Immigration

Is Angela Merkel making a U-turn? It was only a few weeks ago when City Careers report on the how Angela Merkel was facing resistance over her open-door policy to migrants and it appears that the German Chancellor has swiftly changed her opinion. Following the Cologne attacks on New Year’s Eve the country has been left in horror. The Guardian reports how whilst the police commented that the evening was "quiet", 'more than 100 women filed sexual molestation charges against men "of African or Arab origin."' The Guardian argues how '"Cologne" has become a byword for all the fears, prejudices and - let's face it- real problems associated with mass immigration.' Last month, Merkel would have fought opposition for her plans of mass migration of refugees into Europe and whilst recently she has begun to convince her opponents, she now, in light of the attacks, will have to go back to the drawing board! Nonetheless, The Independent explains how Angela Merkel has begun a U-turn to the opinion she so highly defended as she proposes to change immigration policy regarding how quickly a migrant can be exported. The Independent outlines how 'currently, asylum seekers are only deported if they have been sentenced to jail for at least three years and are deemed to not represent a threat to people in their home country' however, Merkel is now suggesting that the time frame should be reduced to immediate deportation for 'immigrants who commit crimes'. Is Merkel's change of tune valid? Has she changed it because she is worried about the German vote, or is she simply acting because of circumstance? Time will tell how much of a U-turn Angela Merkel is making or whether she is only suggesting changes because of the attacks.

Articles:

• The Guardian: Angela Merkel seeks tougher laws to deport migrants after Cologne sex attacks
• The Independent: Cologne sexual assaults: Angela Merkel begins U-turn on immigration policy following attacks
• The Guardian: Germany after the sex attacks: fences are going up and the mood is ugly

Europe

The clock is ticking and David Cameron has a month and a half to secure a deal with a better Europe before he puts "in or out" vote to the UK voters in 2017. The BBC reports the UK Prime Minister arguing that whilst he did not believe a Brexit is right for the UK, he would do "everything necessary to make it work" if the country chose to leave. Whilst, Cameron and other European leaders are continually telling the press that recognition is going well but no firm decisions have been made. However, these releases appear to come unstuck when European leaders are concerned and critical over Cameron's plans for a four year freeze for EU migrants for work benefits. As one of the main points of renegotiation in which the UK was seeking, the picture painted by Cameron does not seem to be too perfect. The BBC clearly outlines the other main points of renegotiation in the following:

Cameron's optimistic picture for the renegotiation however remains as recent reports published by Bloomberg shows that the UK Prime Minister is willing to bring forward the referendum if the right deal is secured. His confidence in Europe is reconfirmed by the fact that Cameron is allowing his politicians a free vote, something in which he did not allow his party in the recent vote on Syrian air strikes. Is Cameron right in his confidence? Or will people in the UK remain pessimistic about Europe? The vote shall tell, but by that point is it not too late? Convincing before the upheaval of a Brexit will be needed.

Articles:

• BBC: EU referendum: David Cameron 'hopeful' of February deal
• Bloomberg: Cameron Targeting U.K. Deal on EU in February Before Referendum
• The Telegraph: Cameron closing in on 'four years' deal on in-work benefits to deter EU migrant workers

Business

Last week City Careers reported on the emergence of another scandal for car manufacturer Volkswagen as the US Justice Department is suing the company. Reuters this week sheds new light on the situation by suggesting that despite the extensive blow to the company following the current lawsuit which may see VW have to pay $46 billion, the German car manufacturer is likely to face fewer fines in Europe. Nonetheless this comes as a bit of a surprise considering '8.5 million of the 11 million vehicles world-wide that contain banned software are in Europe' according to Reuters. VW is also facing lawsuits in other countries including Brazil who are attempting to sue the company for the same emissions scandal. However, although they may be have skipped a hefty fine in Europe, the image and reputation of the company has no doubt been tarnished. The BBC outlines how the car manufacturers has experienced its 'first drop in 11 years' after 'sales of VW brand cars fell 4.8% in 2015 to 5.82 million cars from 6.12 million a year earlier'. Will the car manufacturer recover? Or will sales continue to fall and law suits continue to increase?

In other business news, are we looking at a potential de-merger in the heavily concentrated pharmaceutical industry? Neil Woodford, the founder of Woodford Investment Management, explains to the BBC how he believes GlaxoSmithKline 'should be divided into separate companies, rather than run as a single £65bb giant' reports the BBC as Woodford argues that GSK is 'like four FTSE 100 companies bolted together'. However, the company does not seem to be facing any managerial problems despite the argument as on Friday shares 'were up 2.5%' remaining 'one of the five most valuable companies listed on the stock market'. Therefore, it is looking unlikely that GSK will de-merge.

Articles:

• BBC: Volkswagen branded sales drop for first time in 11 years
• Reuters: Facing U.S. storm, VW set for easier ride in Europe on emissions scandal

UK Economy

The outlook of the U.K. economy has come into question again this week. Following China's crash last week, sceptics are warning about the potential halt in the recovery of the U.K. economy. Larry Elliot from the Guardian argues how the beginning of 2016 has resulted in a very pessimistic outlook for not only the UK but the world economy. He argued that 'rarely have financial markets had a more traumatic start the year. Shares plunged, the price of oil clattered to its lowest in 11 years, training on the Chinese stock market was halted twice, and the World Bank warned that a "perfect storm" might be brewing.' The Telegraph places this into the perspective of the U.K. Economy arguing that 'UK house prices to crash as global asset prices unravel'. The newspaper predicts that the 'UK housing will undergone huge shift in the year ahead' because of the lack of money that people have, in particular with the heavy cuts to the buy-to-let scheme, as well as the expected rise in interest rates. Consequently, consumers will no longer be able to spend the contents of their house on near zero percent mortgages as the cost of borrowing will increase. With UK households in approximately £40bn of debt, a slight change to the market conditions, in particular the housing market where money has flooded to could be catastrophic for the economy. Hopefully the economists and strategists are thinking ahead and not allowing the house pricing bubble to pop once more.

Articles:

• BBC: Osborne warns of 'dangerous cocktail' of economic risks
• The Telegraph: UK house price to crash as global asset prices unravel
• The Guardian: Is 2016 the year when the world comes tumbles back into economic crisis?

Global News

The search has finally come to a stop. Jacquin Guzman 'El Chapo', the most wanted trafficker, has been arrested. El Chapo reports Bloomberg helped 'at least five US cities for alleged crimes that helped him build a drug- trafficking empire and amass fortune that Forbes magazine estimated to be $1 billion'. The Mexican trafficker successfully escaped prison for the second time in July 2015 however, now recaptured, the US are pressing for his extradition. Nonetheless, his lawyer is adamant to keep him with the Mexico where he believes he should be tried. This process of extradition is likely to be a lengthy process, will El Capo escape again?

On the subject of crime, in the US Hillary Clinton has spoken out against Bernie Sanders, who has previously voted in favour of arms, over gun control. However, the Guardian reports how despite Sanders stating that he would revise the matter, Clinton is unsatisfied with these answers. Gun control has become a central issue after numerous shootings and killings within the last year; most recently in a California shooting guns were used in a claimed act of terrorism in the name of Syria.

In other US news, the New York Times reports on the positive outlook for the economy with 'the lowest levels in four decades, the jobless rate may fall below 5 percent for the first time since 2007.' Despite the gloomy outlook for 2016, reflected in the World Bank revision of its predictions for the year, the New York Times suggests that whilst the US may experience a few hiccups, it is likely to remain stable throughout 2016 as the problems the world is facing are not new but continuous.

Articles:

• Bloomberg: Mexico Moves Toward Extraditing Drug Kingpin ‘El Chapo’ to U.S.
• The Guardian: El Chapo capture: Mexico drug lord's 'desire to make biopic' helped agents find him

Oil:

It continues to tumble... Last Thursday oil prices fell to below $33 per barrel. The BBC reports how 'Brent crude fell 4.7% hitting fresh 11-year lows, while US crude climbed back to $33.24, down 1.6%'. The low oil prices however should be good as it will help reduce the costs of transport for goods. Nonetheless, is this likely to happen- probably not, as retailers as well as other sellers are unlikely to pass on these reductions. However, this is just one side of the story as the lack of demand mainly comes from the falling need from industry and oversupply.

That comes as surprise?! The Independent reports on the potential of an initial public offering of Saudi Armaco, the Saudi State oil producer. This suggests that the Saudi attempt at undercutting the US producers to push them out of the market has not worked. The Independent explains that this could be a 'short- term fix for long term structural problems'. This could be an interesting move, but would the market be interested considering the low oil prices and the prediction by OPEC that prices will not be in the region of $70 until 2020?

Articles:

• BBC News: Oil price tumbles to below $33

Antonia Marino |

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