IMF backs Greek debt relief, relocating Hong Kong, disrupting diversity problems

The daily briefing “FirstFT” from the Financial Times.

Yanis Varoufakis declared he would resign if the Greeks voted Yes in Sunday’s referendum and added that he would prefer to cut off his arm than sign any deal that did not include his debt relief. Luckily for his arm, the IMF called for Europe to grant the country debt relief.

Unfortunately it also blamed the government for the deteriorating situation in Greece. It warned that it needed more than EUR60bn in new financial help over the next three years anddecades of mounting debt would make it vulnerable to more crises.

Varoufakis has insisted that negotiations would resume after the referendum, even if the government got its way and a No vote won out. But Jeroen Dijsselbloem, chairman of the eurogroup of finance ministers, was quick to deny the possibility of a more attractive package.

In Greece, the economy is being suffocated by sweeping capital controls imposed by the government: Chris Giles says Greeks are suffering the consequences of their prime minister’schildish misbehaviour. (FT, WSJ)

In the news

US jobs miss the mark Employers hired at a decent clip in June – up 223,000 , just shy of forecasts – but wage growth remains stagnant and labour force participation fell. Though the jobs market has some way to go before reaching full strength, the latest report is unlikely to affect the expected September interest rate increase. (FT, FiveThirtyEight)

ECB QE takes in state companies The European Central Bank added state-owned infrastructure companies to the list of organisations whose assets it can buy under its quantitative easing programme. This has fuelled speculation that it is edging towards outrightpurchases of corporate bonds, especially as it is expected to ramp up asset purchases if the Greek crisis escalates. (FT)

RBS $13bn bill The US Federal Housing Finance Agency sued 19 financial institutions including RBS for mis-selling securities by packing them with mortgages to borrowers who had little chance of repaying the loans. If forced to pay up, RBS may not be able to cover the settlement, which is in excess of its provisions and makes it tricky for George Osborne to start selling the UK government’s 79 per cent stake in the bank. (FT)

MH17 criminal tribunal Malaysia wants criminal accountability for the downing of the Malaysia Airlines aircraft over Ukraine last year. It will submit a resolution to the UN Security Council to establish a tribunal. Diplomats said Russia holds the key to the adoption of any resolution as a veto-wielding member of the council. (ABC News)

Cystic fibrosis hope A 25-year endeavour to treat the most common inherited lethal diseasehas produced positive clinical results for the first time. The patients inhaled monthly doses of healthy CFTR – the defective gene that causes the disease – and after more than a year those who received the gene therapy saw significant benefits. (FT)

It’s a big day for

Chinese markets The Shanghai Composite fell 6 per cent in early trade on Friday while the Shenzhen Composite shed 6.2 per cent, capping a volatile week where investors have endured intraday moves in excess of 10 percentage points. Here are some reasons for the wild swings. The rest of Asia meanwhile has been selling off ahead of the Greek referendum and Independence Day in the US. (FT)

Food for thought

Univision IPO The largest Spanish-language broadcaster is returning to the public markets. We’re guessing Donald Trump won’t be investing, though if he’s looking to strike while the iron is hot, he might consider putting some money into the Mexican pinata industry. (FT, NYT)

BP’s Gulf settlement The British energy company will pay $18.7bn to the US federal government and five states over the 2010 Deepwater Horizon disaster. Although this is thelargest environmental settlement for a single company, it is modest compared with the sums that governments had predicted. BP will now push ahead with ambitious new projects in the Gulf of Mexico. (FT)

Tech’s next financial frontier Having upended the banking and trading industry, and revolutionised the way we lend, borrow, invest and raise capital, fintech is sizing up its juiciest prey yet: insurance. (Wired)

The game is the game On “The Cartel”, Don Winslow’s sprawling new novel about narcotraficantes and the devastation wrought on the Mexican side of the war on drugs. (New Yorker)

Replanting Hong Kong The British National Archives released a 1983 government file, which shows government officials discussing the relocation of the entire population of Hong Kong to Northern Ireland before handing the former colony back to China. One official thought the newly created city state between Coleraine and Londonderry would revitalise the local economy. (SCMP)

Disrupt your own diversity problem Women, ethnic minorities and other under-represented groups have got enough on their hands without having to fight for equality, too. Helen Lewis argues for middle-class straight white men to muck in and push for innovation in tech companies. (FT)

Video of the day

Puerto Rican peril Former New York lieutenant-governor Richard Ravitch and Charles Blitzer, former IMF official and hedge fund adviser, debate the US territory’s restructuring plan. Theysee problems ahead. (FT)

This article is published in collaboration with The Financial Times. Publication does not imply endorsement of views by the World Economic Forum.

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Author: FirstFT is the Financial Times’ editors curated free daily email of the top global stories from the FT and the best of the rest of the web.

Image: A Greek flag flutters as tourists visit the Acropolis hill archaeological site in Athens. REUTERS/Jean-Paul Pelissier.