Our editors give us a breakdown of this week’s biggest news stories
United Kingdom: Ross Alexander Hutton
According to the Office for National Statistics, the U.K. economy suffered a record annual decline of 9.9% in 2020 as lockdown restrictions curtailed spending. This confirms the full-scale economic impact of the pandemic but the finer-detail of the GDP report is more revealing. Even though, as many are quick to point out, the U.K. avoided a ‘double-dip’ recession in 2020, the real story lies in the months of growth as restrictions were largely eased which Chancellor Rishi Sunak believes shows “some signs of resilience”. Indeed, the Bank of England’s Chief Economist Andy Haldane compared the U.K. economy to a “coiled spring” ready to release large amounts of “pent-up financial energy”. Whilst this notion will support the growth in the spring-summer months, the medium-run consequences of the pandemic on struggling businesses and industries will not be far behind.
Although the economic impact of Brexit may be difficult to untangle from the pandemic in those GDP figures, the immediate complications of implementing post-Brexit trade rules in Northern Ireland are becoming alarmingly clear. To avoid a hard border on the Island of Ireland the so-called ‘Northern Ireland Protocol’ keeps Northern Ireland in the E.U.’s single market for goods unlike the rest of the U.K., causing a de facto border down the Irish sea. This ‘border on paper’ has now emerged as a fundamental sticking point for N.I.-G.B. trade. Difficulties at some ports have hampered the ‘frictionless trade’ and have fuelled “frank but constructive discussion” between the U.K. Government and E.U.
Post-Brexit trading of physical goods is not the only trading issue facing the British Economy: financial trading in the City has taken quite a hit. This week Amsterdam – yes, you read that correctly – was confirmed to have replaced London as the largest financial trading centre in Europe last month. Trading in stocks and derivatives flowing out of London was largely blamed on Brexit as the ‘Christmas Eve Agreement’ effectively meant a no-deal exit for financial services. The city isn’t holding out for a breakthrough on talks to achieve ‘equivalence’ deals which would allow British financial services firms to have freer access to Europe’s financial markets. Rather U.K.-based traders are already searching for alternative ways of trading in the E.U. such as establishing offices in the E.U. this year. With the E.U. benefiting from the current stand-off, movement of trade from London to the E.U. is set to continue.
Europe: Peter Hourston
In an address to the European Parliament, President of the European Commission Ursula von der Leyen admitted that the EU made a “mistake” which she “deeply regretted” when the bloc attempted to impose border controls on the border between Northern Ireland and Ireland. At the end of January the Commission announced that customs measures would be imposed on Covid-19 vaccines exported from the EU to the UK but, against the protocols of the Brexit treaty, neither the UK or Irish Governments were consulted. At the EU Parliament Plenary, Sinn Fein MEP said, “It is unacceptable that the commission didn’t see the portent of destabilising the withdrawal treaty and Good Friday agreement by proposing the use of Article 16.” With increasing criticism of the EU’s vaccine rollout, von der Leyen also admitted that, “We [the EU] were late [on procurement]. We were too optimistic on mass production” but defended the approach for the sake of European unity, arguing that, “It would have been, I think, the end of our community” if some member states received vaccines before others.
Former President of the European Central Bank Mario Draghi was sworn in as Italian Prime Minister this week following confirmation of the support of the Five Star Movement, the largest parliamentary grouping. Draghi’s new government will face a formal confidence motion next week but has already reappointed ministers to key ministries, with Five Star’s Luigi Di Maio staying on as foreign minister. The former prime minister Matteo Renzi, whose party withdrew support for Draghi’s predecessor Giueseppe Conte, told the BBC that “Mario Draghi was the Italian who saved Europe, and I think now he is the European who can save Italy.”
Asia Pacific: Satyajit Mohanan
A 21-year-old environmentalist has been arrested in India after allegedly mobilising support for protesting farmers by sharing a campaign “toolkit” promoted by Swedish activist Greta Thunberg. The leader of the Indian arm of Thunberg’s ‘Friday for Future’ campaign movement, Disha Ravi was arrested in Bangalore on Saturday. Disha’s arrest comes at a time when Indian authorities are investigating the widespread international support for the farmers movement, what they say is an international conspiracy against the Indian government. The young activists arrest are one among the many arrests made by the state against activists, journalists and protesting farmers.
Protests in Myanmar have intensified after the night-time raids conducted to arrest opponents of the military coup.They are wanted under the rarely used charge of “disturbing tranquillity”.The United Nations human rights office said on Friday that more than 350 people had been arrested since the coup.
Malaysia sees its worst year since the 1998 Asian economic crisis. Gross domestic product shrank 3.4% in the fourth quarter from a year earlier, its third straight contraction.The economy contracted 5.6% for all of 2020, its worst performance since 1998.The government said it would gradually reopen the economy even as the country remains under a state of emergency.
Africa & Middle East: Camille Capelle
On Monday, Israeli Prime Minister Netanyahu appeared in court to face the corruption charges, only the second time he has appeared in person since the start of official legal proceedings against him in 2019. He pleaded not guilty in three cases being combined in the trial, going from accepting bribes from international businessmen to manipulation of various media outlets in exchange for favourable business deals or suppression of the competition. Netanyahu is the country’s first PM to stay in office while on trial, although with the election quickly approaching and clear divisions within the party could affect his power base.
Along the Iran-Afghanistan border, hundreds of fuel trucks exploded into an uncontrollable inferno which caused massive damage to local infrastructure as well as injuring many people. Although the cause is not yet known, the environmental disaster left much of the city of Herat without power and led many people to flee at the sight of the dark smoke cloud. Estimates of the damage caused by the explosion are already exceeding $50 million.
Today, Lebanon was able to initiate their national vaccination programme, after the arrival of the first batch of vaccines from abroad. Despite the harsh 24-hour curfew which has been in place in Lebanon for almost a month now, the country was still experiencing a rapid surge in cases which only added to the frustrations caused by delays in finalising the deals with various pharma companies. Lebanon is expecting to receive vaccines for almost half of its population over the coming year.
North America: Amelia Brown
Donald Trump was acquitted of inciting the Capitol Hill riot after the Senate voted 57-43 against conviction. Only six Republican senators had voted to even allow Trump to be tried after leaving office, so the Democrats didn’t have much hope of getting a ⅔ majority for conviction. The acquittal also means there will not be a vote as to whether to bar Trump from holding public office again or not, which the Democrats could have gotten a simple majority on.
The CDC released new guidelines for opening up schools again after about 50% of students are still not in person at all. The roadmap includes steps for schools in low prevalence areas to open with masks, handwashing, and ventilation. Under the criteria though 90% of schools still wouldn’t be recommended to move from online only, but the CDC aimed to get some more in person at least once a week.
Canadian Prime Minister Justin Trudeau announced on Friday that travellers coming into Canada starting on February 22nd would have to quarantine in a hotel for at least 72 hours while they wait for results from a PCR test. Trudeau estimated a $2,000 cost for the stay, with those testing positive going to a quarantine facility so the government can continue tracking the new variants. Some conservatives are pushing for exemptions for ‘compassion’ reasons, such as those who had to travel abroad for medical or family reasons, calling for them to be allowed to quarantine at home and get tested.
Latin America: Leo Le Borgne
Colombian president Ivan Duque has announced that Venezuelan refugees will be given a temporary protection status. In conjunction with the United Nations High Commissioner for Refugees Filippo Grandi, the UN Refugee Agency, and the International Organisation for Migration (IOM), it was decided that these refugees would be granted a ten-year legal status to work in Colombia. With an estimated 4.6 million Venezuelans fleeing from their home country to the rest of Latin America, more than 1.7 million of those refugees have found a safe haven in Colombia, despite the many job-related and economic obstacles that they faced under a previously uncertain legal status. The incoming policy will provide greater stability and certainty for Venezuelan refugees, who often fall prey to smugglers and armed criminal organisations.
Ecuador’s presidential election is in full swing, with three main candidates contesting in the political arena. Left-wing Andrés Arauz is currently leading with nearly 33% of the vote, but was short of the 40% needed to win the election outright, meaning that there will have to be a run-off. The two other candidates, environmentalist and indigenous activist Yaku Pérez and centre-right businessman and politician Guillermo Lasso are fighting for second place, which will determine who will take on Arauz in the second round of voting. With Pérez at 19.38% and Lasso edging at 19.74%, the stakes have never been higher. A partial recount is underway to determine who will ultimately claim second place. The current political climate is tense, with Arauz having to carefully manage his relationship with his mentor and former-president Rafael Correa, who is wanted for arrest on grounds of corruption.
Science & Technology: Paula Plechschmidt
Australia’s competition commission into the way Big Tech interact with the media has turned into a large-scale showdown between Google and the country. Australia’s goal is to make Google pay for news that appears in their search or that is shared across their platforms. This is seen as totally unworkable by Google as it would force them to set up commercial agreements with every news organization and therefore they have announced that “If this version of the code were to become law, it would give us no real choice but to stop making Google Search available in Australia,“. Publishers have said for a long time that Google unfairly profits off showing headlines from their stories in the search engine, however there had never been the sort of backing Australia now is providing.
Nvidia’s acquisition of Arm faces further scrutiny with the US Federal Trade Commission opening a review into the deal. It is expected that this is only the start of a series of investigations that the commission will open against Big Tech. Allegedly the investigators have asked for comments from companies that have already registered a complaint against the deal or that could stand to lose a lot. One of the challengers of this deal is Qualcomm, the biggest maker of mobile communication chips, telling not only the Federal Trade commission but also its counterparts in Europe, the UK and China that it has serious concerns about this deal.
O2 has been fined £10m for overcharging its customers. A system error had caused customers leaving O2 to be double-charged on final fees. This affecter more than 140,000 people and caused a discrepancy in fees totaling to £2.4m. The telecoms regulator Ofcom who lead this investigation say that O2 knew about “issues with its billing process in 2011 already and still failed to fix them.
Business: Tom Woods
Big-four accountancy KPMG’s chairman Bill Michael has been forced to leave his post after making comments about lockdown restrictions and unconscious bias. On a call on Monday with over 1500 people from the financial services consultancy team, Michael told employees to “stop moaning” about work conditions during the pandemic and dismissed unconscious bias as “complete and utter crap”. Other reports have surfaced claiming that Michael, who has been with the firm for 30 years, boasted about having broken government restrictions to meet clients for coffee. The comments have caused particular outrage as KPMG, which has a reported 227,000 employees, already has a reputation for being a toxic work environment where targets are placed above the mental wellbeing of workers and leadership is not representative of society. With the departure of Michael, the firm has appointed Bina Mehta and Mary O’Connor to take over his former roles as chairman and senior partner respectively, the first time women have held these positions at KPMG. The company is currently organising a formal investigation into Michael’s comments and institutional bias conducted by law firm Linklaters.
Britain’s Supreme Court ruled this week that Shell can be sued by people in two small Nigerian communities over alleged oil spills on their land. The two communities of Bille and Ogale claim to have experienced years of oil pollution issues as a result of the actions of the Petroleum Development Company of Nigeria (SPDC), a subsidiary of Royal Dutch Shell. The pollution has contaminated drinking water and made fishing, the majority occupation of the communities’ 50,000 inhabitants, practically impossible. In its ruling on Friday, the Supreme Court overturned the decision of a lower Court of Appeal, who it said had “materially erred” in its decision. Mike Karipko, an attorney with Friends of the Earth International, said the case had given his organisation motivation to push on and pursue similar cases opposing large corporations. Shell responded to the decision by claiming that the decision should have been heard in a court in Nigeria as that is where the damage took place and that the spills were the result of “oil theft, illegal oil refining and sabotage of pipelines” rather than their own negligence.