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The News that Shaped the Month #5

News Recap: World of Economics – by Daniel Koudijs Over the past month, just as worries about China began to lose some of their clout, another familiar headache appeared: plummeting banks’ shares. Reminiscent of the crisis years, the European bank stock index fell drastically; close to 2012 levels when European banks were in deep trouble. Mario Draghi and the CEO of Deutsche Bank swiftly moved to remind the world of how things are different this time. They are right: the recent drop in bank shares largely follows from the trend of slowing global growth and the spreading climate of negative interest rates. Increased capital reserves and regulations have made banks of all sizes more apt to deal with negative shocks. Only in Italy do the banking problems for now seem a real issue. The Italian government appears indecisive between a bad-debt banking system and protecting individual savers. Yet aside from the troubled banking stocks, markets on both sides of the Atlantic started to recover from their traumatic start of the year. Reasons for this can be found in the surging oil prices (as oil producing countries have agreed on a deal) and there is increased evidence of the US showing robust growth. Inflation is likely to follow soon, just as Ms. Yellen expected and just why she lifted rates in the first place. But in the current fragile situation, inflation and in turn higher interest rates is exactly what nobody wants. Ms. Yellen must be starting to wish she was wrong. ‘No’ to the €500 note – by Michael van Rhee Several European finance ministers recently requested the European Central Bank to investigate the possibility of abolishing the €500 note, nicknamed ‘Bin Laden’ by the populace, as the presence and appearance of the notes are well-known, but the notes themselves are very difficult to find. The note is barely used in everyday life, with most companies rejecting it altogether, and it can’t be found in ATM’s either. Still, the total worth of €500 notes in circulation is over €300 billion, which is over 30% of the value of all the cash money. A million euros of €500 notes can easily be transported in a small briefcase — after all, you only need a mere 2,000 of them — and so it’s very sensitive to criminal or even terrorist activity. (Maybe ‘Bin Laden’ wasn’t such a bad nickname after all, huh?) This is also because it’s one of the most valuable notes of all the currencies worldwide. To compare: the most valuable dollar note is the $100 note, which is not even worth 100 euros in today’s world. Mario Draghi, President of the European Central Bank, has agreed to investigate the possibility. Re-Appearance of the U.S-Cuba Commercial Flights – by Magdalena Wiśniewska On Tuesday morning, February the 16th, in iconic Havana’s Hotel Nacional, USA and Cuba have signed an agreement, which allows resuming the commercial air traffic between the countries for the first time in half a century. It is predicted that the connections will begin in fall and will count five as many flights as there are charters at the moment, reaching 110 flights daily. According to the U.S. Transportation Secretary Anthony Fox ‘It was a historic day in the relationship between Cuba and the U.S.” and ‘It represents a critically important milestone in the U.S. effort to engage with Cuba.’ Adel Rodriguez, Cuban Minister of Transport, has called it a ‘new era’. Indeed, this event constitutes the most momentous development in U.S-Cuban trade relations since 2014. News Recap: World of Business – by Michel Mijlof The most important thing that happened in the business environment in the Netherlands is the definite bankruptcy of the huge warehouse V&D. On the last day of the last year, the 31st of December 2015, the V&D was already declared bankrupt but there were a lot of efforts for a second beginning. Unfortunately, they failed. With this bankruptcy, a major part of the Dutch history in retail business will disappear. Furthermore, the Dutch stock market is again rising a little bit. At the end of January, the AEX was at around 380 points but now it is already above 400 points (414 points, to be precise). Another business change is that Ziggo and Vodafone, two major telecommunication businesses, started a joint venture in the Netherlands. With this joint venture, they will become a big competition for KPN, biggest Dutch telecommunication company. Also, the CEO of the International Monetary Fund (IMF), Christine Lagarde, has been re-elected for another tenure. She was the only candidate but everyone sees her to be a good person to lead the IMF because she also played a major role within the IMF after the big financial crisis in 2008 and after Ben Bernanke quit the job of being the Chairman of the Federal Reserve of the United States. At least, there is the deal with the European Union and the United Kingdom. It is a political issue but it could have a lot of impact on the economy if the United Kingdom leaves the European Union. Vodafone and Ziggo Merger – by Yoeri Min

On the 16th of February, Vodafone the Netherlands and Ziggo announced they will merge and continue as one company. The new company will provide both a fixed and mobile network to customers, and, therefore, will be able to compete with KPN, T-Mobile and Tele2. According to Ed Achterberg, analyst at Telecompaper, the merger will most likely have an impact on the number of jobs at both companies. Companies could utilize each other’s infrastructure and IT-systems, while combining the marketing and website. The joint-venture will most likely save 3.5 billion Euros. The merger between Vodafone and Ziggo must be approved by the European Commission, which is expected to happen at the end of 2016. News Recap: World of Politics – by Raffaele Di Carlo

Europe is still prey to the refugee crisis, consequences of which are shaking the very foundations and values of the European Union. Especially alarming are the measures taken by the EU to assign specific quotas of refugees to each member country: the result is that countries unused to such vast flows of immigration, such as the Scandinavian countries , are left in utter havoc. After the dramatic events of Cologne in January, more episodes of violence are taking place in Sweden and Austria, where the people are starting to cry for a strong reaction.

In the meantime, Pope Francis, in the spirit of the Jubilee of Mercy, announced that the Catholic Church will soon revisit its position on hot topics such as contraception and abortion. “Abortion is a crime, it is like murder”, he stated firmly. “Preventing such a crime, for example via contraception, can be considered as a lesser evil.” He also took advantage of the situation to question Donald Trump’s Christianity: the idea of building a wall, is the argument, goes against the Christian values of brotherhood. The presidential candidate scolded the head of the Catholic Church, urging him to stay out of political matters. The debate caused very contrasting reactions throughout the Christian world. UK PM in EU Special Status Deal – by Antoine Steen UK Prime Minister David Cameron has struck a deal with EU leaders granting Britain a special status within the Union. Cameron sought the freedom to limit welfare benefits for citizens of other EU countries living in the UK. In the end he got a compromise – an “emergency brake” on such payments for a seven-year period. He also won protections for the City from new Eurozone regulations and an exemption from the EU’s ‘ever closer union’ ideal of further integration. Cameron was able to secure the deal with the threat of “Brexit” – he had promised voters a referendum on Britain’s membership in the union. The deal allows him to return to England and claim a victory, however, the British tabloids have slammed it. And within the governing Conservative Party there remain divisions, with several senior ministers expected to back calls for Britain to leave the union. Cold War in Making – by Artur Rymer Between the 12th and the 14th February, for the 52nd time, the German city of Munich hosted its annual Munich Security Conference. Each year, several hundred of leaders and senior officials from around the world gather there to discuss threats to security that affect the globe. This February, the main point of discussion was the Syrian Conflict. Although there have been many attempts before to end the war in Syria, they were all unsuccessful due to the fact that Western countries support the rebels fighting against Syrian President, Bashar al-Assad, while Russia backs the President’s regime. The issue is straining diplomatic relations between the West and Russia, already cold after the Ukrainian Crisis. Already in the very beginning of the Conference, Russian Prime Minister, Dmitry Medvedev, said that Western countries are bringing Europe towards another Cold War. The response from politicians from the other side was that if there is anyone who is bringing Europe towards Cold War, it is Russia. The animosities have once again proved too strong and no solution to the Syrian conflict has been reached, despite ambitious plans to end fightings within a week. As a result, the Conference has been called a huge disappointment by many and it seems that putting an end to the war will not happen any time soon. This is bad news not only for the EU Member States, who are anticipating another influx of refugees in the spring but, more importantly, also for millions of Syrians who suffer, while big powers are unable to reach an agreement. Building Bridges Across Christendom – by Ioana Nicolau Pope Francis and Russian Orthodox Patriarch Kirill of Moscow and All Russia met in Havana, Cuba on Friday, the 12th of February. The historic encounter consisted of a discussion which mainly regarded the persecution of Christians in the Middle East. The two religious leaders addressed the need of the global community coming together in order to stop this Christian genocide. The meeting was received as a surprise by the whole world. Nevertheless, it has been speculated that the encounter had been prepared for almost three years. The discussion culminated with a joint declaration signed by both the Pope and the Russian Patriarch. Beside the horrible crimes that happen in the Middle East, Pope Francis and Patriarch Kirill prove to be frightened by the destruction of religious values and the emerging modern pillars of the contemporary society. Specifically, they perceive abortion, euthanasia, same-sex marriages and biomedical reproduction as challenges that are sometimes decaying human ethics and implicitly, Christianity. They pledge for the need of finding a “middle way” that would not hurt the freedom of people, as well as religious dogmas. Both religious leaders recognize the need for Orthodox and Catholic Christians joining their forces in order to end this whole phenomenon, regarded as a Christianity crisis.   In the end, the encounter is regarded as a milestone for the road towards global acceptance and cooperation. Since the Great Schism of 1054, which involved the separation of the Catholic and Eastern Orthodox Churches, numerous attempts for establishing this type of meeting have been made, but none was successful. Zika Virus – by Olga Kowalska The epidemic of Zika virus is recently spreading across the continents. The virus, which is transmitted by mosquitoes (Aedes aegypti), was discovered in Uganda in 1947. The recent outbreak has its epicentre in Latin America and the Caribbean, with particularly high number of infected people in Brazil. The main symptoms of Zika are similar to those of flu (fever, rash, joint pain, headache etc.), but are usually quite mild. It has been reported that actually only about 1 in 5 people infected with the virus become ill. However, the Zika virus can be dangerous for pregnant women, since the virus is believed to cause microcephaly: children are born with small heads and often damaged brains. Since there is no vaccination against Zika and there is no medication against microcephaly, the problem is really severe. Brazil is trying to stop the spread of the virus before The 2016 Summer Olympics, but the fight against it seems to be very challenging.


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