The mouth of a shark
Written by Javier Maquieira, Associate
Edited by Kevin Pringle, Partner
These are days of containment for Europe, and I’m not only referring to the coronavirus outbreak. It all started last week, when Turkey’s president, Recep Tayyip Erdoğan, vowed to open the gates for Syrian refugees heading to the European Union. According to him, the country couldn’t cope with a new wave of migrants, which meant having to break the 2016 deal he had struck with the EU preventing them from entering the bloc. In an address to the parliament on Saturday, following the killing of 33 soldiers in northern Syria, Erdoğan, who had threatened to open the borders in the past, said he had been forced to take the decision after the EU hadn’t “kept its promise” of allocating €25m to share the financial burden of refugees in Turkey. But the Turkish president has also been seeking to pressurise the EU into backing his role in the Syrian conflict. Now that threat has been realised. Since Ankara opened the border with Greece and warned the EU that “hundreds of thousands have crossed, soon we will reach millions”, Kyriakos Mitsotakis, the Greek prime minister, has decided to increase the “level of deterrence at our borders to the maximum” and block any new asylum applications for a month. This move effectively waives the country’s obligation to help asylum seekers, as spelled out in the United Nations 1951 Refugee Convention and required under EU refugee law. As clashes continue at the border, where Greece has strengthened its presence, Greek authorities are also facing an increasing number of refugees attempting to cross the Aegean Sea. The result has been deeply concerning. A young boy died after the boat carrying migrants capsized off the island of Lesbos on Monday, and a video emerged showing Greek coastguard officers apparently trying to overturn another boat at sea. While European leaders such as Austria’s chancellor, Sebastian Kurz, have pledged to protect their own borders if containment proves unsuccessful, the tragedy and stories of devastation and war that explain why thousands of migrants are trying to cross them appears to be taking second place. In the words of British-Somali poet Warsan Shire, “no one leaves home unless home is the mouth of a shark.”
Boris Johnson has said that the spread of Covid-19 in the UK is now “very likely”, adding that a plan to tackle it has already been agreed. The prime minister, whose announcement yesterday came after the number of cases in the country rose by four to 40, has advised people to “go about business as usual”. He has also promised more information on the government’s plans in the coming days and weeks. In related news, the EU has raised the risk of contracting the virus within Europe from moderate to high. Launching a coronavirus response team of commissioners in Brussels, Ursula von der Leyen, the European Commission president, said that the disease was “spreading very fast”, following the latest analysis by the European Centre for Disease Prevention and Control. Meanwhile, the head of the World Health Organisation has said that public health authorities are operating in “uncharted territory” as the number of coronavirus cases worldwide passes 90,000. Democratic presidential candidate Amy Klobuchar has ended her presidential campaign and given her endorsement to former US vice-president Joe Biden ahead of today’s Super Tuesday. It comes hours after mayor Pete Buttigieg, who also supported Biden at the rally, dropped out of the 2020 race to be the Democratic presidential nominee.
Business and economy
The Organisation for Economic Cooperation and Development (OECD) has warned that global economic growth “could halve” in the event of a longer, “more intense” coronavirus outbreak. The institution has forecast growth of 2.4% in 2020, down from 2.9% in November 2019 and its slowest rate since 2009. It also said that the situation would worsen if the disease spread throughout Asia, Europe, and North America. British Airways and Ryanair have announced the cancellation of hundreds of flights between the UK and parts of Europe and the US as a result of the Covid-19 spread. British Airways will drop flights between 16 March and 28 March, including journeys between Gatwick and Italy, France, and Albania; London City flights to and from Italy and Germany; and flights between Heathrow and Italy, France, Austria, Belgium, Germany, Ireland, Switzerland, and New York’s JFK airport. The UK Government has admitted that a comprehensive trade agreement with the US would make the British economy at most 1.06% larger by the middle of the next decade – equivalent to £3.4bn after 15 years. The government had previously predicted that the UK economy would be left 7.6% smaller if the country leaves the EU without a deal, and around 4.9% smaller under a Canada-style agreement.
Columns of note
Rachel Sylvester writes in The Times that ministers won’t be able to implement the UK Government’s plans without the help of the civil service – especially while also handling external crises such as the Covid-19 outbreak. In the particular case of the Home Office, Sylvester sees the resignation of Sir Philip Rutnam as part of a broader culture of fear emanating from No 10 and Dominic Cummings. (£) Writing in The Guardian, Josie Cox argues that start-up overvaluations driven by low interest rates will not last. In her view, many companies that have taken huge amounts of debt will struggle to service it once rates rise, which for larger firms it could lead to their collapse and send shockwaves through the entire economy.
Source: The Times
What happened yesterday?
London's FTSE 100 started the month of March ahead by 1.13% at 6,654.89, following hopes that central bank stimulus could offset ongoing concerns about the impact of Covid-19 on the British economy. The Bank of England said it was working with the Treasury, the Financial Conduct Authority, and international partners “to ensure all necessary steps are taken to protect financial and monetary stability”. In equity markets, British Airways and Iberia parent IAG (-8.24%) remain affected by heavy losses, as investors continued to worry about the impact of the coronavirus on airlines and the travel sector more generally. Cruise operator Carnival (-4.19%) was also in the red, along with budget airline easyJet (-3.45%). Driven by the expectation that the Federal Reserve will cut rates, US stocks recorded solid gains on Monday, with the Dow Jones Industrial Average up 5.09% at 26,703.32; the S&P 4.60% firmer at 3,090.23; and the Nasdaq Composite 4.49% stronger at 8,952.16.
What's happening today?
Finals 4Imprint, Apax Glb, Cairn Homes, Direct Line, Getbusy, Greggs, Hutchison China, Ibstock, Intertek Group, Legal & General, Rotork, Signature Aviat Interims Craneware Dx Plc AGMs Aberforth Smaller Companies Trust Plc Schorder Eur.r Int. economic announcements (10:00) Producer Price Index (EU) (10:00) Unemployment Rate (EU) (20:30) Auto Sales (US)
Did you know?
Adobe has developed a software than can detect Photoshopped images and faces with 99% accuracy.
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