World moves towards major economic crisis | Daily News


 

World moves towards major economic crisis

Shelves where disinfectant wipes, toilet tissues, bottled water, flu medicines are usually displayed are nearly empty at a  local store in Sydney, Australia. As fear of the Coronavirus spreads, people are buying above products in abundance.
Shelves where disinfectant wipes, toilet tissues, bottled water, flu medicines are usually displayed are nearly empty at a local store in Sydney, Australia. As fear of the Coronavirus spreads, people are buying above products in abundance.

This week saw rising fears of a coronavirus-driven global economic slowdown after stock markets gave a lukewarm reaction to the emergency cut in US interest rates, which could take the world to a major economic crisis. Data showed that China and Hong Kong came to a virtual standstill in February, and such situations are now taking place in Italy, Iran and South Korea. There are rising concerns of massive spread in India.

At the time of writing there were 96,779 cases worldwide, with 3,308 deaths, and 53,974 recovered.

The World Health Organization warned that panic buying and market manipulation was “rapidly depleting” supplies of protective equipment, world leaders and central banks continued their uncertain efforts to cushion the economic impact of the Covid-19 spread.

Although the US Federal Reserve brought a surprise cut of 0.5% in borrowing costs it had little impact on the US and global economies. Asian markets continued to face difficulties as business and economies were scaling down.

Covid-19 cases continue to rise in the US with deaths now at 9, and more than 150 confirmed infected. The State of California has declared an emergency, and there are increasing fears of a huge epidemic, especially due to the low public health facilities in the US.

India has reported 30 coronavirus cases, and has introduced strong quarantine measures for visitors from affected countries. The rise in cases in India has prompted concerns that the world's second-most populous country could face a serious outbreak of the disease. Prime Minister Modi has decided not to participate in the traditional ‘Holi’ ceremonies that draw large crowds.

As the numbers infected increase in the UK, there are fears that a large outbreak of Covid-19 there could push the UK to the brink of a recession in the coming months. It has been decided that action would include population distancing - such as school closures, greater home working, reducing large gatherings to slow the spread of the disease.

The International Monetary Fund (IMF) will provide $ 50 Billion to help countries address the current crisis. The World Bank also announced a $12bn package to assist countries grappling with the health and economic impacts.

WB president, David Malpass, said there were still “many unknowns” about the virus and “much more” aid might be required. British banks are reportedly preparing emergency loans for companies facing risks being exposed to the crisis.

China, South Korea, Australia, New Zealand and Japan all reported new cases, with 38 more deaths reported in China.

The Covid-19 outbreak continues to have widespread non-economic impacts. Italy, the worst affected in Europe, has decided to close all schools and universities as the virus spreads with increasing deaths. Very strong action is also being taken in Iran, reportedly one of the worst affected countries.

Japan cancelled an upcoming ceremony to commemorate the 2011 triple earthquake, tsunami and nuclear disaster. There are increasing questions whether the planned Olympic Games will be held in Japan in July this year.

The spread of the virus and measures to contain it, including city-wide shutdowns, mass quarantining, social distancing, factory closures and travel restrictions, have disrupted supply chains and contributed to major losses to the retail and service sectors globally, and poses questions on how such a crisis could be prevented.

Israel - Netanyahu gets lead

Benjamin Netanyahu has begun talks to form a government after coming out ahead in Israel’s third election within a year, with the prime minister still short of vital seats for a majority coalition.

Netanyahu’s Likud party is leading with 36 seats, with a total of 59 for his rightwing alliance, and is two short of a 61-seat parliamentary majority. He would only be able to forge an administration by getting rival politicians to join him.

Netanyahu (70) has already gathered allies, including far-right nationalists and Jewish religious party chiefs, in Jerusalem to discuss a plan of action to break the deadlock.

Under Israeli law, Netanyahu will have 28 days to do so or risk the process collapsing, leading to the possibility of a fourth election later this year.

Former military chief Benny Gantz who leads the main opposition to Likud, Blue and White party, has little chances of forming a coalition with much less seats. He has thrice campaigned on an anti-corruption, anti-Netanyahu platform.

Greece - refugee rush

European Union leaders have visited Greece’s border with Turkey to show solidarity with the country as it tries to prevent thousands of migrants from crossing to Europe through Greece. There is increasing tension between Turkey and the EU as Turkey is enabling Syrian refugees there to move to the EU through Greece and Bulgaria.

The EU pledged €700 million in aid to Greece, and gave details of a European intervention force to be deployed in the area to help the Greek authorities. The EU leaders visit came four days after Turkey stopped trying to prevent migrants, many of them from Syria, from reaching the EU – prompting clashes with Greek security forces at the border.

“This border is not only a Greek border but it is also a European border. And I stand here today as a European at your side,” Ursula von der Leyen told the Greek Prime Minister Kyriakos Mitsotakis.

“Turkey is not an enemy and people are not just means to reach a goal. We would all do well to remember both in the days to come. I thank Greece for being our European ‘aspida’,” the Commission president added, using the Greek word for “shield”.

Of new funds offered to Greece, half (€350 million) would be immediately available, while the other half could be requested “as part of an amending budget”. The EU's border agency Frontex is preparing a “rapid border intervention” team in response to a Greek request for help. Von der Leyen said this would provide several patrol vessels, aircraft and 100 border guards at Greece's land and sea borders.

Some humanitarian groups have expressed anger at how Greece and Turkey are dealing with the situation at the border, as Greek authorities said they had thwarted another 1,000 attempted border crossings overnight.

Afghanistan: US action

The US military conducted an air strike against Taliban fighters in Afghanistan, just hours after President Donald Trump said he had a “very good talk” with a leader of the group.

The US signed a deal with the Taliban on Saturday aimed at bringing peace to Afghanistan after years of war. The air strike on Wednesday was in response to Taliban fighters attacking Afghan forces in Helmand province.

The US - Taliban agreement seeks to bring peace to Afghanistan after more than 18 years of conflict. The US and its NATO allies agreed to withdraw all troops within 14 months if the militants upheld the deal.

A Taliban spokesman said it “plans to implement all parts of the agreement one after another to prevent conflict escalation...The opposite side should also remove the obstacles in implementing all parts of the agreement so the way is paved for comprehensive peace and for the Afghans to have their basic rights.”

Wednesday's strike was the first by the US against the Taliban in 11 days, when a reduction in violence agreement began between the two sides in the lead-up to Saturday's pact. The spokesman added that the US was still “committed to peace” but had a responsibility to defend its Afghan partners. He said Afghans and the US had complied with their side of the agreement, while the Taliban appeared intent on “squandering” the opportunity. The current spate of attacks by the Taliban could be seen as an attempt to pressurise the Afghan government into releasing thousands of their prisoners. But Afghan President Ashraf Ghani has refused to agree to this.

Central to the obstacles facing the deal is the disagreement over prisoner swaps, involving some 5,000 Taliban prisoners and 1,000 Afghan security force prisoners to be exchanged by March 10, when talks between the Taliban and the Afghan government are due to start. But Afghan President Ghani said his government had agreed to no such release, and later the Taliban said talks would not take place if their prisoners were not released first.

US Polls - Biden vs Sanders

The Democrat race to contest President Donald Trump at the coming November presidential election has moved to a battle between former vice-president Joe Biden and Senator Bernie Sanders after the Super Tuesday primary polls in several US states. Several runners for the Democratic candidacy have moved out declaring support for Joe Biden, who has emerged a leading contender. The contest is now being ranged between “moderates” backing Joe Biden and youth, women, Latin Americans and many Black American groups that back Bernie Sanders - who calls himself a Democratic Socialist. Biden’s powerful showing in several states on Tuesday propelled him past Sanders in the pledged delegate count, 566 to 501, though the number will change along with the vote totals. It takes 1,991 pledged delegates to win the nomination on the first ballot at Democrats’ summer nominating convention.

Sanders, who could have essentially wrapped up the contest with a commanding Super Tuesday performance, was undeterred by Biden’s surprising surge and their change in fortunes. He is stressing on a policy on Medicare for all, Social Security and fair trade. He is critical of Joe Biden for accepting campaign contributions from billionaires and corporate interests. The increasingly divided contest among Democrats could strengthen the position of Donald Trump, similar to how he won the election in 2016, defeating Hillary Clinton. However, the quick spread of the coronavirus in the US is giving new problems to President Trump, and would also impact the Democratic rivalry in the contest.

 


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