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Monday 11th - The BESA Times

Sixty-Eight Edition - Monday, 11th Every week, a complete snapshot of what happened around the world in the past seven day.


Canadian Prime Minister Facing a Political Crisis Over Interference Allegations

Canadian Prime Minister Justin Trudeau is facing potentially the biggest crisis of his political career as him and several from his government are being accused of exerting "sustained and inappropriate" pressure onto the former attorney-general and justice minister Jody Wilson-Raybould to secure a deferred prosecution in a serious corruption case. SNC-Lavalin is a Canada-based engineering and construction company, currently being prosecuted under the allegations that its executives bribed foreign officials in Libya. Ms. Wilson-Raybould reported that she had been pressured by the Prime Minister to settle corruption charges against the company in order to avoid cutting jobs or moving from Montreal, thus she resigned in February. At first, the Prime Minister denied these allegations of inappropriate attempts but later admitted that some efforts to “make the attorney-general see other options” have been made. However, he refused to apologize for this, claiming that he was standing up for Canadian jobs. These jobs are mostly the ones of SNC-Lavalin which employs more than 8,000 people in Quebec, a province crucial to the re-election of Justin Trudeau when the new elections come, in 7 months. Economic statistics pointed at more concerns for Mr. Trudeau as Statistics Canada reported that the real GDP growth shrunk to just 0.4% and the Canadian central bank stating that interest rates, despite being at a ten year high, might have to rise further. With the worsening economic conditions and his “nice guy” image being threatened, Justin Trudeau might run into some difficulties in the upcoming election.


US Trade Deficit Reaches a 10-year High

One of the main selling points of Donald Trump’s campaign was to reduce the large trade imbalance between the US and China. However, according to the Commerce Department, the US trade deficit rose last year by 12.5% hitting a decade high of $621bn in 2018, compared to $552.3bn last year. An increase in people buying foreign consumer goods as well as cars, machinery, and computers caused the jump in imports by 7.5%, reaching $3.1 trillion while exports rose by 6.3% reaching $2.5 trillion, over the course of 2018. Overall, the trade deficit with China reached $419.2bn last year and this might be a big blow to his 2020 election campaign unless he takes action soon. Economists argue that the strong demand of US citizens was enough to overcome the tariffs imposed Mr. Trump, as well as the strength of the US dollar making buying foreign goods cheaper and selling domestic goods more expensive abroad. Administration officials have urged for a revision on the trade policy with China, which will come by the end of March in the form of negotiations between the presidents of the two superpowers


Macron Calls Out for a More United EU

The president of France laid out many potentially radical proposals for deepening EU integration. In an opinion article published in a European newspapers, he addressed the “citizens of Europe” calling for a new “European Renaissance”. It is no coincidence, nor surprise, that this plea comes barely three weeks before the (current) Brexit date and three months before the European elections in May. The tone of the speech was akin to emergency sirens, warning the EU against the danger of Brexit and rising nationalism to the stability of the bloc, while also pushing for a set of proposals for a more integrated EU. Among these ideas were: Penalties or a ban on companies that failed to adhere to environmental norms, protect online data or pay fair taxes, along with new environmental and climate targets; Revisions of the EU’s treaties (resisted many times by the governments of the bloc); Protection of the governments democracies against cyber-attacks; A call to “rethink the Schengen area from scratch” and more.

Surprisingly, the ideas presented here have received support from unexpected sides. Namely, Victor Orban, the Hungarian nationalist premier, and Liviu Dragnea, the most powerful politician in Romania, who are both regular dissidents of the EU, have given their support of these ideas. However, they might hope to use these new proposals to reshape the bloc according to their interests.

Did You Know?

Where you live is one of the main determinants of the probability of transitioning from a low to a high percentile of the income distribution, also known as absolute upward mobility. For example, the percentage of children born in the bottom 20% of the income distribution that transition into the top 20% of the income distribution is 10% in Italy, 11% in Sweden and 8% in America. So, in a way, achieving the “American dream”, going “from rags to riches”, is more likely to happen in Sweden or Italy than America! This difference gets even larger when you take into account different regions within a country, as this percentage is 24.1% in Milano and 5.5% in Palermo, but one should not judge a book only by the absolute upward mobility it provides.


What To Look Out For Next Week

As the hour of Brexit approaches and tensions rise as Theresa May scrambles to reach a deal, we will probably hear more about this. Will it be as bad as everyone says or has everyone overestimated the negative effects? Only time will tell. North Korea seems to be continuing its long-range missile testing by rebuilding a launch facility at Sohae, according to satellite images, despite any progress it has made with the Trump-Kim summit to reduce the number of WMDs in the peninsula. Will there be another summit and will it turn out like the previous ones?





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