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Why the cost of insurance is driving UK motorists to distraction

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Line chart of Share prices and index rebased in pence terms showing Underwriting losses have held back motor insurance stocks

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Increasingly motorists are comparing car insurance to highway robbery. The average price of a new quote rose by nearly four times as much as inflation in the three years to June 2024. The government has pledged to tackle the problem. But are insurers really taking customers for a ride?

Some pricey policy add-ons fuel that perception. This week the UK financial watchdog launched an investigation into whether people are being overcharged to pay for car and home insurance in instalments. If the Financial Conduct Authority ends up imposing a 15 per cent annual percentage rate ceiling on premium finance, it could deliver an 8 per cent hit to the earnings of Admiral and Direct Line unless prices increase to replace the lost income, according to Abid Hussain of Panmure Liberum.

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The FCA will also probe the puzzle of why motor insurance has risen by so much in the UK. Yes, costs have been driven up by supply chain disruption, energy costs and labour shortages. As cars use more sophisticated technology, they are more expensive to repair. Fraud — including “crash for cash” scams — and inefficient claims handling arrangements are piling on expenses. But why have rates risen by four times as much in the UK as the EU? They are up by 82 per cent compared with 19 per cent in the three years to June.

One explanation is that these statistics overstate the problem. They measure quotes to new customers which appear to have risen particularly steeply following a 2022 ban on “price walking” — the practice of offering better rates to new customers than existing ones. Using a broader measure that includes renewals, premiums are at present £12 lower than inflation-adjusted peak prices in late 2017, according to the ABI. Moreover, UK prices fell more than EU ones in the pandemic, accentuating the subsequent rise.

Another possibility is that motor insurers are making excessive profits from underwriting. But that does not stand up to scrutiny. The sector reported an underwriting loss in both 2022 and 2023.

Line chart of Share prices and index rebased in pence terms showing Underwriting losses have held back motor insurance stocks

Some of the pressure is easing. Premiums edged downwards between the first and second quarter of this year. But they have already risen enough to return insurers to profit. EY forecasts a net combined ratio — claims and costs as a percentage of premiums — of 96 per cent this year.

Even so, a concerted push to improve efficiency and drive down costs is vital. This is a multi-faceted problem that is not for the industry alone. Some of the remedies — from policing thefts to repairing potholes — are in the hands of the government. Just leaning on insurers will not move the dial.

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vanessa.houlder@ft.com

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Travel

Greek island set to be the next big thing in 2025 – with much quieter beaches and new hotels

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Paphos has been named a trending destination for 2025

GREEK island are aplenty, with Santorini and Mykonos some of the most popular holiday destinations in the world.

But a new study has named the island of Paros as a trending destination for next year.

Paphos has been named a trending destination for 2025

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Paphos has been named a trending destination for 2025Credit: Getty
Paphos is often overlooked in favour of the nearby Mykonos

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Paphos is often overlooked in favour of the nearby MykonosCredit: Getty

American Express Travel included the island in their 2025 Trending Destinations list.

Analysing travel bookings as well as working with global travel consultants, the island was one of the few European destinations to make the list.

The website states: “Laid-back Paros has become the Greek island of choice for many.

“The cultural scene is vibrant here, and the rocky coastline is studded with beaches, secluded coves, and sea caves.

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“A mere 40-minute flight from Athens—or three hours on a ferry—this windblown retreat is also easy to get to.”

Around 200,000 people visit a year – just 10 per cent of the annual tourists that go to Santorini.

This means you can expect the island to be much quieter, and off-the-beaten track.

Its famous for a few things. This includes its marble, which was considered to be the best in ancient times, but there are other attractions too, including its many beaches.

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The town of Naoussa is the second largest town on the island and has been called a “smaller version of Mykonos”.

Expect amazing seafood when there too, with most of it caught at fresh before being served up

How to do two Greek islands in one holiday – with stunning private-pool rooms

However, it is also undergoing some new changes.

The island’s airport is expanding its terminal and runway, which will allow better infrastructure for travel.

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The €41million project hopes to be complete by 2026.

New hotels are popping up too.

This includes the boutique Andronis which opened earlier this year and a new Canaves Collection resort following success in Santorini.

You can fly there from Athens or get a ferry from the islands

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You can fly there from Athens or get a ferry from the islandsCredit: Alamy
The streets are similar to those in Santorini

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The streets are similar to those in SantoriniCredit: Alamy

Last year, professional travel planer Jennifer Greene said Paros was on the up.

She added: “The lack of an international airport tends to keep it that way, but a gentle ebb of chic new hotels is attracting more tourists.”

American Express also named Brittany in France as a trending hotspot.

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They included the destination because of its “distinctive culture, coastal scenery and miles of seaside walking paths like the GR34 trail”.

Mont-Saint-Michel is one of the region’s most famous attractions, located in the bay shared by Normandy and Brittany.

One beach that’s proven popular among holidaymakers because of its long stretch of sandy beach, stunning views, and tranquil waters is Plage de Tahiti.

Ferry is a popular option for travelling to Brittany from the UK – with routes from Plymouth and Poole.

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American Express Travel’s 2025 Trending Destinations

  • Brisbane, Australia – located between the Gold and Sunshine Coasts, Brisbane offers excellent museums as well as vibrant dining and nightlife.
  • Brittany France – Distinctive culture, coastal scenery and miles of seaside walking paths like the GR34 trail top the list of reasons to visit the Brittany region.
  • Franschhoek, South Africa – Franschhoek, the mountain-ringed gem in the Cape Winelands region, is an ideal add-on to a safari vacation with nearly 50 wineries, farm-to-table restaurants and hiking.
  • Koh Samui, Thailand – 88-square-mile Koh Samui offers a dreamy combo of lush jungle, white sand beaches, and turquoise waters, perfect for active travelers or those looking to relax. The island will be featured on a popular TV show scheduled to air next year and is sure to inspire set-jetting travelers.
  • Macau, China – Though The Historic Centre of Macau enjoys UNESCO World Heritage status, and the local Cantonese-Portuguese fusion cuisine is a must-try for foodies, the supersized casinos are the reason this densely populated peninsula, known as the “Las Vegas of the East,” boasts a number of award-winning restaurants.
  • Moab, United States – As the gateway to Utah’s “Mighty Five” national parks, Moab is a perfect starting point to explore the American Southwest. Travelers come for world-class rafting, mountain biking, and canyon hiking – or simply to bask in the red rock scenery.
  • Nikko, Japan – This tucked away mountain retreat in mostly rural Tochigi prefecture blends elements of Kyoto and Mt. Fuji, with photogenic waterfalls and abundant hiking trails.
  • Paros, Greece – Laid-back Paros has become the Greek island of choice for many with a vibrant cultural scene and rocky coastline studded with beaches, secluded coves, and sea caves.
  • São Paulo, Brazil – This multi-ethnic city is one of the great cultural destinations of South America and home to rich architectural heritage and some of the continent’s best museums, street art, and homegrown fashion.
  • Sun Valley, Idaho, United States – With fewer crowds than other Western ski resorts, Sun Valley appeals to premium travellers and everyday outdoor enthusiasts alike. During the summer months travellers can enjoy trout fishing, whitewater rafting, mountain biking and more.

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HTSI editor’s letter: the wisely issue

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HTSI editor Jo Ellison

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HTSI editor Jo Ellison
HTSI editor Jo Ellison © Marili Andre

What is wise in 2024 remains a much-debated topic: but the value of a great education is something about which few would argue. For this week’s cover story, we followed Oxford student Grace Clover as she enjoyed her final days as an undergraduate at Wadham College, in a university recognised by many as being the world’s most prestigious. Grace writes about her experiences in a piece to accompany the pictures, and captures the strange contradictions, exhilarations and adventures that come with student life. In particular, she notes the peculiar isolation that comes with fulfilling the weekly essay deadlines, the “constant socialising” and the tremendous privilege of being surrounded by so much history and beauty.

As someone who has just delivered their child to university (though not Oxford), I found Grace’s essay especially pertinent. I also felt a huge nostalgia for that short moment where one stands on the precipice of “grown-up” life. The undergraduate experience is emotionally intense, confusing and wonderfully liberating. The pictures capture the great gift it is to be a student. Side note: it also bears testimony to the many friendships forged in adolescence – the shoot’s photographer, Tom Craig, and I were both in the same graduating year at Edinburgh.

Reading and studying are two ways of grasping the branches of universal wisdom. Other stories in this issue look at different ways to live intelligently. Grace wears predominantly vintage and pre-loved fashion, a business that has transformed with the rise of sites such as Depop and eBay, but one that can be somewhat overwhelming for those who prefer a more boutique-curated browse. Rosanna Dodds has compiled a list of the world’s best vintage dealers, most of whom have online and in-person concessions as well as areas of specialisation. The guide is designed to sort the jewels from the jumble and, in a crowded and largely ungoverned market, help steer a more productive search.

Can sustainable cutlery be sustainable and satisfactory?
Can sustainable cutlery be sustainable and satisfactory? © Morwenna Parry

Next, a personal obsession: since the ban of single-use plastic cutlery in England in 2023, restaurants and fast-food outlets have had to introduce a range of sustainable alternatives. There are now dozens of options when it comes to compostable cutlery, but most make for an unpleasant eating experience – there are few things more revolting than eating one’s lunchtime soup from a “cringey” and rough-sided wooden spoon. Ajesh Patalay investigates the state of eco cutlery, the issues of trying to make something both satisfactory and sustainable, and whether the current composting options are even viable. He finds that few options are especially compliant: I’ve vowed therefore to try to keep a real spoon around the desktop. 

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Polentina restaurant and staff canteen in east London
Polentina restaurant and staff canteen in east London © David Post

On the subject of the working lunch, how many of you have a kitchen or catering facilities in your office? You’ll probably enjoy Grace Cook’s piece about some of the world’s great staff canteens. From Polentina, an Italian restaurant set in a garment factory in east London, to Kantine, the kitchen restaurant that feeds the staff – and visitors – of David Chipperfield’s Berlin headquarters, Grace has looked at the new wave of cooks and forward-thinking employers who are rehabilitating this much-derided catering genre. I am rather envious of the folk at On Labs in Zürich, who have a dining room designed to mimic a living space where they get to enjoy a “vegan buffet”. Thankfully, many of these kitchens are open to non-staffers: you don’t need a visitor’s pass to try them for yourselves. 

@jellison22

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Full list of banks including Nationwide offering free cash payouts of up to £200 before Christmas

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Millions on state pension to receive festive bonus

HOUSEHOLDS could get a free cash payout worth up to £200 just in time for Christmas.

Four major banks are now offering cash incentives for new customers and you could land a boost in time for the festive period.

Households could get free cash for Christmas by switching bank accounts

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Households could get free cash for Christmas by switching bank accountsCredit: Getty

Switching bank accounts can be an easy way to give your balance a quick boost.

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Cash incentives are regularly launched by banks to entice new customers, but do be sure to check the small print.

Most of these offers have certain criteria that you need to meet in order for you to get the cash.

For example, some accounts require you to pay a certain amount each month to maintain them.

While others might charge you for setting up an overdraft.

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Be sure to check that the account you chose is right for you in the long term before switching.

Once you’ve decided you’ll need to make the switch using the current account switching service (CASS) which takes just seven days, and the new bank handles it for you.

We explain further down how the CASS works, but first here’s the full list of the offers available now that could tempt you to move.

Lloyds Bank – £200

If you switch your current account to Lloyds you could get £200.

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Both new and existing customers can take advantage of the free cash offer available for those who switch between now and December 10.

Those who switch to the Club Lloyds account can expect the £200 to be paid within ten days of completing the switch.

It is important to be aware that the account comes with a £3 a month fee unless you pay in £2,000 a month.

To finalise the switch, customers can either scan the QR code available on the bank’s website or use the mobile app.

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Once completed, Club Lloyds customers will be able to select from a range of perks, including a 12-month Disney+ subscription, a choice of Vue or Odeon cinema tickets, a magazine subscription, or a Coffee Club and Gourmet Society membership.

But remember you pay a fee for the extras, so work out if it’s worth paying the fee to get these.

New customers can get the bonus, and so can existing Lloyds customers if they don’t already have a Club Lloyds account and open a new one.

Those who already received a switch bonus since April 2020 from Lloyds, Halifax or Bank of Scotland (all part of the same group) won’t be eligible.

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The same bonus is also available when switching to the Club Lloyds Platinum Account and Club Lloyds Silver Account but these comes with a £22.50 and £11.50 a month fee, respectively, on top of the £3.

How do I switch bank accounts?

SWITCHING bank accounts is a simple process and can usually be done through the Current Account Switch Service (CASS).

Dozens of high street banks and building societies are signed up – there’s a full list on CASS’ website.

Under the switching service, swapping banks should take seven working days.

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You don’t have to remember to move direct debits across when moving, as this is done for you.

All you have to do is apply for the new account you want, and the new bank will tell your existing one you’re moving.

There are a few things you can do before switching though, including choosing your switch date and transferring any old bank statements to your new account.

You should get in touch with your existing bank for any old statements.

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When switching current accounts, consider what other perks might come with joining a specific bank or building society.

Some banks offer 0% overdrafts up to a certain limit, and others might offer better rates on savings accounts.

And some banks offer free travel or mobile phone insurance with their current accounts – but these accounts might come with a monthly fee.

First Direct – £175

First Direct has relaunched its popular cash switch incentive for anyone who opens a 1st Account.

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Customers can receive a payment of up to £175 by using the CASS.

Users have to switch at least two direct debits or standing orders within 30 days of opening the account to qualify for the cash.

Switchers also need to add at least £1,000 into the account, register and log on to internet banking and use the debit card at least five times within 30 days of opening the account.

Customers who meet the criteria should expect the free bonus in their accounts by the 20th of the following month.

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The bank revealed that new customers switching to their current account to first direct can expect several extra perks, including a £250 interest-free overdraft.

You won’t qualify for the switching incentive if you have previously held a First Direct product or opened an HSBC current account on or after January 1, 2018.

Customers moving across to the bank will also get access to a regular savings account paying 7% interest, one of the best deals around, as well as a 0% overdraft on the first £250.

Nationwide – £175

Nationwide Building Society has launched a new offer of £175 to switch to its FlexDirect, FlexPlus or FlexAccount current accounts.

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The free-cash perk is a joint-market leading sum with First Direct.

The FlexDirect account gives the holder 5% credit interest on balances up to £1,500 for the first 12 months.

This account also offers an interest-free overdraft for the first 12 months.

Those who open a new FlexDirect account will still get the 5% credit interest rate, and will also receive 1% cashback for the first 12 months on debit card purchases, capped at £5 per month.

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For new FlexDirect account openings, the previous interest-free overdraft offer will be withdrawn.

But if you are an existing customer who is benefiting from an interest-free overdraft offer then don’t worry, this will continue until the end of their 12-month period.

You also can’t have switched into a Nationwide account, or have received switch cash from Nationwide, since August 18, 2021.

Co-op Bank

The Co-operative Bank has announced eligible customers could receive up to £150.

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The first £75 is given when a customer completes a switch to the bank.

Then, the bank is offering three monthly instalments of £25 – another £75 – to make up the £150.

Both new and existing customers can apply to switch to a current account to make themselves eligible for the payment.

Customers must apply for a Standard Current Account or Everyday Extra account.

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To be eligible, customers must not have benefited from a switch incentive at The Co-operative Bank since 1 November 2022.

And to receive the first £75, customers need to follow a series of rules.

They are:

  • Deposit a minimum of £1,000 into their new account (this includes balances transferred as part of the switch).
  • Have 2 active Direct Debits.
  • Make a minimum of 10 debit card or digital wallet transactions (pending payments will not count toward fulfilment of this criteria).
  • Register for our online and/or mobile banking service.
  • Set up the debit card in a digital wallet (Apple Pay, Samsung Wallet or Google Pay).

That leaves the three £25 instalments – and there are some rules to claim them too.

Customers need to deposit at least £1,000 into their account, have two direct debits and make a minimum of 10 debit card transactions.

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Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

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Russia’s elusive war aims

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This article is an onsite version of our Europe Express newsletter. Sign up here to get the newsletter sent straight to your inbox every weekday and Saturday morning. Explore all of our newsletters here

Welcome back. President Volodymyr Zelenskyy of Ukraine this week unveiled a five-point “victory plan” for the war against Russia. Even from Ukraine’s western friends, the plan didn’t receive unqualified support.

One way of approaching this topic is to turn matters round and ask: will Russia prevail in the war, and what would constitute “victory” for President Vladimir Putin? I’m at tony.barber@ft.com.

Zelenskyy’s plan

Zelenskyy’s initiative had five main components, summarised here by the BBC:

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  1. Joining Nato

  2. Strengthening Ukraine’s defences and securing western support to use long-range weapons in Russia

  3. A non-nuclear, postwar deterrent to contain Russia

  4. Joint Ukrainian-western exploitation of Ukraine’s natural resources

  5. A Ukrainian contribution to the west’s defences after the war

Mark Rutte, Nato’s new secretary-general, gave a guarded response to Zelenskyy’s plan:

The plan has many aspects and many political and military issues we really need to hammer out with the Ukrainians to understand what is behind it, to see what we can do, what we cannot do.

Some Ukrainian politicians were not convinced, either. Opposition lawmaker Oleksii Honcharenko said:

“It’s kind of a wish list from Ukraine for our partners . . . And it doesn’t look realistic.”

One large, unanswered question about the plan is whether an end to the war would leave Russia occupying the roughly one-fifth of Ukrainian territory that it now holds.

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The plan contains annexes, not made public, that may address this point. Clearly, territorial control would lie at the heart of any negotiations, no less than Ukraine’s postwar security.

For the moment, I think we can assume that neither Ukraine nor western governments are inclined to cede formal, legal control over the occupied territories to Russia.

A truncated but successful Ukraine?

It isn’t difficult, however, to imagine an end to the fighting that leaves Russia in de facto control of Crimea and much of south-eastern Ukraine.

Thomas Graham, writing for The Hill, explains:

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Most western governments now acknowledge privately, if not publicly, Ukraine is not likely to drive Russian forces from all the Ukrainian land they have seized since 2014.

For Graham, the key point is how a truncated Ukraine would develop after the war. Would it revert to “the poor, corrupt, oligarchic country of little interest to the west” that it was before the 2014 Maidan revolution?

Or would Ukraine emerge as “a strong, prosperous, democratic, independent country” anchored in western institutions?

Framing the issue in this way clarifies the question of what would amount to victory for Russia.

Control of territory: far from the only issue

Viewed in purely territorial terms, Russia’s war aims are to retain Crimea and the four eastern regions over which Moscow proclaimed its sovereignty in 2022.

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However, even after the gradual advances of Russia’s armed forces in the east this year, the Kremlin does not fully control these four regions. It follows that an end to the fighting that froze the battle lines more or less as they are now would not completely fulfil Russia’s territorial war aims.

But the picture is much bigger than who controls what chunks of Ukrainian land.

Ukrainian soldiers adjust a national flag near the strategic city of Lyman
Ukrainian soldiers adjust a national flag near the strategic city of Lyman, Donetsk region in October 2022, after Zelenskyy said that the area had been ‘cleared’ of Russian troops © AFP via Getty Images

Putin launched his full-scale invasion in February 2022 under the pretext of demilitarising and “de-Nazifying” Ukraine. Put differently, his aim was to destroy the independent Ukrainian state that emerged in 1991 out of the rubble of the Soviet Union, and to discredit the very idea of a Ukrainian national identity separate from that of Russia.

The historian Thomas Otte, writing in March 2022, captured this point brilliantly:

Putin’s views . . . reflect his embrace of the fundamentally anti-western, anti-European concept of russky mir [the Russian world], a partly historical, partly ideological construct that draws on the idea of “holy Rus” of the 10th century – itself an “invention” of 19th-century historians.

It encompasses late tsarist ideas of an ethnocultural pan-Slav bond between the eastern Slavs, and it is fuelled by memories of victory over fascism in the “Great Patriotic War” [the second world war].

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Looked at from this angle, Russia has already fallen short of its aims. Ukraine’s national identity has been forged in the fires of war and cannot now be subsumed into some nebulous Russian-dominated east Slav brotherhood.

Furthermore, even a dismembered Ukraine would remain a functioning state and part of the international system. Still, as Graham says, it would have to continue along the road of internal reform and would need credible guarantees of western protection.

Building Brics

Putin’s ambitions, stimulated by the Ukraine war, also encompass a revision of the world order in favour of Russia and its sympathisers, and to the disadvantage of the US and its allies.

How is that going?

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Next week, leaders of about two dozen countries will meet in Kazan, capital of the Russian region of Tatarstan, for a summit of the Brics club.

Gleb Bryanski writes for Reuters:

The Oct. 22-24 summit . . . is being presented by Moscow as evidence that western efforts to isolate Russia have failed. It wants other countries to work with it to overhaul the global financial system and end the dominance of the US dollar.

However, even some Russian commentators sound cautious about the usefulness of the Brics group, which has expanded beyond its original membership of Brazil, Russia, India, China and South Africa.

Fyodor Lyukanov, editor-in-chief of the journal Russia in Global Affairs, says that, from Moscow’s viewpoint, it is positive that “the west’s ability to determine the entire global situation is rapidly disappearing”.

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But, with regard to the Brics group of existing and aspiring members, he adds:

The difficulties are obvious. With such a number of completely different states with different cultures, different interests, different levels of development, finding a consensus, a common denominator is extremely difficult. And the more states, the more difficult.

Iran, North Korea and China

In some respects, Russia has found it more beneficial to expand co-operation with Iran and North Korea, which are explicitly anti-western in a way that isn’t true of Brics countries such as Brazil and India.

This month, Putin met Masoud Pezeshkian, Iran’s new president, in Turkmenistan (the FT’s Charles Clover and Najmeh Bozorgmehr wrote a good piece on the military dimensions of the Russian-Iranian relationship).

How close are Russia and Iran? Perhaps less close than meets the eye.

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According to Tatiana Stanovaya, an independent Russian political scientist, the Kremlin remains reluctant to share military, space and especially nuclear technology with Iran.

Trade volumes between Russia and Iran fell last year, underscoring the mistrust of Russian businesses towards their Iranian counterparts, she says.

As for North Korea, ties with Russia have unquestionably deepened the longer the Ukraine war has gone on. Putin visited Pyongyang in June and signed a “comprehensive strategic partnership pact” with Kim Jong Un.

However, in this piece for the Stockholm Centre for Eastern European Studies, Hugo von Essen comments:

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[The partnership] could . . . have serious negative impacts for both China and Russian-Chinese relations. These include a destabilised Korean peninsula, greater US attention and resources spent in the region and a strengthened US-Japan-South Korea trio.

With regard to Russia’s relationship with China, let me highlight for you this excellent analysis by Eugene Rumer for the Carnegie Endowment for International Peace.

He points out that Moscow and Beijing have much in common — authoritarian domestic politics, tensions with the US. But he stresses that they do not see eye to eye on everything and that, during the Ukraine war, the relationship has tilted in China’s favour.

Russia’s militarised economy

Finally, some thoughts on Russia’s war economy. As Bank of Finland analysis in the chart below shows, military expenditure is soaring:

Column chart of Military expenditure, Rbs trillion showing Russia's military budget has soared in recent years

But few topics more sharply divide western commentators than the prospects for the Russian economy.

On one hand, some specialists emphasise Russia’s resilience and the limited effectiveness of western sanctions. Wolfgang Münchau, writing for the New Statesman, comments:

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“The Russian war economy is running on steroids and generates huge revenues for the state.”

On the other hand, Anders Åslund, a longtime Swedish expert on Russia’s economy, says:

“My own view is that the current sanctions regime shaves off 2-3 per cent of GDP each year, condemning Russia to near stagnation.”

He makes the interesting point that Russia’s central bank, whose main interest rate stands at 19 per cent, estimated annual inflation in August at 9.1 per cent. Åslund says:

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“Nobody should believe such figures. Most likely, the authorities are repacking inflation as real growth.”

My own view is that, whatever Russia’s difficulties and manipulation of data, an end to the fighting in Ukraine is likely to arrive sooner than a breakdown of the Russian economy.

What do you think? Will Russia win the war? Vote here.

More on this topic

China and Russia’s strategic partnership in the Arctic — a commentary by Paul Goble for the Jamestown Foundation

Tony’s picks of the week

  • As much as two-thirds of the EU’s water bodies are in bad condition, according to the European Environment Agency, the FT’s Alice Hancock and Alan Smith report

  • One year on from October 7, Palestinians face their most severe crisis in 75 years but have no unified leadership to guide them, Omar Rahman writes for the Italian Institute for International Political Studies

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Moldova confronts Russian cash-for-votes in EU referendum

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Map of Moldova showing Chisinau, Orhei, Bardar and Transnistria

This summer, some elderly residents of the small Moldovan city of Orhei started receiving an unusual top-up to their monthly pension.

It came not from the state but from a fugitive oligarch living in Moscow, via a Russian state bank subject to western sanctions, and was paid to Russian-issued credit cards outlawed in Moldova.

Ilan Șor, the oligarch behind the scheme, announced that all Moldovan pensioners could receive this extra cash, provided they voted “No” in a referendum on EU membership taking place on Sunday.

“I need your co-operation, my friends. No EU!” Șor said on social media. A former mayor of Orhei, the businessman fled Moldova in 2019 after being convicted of massive fraud, and is now a Russian citizen.

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Moldovan authorities say the pension top-ups are just one of many methods the Kremlin is using to influence the referendum, which is being held simultaneously with a presidential election. The incumbent, Maia Sandu, is hoping to secure a second term and reaffirm the EU aspirations of her country, which is sandwiched between Romania and Ukraine.

Taken together, the two votes mark a “historic” choice for the ex-Soviet nation, local politicians say, between a European path and a return to the Russian fold.

Map of Moldova showing Chisinau, Orhei, Bardar and Transnistria

The stakes are high for Moldova, said Olga Roșca, an adviser to Sandu on foreign policy. “With Russian pressure, we thought we’d seen it all. But this is an unprecedented scale of interference, backed by an unprecedented flow of illegal money.”

Police have intercepted schemes funnelling money from Russia directly into the bank accounts of more than 130,000 Moldovans — a network police chief Viorel Cernăuțeanu has described as carefully cultivated by Șor in the 2.5mn strong country.

Sor has denied voter bribery, telling Russian state news agency Tass that such claims were an “absurd spectacle”.

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Once the transfers were shut down, police started catching “money mules” at the airport arriving from Moscow with stacks of cash. Officials estimate Russia to have spent about $100mn this year on Moldova’s electoral processes.

“Russia has created a Ponzi scheme of people who take money to vote a certain way,” said Vladislav Kulminski, a former deputy prime minister of Moldova. Moscow “still thinks that somehow Moldova is its historical territory, and it’s not willing to relinquish it voluntarily”.

Ilan Shor examines a basket of grapes during the opening of the Moldovan trading house 'Eurasia' in Moscow. He and two women are standing in front of shelves displaying various packaged fruits and vegetables.
Ilan Șor, centre, at the opening of a store in Moscow in September. The oligarch fled Moldova in 2019 but still wields influence in the town of Orhei where he used to be mayor © Sergei Ilinitsky/EPA-EFE

Șor has been accused of deploying his network and funds, first to build a power base in a southern region of the country, and then to skew Orhei’s local elections, favouring his proxies.

“Now he’s trying to repeat this, but on a national level,” said a person close to the country’s security services.

Orhei’s pension top-ups were announced by Șor-backed mayor Tatiana Cociu after she travelled to Moscow. Authorities in Chisinau balked.

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“Name me a country that would tolerate a foreign government illegally paying ‘bonus pensions’ directly to its citizens,” the person said. “It’s a clear attempt to buy loyalty, and we’ve seen it work.”

Șor, who fled Moldova after being convicted in a bank fraud scandal in which $1bn was taken out of the country, has also spent lavishly on local projects in Orhei. But residents this week appeared unfazed and largely in favour of the EU, in line with much of the rest of the country.

A poll last month found 62 per cent of Moldovans favour EU membership, which Sandu’s government applied for after Russia’s full-scale invasion of Ukraine in 2022.

“I can see it’s all PR, he just wants votes,” said Alla, 65, as she watched her grandchild play in Orheiland, a free amusement park built by Șor. People had knocked on her door this summer, offering Șor’s extra pension, but she declined.

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The Kremlin has denied any meddling and has accused the Moldovan government of suppressing pro-Russian views. Șor could not be reached for comment.

On a campaign stop in the central Moldovan village of Bardar this week, where chickens roamed unpaved streets and tractors rumbled past small vineyards, Sandu went door to door reminding people to cast their votes.

Villagers said they knew the stakes. “I’ve seen both. I lived in Russia for six years, and I’ve lived in Portugal. I know the difference,” said Vasile, a pensioner, leaning over his fence.

Peering through garden gates in the village and greeting grandmothers in headscarves, Sandu spoke about the need to withstand the forces buffeting the small nation.

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Maia Sandu stands on a dirt road, peering over a tall green fence topped with white decorative metalwork.
President Maia Sandu speaks to villagers in Bardar © Polina Ivanova/FT

“We can see this big effort from Russia . . . it’s sort of mesmerising,” said Mihai Duca, the general manager of a 100-year-old cognac distillery in Bardar.

“The Kremlin has unimaginable resources to buy votes, while people are poor and vulnerable . . . I hope we don’t get left behind on other side of a new iron curtain.”

It is unclear what the bloc — which just pledged a €1.8bn multiyear package for Moldova to help it on the EU accession path — would do if the country votes “no”, or if turnout is below the 33 per cent threshold for a “yes” to pass.

“It’s a gamble,” one western official in Chișinău said. “There is no contingency plan for if the referendum fails. There’s no plan B.”

Moldova did not consult with the EU before deciding to hold the referendum, which was not required at this point in the accession talks, said two European officials and a Sandu ally.

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“It was a decision driven by the domestic picture and the EU wasn’t particularly happy about the timing,” the ally said. “It sort of held them hostage.”

Maia Sandu poses for a selfie with a local child in Bardar. They stand on a quiet street lined with rustic fences and houses.
Sandu poses for a photo while campaigning in Bardar © Daniel Mihailescu/AFP/Getty Images

Sandu’s critics have accused her of tying the referendum to the presidential vote in order to boost her own chances of winning, and becoming the first Moldovan president to be elected for a second term. 

A poll this month by CBS-Axa Centre for Sociological Research found Sandu leading with 35.8 per cent of the vote, ahead of the next candidate in line, Alexandr Stoianoglo, at 9 per cent.

Sandu’s supporters say the timing of the referendum was intended instead to seize a moment when Moldova’s president and parliament are both firmly pro-EU, and the bloc itself is spurred by Russia’s invasion of Ukraine to expedite Chișinău’s bid.

“Moldova has never been as geopolitically sexy as it is right now,” the western official said. “It has the support of the whole democratic world.” Eight EU foreign ministers visited the country in the past week.

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Russia is expected to focus even more intensely on parliamentary elections, due in 2025, politicians said. Stacking the legislature with compliant MPs could allow it to block reforms needed for EU integration.

Sandu may be hoping to pre-empt that by holding the referendum now. If a “yes” wins, EU accession would be written into the country’s constitution as a national goal, making it far harder for opponents to change the country’s course.

“The longer we drag, the more intense the Russian pressure becomes,” Roșca, the adviser, said. “We’re in a race against the clock.”

The EU’s funding package is likely to energise support, Moldova’s economy minister Dumitru Alaiba said. “If you include investments we could leverage, it’s potentially 10 per cent of Moldova’s GDP every year. It could mean more than doubling the Moldovan economy over the next 10 years.”

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Many in Moldova have felt economic strain in the four years of Sandu’s rule, which has been marked by the Ukraine war and the subsequent energy crisis that led Moldova to end its dependence on Russian gas.

A fruit trader in Bardar said he had felt prices go up and Duca, at the distillery, recalled natural gas prices in the first year of war hitting the business hard.

A fruit seller in Moldova stands next to a white van filled with produce. In front of him are boxes containing apples, tomatoes, and various vegetables. The van is parked on a gravel area with a small Moldovan flag visible inside the vehicle.
A fruit trader in Bardar said prices had gone up © Polina Ivanova/FT

Some also fear provoking Russia. “There’s a significant segment who are neutralists and say let’s stay friends with east and west,” said Alexandru Flenchea, a former deputy prime minister.

Many of his fellow countrymen lived by the motto “don’t trouble the Russian bear”, he said, given the historic trauma of being annexed by the USSR in 1940.

Russian foreign minister Sergei Lavrov has warned Moldova’s westward pivot risks turning it into the “next Ukraine”.

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It has become a mantra for several candidates running against Sandu, while Șor often tries to fuel a sense of victimhood among Russian speakers in the majority Romanian-speaking country.

Sandu has tried to prove this is not the case, her team said. This summer, she handed out Moldovan passports to a Russian rock band called Bi-2 that had opposed the invasion of Ukraine.

On Tuesday night, the band performed in Chișinău, to a massive crowd. On a balcony at the back, Sandu sang along to the Russian hits.

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Venice in three ingredients

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View across the water towards trees and houses on the island of Sant’Erasmo

This article is part of a new guide to Venice from FT Globetrotter

Sitting in the leafy courtyard of a quaint hotel in central Venice, I overhear a conversation at a nearby table. A young couple from abroad are having a private wine tasting with a local sommelier. It’s their first time in Venice, they say, and they’re “into food”. The sommelier introduces the wines, mentioning that one is produced “on an island of the northern Lagoon”. “Wait, what’s ‘the Lagoon?” one of them asks. Ah, I think. I hope no one’s in a rush. 

As one of Europe’s most extensive wetlands, the Venice Lagoon is intrinsically bound to the destiny of the city at its centre. This interdependence is outlined by Unesco, which granted World Heritage Site status to both: “Venice and its lagoon landscape is the result of a dynamic process which illustrates the interaction between people and the ecosystem of their natural environment over time.”

Venice overwhelmingly owes its existence to the inventive exploitation of its swampy surroundings throughout history. The aquatic landscape of the Lagoon, once understood and governed, offered the early settlers of the marshlands and their descendants a variety of perks, not least abundant sustenance, enhanced by the crucial presence of salt. Fish, game, and wild edible flora formed the basis of the local diet, supplemented with cultivated vegetables and fruits. Later, trading activities with the Mediterranean region, the Middle East and the Far East introduced exotic ingredients such as spices and nuts, whereas grains — corn, rice and eventually wheat — entered the city from the fertile fields of the Po Plain. The resulting cuisine is a synthesis of land and water, urban and rural, local and foreign. 

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View across the water towards trees and houses on the island of Sant’Erasmo
The island of Sant’Erasmo, also known as Venice’s kitchen garden © Camilla Glorioso

Back in the Lagoon, the Serenissima had a clear system for organising life on the more than 100 islands that constituted the Venetian archipelago, based on vocation and position. Some islands became monasteries, others quarantine facilities and others proto-industrial hubs. The most fertile and naturally rich islands, such Burano, Torcello, Mazzorbo and Sant’Erasmo, grew into dynamic fishing and agricultural centres. Each produced a wealth of culinary subcultures that are still present, largely unaltered, on today’s tables.

What has changed is the environment: overfishing practices, rising water temperatures, the invasion of alien species and increasing salinity levels in the soil are altering the spectrum of what can be farmed and fished, shifting the perception of what is considered local and traditional.

As a result, creating a guide to Venetian cuisine that reflects its timelessness and cultural heritage while also being attuned to its contemporary changes is an interesting challenge. Here, I chose three key ingredients — eel, mallard and artichokes — with each serving as a doorway into a slice of Venetian history, geography and food culture from past to present, while also providing an opportunity to explore lesser-known flavours within this ever-changing and often-simplified liminal territory.

Eel

For centuries, the Venice Lagoon was a particularly favourable habitat for eels, given the abundance of food and the relatively calm environment. Fortunately, Venetians have long had a fondness for them and invented some extraordinary ways to cook eel. One of the oldest recipes hails from Murano, the island famous for its glass-blowing tradition. With the locals embracing a “waste not, want not” attitude, the furnaces used for glassmaking would often double as cooking ovens. Bisato sull’ara, as the dish is called, was made by placing pieces of eel and a host of bay leaves inside a clay pot and leaving it for hours to cook in a cooling glass furnace.

Eels on sale at the Rialto fish market
Eel can be bought at the famed Rialto fish market © Camilla Glorioso

Today, it’s nearly impossible to taste this dish in its original form. Not just because glass furnaces cannot be used as health and safety-approved cooking facilities, but also because eel is now much rarer in the Lagoon due to overfishing and climate change. “There have been restrictions put in place on fishing for eels,” Domenico Rossi, a fisherman from Burano, told me. “This year, for example, it was forbidden to fish for them from January to June. This is because there are so few of them, and they want to ensure that any repopulation programmes in the rivers have time to take effect. And then, even when the season is right, there just aren’t many to catch.” Most eels found at the market these days are reared in the valleys of Comacchio, further down the Adriatic.

Tastes have changed, too. Fewer people, local or otherwise, seem to appreciate eel. This is confirmed by empirical evidence: as I searched for restaurants in Murano offering not just bisato sull’ara, but any eel-based dish, I was met with a “Sorry, no”. “We wanted to update our offering,” said a restaurateur at a contemporary osteria near Murano Colonna, while the owner of a very traditional restaurant nearby said: “It’s a hard sell, so we decided to favour other species.” Back in central Venice, however, a handful of restaurants still stubbornly serve eel, mostly chargrilled so as to reduce the natural oiliness and add some beneficial smokiness to its rich white meat.

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Vini da Gigio

Calle Stua Cannaregio 3628A, 30121 Venice
The facade of Vini da Gigio restaurant, in a pink-orange-hued corner building
The family-run Vini da Gigio in Cannaregio . . .  © Camilla Glorioso
Grilled eels with vegetables on a square plate at Vini da Gigio
. . . does grilled eel with vegetables © Camilla Glorioso

This cosy, family-run place in the Cannaregio district is the perfect go-to for all things traditional, including eel. “What we serve is a reflection of what we like to eat,” said Nicolò Lazzari, the restaurant manager and son of the owner, Paolo. “Eel is something we enjoy very much and we like making it available to anyone who wants to try it. That is, whenever the season is right — we only source local eel. We serve it smoked and grilled alongside polenta, and our guests love it.” Website; Directions

Osteria Giorgione da Masa

Calle Larga dei Proverbi 4582/A, 30121 Venice

Masahiro Homma, the Japanese chef at the head of Osteria Giorgione da Masa, in Cannaregio, has a knack for creating original dishes that blend Japanese and Venetian flavours, ingredients and techniques. On his menu, eel is a year-round feature in his signature and much-loved eel cirashi, where a base of sushi rice is topped with amiyaki-grilled eel glazed with concentrated soy sauce. Website; Directions

Wild duck (mallard)

Male and female mallards swimming in the water off the island of Sant’Erasmo
Mallards are widespread in the Lagoon © Camilla Glorioso

When it comes to Venetian cuisine, one instinctively thinks of fish dishes. However, the Lagoon ecosystem provides an ideal environment for another protein that has been a favourite since the time of the Doges: wild duck. In the past, fishermen would pick up a rifle the moment fishing paused, with the marshlands doubling as hunting grounds. Today, the vast majority of “fishing valleys” in the northern Lagoon are used less for rearing fish and more for hunting feathered game, or selvadego in the local idiom. 

Among the many species populating the Lagoon, wild duck (mallard) or masorin is perhaps the most widespread and appreciated. They are so numerous that they are categorised as being of “Least Concern” on the International Union for Conservation of Nature’s list of threatened species, and it’s not uncommon to see them in their thousands flying above the serpentine landscape of the barene, the marshland islands. Even though they are present year round, the best time to hunt duck is in the autumn and winter, which, incidentally, is also the best time to enjoy them in a ragù sauce scented with hints of cinnamon and orange. This intensely flavoured condiment is used to season pasta such as bigoli (thick fresh spaghetti from the Veneto region), tagliatelle or, more typically, potato gnocchi. 

Villa 600

Fondamenta dei Borgognoni 12, 30100 Venice
A black and white photograph of a waiter in profile at Villa 600, looking out of a window
A waiter at Villa 600, which appeared in Stanley Tucci’s TV series ‘Searching for Italy’ © Camilla Glorioso
A plate of wild-duck gnocchi at Villa 600
The restaurant is one of the best places to try wild-duck gnocchi © Camilla Glorioso

Opposite the celebrated Locanda Cipriani, set at the centre of a peaceful garden on the island of Torcello, is this elegant restaurant that recently gained fame precisely for its wild-duck gnocchi. Stanley Tucci prepared the dish and ate it here after a Hemingway-esque hunting session across the marshlands in the Venice episode of his TV series, Searching for Italy. Villa 600 is possibly one of the best places to try this dish, though everything else on the menu is just as tasty. Website; Directions

Trattoria Alla Maddalena

Fondamenta di Santa Caterina 7b, 30142 Venice

Set in an unassuming house facing the tranquil waters of Canale di Mazzorbo, this family-run trattoria offers traditional seafood dishes and, in season, some of the most delightful wild-duck primi. Choose between fresh tagliatelle ribbons or pillowy gnocchi, topped with a generous ladleful of dark, shiny ragù. In good weather, sitting on the waterfront or under the leafy pergola is a treat. Website; Directions

Violet artichokes

Young violet artichokes
Sant’Erasmo’s violet artichokes are grown under tight regulations by a consortium of local producers © Alamy Stock Photo
The leaves of young violet-artichoke plants on the island’s I Sapori di Sant’Erasmo farm
Young violet-artichoke plants on the island’s I Sapori di Sant’Erasmo farm © Camilla Glorioso

Setting foot on Sant’Erasmo after a 30-minute vaporetto ride feels like landing in a parallel universe of open fields, vineyards, sputtering Piaggio tricycles, sparse inhabitants and little else. Sant’Erasmo is the Lagoon’s largest island and also one of the most fertile, serving as the garden of Venice since the 16th century. Over time, this generous strip of land, located at the edge of the Lagoon, showed a special talent for producing flavoursome vegetables, particularly artichokes of the prized, tulip-shaped variety called carciofo violetto (violet artichoke). 

Today, the carciofo violetto di Sant’Erasmo is grown under strict regulations dictated by the local consortium of producers. Among them is Fiorella “Cosetta” Enzo, who is at the helm of her family farm, I Sapori di Sant’Erasmo. “It’s not the plant that is unique,” she told me when I asked her why these artichokes are so much tastier. “Anyone could take this variety and try to grow it elsewhere. But only here have these plants found this soil — with clay and salt in perfect proportions. It’s the soil that creates the plant; this is how the plant becomes one of a kind.” 

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Fiorella ‘Cosetta’ Enzo of I Sapori di Sant’Erasmo with her family
Fiorella ‘Cosetta’ Enzo (centre) of I Sapori di Sant’Erasmo with her family © Camilla Glorioso

The artichoke plant is generous, both in yield and in versatility. Flowers grow year round and offer different characteristics depending on when they’re harvested. Production starts in mid-April with the main head, castraura, the most precious and tender and often eaten raw, followed by botoi and massete, which are typically braised. The remaining artichokes, larger and more fibrous, will become fondi (bottoms) by the end of season. 

In May, visitors from all over the region pour into Forte Massimiliano for the Sagra del Carciofo (artichoke fair). They queue patiently to taste this exceptional treat at its prime, prepared in all manner of ways, from braised to raw, thinly sliced and topped with Grana Padano. 

During the spring months, violet artichokes also make a show-stopping appearance at the market and on the menus of all the restaurants worth your while, from fine-dining establishments to frugal osterie, all the way down to the convivial bàcari (small bars) and their array of cicchetti. Some of them might even be part of the commendable Osti in Orto project, in which a group of restaurateurs joined forces to rehabilitate a farm on Sant’Erasmo, growing fresh produce — including artichokes — for their restaurant kitchens. Here, they make for springy antipasti, primi and main courses, in which the precious thistle is paired with anything from prawns, as at Antiche Carampane, to bottarga, as at Trattoria Anzolo Raffaele, where owner Luigi Secchi has a passion for sprucing up Venetian ingredients with touches from his native Sardinia.

Other chefs also make preserves and liqueurs with them. This is the case for Silvia Rozas, chef of Birraria La Corte, a contemporary pizzeria in Campo San Polo; Bacàn, a Latin-American restaurant; and the newly opened Salso, a Lagoon-inspired, water-facing eatery on the island of Certosa. Rozas says: “We usually harvest the artichoke buds when the season starts in April, and we preserve them so that we can use them in the following months — especially for pizza.”

She adds: “We also make use of the trimmings to make our house amaro, which, in addition to artichokes, contains samphire, dill, rosemary, thyme, cinnamon, pepper, cinchona, gentian, anise, and a citrus syrup. We serve it as our house aperitif with Angostura tonic.”

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Tell us about your favourite Venetian dishes and restaurants in the comments below. And follow FT Globetrotter on Instagram at @FTGlobetrotter

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