Weekly Briefing: August 15, 2016
August 15:
German and Russian Foreign Ministers hold talks on Syria, Ukraine
Japan releases preliminary Q2 GDP data: 0.2% expected
August 16:
Indonesian President Widodo gives national address ahead of independence day
British inflation data released
August 17:
Spain’s People’s Party votes on potential coalition deal with Ciudadanos
US Federal Reserve releases minutes of the July meeting
August 18:
China releases housing price index data for July
August 19:
The UN will present a plan to monitor FARC disarmament in Colombia
August 20:
Nothing significant planned
August 21:
Nothing significant
No Date Confirmed:
Sarkozy to announce presidential candidacy
GERMAN AND RUSSIAN DIPLOMATS DISCUSS SYRIA, UKRAINE
On Monday, the German and Russian foreign ministers will meet in the Russian city of Yekaterinburg where talks are expected to focus on the conflicts in Syria and Ukraine.
In the past week, German Foreign Minister Frank-Walter Steinmeier has called for “urgent humanitarian assistance” to be allowed to reach the besieged Syrian city of Aleppo. Russia, which continues to provide air support to the Assad regime in and around Aleppo, has unilaterally announced a daily three-hour ceasefire to allow for aid deliveries to the city’s two million residents. The UN has said Russia’s proposal is “not enough”.
Steinmeier and his Russian counterpart, Sergei Lavrov, are likely to discuss how to avert a potential humanitarian catastrophe in northern Syria. On Friday, Mr Steinmeier told a German newspaper that an “airlift” may be necessary. Arguably, such an operation would need agreement from the Russian air force, which operates in the skies over Aleppo.
The two foreign ministers will also discuss escalating tensions in Ukraine. Over the past week relations between the Kremlin and Ukraine’s pro-Western government have deteriorated significantly, owing to the reported ‘infiltration’ of a group of Ukrainian special forces into Crimea and the subsequent death of an FSB officer. In response, Russia has launched military exercises in the Black Sea and reportedly delivered the highly capable S-400 missile defence system to Crimea.
JAPANESE SECOND-QUARTER GROWTH DATA RELEASED
Preliminary Japanese economic growth figures will be released on Monday, August 15. Japan’s economy grew 0.5 percent in the first quarter of 2016, but economic forecasters expect this rate to have slowed in the second quarter; the majority of those surveyed believe a 0.2 percent expansion is on the cards.
In the long term, Japan’s economic outlook appears to be shaky. In particular, the East Asian giant will suffer from the effects of an ageing population and low consumption. A combination of a low birth rate and a culturally homogenous society that is unwilling or unable to accept significant numbers of migrants means Japan’s labour force may contract in coming decades. This, in turn, will have an effect on government tax revenues, a serious predicament for a country with a 229 percent debt-to-GDP ratio – the highest in the world.
UK INFLATION DATA RELEASED
On Tuesday, the British government will release a report detailing consumer-price growth in June. The announcement will be the first official data released since the Brexit vote on June 23, with many investors and policy makers looking to the figures to assess the state of the British economy.
The British pound fell sharply in the wake of the decision to leave the EU and is yet to recover any of this lost ground. While the Bank of England says the weak pound will increase the cost of imports – therefore helping to boost inflation towards its two percent target – lower domestic consumption and consumer sentiment may counteract any effect felt by currency weakness.
SPAIN’S PEOPLE’S PARTY VOTE ON COALITION
On Wednesday, the leadership of Spain’s centre-right People’s Party (PP) will vote on a package of reforms proposed by Ciudadanos – the centre-left, economically liberal party that won 13.1 percent of the vote in June’s election. If the PP accept the reforms, the party will have taken a significant stride towards the formation of a governing coalition and Spain will be one step closer to ending its nine-month political vacuum.
The reforms put forward by Ciudadanos include electoral reform to make the distribution of seats in Spain’s lower house more proportional to votes. The reforms also seek to address corruption allegations by banning politicians who are under criminal investigation. The fact that some of the PP’s politicians may be barred from office by such a law may make this package hard for the party to swallow.
However, even if the PP do agree to accept Ciudadanos’ reform package, the coalition would still be seven votes short of a majority government. Acting Prime Minister and leader of the PP, Mariano Rajoy, says his party would need to reach an understanding with at least a faction of the Socialist party to form a majority government. Therefore, while a deal with Ciudadanos would represent a significant step towards forming a stable government – and undoubtedly improve Rajoy’s negotiating position vis-à-vis the Socialists – it by no means guarantees a return to effective governance in Spain.
SARKOZY TO ANNOUNCE RUN FOR PRESIDENCY
Former French President Nicholas Sarkozy is expected to announce his intention to again run for the presidency in the coming week, although he may delay this until the last week in August. France is set to hold a presidential election in April or May 2017.
Sarkozy is expected to challenge former Prime Minister Alain Juppé for the nomination of the centre-right party, ‘The Republicans’. Juppé has led the majority of opinion polls in recent months, however growing concerns over terrorism and migration, as well as anti-EU sentiment has begun to shift momentum towards more right-wing candidates. Mr Sarkozy appears to be seeking to capitalise on this public anxiety by positioning himself as an experienced, tough-on-terror candidate. Most recently, the former president has called for tougher counter-terror laws that would allow police to preventatively detain those suspected of plotting attacks, as well as increased electronic monitoring of suspected attackers.
On the far-right, polls show the recent spate of attacks in France have boosted support for Marine Le Pen of the National Front. Le Pen topped the latest first-round poll with 29 percent of those queried in early July saying they would vote for her.
The Republicans will hold their primary contest on November 20.
