With the global economy back on a more stable footing, the focus of policy-makers is shifting towards creating a more inclusive and sustainable economy. Indeed, for the future of financial markets to be bright, leaders must embrace structural reforms including social and environmental policies, placing sustainability at the core.
This long-term perspective is enabled by a more upbeat short-term outlook – global economic growth has improved dramatically in recent months. First, the completion of phase one of the United States-China trade deal has boosted confidence. Second, global central banks are pursuing accommodative policy in a synchronized way. Third, there has been a bottoming out in the trade and industrial outlook.
“Most of the major economies look a lot better today than they did just three months ago,” said Kristalina Georgieva, Managing Director of the International Monetary Fund. Nevertheless, the IMF has reduced its forecast of global GDP growth to an anaemic 3.3% (with central bank stimulus underwriting around 0.5% of that growth).
Clouding the outlook are ongoing trade frictions, most notably between the US and China. “Trade truce is not the same as trade peace,” she stressed.
Framing trade in terms of war and peace is not helpful, countered Steven Mnuchin, the US Treasury Secretary. “Instead we are focused on free, fair and balanced trade,” he said. Whether you like or dislike tariffs, we wouldn’t have these trade deals without them, he added. Looking ahead, he said the Trump administration is focused on implementing phase one and has not yet set any deadline for phase two of the trade negotiations. The US has also recently commenced talks with the United Kingdom on a bilateral trade agreement.
Sajid Javid, the UK Chancellor of the Exchequer, said the newly elected UK government will be one of the most pro-growth and pro-business ever. “We are passionate believers in free trade,” he said, adding that trade is a key driver of growth and job creation, and lowered consumer prices.
Axel A. Weber, Chairman of the Board of Directors of UBS, was more circumspect. “Phase one of the trade deal was a welcome break – but it was not a complete breakthrough,” he said. An air pocket in growth in the first half of the year can’t be ruled out as a result of the Fed on standby and delayed effects of tariffs. To offset any coming temporary weakness, he emphasized the need for a strong fiscal response rather than relying on monetary policy, which he said has “maxed out”.
“There are several countries in Europe that have room to manoeuvre on the fiscal front,” he said, including additional spending and tax cuts. Over the longer term, he stressed the need to keep sight of the tremendous benefits of free trade, which have underpinned decades of growing prosperity and global economic integration.
Coronavirus: Commission boosts budget for repatriation flights and rescEU stockpile
European Commission has proposed to make €75 million from the EU budget available to help Member States repatriate EU nationals and to increase the budget of the RescEU medical stockpile.
Commissioner Johannes Hahn, in charge of the EU budget, said: “Today’s measure is yet another illustration of how the EU budget can add value when and where needed the most. It is also an illustration of European solidarity and cooperation at its best.”
Commissioner for Crisis Management, Janez Lenarčič, said: “The safe return of our citizens is a priority. We are doing all we can to ensure they are reunited with their families as soon as possible during these difficult times. I would like to thank Member States for their efforts during this process. Our Emergency Response Coordination Centre continues working 24/7 with Member States in order to meet their requests.”
Thanks to repatriation flights organised through the Union Civil Protection Mechanism and co-financed by the EU, 2,312 people have been already repatriated to Europe from China, Japan, the U.S., Morocco, Tunisia, Georgia, the Philippines and Cabo Verde since the beginning of the outbreak. More than 80 further repatriation flights are planned in the coming days.
Under the EU Civil Protection Mechanism, the EU contributes to the costs of repatriation flights that carry nationals of more than one Member State, based on a principle of solidarity.
This European Commission proposal will increase the total budget of the first ever rescEU stockpile of medical equipment (ventilators, protective masks and essential medical gear) to €80 million.
The Commission is putting forward a draft amending budget – a proposal to reorganise part of the EU spending for the year in line with the latest priorities – to secure funding for these operations.
The draft amending budget also foresees:
– €350 million of migration management assistance to Greece, to add to the extra €350 million emergency assistance already being deployed, in line with the commitment of President von der Leyen during her visit to Greece;
– €3.6 million for the the European Centre for Disease Prevention and Control to enhance the capacity to identify, assess and communicate threats to human health from communicable diseases, and in particular to increase the expert capacity in the light of the coronavirus crisis;
– €100 million to help Albania recover from the devastating earthquake on 26 November 2019, part of the €115 million Commission pledge and thetotal pledge of €1.15 billion;
– €3.3 million additional funding for the European Public Prosecutors’ Office (EPPO) to boost its 2020 budget. The money will, for example, enable EPPO to recruit more quickly qualified staff and to buy IT equipment to start processing the first cases. Together with case-management support for EPPO mobilised already earlier this year, EPPO’s total funding increase for 2020 is therefore at 48%.
The European Parliament and the Council are now invited to approve the budgetary changes as quickly as possible, to make sure the money can go where the needs are the most pressing.
Celebrate your love for the ocean, virtually
Remote diving is the new remote working.
Schools, events and activities in so much of the world have come to a standstill in the wake of COVID-19, with little or no movement recommended. But that does not mean we cannot still enjoy the world and mysteries that abound below and above its surface.
The Ocean Agency, a partner of the United Nations Environment Programme, is inviting parents and their little ones to experience the ocean and its astounding life forms from the comfort of their homes through a little armchair travel.
Get inspired and engaged with virtual dives, expeditions and ocean quizzes about the fascinating underwater world in a click on your phone or laptop.
Discover coral reefs—some of the Earth’s most diverse ecosystems, full of color, life and mystery—and why they are vanishing at an unprecedented rate due to climate change, pollution and other destructive human activities. Find out why corals are glowing and what this means, not only for marine life, but also for our planet through the “Adventure behind Chasing Coral”, the Voyager story that features the glowing corals phenomenon.
Who is your kindred reef species? Discover and make your own photo morph to share on social media here.
Get more details about coral reefs, which a quarter of all marine life calls home, and meet some of the ocean’s most captivating creatures through the Google Earth Voyager. It is available on desktop, laptop, iPhone and iPad. Download the Google Earth App to dive in to explore the fascinating underwater world, including remnants of World War II as they stand today.
Take an excursion and encounter marine animals, manmade coral reefs and explore shipwrecks using Google Expeditions, available on iPhone and iPad only.
Explore much more here: https://theoceanagency.org/oceanedu
IEA support Luxembourg’s ambitious energy transition goals
Luxembourg is targeting a sharp reduction in emissions by 2030, but new measures are needed to boost investment in renewables and energy efficiency, new IEA report says.
The International Energy Agency released its latest in-depth review of Luxembourg’s energy policies today, welcoming the country’s ambitions to shift to a low-carbon economy.
Luxembourg has shown positive signs in its efforts to move ahead with its clean energy transition, according to the report. While the country has enjoyed robust economic and population growth, its energy demand and greenhouse gas emissions have declined for much of the past decade, until they started to rise again in 2016, due to increased fuel sales to trucks in transit. The share of renewables in its energy supply has doubled since 2008.
“The Luxembourg government is committed to the goals of the Paris Agreement and has adopted ambitious energy sector targets, including reducing its greenhouse gas emissions by as much as 55% by 2030,” said Dr Fatih Birol, the IEA’s Executive Director. “The IEA is ready to support the government’s efforts to achieve these goals, starting with the recommendations contained within this report.”
The report notes that Luxembourg faces challenges in achieving its energy objectives. The country’s energy supply is dominated by fossil fuels, and carbon dioxide emissions are rising since 2016. This trend is driven by higher fuel consumption in the transport sector, mostly from fuel sales to international freight trucks and commuters.
“It is encouraging that the government has embraced an electric vehicle initiative with the intention of reducing greenhouse gas emissions and fuel imports”, Dr Birol said. The initiative is targeting the deployment of 800 public charging stations for electric vehicles by 2020. The aim is for 49% of all vehicles registered in Luxembourg and 100% of the national bus fleet to be electric by 2030. These goals are supported by subsidies for electric vehicles, major investments to increase the level and quality of electrified public transport, the introduction of free use of almost all forms of public transport in March 2020, and gradual increases in excise duties on diesel and gasoline. The report calls on the government to evaluate how much existing transport policies contribute to its energy sector targets and formulate a set of coherent measures to achieve a sustained reduction in fuel demand.
Luxembourg has the highest share of electricity imports among IEA member countries, with imports covering nearly 90% of electricity demand in 2018. Luxembourg expects its electricity demand to rise as a result of a growing population and economy and the increasing electrification of the transport and heat sectors.
The IEA report notes that Luxembourg is undertaking actions on several fronts to ensure a secure supply of electricity. The country is aiming to increase domestic electricity generation to cover one-third of national demand by 2030, mostly from solar PV and wind. Luxembourg is also actively cooperating with neighbouring countries on energy security and is planning to strengthen its electricity grid to support additional imports and domestic renewable generation. The report recommends that infrastructure plans and processes should be aligned with renewable energy deployment and should facilitate smart grid technologies such as demand‑side response, batteries and other energy storage options.
Luxembourg has generous support programmes for energy efficiency and renewable energy, two of the pillars of clean energy transitions. However, the IEA report finds that the country’s low taxes on energy represent a barrier to the investments needed in energy efficiency and renewables to meet the government’s targets. The report calls for the gradual introduction of carbon pricing, which if done wisely, could stimulate the behavioural changes and investments required for the transition to a low-carbon energy system. The government has announced a plan to introduce a carbon price in 2021.
“I strongly believe that both policy and regulatory reforms can help Luxembourg achieve a cost-efficient, equitable and sustainable pathway to meeting its ambitious energy transition goals,” said Dr Birol.
Because of the exceptional situation resulting from the COVID-19 coronavirus epidemic, the IEA and the government of Luxembourg agreed to launch the report online rather than via a press conference.
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