The story of Spain’s December 2015 general election was fragmentation. I made the case myself here. Spain’s historic two main parties – the centre-right PP and the centre-left PSOE – fell to just above a combined 50% of the vote in that election.
EU countries agreed last night a set of common anti-avoidance principles for corporate taxation, incorporating the OECD’s Base Erosion and Profit Shifting principles into law. This is seen by many as a watershed for co-operation on the design and base of business taxes, going far beyond earlier commitments to exchange information and co-operate in the enforcement of tax rulings.
While a lot has been written and said about the impact of Brexit on EU member states (and we have offered our own assessment), less attention has been paid to Turkey. One of the few statements came last week from the head of the Turkish-British Business Council, Remzi Gür, who said that the country would not suffer any commercial or strategic losses if the UK left the EU. This might be an overly optimistic assessment, however.
That is the headline you did not read last week, but in many ways it should have been. The focus of analysts has naturally been on when the Federal Open Markets Committee – the group that sets US monetary policy – will next raise interest rates, following the first rise in seven years last December. For now, the Fed is on hold, with expectations falling of another increase when it next meets in July, particularly after disappointing jobs figures in May. But in sharp contrast to this picture of inactivity, the Fed has been steadily revising down its forecast for longer term rates. This tells us much about the future prospects for the US – and global – economies.
We now have two all-but-certain US Presidential candidates. For all their manifest differences, they have one thing in common: neither has warmly endorsed the Dodd-Frank post-crisis framework for banks. So we might ask where either candidate might go for ideas on what to do to it. Three possible answers this week.
When the guests of the St Petersburg International Economic Forum (SPIEF) land at Pulkovo airport the first thing they see are the huge advertising posters of the US-sanctioned Bank Rossiya alongside with numerous adverts of familiar Western brands – from Total and Mercedes to Coca Cola and Pepsi. Indeed this year’s ‘Russian Davos’ was largely a question of talk business, think sanctions.
Another ‘what if’ Brexit case study yesterday. ESMA has finally announced that the Chicago Mercantile Exchange (CME) has been recognised as a qualified central counterparty for EU banks and investment firms. This means that EU counterparties can use the CME to clear derivatives trades and in doing so meet their EU obligations under the European Market Infrastructure Regulation without incurring much the higher capital charges for using non-qualified CCPs. Large EU-based banks are subject to the EMIR clearing obligation from June 21.
Friday saw the close of nominations to be Labour’s candidate for the new posts of metropolitan mayors of Greater Manchester, West Midlands, and Liverpool City Region. The choice by an important Labour figure such as former Secretary of State Andy Burnham to throw his hat into the ring for Mayor of Greater Manchester reflects the authority and influence that these new positions are expected to carry, not only in their respective regions, but also within the Labour Party and the broader national policy landscape.
Mexican trade negotiators are in Brussels today for the first round of negotiations to upgrade the fifteen-year-old EU-Mexico FTA. The 2000 EU-Mexico agreement was one of the first ‘modern’ (translation: “we agreed to talk about services and investment”) FTAs the EU ever signed, and one of the very few FTAs it has ever managed to sign with one of the larger emerging economies (the other is the EU-South Korea FTA).
Last week’s Global Status Report from the Renewable Energy Policy Network for the 21st Century (REN21) makes for striking reading. In 2015 global new investment in renewable energy hit a new record at over $285 billion. Of that figure $265 billion went into renewable power, more than double the amount invested in new coal and gas-fired power generation. Led by China, India and Brazil, for the first time ever investment in renewable power in developing countries exceeded that in developed countries. The figures demonstrate the accelerating growth in decarbonised power generation around the world.