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19th September 2016 |
European leaders have faced increasing criticism over the summer as they have failed to respond and bring control to the immigration crisis. The ‘jungle’ refugee camp has witnessed many deaths, in particular among miners, as individuals risk their lives in order to cross the border between France and England. Additionally, numerous boats have sunk as refugees from war torn countries attempt to escape their homelands and seek freedom and a new life in Europe. This idea concerning peace and a new life for refugees in Europe was once embodied by Angela Merkel, Chancellor of Germany however, following the recent German attacks undertaken by some refugees on German citizens, Merkel’s stance has begun to change as she faces backlash from her people. Whilst Merkel has not made a complete U-turn on policy she has started to recognise how her approach has been flawed. Germany over the summer has let over one million migrants into their country, reports the BBC. The news broadcaster has also informed us of statements from Angela Merkel which state, ‘If I could, I would turn back time for many, many years, to prepare better’. It is clear that European leaders whilst concerned about the migrants, they have not thought through logistics in order to encourage a smooth operation and integration of migrants into their country.
Meanwhile, immigration remains a hot topic in the UK as it was one of the main motivators for those who voted to leave the European Union. Theresa May, the new British Prime Minister, has since told the UN at its first meeting since the summer break, that the UK has the ‘right to control borders’, reports Sky News. May went on to explain that refugees should remain in their first country of refuge as this will help prevent the danger migrants are exposing themselves to, the criminal activity that later occurs, in addition to the hope that following the end to conflicts in the countries that they have fled, that they might be able to return home. Despite these statements, immigration remains an issue. Sky News explains that around ‘57,000 migrants are said to be trapped in Greece in 47 camps because some European countries have closed their borders’. If every country closes its borders, how will these Westernized countries be able to justify that they are fighting for peace in the world? The issue is pressing; the issue needs to be sorted in an organised manner.
In other immigration news, there is great fear that Britain’s exit to leave the European Union will result in job cuts, as big businesses decide to leave Britain and establish themselves in neighbouring European countries in order to avoid immigration issues. This issue is intensified by recent reports as it appears that it may be harder for large corporations to stay in the UK as Britain’s interior Minister, Amber Rudd discusses the idea of a work permits system, which would now include EU citizens, in attempt to reduce Britain’s net annual migration by 100,000, reports Reuters. It would seem that if a system such as the latter is adopted some companies may not have a choice but to exit as London, a commercial centre attracts many Europeans to work and the expense of this new system may outweigh the benefits of remaining in the UK. It will be interesting to see in the forthcoming months what the British government decide to do with regard to working visas and the EU passporting system, in particular after Article 50 is enacted.
Keeping on the topic of Brexit, Slovakia’s Prime Minister has stated that ‘Europe will make Brexit ‘very painful’ for the UK’ reports the Independent. It is believed that Europe will use Britain as an example in attempt to deter other countries from holding a referendum. The leader of Slovakia, Roberto Fico, in particular argued that Britain would not be able to choose elements of the European Union in which it benefitted and simply remove and limit aspects such as immigration of workers. These comments all provide a little insight into the forthcoming crisis the European Union is about to undergo when the UK commits to leaving by triggering Article 50. Consequently, in order to keep Europe together, there have been discussions over the last week in Bratislava as EU leaders met to consider a reform agenda. Nonetheless, Italian Prime Minister, Matteo Renzi, left the meeting very frustrated. Reuters explains that Renzi was dissatisfied with the ‘conclusions drawn on growth and immigration’. He stated, "To define as a step forward today's document on migrants would require a form of fantasy, a verbal high-wire act”. With EU leaders continuously frustrated, will there be a Europe to reform? Will there be a need for Brexit negotiations?
The UK continues to remain under the watchful eye of the news journalists, as question over the sustainability of the current growth levels and the economy persist. The BCC has released reports that it expects that the present situation will not be maintainable. Its prediction for GDP in 2017 has dropped by more than half from 2.3% to 1.0%, suggesting the worth growth levels since 2009, reports the Guardian. BCC’s predictions are in line with other reports this week which suggest that business confidence is at a four year low. Lloyd’s Banking Group has released a report demonstrating how ‘expectations that sales, orders and profits will grow over the next six months have slipped to 12%, down from 38% in January’, explains the Guardian. These worrying factors are intensified by May’s current plea to U.S. businesses not to pull investment from the UK. May is currently on a visit to New York to make this request in person and to hear the concerns of these businesses. She will be meeting with U.S. companies including Goldman Sachs, Morgan Stanley, Blackrock, Amazon as well as many others reports Bloomberg.
On the business side, it is more bad news for Volkswagen as Blackrock is about to sue them over the emissions scandal which erupted last year. The BBC reports that VW ‘failed to disclose its use of software defeat devices on diesel cars in a timely way’, which consequently meant that investors took a hit in the share price upon the break of the scandal.
Facing similar negative news, Deutsche Bank has been asked to pay $14bn to the US Department of Justice to resolve the inquiry into the European bank’s mortgage back securities. Whilst Deutsche Bank is yet to accept blame for the accusations, this has not prevented concerns as its share price fell by around 7% in the early trading hours on Monday reports BBC News.
In the meantime, as the FCA continues to increase red tape on lending UK payday lender, CFO Lending Ltd, has been ordered to pay £34 million to 97,000 customers due to unfair practise, reports Bloomberg. Jonathan Davidson, FCA director of retail and authorizations supervision stated, “We discovered that CFO lending was treating its customers unfairly and we made sure that they immediately stopped their unfair practices. Since then we have worked closely with CFO Lending, and are now satisfied with their progress and the way that they have addressed their previous mistakes”, explains Bloomberg. CFO Lending Ltd are one of the many payday lenders who have come under scrutiny over the recent years for mal practise, will the industry be able to sustain itself as pressure from regulators increases?
On a more global scale, the US elections are heating up as the debates between Hilary Clinton and Donald Trump continue. Whilst Hilary Clinton initially took the lead against Donald Trump, over recent months the gap between the polls have decreased, making it impossible to call who will be the next US President. The Telegraph explains that, ‘The New York Times has also worked out that, at the convention stage of all previous elections, a simple polling average across has differed from the final result by about nine percentage points. So, with the polls being so close, anything could still happen.’ The tight race between the candidates follows the continuous controversial claims from Trump and Clinton’s latest health worries after suffering pneumonia and later fainting at a 9/11 memorial service.
Meanwhile, China, one of the renowned economic powerhouses of the world, is facing a debt crisis warns the Bank of International Settlements (BIS). This warning comes after China’s economy continues to slow despite the 225% of GDP debt being used to prop up growth, explains the BBC. These are not the first warnings that have been issued to China, the IMF have already ‘urged China to act fast to address this’ reports the BBC. It will be interesting to see if China decides to act and whether it will be fast enough.