Germans still prefer cash over Credit Cards

For the complete report go to : http://m.dw.com/en/times-change-but-german-obsession-with-cash-endures/a-43718626

EU: Overview - What is the Europe 2020 strategy about?

The Europe 2020 strategy is the EU's agenda for growth and jobs for the current decade. It emphasises smart, sustainable and inclusive growth in order to improve Europe's competitiveness and productivity and underpin a sustainable social market economy.

To reach this objective, the EU has adopted targets to be reached by 2020 in five areas:

• Employment
• Research & Development
• Climate change & energy
• Education
• Poverty and social exclusion

 What are the key targets to be reached by 2020?

The headline targets related to the strategy's key objectives at the EU level cover:

• Employment:
  > 75% of the population aged 20 to 64 years to be employed;

• Research & Development:
  > 3% of GDP to be invested in the R&D sector;

• Climate change & energy: 
  > Greenhouse gas emissions to be reduced by 20% compared to 1990
  > Share of renewable energy sources in final energy consumption to be increased to 20%
  > Energy efficiency to be improved by 20%

• Education: 
  > Share of early school leavers to be reduced under 10%
  > At least 40% of 30 to 34 years old to have completed tertiary or equivalent education

• Poverty and social exclusion: 
  > At least 20 million people fewer at risk of poverty or social exclusion.

The EU-level targets have been translated into  national targets in each EU country, reflecting different situations and circumstances.

Ireland - Artificial Intelligence: Ireland committed to digitisation of EU economy, says minister

Ireland’s commitment to the digitisation of the EU economy is to be raised during a high-level meeting in Brussels on Monday.

Minister for Trade Pat Breen will also discuss issues relating to EU competitiveness, including the 25th anniversary of the single market and EU industrial policy when he meets European commissioner for digital economy and society, Mariya Gabriel later.

The Clare TD said: “Digitisation is increasing on a vast scale and Ireland continues to be regarded as one of the EU’s digital front runners.

“We fully support the overall DSM (digital single market) agenda and the Government sees obvious synergies between digital policy initiatives at EU level and national policy.

“In particular, we want to underline the benefits to small and medium enterprises that the DSM will bring in terms of market access and opportunities for growth.

“In helping to progress the DSM, Ireland will continue to strive for outcomes which are pro-trade, pro-enterprise and pro-innovation.”

The DSM is one in which the free movement of people, services and capital is ensured, and where the individuals and businesses can seamlessly access and exercise online activities under conditions of fair competition, and a high level of consumer and personal data protection, irrespective of their nationality or place of residence.

The strategy was endorsed by the European Council in June 2015.
Meanwhile, artificial intelligence will be the central theme when Europe’s nine digital front runner countries meet in Dublin in May.

Mr Breen added: “Artificial Intelligence (AI) is an exciting development that is shaping a new reality for Irish businesses and creating significant new opportunities for innovation across all industries.
“The meeting in May will be an opportunity for both the international AI dimension and the Irish AI ecosystem to be showcased.”

Read more:Ireland committed to digitisation of EU economy, says minister - BelfastTelegraph.co.uk 

Italy: Elections: Why the Italian elections are no test for the European Union - by Cas Mudde

This Sunday, more than 30 million Italians will go to the polls to elect a new legislature and, indirectly, a government. It will be the first major European election of 2018, after a somewhat confusing and inconsistent pattern of elections in 2017, and the international media is sparing few cliches.

Almost no journalist can resist making references to Italy’s almost inherent “political instability”, referring to the many “political crises” and national elections and governments the country has had in recent history – even though Italy had one government more and held one election less than the (allegedly stable) Netherlands in the 21st century.

In the runup to the 2018 Italian elections, the international coverage is dominated by stories that present the usual Italian tropes in all possible combinations. As always, Italy is “on the brink” of political chaos or worse. Article after article covers topics such as mafia and immigration, the rise of fascism, the risk of political violence, or the threat of populism to Italian democracy and the European Union. Don’t get me wrong, many stories are factually correct, even if they often overstate the relevance of their topic. 

Read more: Why the Italian elections are no test for the European Union | Cas Mudde | Opinion | The Guardian

The Netherlands: Hollywood in the Netherlands - by Manja van Kesteren

With its iconic canals and canal houses, windmills and fields of tulips, Dutch scenery can make for a pretty picture.

Therefore, it’s no surprise that Hollywood has stopped by a couple of times over the years.

Here are some Hollywood blockbusters that have been (partially) filmed in the Netherlands:

Girl with a Pearl Earring (2003)
Ocean’s Twelve (2004)
The Fault in Our Stars (2014)
Dunkirk (2017)
The Hitman’s Bodyguard (2017)

To promote film production in the Netherlands, and to attract big Hollywood productions to the country, the Netherlands Film Production Incentive was introduced in 2014. To qualify for a 35 percent cash rebate, feature films must incur at least 75 percent of their production costs within the Netherlands, and they are required to spend 100.000 euros on local production costs as well.

Since its introductio the incentive has contributed to over 200 projects, including 98 film productions from abroad. Thanks to the program, Dunkirk received a sum of 1,2 million USD, and the Hitman’s Bodyguard took home 960.000 USD.

Read more and see the film clips:The Netherlands: Hollywood in the Netherlands - by Manja van Kesteren 

Brexit: Europe will be big Brexit winner, says German economics minister-by Guy Chazan and Claire Jones

Europe will be the big winner of Brexit, Germany’s economics minister said, as UK-headquartered companies move to the continent and Emmanuel Macron’s reform push leads to a new “spirit of revival” that will benefit the whole of the EU.

 Brigitte Zypries made the prediction on Wednesday as she revealed the German economy was growing at a faster rate than previously estimated. The government now expects gross domestic product growth of 2 per cent this year, up from a forecast of 1.5 per cent, as Europe’s economic powerhouse continues to charge ahead.

The economy will also grow by 1.9 per cent in 2018, she said. Ms Zypries said Germany’s economic boom had “gained momentum and become more broad-based”.

The economy would “also remain on a growth trajectory in the years to come”. “Germany is doing well and the next government must ensure that it continues to do so,” she said at a press conference in Berlin.

The global economic recovery had stimulated German exports and led to an increase in private sector investment: incomes were rising and unemployment falling. The number of people in work had grown by 2.5m during the past four years. 

Read more: Europe will be big Brexit winner, says German economics minister

The Netherlands - Economy - Individual Wealth: More millionaires in the Netherlands - by Mina Solanki

According to a report by Statistics Netherlands (CBS) based on asset figures from 2007 to 2015, the number of millionaire households in the Netherlands rose by 500 to 106.000 in 2015. The report did not look at the value of the millionaire’s residence or mortgage debt.

Of the 106.000 millionaire households, two-thirds reported employment as their main source of income. The majority of millionaires work in the agricultural industry, financial services, trade, specialised business services, or in the care industry.

About 80 percent of millionaires are entrepreneurs in one way or another, with half taking the title of managing director or major shareholder and a third being self-employed.

Coming in first with the highest percentage, 19 percent of millionaire breadwinners work in the agricultural industry, half of which are active in dairy farming businesses. Many people in this industry are self-employed, and often their money is tied up in their business, for example, in land and equipment.

Financial services came second as the industry in which the most millionaires work.

In 2015, there were 94 Dutch municipalities with 2,5 percent or more residents who had millionaire status. However, in 5 municipalities, 6 percent or more of the residents were millionaires.

The greatest number of millionaires lived in Laren, followed by Bloemendaal, Blaricum, Wassenaar and Rozendaal.

Dutch Millionaires are often married, with 71 percent having tied the knot compared to 45 percent of non-millionaires. Few, 7 percent, had also gone through a divorce, as opposed to 14 percent of non-millionaires.

Read more: More millionaires in the Netherlands

Denmark in the top ten of world’s best counties to be an immigrant Nordic neighbour Sweden in first place - by by Ray W

Denmark and its Nordic cousins are some of the best countries in the world to be an immigrant, according to a study complied by U.S. News and World Report.

The study looked at measures such as economic stability, income equality and job markets to create its list, using a survey of the opinions of more than 21,000 people from all walks of life.

Nordic Sweep: Sweden was number one, but Norway, Finland and Denmark also took places in the top 10, largely due to favourable perceptions about their economies and commitment to income equality.

Read more: Denmark in the top ten of world’s best counties to be an immigrant Nordic neighbour Sweden in first place

Brexit Britain: falling pound, border fears and a frightened workforce

A year after Britain voted to leave the EU the pound is at least ten percent weaker, the economy is shaky and may be headed for a downturn and Theresa May’s minority government is weak after losing its majority in parliament after June’s general election.

There’s also the worrying possibility that a hard border between Ireland and Northern Ireland could unravel the Good Friday Peace Agreement.

The uncertainty is infectious.

In her first policy position after the two year long Brexit negotiations started earlier this month, May set out her plan for the rights of the three million or so EU citizens living in the UK. They will only qualify for “settled” status after five consecutive years living in Britain.

But this has not gone far enough to reassure many EU officials including Guy Verhofstadt, the Brexit co-ordinator for the European Parliament.

A report by the consultancy firm Deloitte released on June 27th suggests that 47 percent of highly skilled EU workers are now considering leaving Britain.

One of them is Joana Ferreira, a dentist who works in a private practice on the outskirts of London, and who arrived from Portugal four and a half years ago.

“I’m just worried about the living conditions, really,” said Ferreira. “Am I going to be able to work? Am I going to get a normal salary, like everyone? Am I going to be kicked out of the country? I don’t know, nobody knows!”

Joana and her husband have a three year old daughter who was born in Britain and they had planned for her to grow up in the country.

“I just feel very insecure of what’s going to happen in the future. I really want to know more so I can plan. Because at the moment, I cannot plan anything in my life,” she said.

Joana’s employer Smita Mehra, the managing director of The Neem Tree practice, is also worried as 60 percent of the staff at the four practices she manages are non-British EU nationals.

Read more: Brexit Britain: falling pound, border fears and a frightened workforce | Euronews

The Netherlands: Quarter of IT firms in the Netherlands have staff shortages

One in four information technology firms in the Netherlands say their production has been down since April because they are short of staff, the national statistics office CBS said on Tuesday.

The IT sector has been most affected by the tight jobs market since the first quarter of 2015 when one out of every nine IT companies had staffing problems. Until then the mining sector (gas, oil) had the biggest need for employees.

There were 12,300 job vacancies in the IT sector in the first quarter of 2017, equating to 6.3% of the national total, the CBS said. The catering sector (hotels, restaurants, cafés) report an 11.3% shortage, industry 9.9% and construction 7.6%.


Read more: Quarter of IT firms in the Netherlands have staff shortages - DutchNews.nl

German Economy: Only the World Can Stop Germany as Business Climate Hits Record - by Carolynn Look

tt seems the sky is the limit for Germany’s economy.

Business confidence -- logging its fifth consecutive increase -- jumped to the highest since 1991 this month, underpinning optimism by the Bundesbank that the upswing in Europe’s largest economy is set to continue.

With domestic demand supported by a buoyant labor market, risks to growth stem almost exclusively from global forces.

“Sentiment among German businesses is jubilant,” Ifo President Clemens Fuest said in a statement. “Germany’s economy is performing very strongly.”

Read more: Only the World Can Stop Germany as Business Climate Hits Record - Bloomberg

EU - when will the EU sit up and smell the roses when it comes to its relations with the US - by RM

EU-US Relations on collision course

When President Trump sits around the table with his policy advisors you can be sure that the EU is not on top of the agenda.

Just compare last weekends state visit of Chinese President Xi Jinping to the Trump Estate in Palm Beach Florida to the "sober, cold shoulder" reception by Trump given to European Heads of State, Angela Merkel and Theresa May in Washington DC.

That probably says it all as to how President Trump ranks Europe in his thought process.

Trump has also said that he trusts German Chancellor Angela Merkel and Russian President Vladimir Putin equally. Does that imply that the United States will pursue a policy of equidistance between the EU and the Kremlin?

Everything is possible .

It is not an idle question. Trump has made it obvious that established partnerships, alliances, rules, and protocols mean little to him. In his tweets, he rants about the media, attacks independent judges, targets individuals and companies, and belittles international organizations.

But even though the US under Trump is now a very unattractive ally for Europe, writing off the US as a European partner – which some in Europe would like to do sooner rather than later – would probably be a major mistake.

In the meantime, maybe Mr. Trump and his advisors should start to read-up on how important the EU and the US are to  each others economic well being.

• Total US investment in the EU is three times higher than in all of Asia.
• EU investment in the US is around eight times the amount of EU investment in India and China together.
• EU and US investments are the real driver of this EU-US  transatlantic relationship, contributing to growth and jobs on both sides of the Atlantic. It is estimated that a third of the trade across the Atlantic actually consists of intra-company transfers.
• The transatlantic relationship also defines the shape of the global economy as a whole. Either the EU or the US is the largest trade and investment partner for almost all other countries in the global economy.
• The EU and the US economies account together for about half the entire world GDP and for nearly a third of world trade flows.

Nevertheless, it is also very important for the EU to realize, if they haven't already, that they can't continue to be a "lackey" of the US, having to say "how high", whenever  the US says "jump". .

But first,  before issuing an avalanche of "directives", the EU Commission, which has been running a pretty colorless "operation", should set itself a primary goal, which is to get all the member countries of the EU running in the same direction.This is not the case at present.

They can do this by initiating some basic changes as to how the EU operates, in order to make it more homogeneous and people friendly including:

* Having the President of the EU Commission, who is presently appointed,  instead elected by popular vote in all EU member states.
* Develop an independent foreign policy for the EU, which is not aligned with any other country's foreign policy.
* Develop an independent EU Military defense force, which includes a central EU command and is not aligned with any other foreign military force.  

It is  no secret that NATO (which includes many EU member states)  and which was initially intended, after WW2, to protect Europe from Soviet aggression during the cold that followed, was gradually expanded by the US into a US government policy controlled global strike force.

Its purpose being to support US foreign policy in military operations around the world.

For the past past 16 years, however, mainly focusing on Afghanistan and the Middle East.

So far the results of these NATO military operations in Afghanistan and the Middle East (Iraq, Syria, Libya) have been a complete disaster.

In the meantime, NATO and US military campaigns in the Middle East over these past 16 years have also resulted in hundreds of thousands of people killed, created millions of displaced persons, flooding the EU and Turkey with refugees,and created major economic and social hardship.

Last but not least, the turmoil surrounding these wars  in the Middle East also resulted in the birth of the so-called Islamic State, which in reality is an assortment of former Iraqi soldiers, disturbed Islamic radicals and young indoctrinated Islamic fanatics from Europe and other parts of the world who have made terrorism their trade mark around the globe.   

Unfortunately, there is very little time left for the EU to change cours in this turbulent world..

The EU  must be warned, however, that if they fall apart into smaller states again, these individual states will become "chopped meat" in serving US, Russian and Chinese interests and ambitions to obtain global dominance

If BREXIT wasn't a wake-up call, Mr. Trumps foreign policy "tap-dance" with Russia and China certainly is a signal for the EU Commission to sit up straight and smell the roses.

EU-Digest

US Economy:Renewable Energy Industry Creates Jobs 12 Times Faster Than Rest of US

The solar and wind industries are each creating jobs at a rate 12 times faster than that of the rest of the U.S. economy, according to a new report.

The study, published by the Environmental Defense Fund's (EDF) Climate Corps program, says that solar and wind jobs have grown at rates of about 20% annually in recent years, and sustainability now collectively represents four to four and a half million jobs in the U.S., up from 3.4 million in 2011.

The renewable energy sector has seen rapid growth over recent years, driven largely by significant reductions in manufacturing and installation costs. Building developers and owners have been fueled by state and local building efficiency policies and incentives, the report explains.

But, these gains are in contrast to Trump's support for fossil fuel production, his climate change denial and his belief that renewable energy is a "bad investment".

 "Trump's current approach is basically ignoring an entire industry that has grown up over the last 10 years or so and is quite robust," Liz Delaney, program director at EDF Climate Corps, told Business Insider.

Note EU-Digest President Trump, however, who does not believe in scientifically proven evidence that Carbon Dioxide Emissions caused by fossil fuels and a variety of other factors are the main cause for global warming, has today signed several sweeping executive orders taking aim at a number of his predecessor's climate policies,  Thereby turning back the clock of American advantages in the alternative energy sector for many years. It will also jeopardize America's current role in international efforts to confront climate change.

Renewable Energy Industry:  Creates Jobs 12 Times Faster Than Rest of US | Fortune.com

EU-Canada relations: In counter to Trump, Trudeau says EU and Canada must lead the world economy - by Dan Alexe

Canadian prime minister Justin Trudeau addressed the European Parliament in Strasbourg, marking the adoption by MEPs of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union.

“Make no mistake about it, this is an important moment,” he said.

Trudeau said the whole world benefited from a strong European Union and that the bloc and his country needed to lead the international economy in challenging times.

With the passage of their trade deal, Canada and the European Union offer a counter to Trump, who has withdrawn from the Trans-Pacific Partnership (TPP) and wants to rework the North American Free Trade Agreement.

Trudeau told the European Parliament that the Union was an unprecedented model for peaceful cooperation in a speech that marked his distance from both the United States under new President Donald Trump, who has questioned the value and future of the bloc, and from Britain, which has voted to leave it.

On Wednesday the European Parliament approved CETA, with 58 % of members voting to adopt the deal.

The final vote saw most of the members representing Europe’s centrist parties voting in favour, with opposition from members representing left-leaning socialist and Green as well as right-wing, nationalist parties.

Of the 695 members present in the 751-seat legislature, 408 voted in favor, 254 against and 33 abstained.

For Canada the Comprehensive Economic and Trade Agreement (CETA) is important to reduce its reliance on the neighboring United States as an export market.
 

For the EU, it is a first trade pact with a G7 country and a success to hail after months of protests at a time when the bloc’s credibility has taken a beating from Britain’s vote last June to leave.

Trudeau will next travel to Berlin, where he will meet with German President Joachim Gauck and Chancellor Angela Merkel. 

Read more: In counter to Trump, Trudeau says EU and Canada must lead the world economy

The Netherlands - banking industry: ABN Amro to slash below board level management from 100 to 40

ABN Amro is planning to reduce the number of senior managers from around 100 to just 40 and is shaking up its executive board to make the bank ‘more client-focused, agile and efficient’.

Among those leaving is Chris Vogelzang, who had been tipped to take over when Gerrit Zalm stood down as chief executive. The managerial jobs to go will run across the level below the executive committee.

The 40 jobs remaining ‘will have a stronger involvement in the strategic direction and the leadership of the bank than before,’ the bank said in a statement. The composition of the ‘top 40’ will be reviewed every year.

‘Over the past few years, the number of bank staff has been reduced considerably but there has been no change in the number of senior managers,’ chief executive Kees van Dijkhuizen said. T

he bank will also have a slimmed down executive board made up of CEO Van Dijkhuizen, chief risk officer Wietze Reehoorn and a new financial boss who has yet to be appointed.

Read more: ABN Amro to slash below board level management from 100 to 40 - DutchNews.nl

EU Forecast 2017; Three trends that will continue hurting the eurozone in 2017 – by Ilaria Maselli

In a referendum earlier this month, Italian voters dealt a knockout blow to their prime minister’s proposed reform agenda. He declared his resignation that very night.

Disdain for the current crop of politicians extends throughout Europe, with uncertainty surrounding the 2017 elections in the Netherland (March), France (May), and Germany (September.

On top of all of this comes the start of the Brexit negotiation, presumably in March. How will Theresa May manage to ensure that companies but not people retain the freedom of movement? For the rest of the EU, more than an economic challenge, the negotiation poses an existential challenge: does the eurozone need more or less integration to fix its economy and address the uncertainty? And if the answer is “more” what are the policies needed? Eurobonds? A common unemployment insurance scheme? More redistribution across regions?

This lack of confidence almost always puts the brakes on economic growth, since it pushes companies to postpone hiring and delay investment decisions. Moreover, recent research reveals that the most productive companies – those that have the most to lose from taking risks – demonstrate the strongest wait-and-see attitude. A protracted state of uncertainty can therefore permanently affect the productivity, innovation and growth performance of even the best companies.

Read more; Three trends that will continue hurting the eurozone in 2017 –

EU Refugee Crises: Why Are EU Politicians Never Mentioning US Is To Blame For EU Refugee Crises? - by A. Bacevich

The Middle East: From Bad To Worse

‘If you break it, you own it.” Colin Powell’s Pottery Barn Rule, warning George W. Bush of the consequences of invading Iraq, turned out to be dead wrong.

Make that half wrong. Bush broke it — “it” being a swath of the greater Middle East. But the U.S. adamantly refuses to accept anything like ownership of the consequences stemming from Bush’s recklessly misguided acts and you will never hear a European politician openly admit to it.

Not least among those consequences is the crisis that finds refugees fleeing Syria, Iraq, Afghanistan and other parts of the Islamic world in search of asylum in the West. The European nations most directly affected have greeted this wave with more hostility than hospitality — Germany, for a time, at least offering a notable exception.

For its part, the U.S. has responded with pronounced indifference. In a gesture of undisguised tokenism, the Obama administration has announced it will admit a grand total of 10,000 Syrians — one-eightieth the number that Germany has agreed to accept this year alone.

No doubt proximity plays a part in explaining the contrast between German and U.S. attitudes. Viewed from Wichita or Walla Walla, the plight of those who hand themselves over to human traffickers in hopes of crossing the Mediterranean plays out at a great distance.

Syria is what Neville Chamberlain would have described as a faraway country of which Americans know nothing (and care less). And Iraq and Afghanistan are faraway countries that most Americans have come to regret knowing.

Such attitudes may be understandable. They are also unconscionable.

To attribute the refugee crisis to any single cause would be misleading. A laundry list has contributed: historical and sectarian divisions within the region; the legacy of European colonialism; the absence of anything even approximating enlightened local leadership able to satisfy the aspirations of people tired of corruption, economic stagnation, and authoritarian rule; the appeal — inexplicable to Westerners — of violent Islamic radicalism. All play a role.

USA: The Creator Of The George Bush Refugee Crises 

Yet when it comes to why this fragile structure collapsed just now we can point to a single explanation — the cascading after-effects of a decision made by Bush during the spring of 2002 to embrace a doctrine of preventative war.

The previous autumn, U.S. forces toppled the government of Afghanistan, punishing the Taliban for giving sanctuary to those who plotted the 9/11 attacks. Bush effectively abandoned Afghanistan to its fate and set out to topple another regime, one that had no involvement whatsoever in 9/11.

For Bush, going after Saddam Hussein’s Iraq formed part of a larger strategy. He and his lieutenants fancied that destroying the old order in the greater Middle East would position the U.S. to create a more amenable new order. Back in 1991, after a previous Iraq encounter, Bush’s father had glimpsed a “new world order.” Now a decade later, the son set out to transform the father’s vision into reality.

The administration called this its Freedom Agenda, which would begin in Iraq but find further application throughout the greater Middle East. Coercion rather than persuasion held the key to its implementation, its plausibility resting on unstoppable military power. For Bush’s inner circle, including Dick Cheney, Condoleezza Rice, Donald Rumsfeld and Paul Wolfowitz (but not Powell), victory was foreordained.

They miscalculated. The unsettled (but largely ignored) condition of Afghanistan after the fall of the Taliban already hinted at the extent of that miscalculation. The chaos that descended upon Iraq as a direct result of the U.S. invasion affirmed it. The Freedom Agenda made it as far as Baghdad and there it died.

That Saddam was a brutal tyrant is a given. We need not mourn his departure. Yet while he ruled he at least kept a lid on things. Bush blew off that lid, naively expecting liberal democracy or at least deference to American authority to emerge. Instead, “liberating” Iraq produced conditions conducive to the violent radicalism today threatening to envelop the region.

The Islamic State offers but one manifestation of this phenomenon. Were it not for Bush’s invasion of Iraq, ISIL would not exist — that’s a fact. Responsibility for precipitating the rise of this vile movement rests squarely with Washington.

So rather than cluck over the reluctance of Greeks, Serbs, Hungarians and others to open their borders to those fleeing from the mess the U.S. played such a large part in creating, Americans would do better to engage in acts of contrition.

On the 10th anniversary of Hurricane Katrina, former president Bush visited New Orleans, implicitly acknowledging that his administration’s response to that disaster just might have fallen a bit short. It was a handsome gesture. A similar gesture is in order toward the masses fleeing the region into Turkey and Europe.

It’s never too late to say to say you’re sorry. 

Note EU-Digest: as to our own "whimpy" EU politicians, who are supporting these totally failed US Middle East Policies, they ask no questions. 

They continue backing this madness with costly military assistance from the air and on the ground, financed by taxpayers money. 

Why are European Politicians not coming to their senses and develop their own independent foreign policies based on the real needs of the EU.

After all, as the saying goes, "charity begins at home" . 

Read more:  - by Andrew Bacevich The George W. Bush refugees – POLITICO

SAUDI ARABIA: Women ñot driving in Saudi Arabia hurts the Saudi Arabia economy

Prince Alwaleed says women driving ban hurts Saudi economy - http://www.bbc.co.uk/news/business-38157565.

For full report click here

Turkey's economy spiraling down as risk indicators growing for the country

Are Erdogan's undemocratic actions taking their toll?

Credit default swaps are a major indicator measuring country risks, denoting the insurance premium on money invested in a country’s government bonds. The higher the credit default swaps, the higher the country risk.

According to economic sources such as Reuters and Bloomberg, Turkey’s credit default swaps reached 250 in October, the second highest among emerging economies after Brazil with 266. South Africa is third, almost neck and neck with Turkey, followed by Russia, whose risk premium has been on the decline, falling to 218 in October.

Turkey’s risk premium has fluctuated over the years. When the global financial crisis erupted in 2008, for instance, it shot up to 321, while falling to 167 in 2010, when economic growth gathered steam. With the recent decline in economic growth, the risk premium has climbed up again, reaching the current level of 250.

Another widely monitored risk indicator is the grade a country receives from credit rating agencies. Two of the top three agencies watched by investors around the world — Standard and Poor’s and Moody’s — cut Turkey’s sovereign credit rating to non-investment grades in July and September respectively, infuriating Ankara and leaving Fitch as the only major agency that keeps Turkey on investment grade.

Downgraded ratings especially sway the movement of “hot money” or short-term investments in stock market shares and government bonds. These types of external funds have become quite important for Turkey, accounting for a portfolio investment stock of between $40 billion and $42 billion.

Pension funds, in particular, heed closely the assessments of credit rating agencies, pulling out from countries downgraded to non-investment level. And indeed, the Turkish Central Bank’s data points to net capital outflows in the wake of the latest downgrades.

The flight of foreign capital was then followed by the Turkish lira tumbling against the dollar. The greenback, which traded for 2.94 liras before the Moody’s move, has climbed up to 3.11 liras in the ensuing weeks, and seems unlikely to retreat from these levels. Given the country’s bulky external debt stock and the significant share of short-term debt it includes, the appreciation of the dollar on such a scale is not something the Turkish economy can easily digest.

 For indebted entities, a more expensive dollar means their debt has now increased in terms of the Turkish lira. And when it comes to imports, which amount to about $200 billion per year, the dollar’s appreciation means an increasing cost for imported inputs, including machinery and equipment, and thus a cost-push inflation.

In its 2017-19 medium-term economic program, the government tacitly estimates the average dollar-lira parity for 2016 at 2.95, but the trend has already surpassed its projection in the first 10 months of the year. The average parity stood at 2.93 in the first half of the year, while reaching 3.00 in the second half so far. A downward trend seems highly unlikely in November and December, meaning the average for the whole year would be no less than 3.00.

This, in turn, would equal to a yearly increase of nearly 10%, given that the average parity was 2.73 in 2015. According to the program, the government projects a consumer inflation rate of 7.5% for 2016, and if this materializes, the increase in the dollar-lira parity would exceed the inflation rate as well.

When it comes to economic growth, the program projects the rate at 3.2% for 2016 and 4.4% for 2017.

The target for next year depends largely on the inflow of foreign capital, something that the program itself admits by projecting that domestic savings would not exceed 13% or 14% of gross domestic product, meaning that the funds needed for investment could be secured only externally. And this brings up the key question: Will the expected inflow of capital materialize? How will Turkey attract foreign funds to stimulate growth while its risk premium is on the rise, coupled with a “non-investment” grade by credit rating agencies?

Turkey’s prevailing conditions and its prospects for 2017 signal heightening rather than easing risks. Economic vulnerabilities are growing, with only a 0.1% increase in investments this year. Atop the investment drought, net external demand falls short of leveraging growth, compounded by rapid declines in domestic demand, the result of growing political and geopolitical risks affecting consumers.

Swelling housing stocks have caused particular concern, leading the government to cut the value added tax on housing sales by 10 percentage points last month at the expense of losing budget revenues. Yet, the construction and housing sector — the driving force of the economy in recent years — appears headed to new bottlenecks in demand.

Rising geopolitical risks are an important factor driving the decline in domestic demand, the backbone of economic growth. Turkey's interventions in Syria and Iraq have painted the picture of a country at war, deterring both foreign tourists and investors. The turmoil in the Middle East and Ankara’s ongoing confrontation with Kurdish actors both at home and abroad represent a major component in the risk factor. The choice of a security-based policy rather than dialogue and negotiations on the Kurdish issue is, no doubt, pushing up the country risk.

In sum, the policies that manage the Turkish economy, already relegated to the “non-investment” league, are bound to heighten rather than lower the risk factors in the coming period. And a meaningful rate hike by the US Federal Reserve in December would intensify the flight of foreign capital from Turkey, further escalating the risks.

Read more: Risk indicators growing for Turkish economy

Britain: British views on Migration Classing With Those of The EU

Theresa May is driving a wedge between the UK and the EU on migration http://flip.it/m8gUBr