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                             Bad week for Britain!!

BREXIT!!

Markets Dive Downwards!

England Football loss to Iceland! 

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EURO 2016 Football--Surprises!


The 2016 Euro football/soccer championships seem to be all about surprises,
shock, and awe.  France is hosting the tournament which so far has proved anything
but conventional.  

Iceland shocked the world and toppled England.   

Powerhouse Spain was unseated by Italy.

France, Germany and Belgium are in the quarterfinals but not without a fight.  

Poland survived and will now play powerhouse Portugal.  Wales faces Belgium. 

Teams like Hungary, Ireland and Slovakia edged forward throughout the early matches. 

Again we are reminded that teams like Austria, Hungary Northern Ireland, and Wales  are among the oldest football teams in the world predating both FIFA and UEFA associations.  

As the championships approach the Quarter Finals in France, it looks like Footie fans are in for some amazing face-offs.  

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Ukraine Fault-line with Russia still Rumbles

The artillery rumbles like a rolling late Spring storm.  Small arms fire reaches a staccato, only to fall silent just as quickly.  And hapless civilians on both sides of an arbitrary divide endure and suffer as the forgotten slow burner conflict in eastern Ukraine continues far from the headlines but embedded in the acute anxiety of European and U.S. policymakers.

The French Senate has called for a lifting of economic sanctions on Russia which were slapped on Moscow after Russia’s illegal annexation of Crimea two years ago.  Now Military planners in NATO, are running a once unthinkable scenario of major multinational maneuvers aimed at very visibly reinforcing the vulnerable security of Poland and the Baltic states from Vladimir Putin’s political probing.  Meantime the USA remains embroiled in a divisive presidential campaign where foreign policy remains more of a laugh line than a serious focus.

But along the cultural fault-lines which divide Ukraine’s eastern regions bordering Russia, the gritty industrial areas where language, customs and religion are profoundly linked to Moscow’s eastern embrace.  The majority of Ukraine looks westwards towards Europe.

But it is no wonder that in a hyper-nationalist post Soviet polity, that President Putin would press to reintegrate the culturally Russian regions of Ukraine’s east, as well as Crimea.  Moscow’s actions have produced justified fears in the Baltic states that they too may face an inevitable threat to their sovereignty more than 20 years since they broke free from the former Soviet Union.  

There’s genuine reason for concern.  According to  the UN’s  High Commissioner for Human Rights survey, “From mid-April 2014 to 15 May 2016, OHCHR recorded 30,903 casualties in the conflict area in eastern Ukraine, among Ukrainian armed forces, civilians and members of the armed groups.  This includes 9,371 people killed and 21,532 injured.”  

The report adds,  “After two years, the situation in the east of Ukraine remains volatile and

may develop into a ‘frozen conflict’, creating a protracted environment of insecurity and instability; escalate, with dire consequences for civilians living in the conflict- affected area; or move towards sustainable peace through the meaningful implementation of the Minsk Package of Measures. The stakes are high.”  

Yet the same events triggered a slow-burning conflict in which Russia has used its own troops as well as supported and armed unwieldy separatist militias to dismember Ukraine’s territory.  

While openly criticizing both the Ukraine government and the Moscow backed separatist enclaves, the survey clearly states, “In the territories controlled by the armed groups, freedom of expression, including the ability to openly express dissenting views, remained severely restricted.”  Moreover the report adds that in Russian-annexed Crimea,  “residents have witnessed a sharp deterioration of the human rights situation, including the imposition of a new legal framework restrictive of civil liberties, abductions and disappearances, the shutting down of opposition media outlets and the silencing of dissenting voices through the initiation of repressive measures, including abusive criminal proceedings, targeting mainly pro- Ukrainian activists and Crimean Tatar institutions.”

As Vladimir Putin approaches parliamentary elections in the Summer, one wonders if he will make the hyper-nationalist gamble to turn up the heat in eastern Ukraine?  Although relatively weak petroleum prices have put a damper on  Russia’s political maneuverability,  an uptick in the oil price combined with European indifference and  American detachment, could allow for Moscow’s mischief if not wider malevolent moves.      

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Global Growth Lackluster; Governments Oft Clueless

“Economic activity in the world economy remains lackluster, with little prospect for a turnaround in 2016,” cites the gloomy prognosis by the World Economic Situation and Prospects Update for 2016.  The UN survey cautions that weak global growth “continues to linger,”  posing a serious challenge for governments and economies.

World gross domestic product is only expected to grow by 2.4 percent in 2016.  The tepid expansion reflects what the survey calls  “low investment, low commodity prices and financial market turbulence.”  It adds “bleak prospects have been compounded by severe weather related shocks, political challenge and large capital outflows in many developing regions.”

Hardly a sunny forecast, as the world economy is facing severe drought-related agricultural losses from the cyclical El-Nino weather effect as well as major setbacks in commodity prices.

But besides bad weather we see that in the developed economies “the momentum of growth has slowed significantly.”  In the United States GDP growth is expected to reach only 2.2 percent in 2016  but remains fragile.  The survey states, “The revival of business investment in the United States lost momentum last year culminating in a sharp drop in the final quarter of 2015.”

USA job creation numbers remain lackluster too.

Japan still experiences tepid economic conditions with GDP growth a mere 0.5 percent. Despite its lackluster performance last year, Japan’s economy grew impressively at 1.7 percent in the first quarter of this year.  The report warns that should the government increase a consumption tax from 8 to 10 percent,  “Japan could fall back again into recession in 2017.

European Union economies are expected to expand by 1.9 percent this year and 2 percent next year, but here again growth varies widely among the 28 member states with Germany’s economy still the EU locomotive at 1.5 percent growth.

East Asia again gets among the best marks with regional growth pegged at 5.5 percent this year. Mainland China’s economic deceleration has taken its toll;  Beijing’s once dizzying growth rates have tempered to 7.3 in 2014 and 6.4 percent expected this year.   Not only has China’s economy precipitously slowed but the knock on effect has  been felt especially among commodity exporters in Africa and Latin America.

Yet, Mainland China’s trade with the U.S. continues to surge with a $366 billion trade deficit favoring Beijing last year alone!

 Russia continues to stagnate due to the fall in petroleum prices as well as Western economic sanctions slapped on  Moscow over Ukraine.  Russia’s growth in 2015 recorded a  minus 3.7 while this year a minus 1.9 is expected.  Ukraine’s economy is equally projected to suffer this year.

The enthusiasm over what many economists call the BRICS (Brazil, Russia, India, China, South Africa) seems to have dampened as the once vaunted group has weathered notable economic setbacks which have knocked down many of the BRICS.

The report stresses that persistent weakness in demand in developed economies remains a drag on global growth.  Equally the massive debt levels accumulated by government spending in the USA and much of Europe  has served as an deadweight to hinder a robust economic recovery.

The U.S. must revive its economy through entrepreneurism, not more government spending.