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US Headlines Special 3: The Outcome
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23 November 2015 |
A lot has been occurring over the world in the last week with discussion over immigration and the economy being at the centre as the global shock of the Paris attacks remains.
Following the Paris attacks ten days ago there has been much discussion about how the members of Isis got into France and Europe. The New York Times reports how the individuals who staged the attacks held European passports allowing them to ‘slip in and out of Syria without being identified or checked’ upon their return to the Europe. A commitment has now been made by the European Union to tighter border controls; expected to come into force by the end of the year.
The discussion over the Paris attacks has not only increased speculation and debate within Europe over immigration but also across the water in the Atlantic. The Guardian has reported on the recent Syrian immigration to the US as individuals seek asylum from the warzone in Syria. In light of both the events in Paris and immigration of Syrian migrants, Republican presidential candidates have called for greater control of the US borders with ‘all Syrian refugees to be barred from entry to the US, or for only Christian refugees to be allowed in’. In turn on Thursday according to The Guardian ‘the House of Representatives passed a bill strengthening barriers against refugees from Syria and Iraq. President Obama has said he will veto it.’
It will no doubt be interesting over the next weeks and months how governments across the world react and whether they will actually change their strategy towards immigration.
With talks regarding Britain and the EU supposed to take place next month, the issue of security and a Brexit has now arisen. Following the Paris attacks, individuals and the general public have raised question to whether the UK will be able to protect themselves if they left the European Union. The former chief constable of the Police Service of Northern Ireland, Sir Hughe Orde believes that quitting the EU ‘would not quell jihadis’ murderous intent towards the British way of life, but it could make it harder for us to prevent them arriving and then deport suspects when here’ reports The Guardian. In turn, is national security or the economy going to take priority when the debate over the European Union and Britain is discussed next week and later voted on by the British public?
In other European news, the recovery of the Eurozone economy has also be questioned this week. The shock to the markets and to the economy following the Paris attacks has made the economic recovery of the Eurozone appear even bleaker. With weakening faith over how effective monetary policy will really be in provoking growth, it will be interesting whether monetary policy will actually impact positively on the economy. In the wake of the attacks, The Guardian reports how it is suspected that Mario Draghi will increase the planned increases in quantitative easing from 60bn euros to 80bn. This is expected because French citizens have reduced spending and there has been a multitude of cancellations from tourists as well as big department stores such as Galeries Lafayette reporting a 50% drop in sales. Nonetheless, Reuters reports how the EU Economics Commissioner Pierre Moscovici says that the Paris attacks will not be detrimental to the economy as previous incidents for example in Spain did not harm the economy in the long term. Only time will tell about the real impact.
Reuters also reports on how Greece has met all its requirements for the ESM Board of Directors to approve the 2 billion euro ‘sub-tranche’. The approval is expected to be issued today.
Standard Life, a 1% shareholder in HSBC, is considering moving out of the City as the BBC reports on how the company believes it has a competitive disadvantage by being located so centrally within the UK.
In other business news, the chief executive of Siemens, the largest industrial manufacturer in Europe, Joe Kaeser commented on the impact of the Paris attacks to the Financial Times stating that ‘Investment is about believing, about the future, and [when] events like that happen, people will wait’ reports the BBC.
The UK and France are holding talks today about British support of the French with regards to air strikes in Syria. News is still unfolding surrounding the dialogue between the UK Prime Minister David Cameron and French President Francois Hollande, however, Cameron has said according to the BBC the ‘world is coming together’. Cameron has already enabled the French to use Akrotiri, the UK airbase in Cyprus to support the attacks.
Leadership is always put under question following a terrorist attack and similarly the discussion of the Labour party leader Jeremy Corbyn has hit the headlines this week. It appears that the Labour Party leader’s support is weakening by the minute. The Independent reports how Unison general secretary Dave Prentis, a supporter of Corbyn during the last elections, argues that it is time that the leader ‘got its act together.’ The negative sentiment towards Corbyn comes following a poll that ‘six out of 10 voters now believe Mr Corbyn would not keep them safe’. This comes after the leader’s response to the Paris attacks.
The UK’s chancellor has come under fire this week as the latest figures suggest that George Osborne is far from reaching his target to remove the deficit by 2020. According to The Guardian the figures are ‘the worst…for the public finances in six years…the deficit, or the gap between what the government spends and takes in, swelled by 16% from a year earlier to £8.2bn in October’. It will be interesting what the Autumn statement states this week. Economists predict that Osborne ‘will redouble austerity measures in next week’s spending review’ reports The Guardian.
It other news, entrepreneurs are calling and hoping for further tax relief in this week’s Autumn statement the Telegraph reports. The newspaper summarises the feelings of digital start-ups when stating that, ‘if the Government is serious about making the UK the centre of the global sharing economy.. we need to keep the UK at the forefront and position it at the global centre of the sharing economy. This [tax break] would be a bold statement.’
Is the UK economy at threat? Manufacturers have reported a decline in exports leading to fear that this will be detrimental for the economy. The Guardian explains how the ‘stronger pound and weaker global economy’ have led to the lack of demand, the worst demand for goods for three years. The paper also reports how it has been caused by a lack of demand and the slowdown of the Chinese economy. One can only hope that adjustments are made to ensure that growth in the UK does not slacken.
The oil crisis seems to be erupting once again as The Week reports how ‘the oil price fell back sharply overnight in Asia, as a surge in the US dollar prompted a wider commodities rout.’ This comes according to Reuters as a result of speculation surrounding interest rate rises within the US. Hence, the US dollar is typically the currency in which oil is traded and therefore if interest rates rise, it will be more expensive for foreign buyers to purchase oil. The Telegraph reports on the damaging effects as ‘Saudi Arabi’s currency regime is at risk of blowing up if oil prices fall further’. Hence the nation who has filled the market with great amounts of supply in order to try and drive out competitors is at risk because its pegged currency with the US means that in light of new discussion over interest rates, its reserves of foreign exchange will deplete very quickly. There appears to be two options Saudi Arabi could adopt to avoid this, de-peg or cut oil supply, will they act? Which method will they choose to adopt?
Goldman Sachs has reported that emerging markets are likely to grow in 2016 as assets become fruitful. The growth will be assisted by the US economy’s positive outlook which sees a potential increase in interest rates next month as well as signs of ‘healthy labour’ and ‘economic activity’ according to Reuters.