In two years of writing the Daily Briefing, I’ve regularly covered the various trials and tribulations of the world’s most prominent leaders as they navigate the rollercoaster of their respective premierships and presidencies.
The one person who has been the exception to the rule is Angela Merkel. And the reason the German chancellor has avoided appearing with anywhere near the same frequency as her peers is quite simple: she has hardly put a foot wrong in her thirteen years in power. However, there have been signs recently that the women dubbed the ‘Empress of Europe’ is losing her grip on both the country and continent that she has - metaphorically - reigned over since 2005.
Despite only reaching the agreement back in February that led to Merkel securing a fourth term in office, disagreements over Germany’s immigration laws have brought the Social Democratic Party and her Christian Democratic Union to the brink of dissolving their coalition.
In a move to crank up even more pressure on the chancellor, and perhaps as a means to justify his own hard-line stance at home, Donald Trump took to Twitter yesterday to assert that Merkel’s liberal stance on migration had caused crime to rise in Germany and the situation was “rocking the already tenuous Berlin coalition,” a claim the chancellor hit back at.
The Economist’s Jeremy Cliffe calculates that Merkel has two weeks to find a solution to her domestic difficulties, and has even sketched a rather intricate graph that charts the various pressure points and consequences that the chancellor must face down over the next fortnight.
If Merkel has seen her position weaken at home, she is also finding that she may no longer find solace in the affairs of the EU, an arena in which she has proved formidable for more than a decade. Following a four-hour bilateral meeting with French president Emmanuel Macron yesterday, she conceded to his longstanding demand for a budget for the eurozone, rewriting the way the euro will operate in future, as well as exploring measures that would develop closer co-ordination of foreign and defence policy and initiatives to tackle the aforementioned migration crisis on an EU-level.
However, Merkel showed that she’s not ready to surrender her vision on what the EU should look like, forcing the French president to compromise on the budget’s ultimate objective, governance and size.
Yesterday’s meeting provided an intriguing precursor to next week’s EU summit. The other leaders joining them in Brussels will no doubt have learned yesterday that Merkel still has plenty of fight left in her. And another thing - that they should stay clear of calling the French president ‘Manu’ when they meet him.
The US has withdrawn from the UN Human Rights Council, citing that the body is guilty of “shameless hypocrisy” that “enables human rights abuses by absolving wrongdoers through silence”. Nikki Haley, the country’s ambassador to the UN, said that the US would “continue to lead” on human rights and would be happy to rejoin the body it joined in 2009 were it to reform.
Canada has passed a landmark law that legalises the recreational use of marijuana nationwide. The Cannabis Act, which controls and regulates how the drug can be grown, distributed, and sold, passed its final hurdle on Tuesday. Canadians will be able to buy and consume cannabis legally as early as this September.
Jeremy Fleming, the director of GCHQ, has outlined how British intelligence has saved European lives, making an unprecedented intervention in the UK’s dispute with Brussels over security services following Brexit. Jeremy Fleming said he was confident that Britain and the rest of Europe will continue to work in partnership after the UK leaves the bloc.
Business & Economy
MPs have been warned that the £12 billion merger of J Sainsbury and Asda could “inescapably and powerfully” affect British farmers and smaller suppliers. Lord Haskins, the former chairman of Northern Foods, has said that the two retailers must avoid the unintended consequences of the pricing pressure being passed further down the chain and commit to buying from British farmers first and not reopening negotiations with small and medium-sized suppliers in the year after the merger gets the go-ahead.
The Ministry of Defence has handed a new contract to Capita to run military fire and rescue services, despite giving them the highest possible risk rating following an internal assessment. The document, dated 7 June, showed that Capita scored 10/10 for risk and had a ‘health score’ of 3/100, indicating it may be “vulnerable and should be viewed with care”. The new deal is estimated to be worth £500m over 10 years, which will see the company take over 69 defence fire stations worldwide.
Rival car firms Volkswagen and Ford are exploring the possibility of jointly developing a range of commercial vehicles. The ‘strategic alliance’ is aimed at boosting the competitiveness of both companies and would explore a number of joint projects.
General Electric has dropped out of the Dow Jones Industrial Average after more than a century, a result that illustrates the company’s declining fortunes and a changing economic environment. Walgreens Boots Alliance will take GE’s place on 26 June.
What happened yesterday?
UK stocks had a particularly difficult day yesterday thanks in part to domestic corporate news and the wider global selloff prompted by heightening fears over a trade war between China and the US.
The FTSE 100 ended the day down 0.4% at 7,603 points, while the mid-cap FTSE 250 index fell by double at 0.8%.
The headline retail news came when Debenhams issued a profit warning for the third time in six months, citing that increased competitor discounting and a weakening in key markets had caused a slump in performance. The news caused stocks in the department store to fall by 10%.
It was another tough day for the retail sector more generally, with Footasylum posting a mammoth 52% drop in share price following disappointing full-year revenue figures. A profit warning from McCarthy & Stone, the UK's biggest builder of homes for retirees, saw its shares fall by 17%. It was a rather better afternoon for Ferguson, with the world's largest distributor of plumbing and heating products posting a 17.1% rise in quarterly profit, sending its shares 1.9% higher.
Across the pond, an escalation in the US-China trade dispute saw the Dow Jones half its gains over this year wiped out as it was down 339.21 points, or 1.36%, at 24,648.26. This is perhaps best illustrated in the share movement of Boeing, the US’s single largest exporter to China, as it fell 3.2% at the close. The S&P 500 and Nasdaq were both down too.
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Columns of Note
On the subject of the escalating trade war between the US and China, the FT’s George Magnus says that Donald Trump is correct to punish China for bad intellectual property practices and technology abuses. However, he says thattariffs are a contentious and damaging instrument to use to tackle the issue. He outlines four ways as to why tariffs are the wrong mechanism, including the consequence that it will harm the US and the reality that it is unclear they will result in a change in Chinese behaviour towards trade.
Writing in The Times, Daniel Finkelstein says that giving parliament a meaningful vote on the outcome of Brexit negotiations may actually pave the way for a hard Brexit. Finkelstein goes against the conventional view and believes that the more control MPs have over the deal, the greater the chance the UK will leave without a deal as, to his mind, the popular thinking ignores the powers of the other countries in the EU, is naive about the position of the Labour Party and underestimates the strength and will of the supporters of a hard Brexit.
Did you know?
In 2008, South Korea’s Constitutional Court ruled that only the visually impaired can be licensed masseurs in the country, upholding a law set up in 1912 - when Korea was under Japanese colonial rule – that guaranteed blind people a livelihood.
House of Commons
Prime Minister’s Question Time
Ten Minute Rule Motion
Armed Forces Representative Body – Martin Docherty-Hughes
Consideration of Lords message
European Union (Withdrawal) Bill
House of Lords
Proportion of mental health treatment funded by the NHS nationally as against local funding - Lord Cotter
Risks to the creative sector as a result of Brexit. - Baroness Neville-Rolfe
Attacks on NHS staff - Lord Clark of Windermere
Continued roll out of Universal Credit - Baroness Sherlock
Courts and Tribunals (Judiciary and Functions of Staff) Bill [HL] - Second reading - Lord Keen of Elie
Health and Sport
Scottish Labour Party Debate: Review of Government FOI Handling and Record Keeping
Scottish Labour Party Debate: Access to Vital Medicines
House of Commons
Digital, Culture, Media and Sport
Business Questions to the Leader of the House
House of Lords
Introducing an annual celebration of the anniversary of the arrival of the MV Windrush on 22 June 1948 - Baroness Berridge
Government support and representations to the organisers and Turkish authorities about the Pride March and celebrations in Istanbul in June 2018 - Lord Scriven
Benefits of yoga for obese school children - Lord Brooke of Alverthorpe
Applications to prescribe cannabis based medicines
Implications for the UKs future trade relations following the failure to reach agreement at the G7 Summit in Canada. - Baroness McIntosh of Pickering
First Minister's Questions
Scottish Government Debate; World Refugee Day: Supporting People to Settle in Scotland