The Koyal Group
1 view | +0 today
Follow
Your new post is loading...
Your new post is loading...
Scooped by Eve John
Scoop.it!

The Koyal Group Economy Reviews on China Joins Europe in Syria Economic Risk Warning at G-20 Summit

1 discussion post. Andreliezer said: http://www.shelfari.com/groups/103998/discussions/496418/China-Joins-Europe-in-Syria-Economic-Risk-Warning-at-G-20-S...
Eve John's insight:

the koyal group economy reviews, China Joins Europe in Syria Economic Risk Warning at G-20 Summit

 

China and Europe at a Group of 20 summit hosted by Russia warned that U.S.-led strikes on Syria would risk harming the global economy, bolstering efforts to rally opposition to the proposed attack.

 

“Such a military action will definitely have a negative impact on the world economy, especially on the oil price,” Chinese Vice Finance Minister Zhu Guangyao told reporters in St. Petersburg today. “We hope that this issue could be solved at the United Nations and through diplomatic channels.”

 

U.S. President Barack Obama, who has asked Congress to endorse a punitive strike on Syrian President Bashar al-Assad’s forces after an alleged chemical attack on civilians, is trying to enlist international support at the G-20 meeting. Italy and Germany have joined Russia and China in insisting they won’t support military intervention in Syria without approval from the United Nations Security Council.

 

Italian Prime Minister Enrico Letta said any such operation would cause volatility on financial markets. “We don’t need volatility, we need stability,” he said. “We are concerned about it.”

 

Russia, a Soviet-era ally of Syria, and China, both veto-wielding members of the Security Council, have repeatedly blocked any action against Assad over a 2 1/2-year civil war that has killed more than 100,000 people.

 

Oil Effect

 

The possibility of renewed conflict in the Middle East comes as the expected tapering of U.S. stimulus measures is causing concern of spillover effects in emerging markets. Brent may rise to $120-$125 a barrel if the U.S. and allies begin military action in Syria and may “spike briefly” to $150 if a U.S.-led attack on Syria sparks further conflict in the Middle East and supply disruptions, Michael Wittner, Societe Generale SA (GLE)’s New York-based head of oil market research, said in a report on Aug. 30.

 

“The concern for everyone is that a rise in oil prices would pose a risk to economic recovery,” Capital Economics Ltd. economist Julian Jessop, said by phone from London today. “It remains to be seen if the current rate of growth will continue if oil prices stay at today’s levels or even rise.”

 

The 17-nation euro area returned to growth in the second quarter after 18 months of recession.

 

‘Negative Influence’

 

The BRICS group of major emerging economies, which includes Russia, South Africa, China, India and Brazil, today discussed the risk posed by a Syria strike on the sidelines of the G-20 summit, said Dmitry Peskov, Russian President Vladimir Putin’s spokesman.

 

They agreed that it would lead to an “extraordinary negative influence on the economy,” Peskov told reporters.

 

China today also urged the U.S. to limit global risks from shifts in monetary policy, with Indonesia warning the changing stance is spurring capital outflows as the G-20 leaders met.

The U.S. should be mindful of a possible “very significant spillover effect,” said Zhu, the deputy finance minister, speaking through an interpreter.

 

Emerging markets, which helped pull the world out of a recession after the global financial crisis, now face an exodus of cash and sliding currencies in anticipation of the Federal Reserve’s eventual tapering of its $85 billion in monthly bond purchases.

 

‘Collateral Damage’

 

The risk of military strikes on Syria threatens to weaken the global economic expansion, say economists from banks including Deutsche Bank Securities Inc. and Nomura Holdings Inc.

 

Deutsche Bank economist Carl Riccadonna wrote in an Aug. 27 report that rising gasoline prices could inflict “collateral damage” on economic confidence and consumption this year.

 

Capital Economics’ Jessop calculates that in the worse-case scenario, a jump to $150 a barrel, would threaten “stagnation” by knocking 1 percentage point off international expansion.

 

China’s Zhu said his country is in consultations with the International Monetary Fund on the fallout from Syria and cited the Washington-based lender’s forecasts that a $10 per barrel increase in oil a quarter percentage point off global growth.

 

European Central Bank President Mario Draghi said today that the euro area is “alert to the geopolitical risks that may come out of the Syrian situation.”

 

‘Very Cautious’

 

“I’m very, very cautious about the recovery,” Draghi said at his monthly press conference in Frankfurt. “I can’t share enthusiasm. It’s just the beginning. Let’s see. These shoots are still very, very green.”

 

The ECB kept its benchmark interest rate unchanged today at a record low after the euro area returned to growth in the second quarter. Gross domestic product expanded 0.3 percent in the three months through June after six quarterly contractions and recent economic indicators point to the rebound continuing.

 

Analysts surveyed by Bloomberg News last month see growth in China slowing to 7.3 percent in the fourth quarter, the weakest in more than four years, after 7.5 percent in the July-September period, based on median estimates.

 

Even though an attack on Syria may benefit Russia by sending oil prices higher, a major split with the U.S. and its European allies would deter investors, according to Chris Weafer, a senior partner at Moscow-based Macro Advisory.

 

See more articles of The Koyal Group here:

 

http://buffer.uservoice.com/forums/85149-feedback/suggestions/4403979-china-joins-europe-in-syria-economic-risk-warning-

http://writeforten.com/posts/7992

 

more...
No comment yet.
Scooped by Eve John
Scoop.it!

Osborne in warning over SNP plans for oil fund

Osborne  in warning over SNP plans for oil fund | The Koyal Group | Scoop.it
ALEX Salmond's hope of ­establishing a Norwegian-style oil fund in an independent Scotland would result in £12.5 billion of spending cuts or tax rises, George Osborne has warned.
Eve John's insight:

Osborne in warning over SNP plans for oil fund


the koyal group, Osborne in warning over SNP plans for oil fund

 

 

ALEX Salmond's hope of ­establishing a Norwegian-style oil fund in an independent Scotland would result in £12.5 billion of spending cuts or tax rises, George Osborne has warned.

 

The Chancellor, launching the Treasury's fifth analysis paper on independence, also rubbished the First Minister's assertion that there was £1.5 trillion worth of revenues still in the North Sea, noting how the Office for National Statistics valued it at £120bn.

 

Speaking to the Offshore Europe oil and gas conference in Aberdeen, the Chancellor argued Britain's integrated economic union worked well for Scotland.

 

The SNP hit back, saying the UK Government's mismanagement of the oil and gas industry showed it could not be trusted.

 

John Swinney, the Scottish Finance Secretary, claimed the Treasury paper actually showed "there is no doubt Scotland can not only afford to be an independent country but has the means to thrive" after independence.

 

Stressing how oil and gas ­revenues were the most volatile that existed, Mr Osborne in his speech warned the SNP on overstating its case for independence on black gold.

 

He said: "To suggest that ­spending can be increased, tax bills cut, an oil fund established, household energy bills kept down and investment in renewables increased simply doesn't add up."

 

The analysis paper points out that, if oil revenues are excluded, then public spending in Scotland since the start of devolution in 1999 was around 10% higher, £1200 per person, than the UK average.

 

Had Scotland received its ­population share of spending over this period, the paper states, then it would have received £74bn less, or £6bn a year.

 

But it then notes that if oil ­revenues are included, Scotland's contribution to UK tax revenues increases substantially, with Scotland's fiscal balance being "very similar" to that of the UK as a whole and, while Scottish spending would still be 10% higher, its revenues to the Exchequer would be 10% higher too.

 

The paper's central attack is on creating a Norwegian-style oil fund in an independent Scotland, which the SNP has long championed. The Scottish Government has said it plans to establish one "when fiscal conditions allow".

 

Since 1990, Norway has invested profits from its oil industry into coffers for the nation's future when its budget has been in surplus. It contains £475bn - 40% bigger than the value of the Norwegian economy - making it the world's largest sovereign wealth fund.

 

The Treasury paper stresses how setting one up post-independence might not be straightforward, noting how production was due to decline and projected returns might be over-optimistic.

 

The analysis points out if an independent Scotland wanted to set up a Norwegian-style oil fund, then in 2016/17 it would need to find £8.4bn to balance its books, implying 13% spending cuts or 18% tax rises.

 

If Scotland received its geographic share of oil revenues on independence, £4.1bn, putting it into the new fund, then this would mean the fiscal consolidation would rise to £12.5bn with spending cuts of 19% or tax rises of 27%.

more...
Lewis Sean's comment, September 5, 2013 3:07 AM
thanks for such wonderful information…keep posting more.