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US Headlines Special 3: The Outcome
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26 December 2016 |
In the lead up to Christmas, the world has been shaken by another disaster following the terrorist attack on the Berlin Christmas Markets last Monday. Economic overviews and predictions for 2017 have begun to surface, whilst the political scandal over the US elections continues.
The German population were faced with another terrorist attack this week leading to Angel Merkel being questioned once again on her stance to immigration. President-elect, Donald Trump has used this opportunity to reinforce his views on banning Muslims from America. Trump during the US elections had to withhold and revise some of his comments on this stance, proposing to temporarily suspend people from immigrating to America if they were from terrorist prone countries. Concern over security has not only been shared by Trump but also Britain. Former police chief explains that the free movement of people in neighbouring countries poses a threat to Britain. These concerns come as Anis Amri, the person responsible for the Berlin Market attack was able to travel 1,000 miles before being caught by chance in Italy. Meanwhile, the Home Office is trailing ‘a one-day only system for immigration applications’, which may replace the six month process that applicants normally have to endure. This trial comes as groups continue to protest and criticise the process in which enables EU citizens to become UK permanent residents. As nations choose to adopt harsher policies, how will this impact diplomatic relationships between countries?
Sounds like bad news for Britain! Whilst politicians try to reassure the British population that Brexit will lead to greater independence and power for Britain, reports suggest that whilst negotiations are taking place this will not take place. This comes as the Telegraph suggests that ‘a post-Brexit trade deal could be blocked by the national and regional parliaments of the 27 member states after a landmark ruling by a senior member of the European Court of Justice’. Despite these comments, the former Bank of England governor attempts to shed some more positive light on the situation. Although Lord King recognises that ‘it will not be a “bed of roses”’, he suggests that there is opportunity in Brexit with the potential for greater economic reform. His perspective is quite refreshing as being part of a democratic country which voted, no matter how big or small to leave the European Union, the conclusion of the vote is clear. Therefore, the future and not the past needs to not be concentrated on.
Concentrating once again on the state of the European economy, the Financial Times reports that European banks are on ‘track for the best quarter since 2009.’ Last week City Career Series questioned whether the loosening of regulation on Commerzbank was a good thing, but the Financial Times seeks to reassure these concerns explaining that ‘the value of the Euro Stoxx banks index has risen 30 per cent since the start of October, approaching the three-month gain of 33 per cent set between July and September of 2009 as stock markets worldwide bounced back from crisis lows.’ The FT explains that the second half of the year has saved the European banks.
Meanwhile, the Eurozone has confirmed that it will unblock Greek short-term debt relief. This comes after Athens has ‘reassured euro zone lenders it would honour its bailout commitments’ reports Reuters.
Despite this, pessimism remains as wealth inequality rises to new levels. Reuters explains that ‘the euro zone's top 5 percent of households owned 37.8 percent of the net wealth in 2014, up from 37.2 percent in 2010 while the bottom 5 percent owned only debt, the ECB said based on a survey of 84,000 households.’
Releasing her Christmas message this week, Theresa May seeks to reassure the UK population about Brexit. The BBC informs us of May’s comments which stated, "As we leave the European Union we must seize an historic opportunity to forge a bold new role for ourselves in the world and to unite our country as we move forward into the future." May’s topic of choice for her Christmas message contrasted to other major parties including Labour and the Liberal Democrats who respectively choose to focus on homelessness and child refugees. Will May’s focus on economic centred activity cause her problems in 2017? Is such a focus necessary? Despite major concerns since Brexit about the economy, the Guardian has reported how GDP has exceeded expectations following the vote to leave the European Union. During quarter three of 2016, the UK economy grew by 0.6%, up 0.1% from previous calculations. This growth was primarily driven by the services sector followed by the transport and communications industry. This challenges concerns about the potential impact of Brexit on the services sector which is responsible for 80% of economic activity.
The mergers and acquisition sector continues to boom with yet another merger being approved this week. Reuters reports how Delek Group, a gas and oil exploration unit, will merge with Avner Oil in attempt to reduce costs and attract new investors.
China has handed a hefty fine to General Motors totalling $29 million. This comes following allegations that General Motors have been conducting monopolistic pricing behaviour. The Wall Street Journal explains that, ‘the Shanghai authority overseeing prices, the CCTV report said SAIC General Motors Corp. had reached a monopoly agreement with its dealers, setting a floor on prices of car models including the Cadillac SRX, Chevrolet Trax and Buick Excelle.’
Similarly facing fines for misbehaviour this week is JP Morgan. BBC news reports how the investment bank will be forced to pay the Swiss Competition Commission (Comco) £26 million for ‘rigging benchmark interest rates and related products.’
In light of the US election result, the economic impact continues to be minimal. Reuters reports this week that both consumer confidence and economic growth suggest a robust economy. Growth increased at an annual rate of 3.5%, ‘the strongest since the third quarter of 2014 and followed the second quarter's anemic 1.4 percent pace’. Meanwhile the number of house price sales increased by 16.5%, which is expected to increase again with Trump’s election as he seeks to ‘cut taxes and increase infrastructure spending’ reports Reuters. Will Trump continue to secure a brighter future for the American economy?
Allegations remain that Russia hacked the US elections. The BBC reports how current US President Barack Obama ‘has directed his intelligence agencies to declassify as much as possible of their review into US election hacking.’ In view of these investigations one question is posed, if it transpires that the US elections were hacked in favour of Donald Trump, will there be a re-election?