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Mon, 27th March 2017

Anirudh Sethi Report

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Archives of “February 5, 2017” Day

Schauble Agrees With Trump That Euro Is “Too Low” For Germany, Blames Mario Draghi

In surprising comments that may rekindle a verbal currency war between president Trump and Europe, German finance minister Wolfgang Schäuble told German newspaper Tagesspiegel that in his opinion the Euro is “too low” for Germany, echoing criticism from Trump’s trade advisor Peter Navarro, who last week told the FT that Germany was exploiting its US and EU partners by using a “grossly undervalued” euro to create a vast trade surplus. The comment placed Germany, alongside China and Japan, in a category of countries that the Trump administration has accused of currency manipulation for competitive advantage.

As the FT reports on Sunday morning, Schauble acknowledged that the ECB had to set monetary policy for the eurozone as a whole, but said: “It is too loose for Germany.” A recent chart from Morgan Stanley confirms that on a PPP basis, the EUR is over 40% undervalued for exporting and current surplus powerhouse Germany on a standalone basis, however for many of Europe’s peripheral countries it still remains expensive.

What was more curious about Schauble statement is that the German finance minister blamed the European Central Bank for the low exchange rate.

Italy Increasingly Likely To Abandon The Euro

An analysis of the political setup in Italy shows eurosceptics are on the verge of taking control of the country.

The only missing ingredient is an early election. And early elections are now the odds-on favorite.

Let’s back up a bit to fill in the pieces as to how things got to this point.

  1. Former prime minister Matteo Renzi stepped down in December after holding a referendum that failed miserably. See Renzi Resigns Following Crushing Referendum Defeat: Beppe Grillo, Marine le Pen, Matteo Salvina Tweets
  2. Italy’s president, Sergio Mattarella, appointed Paolo Gentiloni as the new prime minister after Renzi resigned. See Meet Paolo Gentiloni, 4th Consecutive Italian Technocrat Appointed Prime Minister: Renzi Not Vanquished Yet
  3. The president said he would not hold new elections until differences between how the lower house of parliament assigned seats.
  4. Point number three has been resolved. Both houses of Parliament are back on a proportional system.

New Elections

  • New elections are possible now but the next scheduled elections are not until 2018.
  • Matteo Renzi wants new elections in June. Even though he resigned, he wants back in. Renzi wants new elections this year because PD may oust him if he waits.
  • Beppe Grillo wants elections as soon as possible because he believes he will win, and also because FI leader Silvio Berlusconi cannot run for prime minister until 2018 because of a tax fraud conviction.
  • Berlusconi does not want early elections, but he is in the minority.

It is up to the president to call new elections, and there is pressure form at least two fronts for him to do so.

Beijing Blasts Washington for Plans to Launch High Taxes on Chinese Steel

On Friday, the US Commerce Department announced its plans to raise import tariffs for the Chinese stainless steel products from 63 percent to 190 percent citing a probe that found they were selling on US market at dumping-level price.

“China is disappointed that the United States continued to launch high taxes on Chinese steel export products and calls into question the unfair way the US conducted its investigation,” Wang said, as quoted by the South China Morning Post newspaper.

The United States did not take into the account the evidence previously submitted by the Chinese steel manufacturers and avoided cooperation with the Chinese government, violating the rules of the World Trade Organisation (WTO), the Chinese official underlined.

This is a second blow for the Chinese steel importers in the recent months. The European Commission imposed in January anti-dumping duties on Chinese stainless steel tubes and pipe butt-welding fittings to protect its industry from steel overcapacity.

According the European Commission, Chinese imports will be taxed with duties ranging from 30.7 to 64.9 as its investigation commission confirmed that Chinese stainless steel products had been sold in Europe at dumping prices.

US court refuses to immediately restore Trump travel ban

A U.S. appeal court late on Saturday denied a request from the U.S. Department of Justice to immediately restore a immigration order from President Donald Trump barring citizens from seven mainly Muslim countries and temporarily banning refugees.

The court ruling dealt a further setback to Trump, who has denounced the judge in the state of Washington who blocked his executive order on Friday. In tweets and comments to reporters, the president has insisted he will get the ban reinstated.

 Trump says the temporary immigration restrictions on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen, and on all refugees, are necessary to protect the United States from Islamist militants. Critics say they are unjustified and discriminatory.

The judge’s order and the appeal ruling have created what may be a short-lived opportunity for travelers from the seven affected countries to get into the United States while the legal uncertainty continues.

In a brief order, the appeals court said the government’s request for an immediate administrative stay on the Washington judge’s decision had been denied. It was awaiting further submissions from Washington and Minnesota states on Sunday, and from the government on Monday.

The government’s appeal says the decision by judge James Robart in Washington poses an immediate harm to the public, thwarts enforcement of an executive order and “second-guesses the president’s national security judgment about the quantum of risk posed by the admission of certain classes of (non-citizens) and the best means of minimizing that risk”.

Trump denounced the “so-called” judge in a series of tweets on Saturday and told reporters: “We’ll win. For the safety of the country, we’ll win.”

IRAQI FAMILY

The president’s Jan. 27 order has drawn criticism even from U.S. allies and created chaos for thousands of people who have, in some cases, spent years seeking asylum in the United States.

Iraqi Fuad Sharef, together with his wife and three children, spent two years obtaining U.S. visas, and had packed up to move to America last week, but were turned back to Iraq after a failed attempt to board a U.S.-bound flight from Cairo.

TEPCO Admits Fukushima Radiation Levels Reach Record Highs As Hole In Reactor Discovered

With just 3 years left until the 2020 Olympics, Japan is likely desperate to reassure the world’s athletes that all is well, but an admission from TEPCO – the Fukushima nuclear plant operator – that they discovered a hole at least one square meter in size beneath the reactor’s pressure vessel, and lethal record-high radiation levels have been detected, will not likely reassure anyone.

Radiation levels of up to 530 Sieverts per hour were detected inside an inactive Reactor 2 at the Fukushima Daiichi nuclear complex damaged during the 2011 earthquake and tsunami catastrophe, Japanese media reported on Thursday citing the plant operator, Tokyo Electric Power Company (TEPCO). A dose of about 8 Sieverts is considered incurable and fatal.

Le Pen Kicks Off Presidential Campaign Echoing Trump: The Highlights From Her Manifesto

The leader of the anti-immigration French National Front party Marine Le Pen kicked off her presidential campaign on Saturday by echoing many of the same vows that brought Trump to power in the US, hoping promises to shield voters from globalization, promote protectionism, leave the Eurozone, slap taxes on imports and on the job contracts of foreigners, lower the retirement age, increasing welfare benefits and boost defense spending push her above her competitors at a time of sweeping political turmoil in France.

According to opinion polls – which have recently shown their utter irrelevance in the age of Brexit and Trump – the 48-year old daughter of National Front (FN) founder Jean-Marie Le Pen has a solid lead in the first round on April 23 but then losing the May 7 run-off to a mainstream candidate, who after last week’s fireworks may no longer be her main challenger Francois Fillon, thanks to a corruption scandal.

And in the most unpredictable election race France has known in decades, the FN hopes a two-day rally in Lyon where Le Pen is spelling out her electoral platform, will help convince voters to back her. “The aim of this programme is first of all to give France its freedom back and give the people a voice,” Le Pen said in the introduction to the manifesto.