Merkel to Serve a Fourth Term
The chancellor is expected to stand down halfway through.
Editor’s Remarks: Angela Merkel will serve a fourth term as the Chancellor of Germany following a vote by the Social Democratic Party (SPD) to join a coalition with her Christian Democratic Union (CDU) party. In a postal ballot, members of the centre-left SPD voted 66% in favour of a coalition. Many European leaders have expressed their support, with France’s Emmanuel Macron heralding it as “good news for Europe”. This follows six months of political atrophy in Berlin and delays on proposals for greater integration brought forward by both France and Germany, such as the creation of an EU Finance Minister.
Merkel is not expected to serve a full four-year term but will step down at some point halfway through. She is expected to take office on the 14th of March.
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RBS Behaviour Is “Deeply Shocking”
Judges criticise the RBS Libor scandal as the case is taken to the UK Supreme Court.
Editor’s Remarks: Judges in the UK Court of Appeal have described the behaviour of RBS as “deeply shocking” following allegations by a Manchester property group that the bank had mis-sold them interest rate swaps. The legal team for the Property Alliance Group (PAG) said that it would directly appeal to the UK’s Supreme Court in a test case which is believed to be worth over £30m. PAG claim that the bank had misleadingly sold them four interest rate swap products but the case, which related to sterling transactions, was dismissed by the Court of the Appeal.
Notwithstanding, the judges have been critical of RBS’ behaviour regarding foreign currency Libor transactions. The bank had been fined $612m by US and UK authorities following revelations that they had manipulated the Japanese yen and Swiss franc Libor.
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Pension Funds Will Need a Climate Change Strategy
Trustees may be held accountable for investing in fossil fuels.
Editor’s Remarks: UK pension funds may be required to have a policy on climate change and be made more accountable if they invest in fossil fuel companies. New government plans proposed by the Pensions Minister to regulate pension schemes could make trustees have to consider the impact of environmental risks. The Labour Chair for the Commons’ environmental audit committee, Mary Creagh, has also written to the top 25 pension funds asking whether they had a risk strategy in place for the impact that climate change could have on savings.
Citing the decline of the fossil fuel industry as well as the possibility of payouts for insurance firms from extreme weather claims, Creagh said that there was a real risk that many pension funds could lose a significant amount of money from ill-placed investments.
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US Committee Delays Qualcomm Investor Meeting
The ruling is a major obstacle for Broadcom’s hostile takeover.
Editor’s Remarks: An order by the USA may jeopardise the Chinese semiconductor manufacturer, Broadcom, from its hostile takeover bid for its American rival Qualcomm, valued at $117bn. The Committee on Foreign Investment in the U.S (CFIUS) ordered Qualcomm to delay its investor meeting. Whilst the meeting is postponed for 30 days, CFIUS will investigate the takeover bid. Qualcomm investors were set to meet on Tuesday and vote on six Broadcom nominees, who could potentially form a majority on the board. Qualcomm, which is based in San Diego, has reportedly been fighting to remain independent.
Broadcom has since lashed out at its rival for “secretly” filing a request to CFIUS, calling it a “blatant, desperate act” by the current board of directors.
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China to Increase Its Military Spending
It is still dwarfed by the American defence budget.
Editor’s Remarks: China will raise its defence budget by 8.1% this year, up from the 7% it spent last year. In a report submitted to the annual National People’s Congress in Bejing on Monday, China will now spend $175bn on its defence. Although China has the second largest defence budget after the US, America still spends about as much on defence as the next 10 countries combined.
The raise reportedly comes as a response to the increase in military spending under US President Donald Trump. However, according to a spokesperson from the National Congress, most of the extra funding will go towards improving the welfare and training facilities of the Chinese Liberation Army’s servicemen and women.
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