The European Union has grown in confidence during its handling of Brexit, its member nations standing firm as the UK moves towards its departure from the EU. But the mood is so buoyant that there is a danger that the forthcoming split will be mishandled. Should this happen, Europe is in line to suffer an unexpected economic shock.
And, as we all know, financial injuries hurt the most when unanticipated or self-inflicted.
Foisting an unpalatable settlement on the UK is the surest way to end up with an acrimonious divorce. It would take bravery to argue that the consequences of a no-deal Brexit could be worse for Europe than for Britain. However, it is more of a lose-lose scenario than many appreciate.
It is true that the optics of Britain’s negotiations with the EU have been terrible. The latest EU summit provided several images that underline the resolve of the 27 remaining members against Britain.
One photograph showed a fist-bump between Mark Rutte, the Dutch prime minister, and Charles Michel, the Belgian leader, with Britain's Theresa May in the background. Both men were later reported to have worked together to remove concessions to the UK from a summit document.
On Friday morning, Mrs May was captured on camera having a robust exchange with Jean-Claude Juncker, the European Commission president. And no one has forgotten how badly the sight of blue-suited European leaders walking past Mrs May at another meeting in Salzburg played a few months ago.
Britain is not the manufacturing powerhouse of Europe but European regions – such as northern France, where 15 per cent unemployment is not untypical – are vulnerable to any kind of trade shutdown. More importantly, the City of London is the financial heart of Europe and this is not a good time for it to stop beating.
The European Central Bank (ECB) last week ended the stimulus programme that has printed money to soak up government bonds since 2015. Although launched long after the financial crisis pushed economies, such as that of Greece, into collapse, the ECB’s Quantitative Easing (QE) programme was a lifeline for the Eurozone economy.
It is ending at a time when growth in the Eurozone is slowing. Economists believe that the ECB itself is poised to cut the 2019 growth forecast to just 1.5 per cent.
Inflation remains just above 1.1 per cent, despite four years of printing money, an indication that deflationary pressures remain.
At the same time, European governments are increasing deficit spending. Italy succumbed to a wave of populism in elections earlier this year. Its new government has entered into a showdown with Brussels, as it increases its budget deficit. Without the ECB to buy up the bonds, Rome needs to sell its debt, mostly through London. Just as vital for Rome is continued access for its banks to the money markets to sustain any upturn.
After weeks of protests in France by the gilets jaunes, Paris turned to debt-backed spending by cutting taxes and raising the minimum wage, in order to assuage the demonstrators. That announcement was the death knell to President Emmanuel Macron's efforts to build a common European budget with German backing.
Lack of preparation for Brexit will affect millions of contracts used by European businesses to offset commercial risks. London is the most important centre in a global derivatives market worth an estimated £45 trillion. No one is suggesting EU firms are barred, but contracts written in EU law must now roll over into British law. That could have implications for European-based firms, and there is no market of sufficient depth in Europe to provide the services based in London.
Mervyn King, the former governor of the Bank of England, has taken issue with the Brexit gloom-mongering that hangs over sterling and has slowed annual growth. In an editorial earlier this month, he wrote that leaving did not represent an economic crisis for Britain but had triggered a political breakdown.
Fed by months of alarmist headlines, many in Britain have steeled themselves for disaster. The latest was that the government could introduce emergency powers to pharmacists to block prescriptions or substitute alternative medicines without consulting a GP in the event of Brexit-related drug shortages, after a statement by health secretary Matt Hancock.
Europeans who look at Britain’s prospects only through the prism of movement of goods and people across the English Channel may wrongly assume that the harm only lies on one side.
Disruptions to growth would feed the political divisions across the continent. In France, support for Marine Le Pen’s far-right Rassemblement National party is rising again. The Belgian government lost its parliamentary majority after a row over migration earlier this month. Sweden has rejected proposals for its caretaker Prime Minister Stefan Lofven to form a centre-left government, more than three months after elections that left the nation in a political no-man’s land.
The pinch points across Europe are growing and the vulnerability of Europeans to an unexpectedly rough Brexit is greater than many appreciate.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
How much sugar is in chocolate Easter eggs?
- The 169g Crunchie egg has 15.9g of sugar per 25g serving, working out at around 107g of sugar per egg
- The 190g Maltesers Teasers egg contains 58g of sugar per 100g for the egg and 19.6g of sugar in each of the two Teasers bars that come with it
- The 188g Smarties egg has 113g of sugar per egg and 22.8g in the tube of Smarties it contains
- The Milky Bar white chocolate Egg Hunt Pack contains eight eggs at 7.7g of sugar per egg
- The Cadbury Creme Egg contains 26g of sugar per 40g egg
UAE currency: the story behind the money in your pockets
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
TOURNAMENT INFO
Women’s World Twenty20 Qualifier
Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November
UAE squad
Humaira Tasneem (captain), Chamani Seneviratne, Subha Srinivasan, Neha Sharma, Kavisha Kumari, Judit Cleetus, Chaya Mughal, Roopa Nagraj, Heena Hotchandani, Namita D’Souza, Ishani Senevirathne, Esha Oza, Nisha Ali, Udeni Kuruppuarachchi
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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If you go
The flights
There are various ways of getting to the southern Serengeti in Tanzania from the UAE. The exact route and airstrip depends on your overall trip itinerary and which camp you’re staying at.
Flydubai flies direct from Dubai to Kilimanjaro International Airport from Dh1,350 return, including taxes; this can be followed by a short flight from Kilimanjaro to the Serengeti with Coastal Aviation from about US$700 (Dh2,500) return, including taxes. Kenya Airways, Emirates and Etihad offer flights via Nairobi or Dar es Salaam.
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Marathon results
Men:
1. Titus Ekiru(KEN) 2:06:13
2. Alphonce Simbu(TAN) 2:07:50
3. Reuben Kipyego(KEN) 2:08:25
4. Abel Kirui(KEN) 2:08:46
5. Felix Kemutai(KEN) 2:10:48
Women:
1. Judith Korir(KEN) 2:22:30
2. Eunice Chumba(BHR) 2:26:01
3. Immaculate Chemutai(UGA) 2:28:30
4. Abebech Bekele(ETH) 2:29:43
5. Aleksandra Morozova(RUS) 2:33:01
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
