – fitted with 17,000 photovoltaic solar cells – must reach heights of 9,000 metres during the day so that it can glide through the night. At top speed, it reaches 87mph.

During the 5,079-mile leg, Borschberg has spent about four days, 21 hours and 51 minutes in the air and throughout the journey has only been able to rest in 20-minute intervals. The 62-year-old veteran pilot and engineer has had to endure temperatures close to 37C (100F) in the cockpit. He said that yoga had been a “huge support” for sustaining a positive mindset and helped to keep him alert. Tweeting throughout the journey, Borschberg said that the fourth day of this leg had been tough, after he “climbed the equivalent altitude of Mount Everest four times”.

3 South Africa consumer confidence at 14-year low (Johannesburg Times) Consumer confidence in SA plummeted to a 14-year low in the second quarter of 2015 – thanks to power outages, higher fuel and maize prices, tax hikes and a slowdown in government spending.

Having declined from zero to minus 4 in the first quarter, the First National Bank/Bureau for Economic Research’s consumer confidence index declined further to minus 15. A sub-index, measuring sentiment on the future, plunged 14 points to minus 24, the lowest level since the 1992-1993 recession.

Extremely low levels of consumer confidence mean consumer spending will be muted, which in turn knocks economic growth. The minus 15 was not only far lower than the lowest reading of minus 6, recorded during the 2008-2009 recession, but was also only the second time since 1994 that the index had dropped below minus 12.

A change in labour laws at the beginning of the year that made it nearly impossible to hire workers for short periods might also have led to a drop in temporary employment and a decline in take-home pay. Adding to the woes, South Africa’s worst drought since 1992 is pushing up grain prices. The rand has weakened 5.6% against the dollar since the start of the year.

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Greece may need €60bn in funds and decades of debt relief; Airbus plans second unit in China; Status updates as personality fingerprints

1 Greece may need €60bn in funds and decades of debt relief (Phillip Inman, Larry Elliott & Alberto Nardelli in The Guardian) The International Monetary fund has electrified the referendum debate in Greece after it conceded that the crisis-ridden country needs up to €60bn of extra funds over the next three years and large-scale debt relief to create “a breathing space” and stabilise the economy.

Before Sunday’s knife-edge referendum that the country’s creditors have cast as a vote on whether it wants to keep the euro, the IMF revealed a deep split with Europe as it warned that Greece’s debts were “unsustainable”. Fund officials said they would not be prepared to put a proposal for a third Greek bailout to its board unless it included both a commitment to economic reform and debt relief.

According to the IMF, Greece should have a 20-year grace period before making any debt repayments and final payments should not take place until 2055. It would need €10bn to get through the next few months and a further €50bn after that. Greek prime minister Alexis Tsipras welcomed the IMF’s intervention saying that what the IMF said was never put to him during negotiations.

Tsipras is campaigning for a no vote in the referendum on Sunday, which is officially on whether to accept a tough earlier bailout offer, to impress on EU negotiators that spiralling poverty and a collapse in everyday business activity across Greece has meant further austerity should be ruled out of any new rescue package. Greece’s finance minister, Yanis Varoufakis, pledged to resign if his country votes yes to the plan proposed by the EU, the European Central Bank and what appears to be an increasingly reluctant IMF.

2 Airbus plans second unit in China (BBC) Airbus has signed a deal for its second factory in China as it expands further its growing relationship with the world’s second-largest economy. The new cabin-completion factory for A330 jetliners is worth a reported €150m ($166.3m; £106.5m) and is aimed at attracting new orders for Airbus.

The plant will be built alongside an existing site in the city of Tianjin. Earlier this week, China signed a deal for 45 new Airbus planes worth more than $11bn. “The signature of this [latest] framework agreement on the A330 completion and delivery centre will open a new chapter of strategic cooperation on wide-body aircraft with China,” said Airbus’ president Fabrice Brégier,

3 Status updates as personality fingerprints (Psychology Today/Khaleej Times) Every message posted to a social media site is like a fingerprint–a fleeting trace of the poster. A close analysis of these words, researchers are showing, can enrich our sense of who the users are, online and off.

A team of investigators recently dug into millions of Facebook updates to get a better sense of how personality reads. That is, which words and phrases do specific types of people–the darkly neurotic, say, or the pleasantly agreeable–tend to use when communicating with friends. To find out, they cross-referenced the status updates of thousands of users with the results of a personality test those users accessed via the app MyPersonality.

“The results let you see what personality factors like conscientiousness look like in everyday life,” says Gregory Park, a psychologist at the University of Pennsylvania. The analysis also yielded some surprises. Conscientiousness, for example, is associated with planning and a tendency to get things done, but much of the language highly conscientious people tend to use relates to R and R. “I was pretty surprised to see words like weekend and relaxing,” Park says.

For analysts of important human variables like personality, health, or political attitudes, social media offer naturalistic samples of how people interact with the world. “More and more,” says psychologist Molly Ireland of Texas Tech University, “the language that we are analyzing truly represents what people are thinking and feeling throughout the day.”

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Moody’s downgrades Greece to Caa3; World’s 2.4bn lack sanitation facilities; A book club that terrified the Angolan regime

1 Moody’s downgrades Greece to Caa3 (San Francisco Chronicle) President Barack Obama and Italian Prime Minister Matteo Renzi are discussing ways to keep Greece in the eurozone. Greece has suffered its fourth ratings downgrade this week, as Moody’s investors service slashed the country’s rating from Caa2 to Caa3, or just above default.

The agency said Greece was likely to default on its remaining privately held debt due to its impasse with lenders. “Events of recent months have illustrated the distance between what Greece’s official creditors will demand as a condition of continued support over the coming years, and what Greece’s institutions are able to do to meet those demands. This creates significant difficulties for the achievement of a long-lasting support agreement,” it said.

Greek finance minister Yanis Varoufakis said a deal with lenders could be reached after Sunday’s referendum, while blaming creditors for the country’s bank closures. “This is a very dark moment for Europe. They have closed our banks for the sole purpose of blackmailing what? Getting a “Yes” vote on a non-sustainable solution that would be bad for Europe,” he said.

The European Central Bank’s governing council has decided to maintain emergency liquidity funding for Greek banks at the same levels as before, a banking official said. The ECB has been keeping Greece’s banks on life support while the country’s left-wing government has negotiated for a bailout deal with creditors. Without the money, Greece could default and wind up leaving the euro.

2 World’s 2.4bn lack sanitation facilities (Khaleej Times) Some 2.4 billion people – one out of every three inhabitants of the planet – still have no access to sanitation facilities, the World Health Organisation (WHO) and Unicef has said. Of those, 946 million continue to defecate outdoors, a very problematic practice, because in many places it creates a continuous source of disease and pollutes the water supply.

“Until everyone has access to adequate sanitation facilities, the quality of water supplies will be undermined and too many people will continue to die from waterborne and water-related diseases,” said Maria Neira, director of the WHO Department of Public Health, Environmental and Social Determinants of Health.

The UN, which refers to adequate sanitation as an entire system that hygienically separates human excrement from the population, set as one of its Millennium Development Goals the reduction by half of the number of people without access to such a system by 2015. That means that 77 percent of the world population should now have access to sanitation, a goal that will not be met by some 9 percentage points, or 700 million people.

According to Unicef and WHO, the lack of progress in this area also threatens to undermine child survival and the health benefits that were expected to be achieved by improving access to drinking water, another Millennium Development Goal that, in this case, has fortunately been achieved.

3 A book club that terrified the Angolan regime (Simon Allison in The Guardian) As a group of young Angolans gathered in the capital Luanda for their regular book club, authorities clearly felt the act of reading was so subversive that it was tantamount to a rebellion, and state security forces immediately intervened. Thirteen of the readers were arrested in a raid last week, along with two others for good measure. All have been detained and distributed across various prisons in the city.

This incident reveals much about modern Angola, where the exercise of basic rights – to assembly, to protest, the right to read – has become a subversive act. Some of those arrested have a political history: rapper Luaty Beirao has been arrested for protesting in the past, and Manuel Nito Alves was jailed for two months in 2013 for printing T-shirts critical of the president.

On the reading list were two books that give Angolan authorities sleepless nights. The first was Gene Sharp’s seminal From Dictatorship to Democracy: A Conceptual Framework for Liberation, which describes itself as “a blueprint for nonviolent resistance to repressive regimes”. The second was Angolan journalist Domingos da Cruz’s book, whose title translates as “tools to destroy a dictator and avoid a new dictatorship”. Da Cruz himself was among those arrested.

Since March 2011, the country’s youth movement has been calling for protests aimed at bringing down the president, Jose Eduardo dos Santos who has ruled Angola for 35 years. That a book club has become the definition of rebellion shows just how paranoid and insecure the state has become: fifteen young men are now in prison, because they dared to discuss a future different from the one Dos Santos has decreed.

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Banks close in Greece as crisis deepens; Why we should care about inequality; The perils of being an Indian journalist

1 Banks close in Greece as crisis deepens (Ian Traynor, John Hooper & Helena Smith in The Guardian) Greeks find their savings blocked and their banks closed for a week from Monday morning following a fateful weekend that has shaken Europe’s single currency.

The Greek government decided on Sunday night it had no option but to close the nation’s banks the following day after the European Central Bank (ECB) raised the stakes by freezing the liquidity lifeline that has kept them afloat during a six-month run on deposits.

The Athens Stock Exchange will not reopen on Monday either. The dramatic move, after 48 hours of sensational developments in Greece’s long-running battles with creditors, was sparked by the country’s prime minister, Alexis Tsipras’s Friday night call for a referendum on its creditors’ demands. That prompted finance ministers of the eurozone to effectively put an end to his country’s five-year bailout by the International Monetary Fund, the ECB and the European commission.

Greek banks will not open until July 7 in an attempt to avoid financial panic, after ECB capped the emergency funds keeping them running The prime minister said that Saturday’s move by the eurozone’s finance ministers to halt Greece’s bailout programme was unprecedented. He called it “a denial of the Greek public’s right to reach a democratic decision”.

During a marathon parliamentary debate that ended in the early hours of Sunday morning, opposition leaders argued that it was, in fact, a vote on whether Greeks wished any longer to be part of the eurozone. It will be Greece’s first referendum since the country voted to abolish its monarchy in 1974.

“We are millimetres away from the total collapse of the Greek financial system,” warned Herman Van Rompuy, until last year the president of the European Council and heavily involved in years of Greek rescue negotiations. “It’s actually suicide that’s taking place in Greece right now.”

2 Why we should care about inequality (Andrew Leigh in Sydney Morning Herald) Dutch economist Jan Pen once suggested a simple way of visualising the amount of inequality in a society. Imagine, he suggested, a parade in which each person’s resources were represented by their height.

Suppose we were to conduct such a parade in Australia. People of average wealth would be average height. Those with half the average wealth would be half the average height. Those with twice the average wealth would be twice the average height. Let’s suppose the parade took an hour to pass you. What would you see?

For the first half a minute, people would be literally underground. By the 10-minute mark, people are the size of a child’s doll. They might own an old car. Twenty minutes have gone by, but still the marchers are no taller than a newborn baby. Ten minutes to go, the marchers are two and a half metres tall, and their heights are rising fast. Five minutes till the end of the parade, and the marchers are four metres high. Now come the giants. Ten metres high, then fifty, then one hundred metres high. Their shoes are as big as the watchers; their faces as high as office buildings.

One-thirtieth of a second before the end of the march, and we’re into the BRW rich list. The poorest person on the BRW rich list is twice as high as Centrepoint tower. The rest are taller still. Now, their heads poke into the clouds. The tallest person in the parade is over 30 kilometres high – well on the way to outer space.

Maintaining pro-growth policies, improving our education system and ensuring our welfare spending is targeted to the neediest are good first steps at closing the gulf between the rich and the rest. But this isn’t all that needs to be done. Here are three more egalitarian ideas that governments and policymakers should consider:

A. Put new policy ideas under the equality lens. B. Encourage ethical behaviour by firms and executives. C. 3. Consider inequality in competition policy. Our current competition law is silent on the issue of equity. Inequality is fast becoming a central issue of our age. Pen’s Parade reminds us that the disparities between rich and poor are significant. A richer conversation about inequality is not only in the interests of the disadvantaged, but of all Australians who want to maintain a fair society.

3 The perils of being an Indian journalist (Zubair Ahmed on BBC) Shahjahanpur in India’s Uttar Pradesh state may be a small town by Indian standards, (population 400,000 as of 2011) but it boasts of no fewer than 150 journalists. Poor communications and woefully inadequate infrastructure have not deterred them from their chosen profession.

They are currently working on a story that saw their town catapulted into the national spotlight. Ironically, it is about the death of one of their fraternity, Jagender Singh, who succumbed to burn injuries following a police raid on his house in early June. Mr Singh ran a Facebook page with thousands of followers, where he posted largely unconfirmed stories on corruption involving government officials and ministers.

Mr Singh’s son Rajan told the BBC that his father was regularly harassed by police officers at the behest of a state minister, Ram Murti Singh Verma, who was reportedly a regular subject of Mr Singh’s stories. He alleged that, on the day his father died, a group of policemen acting on Mr Verma’s orders set him on fire during a raid on their home.

In another incident not long after the death of Mr Singh, another journalist, Sandeep Kothari from Madhya Pradesh in central India, was also burnt to death. Like Mr Singh, Mr Kothari wrote on corruption, but he specifically targeted the mining mafia.

The two deaths are the latest in a number of attacks on journalists working in towns outside India’s big cities. They say their confidence is shaken and that they fear for their lives. The Press Council of India (PCI) says 79 journalists have been murdered in India over the past 25 years.

Sardar Sharma was Jagender Singh’s boss for three years. He lamented the loss of respect for journalists and blamed reporters themselves for the situation. “There is a criminal nexus between many journalists, politicians and police. Such journalists are fake. They indulge in extortion and blackmail. They have let us down”, he said. When reporters are not attached to a specific media organisation, it is much easier to intimidate and threaten them.

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Europe’s gathering storm clouds; Greece opts for referendum on bailout; Singapore’s lessons for America

1 Europe’s gathering storm clouds (Mohamed El-Erian in The Guardian) Dark clouds are lowering over Europe’s economic future, as three distinct tempests gather: the Greek crisis, Russia’s incursion in Ukraine, and the rise of populist political parties. Though each poses a considerable threat, Europe, aided by the recent cyclical pickup, is in a position to address them individually, without risking more than a temporary set of disruptions. Should they converge into a kind of “perfect storm”, however, a return to sunny days will become extremely difficult to foresee any time soon.

As it stands, the three storms are at different stages of formation. The Greek crisis, having been building for years, is blowing the hardest. Beyond the potential for the first eurozone exit, Greece could be at risk of becoming a failed state – an outcome that would pose a multi-dimensional threat to the rest of Europe. Mitigating the adverse humanitarian consequences (associated with cross-border migration), and geopolitical impact of this storm would be no easy feat.

The second storm, rolling in from the EU’s east, is the costly military conflict in Ukraine’s Donbas region. Further Russian interference in Ukraine would present the west with a stark choice. It would either have to tighten sanctions on Russia, potentially tipping western Europe into recession as Russia responds with counter-sanctions, or accommodate the Kremlin’s expansionist ambitions and jeopardise other countries with Russian-speaking minorities (including the EU’s Baltic members).

The third storm – political tumult brought about by the rise of populist political movements – poses yet another serious threat. Energised by broad voter dissatisfaction, particularly in struggling economies, these political movements tend to focus on a small handful of issues, opposing, say, immigrants, austerity, or the European Union – essentially whomever they can scapegoat for their countries’ troubles.

Given the EU’s fundamental interconnectedness – in economic, financial, geopolitical, and social terms – the disruptive impact of each shock would amplify the others, overwhelming the region’s circuit breakers, leading to recession, reviving financial instability, and creating pockets of social tension. Fortunately, the possibility of such a perfect storm is more a risk than a baseline at this point. Nonetheless, given the extent of its destructive potential, it warrants serious attention by policymakers.

2 Greece opts for referendum on bailout (BBC) The Greek parliament has backed plans for a referendum on international creditors’ terms for a new bailout. The 5 July referendum was called by PM Alexis Tsipras, who opposes further budget cuts. He urged voters to deliver a “resounding ‘no'” to the package.

Eurozone partners have criticised Greece’s referendum announcement, and rejected its request to extend the bailout programme beyond 30 June. Greece could default on a €1.6bn IMF repayment due on that day. There are fears the country may leave the euro and that its economy may collapse without new bailout funds.

Mr Tsipras’s motion on a referendum easily won the backing in the 300-member strong parliament, with at least 179 MPs voting “yes” in the early hours of Sunday. His government had earlier rejected the creditors’ offer of a five-month extension to Greece’s bailout programme in exchange for reforms. On Saturday, eurozone finance ministers rejected the Greek proposal for the bailout extension beyond Tuesday’s deadline.

When the Greek government thought it had made substantial concessions at the beginning of the week, the creditors said it simply wasn’t enough. And while no-one can say for certain that Greece will leave the eurozone, this is already uncharted territory.

3 Singapore’s lessons for America (Fareed Zakaria in Khaleej Times) To help prepare for a trip there next week, I asked the country’s deputy prime minister, Tharman Shanmugaratnam, what he regarded as the country’s biggest success. I imagined that he would talk about economics, since the city-state’s per capita GDP now outstrips that of America, Japan and Hong Kong. He spoke instead about social harmony.

“We were a nation that was not meant to be,” Shanmugaratnam said. The swamp-ridden island, expelled from Malaysia in 1965, had a polyglot population of migrants with myriad religions, cultures and belief systems. “What’s interesting and unique about Singapore, more than economics, are our social strategies. We respected peoples’ differences, yet melded a nation and made an advantage out of diversity.”

How did Singapore do it? By mandating ethnic diversity in all of its neighborhoods. Over 80 per cent of Singaporeans live in public housing. Every block, precinct and enclave has ethnic quotas. This is what people mean when they talk about Singapore’s “nanny state,” and the minister readily admits it. “The most intrusive social policy in Singapore has turned out to be the most important,” he says.

This belief was at the heart of many of the efforts of the US federal government in the 1950s and 1960s to desegregate schools and to integrate neighborhoods — through court orders, housing laws, and executive action. Those efforts were largely abandoned by the 1980s and, since then, the data show an America that remains strikingly segregated.

Despite the fact that the Supreme Court ordered school desegregation 61 years ago, schools have actually become more homogenous in the last two decades. Secretary of Education Arne Duncan admits that today “only 14 per cent of white students attend schools that you could consider multicultural.”

Singapore is an unusual case. It is a small city-state. It has its critics, who point to a quasi-authoritarian system. Singapore can do things Western democracies cannot. It also has had its own racial problems. All that said, I believe that Singapore is an example of a diverse society that has been able to live together and that we could learn something from. (To be sure, Singapore could learn some lessons from Western democracies as well.)

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Wave of IPOs depress Chinese shares; The Greek tragedy; What competitive sport teaches women about business success

1 Wave of IPOs depress Chinese shares (BBC) Mainland Chinese shares saw sharp losses on Friday as investors began to worry about another wave of new listings drawing up liquidity in the market. Shares of Guotai Junan Securities – China’s third-largest brokerage – jumped 44% on its debut after raising $4.8bn in the country’s biggest initial public offering since 2010. The Shanghai Composite was down 2.5% to 4,415.25 after falling over 4% earlier. The Hang Seng fell 1.1% to 26,853.04.

Investor sentiment was also weighed on by concerns on whether the government and central bank would continue to ease policy in order to boost growth in a slowing economy. However, Bernard Aw, market strategist at trading firm IG said the “correction” in the market was healthy in the longer term and it is what the central bank wants to see.

2 The Greek tragedy (Christian Science Monitor/Khaleej Times) Will Greece be able to reach an agreement with the International Monetary Fund and wealthier European nations before it defaults on a $1.8 billion IMF loan due on June 30? And what happens if it can’t?

The history of sovereign debt negotiations is filled with deadlines and warnings by creditors of imminent cataclysm – and defiant vows by debtors to protect national sovereignty. Yet usually an accommodation is reached. But Greece’s financial position is indeed dire, and prolonged and testy negotiations with its creditors have only exacerbated its plight.

What are they arguing about? The socialist government of Greek Prime Minister Alexis Tsipras doesn’t want further cuts in government spending and tax increases, which the IMF and Europe are demanding. Official Greek unemployment is now at about 25 per cent and government employment has been cut by 50 per cent in the past few years. Tsipras says his people have suffered enough.

What could happen? While a formal default on July 1 seems unlikely, there are enormous risks to Greece’s enfeebled banks, particularly as panic spreads in credit markets. Greek banks experienced a wave of withdrawals last week. Money draining out of banks often begets more money following, and bank runs can undermine an entire system. And then there’s the problem of the government paying its accountants and firemen and teachers. Printing money, since Greece belongs to the euro, isn’t an option. The risks are real for Athens.

What are the odds of a deal? Hard to predict. The atmosphere is rancorous. EU President Donald Tusk was measured in his words and uncompromising. “The game of chicken needs to end and so does the blame game. We are close to the point where the Greek government will have to choose between accepting what I believe is a good offer of continued support or to head towards default,” he said.

Greece could yet end up out of the euro. The country’s financial problems are deep and wide. But the one thing all sides have in common is fear of a terrifying unknown, namely the first crack in a currency union that began 15 years ago. If a rupture is really coming, both sides will probably delay that moment as long as possible.

3 What competitive sport teaches women about business success (Sarah Kiefer in The Guardian) This year, the women’s boat race got equal billing with the men’s race for the first time and 2 million people in the UK tuned in to watch the England v France match in the women’s football World Cup. I participated in that race in 2005 and competitive rowing played a significant part in my life through school, university and full-time employment. There are a number of lessons competitive sport has taught me that have served me well in the workplace.

It’s OK to fail. It often seems that society is sending a message to women that in a competitive work environment failure is too risky and that sometimes it is better just not to try. Sport can impart a different mindset: one that teaches you to enjoy not fear it. In my case, sport has made me more likely to ask for a promotion, apply for a job for which I’m not qualified and speak up in a meeting when I disagree.

Learn to feel comfortable in your own skin. I am unusually tall and broad, which led me to feel uncomfortable and unfeminine as a teenager. Rowing totally changed my relationship with my body, allowing me to see my height and broad shoulders as an advantage. Body confidence undoubtedly makes me happier to take part in an industry panel or comfortable when presenting to important clients.

You have the power to drive your own success. Sport teaches women that hard work leads to tangible results. Although the business world is hardly a perfect meritocracy, my experience of training hard and preparing for big races has given me more confidence and a belief that success is in my control.

Understand the true value of teamwork. Finally, sport teaches women the meaning of teamwork. In sport, as in business, teamwork is not just that warm, fuzzy feeling that comes from pulling together for a common goal. It’s about being self-aware of your weaknesses, appreciating others’ strengths and being able to have tough conversations when team dynamics are not working out.

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Greece’s red lines blur and bend; Facebook worth more than Walmart on stock market; Bumpy ride for Brazil’s bio-fuel business

1 Greece’s red lines blur and bend (Phillip Inman in The Guardian) Like a husband forgiven for countless infidelities, Greek leader Alexis Tsipras is back in Brussels with a wink and a smile and, yes, another kiss and make-up proposal. Only this time, it looks like the marriage is saved.

What his partners want is simple, if difficult to achieve without further sacrifices. They want to close a funding gap in this year’s budget that most analysts estimate at €2bn. It would appear that the leader of the leftist Syriza government has done enough to keep alive his country’s hope of staying inside the euro. The question for his supporters at home will be, has he ditched his principled stand against further austerity, and if he has, do they care?

Tackling the towering cost of the Greek pension system was once considered a no-go area. Already cut by his predecessors, Tsipras had ruled out shaving anymore from the bill. Likewise VAT was off the agenda. Now it seems he is prepared to compromise on both issues. On pensions, Athens appears to have conceded that the government’s coffers must be shielded from a wave of early retirements.

According to documents supplied by Tsipras’s finance minister, Yanis Varoufakis, there are 400,000 Greeks looking to retire this year who qualify for a state pension, most of them under the existing early retirement rules.

Greek economy minister George Stathakis has put forward an increase on tax surcharges that middle and high-income earners pay, together with an extra levy on companies with annual net income of more than €500,000 and a hike in corporation tax from 26% to 29%.

The troika of European Commission, ECB and IMF is now expected to pull out all the stops and wave through the last €7.2bn of funds due under the existing bailout programme. With that, Greece can limp on. But this remains an unhappy relationship.

2 Facebook worth more than Walmart on stock market (San Francisco Chronicle) Facebook is now bigger than Wal-Mart, at least when it comes to its value on the stock market. While the switch is mostly symbolic it signals investors’ insatiable appetite for successful tech stocks. Apple, Microsoft and Google top the list of the highest-valued companies in the US, and Facebook looks to be on its way to joining them.

A company’s market value is calculated by multiplying the number of shares of stock it has in circulation by the current price of one share. Facebook Inc. was valued at $238 billion on Tuesday. Wal-Mart Stores Inc. was valued at $234 billion.

Comparing the two companies’ financial results, though, shows just how much Wall Street is investing in growth and potential — Facebook — versus existing size and might — Wal-Mart. In the first three months of this year, Facebook’s total revenue of $3.54 billion amounted to just a little more than Wal-Mart’s total profit for its fiscal first quarter of $3.34 billion. But while Facebook saw revenue grow 42 percent in the same period, Wal-Mart’s declined slightly.

That said, none of the nine companies that follow Apple in the top 10 come even close to the mighty iPhone and Mac maker, whose market capitalization is about $735 billion.

3 Bumpy ride for Brazil’s bio-fuel business (Daniel Gallas on BBC) In the last three years, low petrol prices in Brazil have plunged Brazil’s bio-fuel business into a crisis. Brazil is known for having one of the world’s most advanced green transport programmes. It has the world’s largest fleet of flex-fuel cars. In the past decade, much of its economy embraced sugarcane-based ethanol as an energy source.

It is widely available in gas stations across the country. The majority of new cars are able to run on either petrol or sugarcane-based ethanol. But in recent years, as Brazil’s economy slowed down, ethanol was one of the hardest hit sectors. While oil prices were high globally, petrol was kept artificially cheap for consumers in Brazil by the state run oil company Petrobras.

Fossil fuels received incentives, as Brazil’s government moved to tackle another issue: inflation. Paulo Furquim de Azevedo, an Economics professor at Sao Paulo’s Insper business school, says Brazil’s government did not act deliberately to hurt its ethanol industry, but its economic policy ended up damaging the sector. “The government did whatever it could to decrease the price of gasoline, which is very important in its inflation index.”

This policy plunged the town of Sertaozinho into its worst crisis in 30 years. Three out of seven major biofuel plants went bankrupt and now once again the town’s producers are having to change tack. Top biofuel producers have started investing in food again. Building biofuel-based power plants is also in decline.

But perhaps local producers have more to look forward to in the coming months. Brazil has overhauled its economic policy again this year, and ethanol is once again a priority. The mandatory mix of ethanol in petrol has increased – from 25% to 27.5%, and the levy on fossil fuel has been reinstated. More importantly, subsidies to petrol have been terminated. Government incentives and Brazil’s weak currency are helping to keep ethanol more competitive than petrol. And ethanol sales are up again this year.

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