Monthly Archives: February 2021

European stocks pushed higher on Monday, with Germany's main stock index striking a record high, buoyed by a pandemic recovery package agreed in the US and Britain's Brexit deal with the EU.

Having been closed since December 23, the blue-chip DAX index bounced 1.7%, reaching 13 819 points at the open, topping the previous high set in February before the coronavirus pandemic forced Europe into lockdown.

The index later pared some of its gains, but still showed a gain of 1.5% in afternoon trading. In Paris, the CAC 40 was up 1.1%.

The stock market in London was closed for a holiday.

The jump came after US President Donald Trump signed a $900 billion (735 billion) stimulus bill late Sunday, averting a government shutdown and removing considerable uncertainty for the world's largest economy.

The US leader had previously refused to sign the relief package, arguing that it included wasteful spending.

On December 24, Britain and the European Union agreed a post-Brexit deal that ended the potentially destructive possibility of its disorderly exit from the bloc.

The Brexit deal and the US aid package were pushing the DAX to "a new high", said Jochen Stanzl, an analyst at CMC Markets.

The market is "breathing a sigh of relief" after the Brexit deal, independent analyst Timo Emden added.

Several EU nations including France, Germany, Italy and Spain began rolling out their first Covid-19 vaccinations on Sunday, although the supply is limited.

"For the markets, it remains crucial to get Covid-19 under control as soon as possible," Emden said.

The DAX's previous high was 13 795 points in February, but it plunged to 8 255 points in March as the pandemic shutdowns battered Europe's economy.

Markets recovered as restrictions on the economy were lifted in the summer and after central banks pumped billions in monetary stimulus into the economy, including 1.85 trillion by the European Central Bank.

US shutdown avoided

The emergency US package is part of a larger spending bill that, with Trump's signature, will avoid a government shutdown on Tuesday.

The president's turnaround came after a day marked by calls from across the political spectrum for action to avert a financial and social disaster in the world's largest economy, especially among the most vulnerable.

"For Americans that have been endlessly checking their mailboxes for a stimulus check, this is the best holiday present anyone could ask for," said Axi strategist Stephen Innes.

"The stimulus balloon will allow the markets to navigate better the number of new air pockets... due to the virus's latest variant," he added.

Markets have recently been shaken by the news of the emergence of a new variant of the coronavirus that authorities believe may spread more easily.

Asian markets traded mixed on Monday. Tokyo closed 0.7% higher on Monday, with Jakarta, Mumbai and Bangkok also in positive territory.

Shanghai, Seoul and Singapore were flat, while Hong Kong closed down 0.3% and Manila slid 1.1%.

Sydney and Wellington were closed for a holiday.

Oil prices rose as the US stimulus measures should help boost demand for energy.

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LONDON (AP) One month after Britain made a New Year split from the European Unions economic embrace, businesses that once traded freely are getting used to frustrating checks, delays and red tape.

British meat exporters say shipments have rotted in trucks awaiting European health checks. Scottish fishermen have protested at Parliament over the catch they can no longer sell to the continent because of complex new paperwork.

The manufacturers organization Make U.K. said Monday that 60% of manufacturing companies have experienced significant disruption since Jan. 1.

The British government says the troubles are teething problems, but companies say they are causing serious pain.

A teething problem is something that will go away eventually, said Alan Russell, who runs plant retailer Trees Online. New customs rules and health checks have prompted him to stop shipping to the EU and to Northern Ireland, which is part of the U.K. but remains in the blocs economic orbit because it shares a border with EU member Ireland.

Its 5 or 10% of my business I have just lost overnight, Russell said. Im used to a little bit of unpredictability. But this is without doubt the most severe and unpredictable event that I cant do anything about.

Britain left the EU politically a year ago, and quit the blocs single market and customs union at the end of 2020. A post-Brexit U.K.-EU trade deal means goods can still move without tariffs or quotas, but businesses face new costs, paperwork and barriers. While many firms prepared as best they could, details of the new arrangements were not nailed down until the trade deal was sealed on Dec. 24, just over a week before it took effect.

The British government is accentuating the positive. U.K. supermarkets have not run short of food, in part due to businesses stockpiling against uncertainty caused by Brexit and the coronavirus pandemic. Traffic jams have not piled up at English Channel ports, and the government says its reasonable worst-case scenario of 7,000-truck tailbacks is now unlikely.

Cross-Channel traffic is flowing relatively smoothly, with less than 5% of trucks being turned back because drivers lack the correct paperwork, the government says.

Business groups say thats because some companies are simply staying away. The flow of goods is only about three-quarters of its January 2020 level, and Make U.K. says many firms have put a hold on importing and exporting from the EU in a hope that things improve.

While many British businesses expected hurdles to trade with the EU, those that ship to Northern Ireland from other parts of the U.K. have found they also face new customs and veterinary checks as part of measures to maintain an open border between Northern Ireland and the Irish Republic to the south.

An open Irish border, free of checks on goods or people, has played a major role in building peace in the region. The sensitivity of the issue was underscored last week, when the EU threatened to ban shipments of coronavirus vaccines to Northern Ireland as part of moves to shore up the blocs supply. That would have drawn a hard border on the island of Ireland exactly the scenario the Brexit deal was crafted to avoid. British, Irish and Northern Ireland politicians all expressed alarm at the plan, and the EU dropped the idea.

U.K. business groups say firms need more support to overcome post-Brexit hurdles. Make U.K. urged the British government and the EU to simplify customs paperwork and to cut rules of origin red tape that has left businesses struggling to prove their goods are British and thus eligible for tariff-free trade.

The British government says it is spending millions to help companies adjust. But it also says some of the new trade friction is permanent.

Weve always been clear that trading as a third-party country would involve processes, the similar processes that you have for trading with the United States or Japan or any other countries, International Trade Secretary Liz Truss said Sunday.

Brexit supporters say any short-term pain will be offset by Britains new freedom to set its own economic agenda and strike trade deals around the world. On Monday Britain applied to join the Comprehensive and Progressive Trans-Pacific Partnership, a trade bloc of 11 countries including Japan, Singapore, Australia, Canada and Mexico.

Critics note Britains 111 billion pounds ($152 billion) in annual trade with the Pacific bloc is a fraction of the 670 pounds ($920 billion) a year in trade between the U.K. and the EU.

Trade expert David Henig of the European Centre for International Political Economy said the British government was not levelling with people.

They are saying teething problems when it is actually a permanent economic shift, he said. Certain things are just going to become a lot harder.

Its a long-term economic adjustment that this is leading to.

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Follow all AP stories about Brexit and British politics at httcrps://apnews.com/Brexit

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A month on, post-Brexit 'teething problems' hit UK-EU trade - The Associated Press

The UK government is to seek the lifting of unexpected Brexit controls in Northern Ireland, including checks on pets crossing the Irish Sea and a ban on British soil entering the region in potted plants from English garden suppliers.

The Cabinet Office minister, Michael Gove, said he would be writing to the European commission vice-president Maro efovi on Tuesday, seeking urgent action on Brexit checks that were affecting the daily life of people in Northern Ireland.

He told parliament he would be addressing the extension of the 1 April grace period on checks on chilled meats, including British sausages, and everything from pet transport to the provision of plants and seeds to gardens in Northern Ireland, and the daily life of our fellow citizens does need to be protected.

The EU rules on soil and pets are designed to prevent diseases from entering the Republic of Ireland. The original Brexit plan was to draw up a list of goods at risk of going over the border but this did not materialise because of rows between negotiators and time constraints.

Gove will also meet Northern Irelands first minister, Arlene Foster, the deputy first minister, Michelle ONeill, and efovi on Wednesday to discuss escalating tensions over Brexit in Northern Ireland.

All of these issues and more are ways in which the protocol is having an impact on people in Northern Ireland, which is not in the interests of Northern Ireland, the United Kingdom, or indeed good relations between US and the EU. Vice-president Maro efovi totally understands the need to resolve these issues. And with goodwill, I believe that we can [do so] speedily, said Gove.

The meeting comes after all Northern Irish and EU officials were withdrawn from duties conducting physical checks on goods from Great Britain amid concerns over their safety after reports of menacing behaviour and graffiti threatening border officials and the former Irish prime minister Leo Varadkar.

The threats have been widely condemned, with Irelands taoiseach, Michel Martin, describing them as sinister and ugly.

Obviously, we will be doing everything we possibly can to assist them to defuse the situation, he said.

The Police Service of Northern Ireland said they did not believe loyalist paramilitaries were involved in threats made to workers conducting post-Brexit trade checks, but that disgruntled individuals or small groups may be responsible, rather than the organised gangs that once instigated serious violence.

Assistant chief constable Mark McEwan said: We are concerned about the actions of a number of individuals and small groups.

We dont believe that those actions are organised. But they do give us cause for concern.

Sammy Wilson, the Democratic Unionist party MP for East Antrim, said it appeared that one staff member may have been identified or followed home, raising deep concerns among the police and the security services.

It is not a case of just guarding the port. It is a case of real danger when they [staff] go home at night. Because it appears that that is what has been happening at present. They have been gathering intelligence about where people live etc, he said.

The outgoing Northern Ireland agriculture minister, Edwin Poots, has said the controls on the Irish Sea were disproportionate and had certainly created a lot of tension in the community.

The parties in Belfast are sharply divided on EU withdrawal and the Northern Ireland protocol, which keeps the land border in Ireland open but imposes controls on the Irish Sea, and unexpected bans on soil and controls on pets have fuelled opposition in loyalist communities.

The DUP MP for Belfast East, Gavin Robinson, told Gove that soil or pets from GB to NI had zero risks to the EU and should not have been part of the arrangements designed to stop fraud and smuggling into the Republic of Ireland.

Gove pledged to redouble efforts on the workings of the protocol and urged the EU to follow suit. The EU needs to work with us at speed, and with determination and resolve a series of outstanding issues with the protocol, he said.

Gove was pressed by several MPs including Labours Hilary Benn and the Conservative MP Simon Hoare, the chair of the Northern Ireland affairs committee, to seek permanent solutions.

We have to make the protocol work and work well, said Hoare.

Louise Haigh, the shadow Northern Ireland secretary, said: Calm is now needed and everyone has a responsibility to dial down the rhetoric and ensure the safety of people in Northern Ireland.

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UK to seek lifting of Brexit controls in Northern Ireland - The Guardian

I enjoyed Ben Fletchers vivid image of Dantes fifth circle of hell for the post-Brexit channel crossings (Report, 31 January).

Theres a big difference, though: in Dante the poor souls are suffering their torment as punishment for their own sins (intemperate anger), whereas at Dover the lorry drivers are enduring their misery because of the sins of others (and one hopes the drivers righteous anger would therefore not be considered sinful).

But I wonder in what circle of hell Dante would place those who are responsible for the chaos. Presumably somewhere in the eighth but is it among the fraudulent counsellors, or the falsifiers, or even the treacherous to country and cause?Martina Crowther-MennCambridge

To claim that the last thing Britain needs is to fall apart in a fit of absence of mind (Editorial, 28 January) is to ignore Englands uncompromising Brexit, forced through in an absence of mind. I have changed my mind on independence. It will be difficult but worth it worth it to be rid of Westminster. Let Scotland decide.Matt RitchieInverness

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To hell with Brexit and Westminster - The Guardian

There is little doubt what is currently the angriest programme on air: Radio 4s Farming Today. Every morning, enraged farmers and despairing fishers fume as their food rots in lorries and warehouses, unable to export to Europe or even Northern Ireland because of Brexit. Fishing boats lie idle. Meat cannot be moved. The talk is of animal product bans, faulty vet certificates, 50-page customs forms and impossible bureaucracy.

Engineering and manufacturing body Make UK says six out of 10 trading companies now suffer significant border disruption. Northern Irish eels suddenly cant be sold in London. More than 100,000 British pigs are stranded. Families and firms slide towards bankruptcy. Where now the promised frictionless Brexit?

Tut-tut says the occasional government minister, with talk of teething troubles or mere bumps in the road. Liz Truss, the trade secretary, says: We havent seen those predictions of Armageddon come true. Cue explosions of frustration and anger from the frontline of the food, retail and haulage industries. Why were we never warned?

The difference between an act of God and an act of government is a fine one. The government is now compensating individuals and firms extensively for its enforced lockdown of the economy due to coronavirus. The lockdown is rightly seen as an act of policy, even if occasioned by an act of God. The government should pay.

To the best of my knowledge, God was not involved in Brexit. In particular, implementing it by leaving the customs union was specifically a choice of Boris Johnson and his government. Politicians maintain that it was the public who, as Tory MP Neil Parish told the BBC, voted to come out of the single market and customs union. It did not. It voted to come out of the EU and was never asked if it wanted also to leave the customs union, let alone told what leaving might mean. It was told a lie that leaving the customs union would be frictionless. Other countries such as Norway are outside the EU but enjoy free trade within the customs union. The UK may have tariff-free trade but it is not frictionless.

How much of the current trauma is temporary remains to be seen, but that is not an issue. Leaving the customs union not to mention other features of the single market was an ideological whim. The victims of this whim manifestly deserve compensation every bit as much as those suffering from lockdown: both are bearing a crippling personal cost for a benefit, real or supposed, to the nation as a whole. In the case of Brexit, the damage is plainly the result of a political decision and its incompetent implementation. It is a massive regulatory failure. As ministers claim the decision to leave the customs union is greatly to the benefit of all, then all should pay its losers.

The same principle applies to the 700,000 hapless residents of dangerous flats, still stuck in buildings with flammable cladding almost four years after the Grenfell Tower fire. They too are the innocent victims of a state policy in favour of tower blocks, and a state failure to subsequently inspect and regulate their construction. If a car design is unsafe, its makers and inspectors are responsible, not its users. The same applies to a flat, even if the eventual cost is enormous. Any dispute should be between a towers owners, constructors and regulators, not its occupants.

As an urgent first response, the state should cover all residents insurance costs. This is not a case of negligent buyers but of bad government. Be it lockdown, the fallout from the Brexit trade deal or unsafe apartment blocks, the government should pay.

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The government must pay the farmers and fishers struggling with its bad Brexit deal - The Guardian

With disruptions at European borders and supply chains perturbed by new tariffs, the U.K. economy has begun to show the negative economic impact of leaving Europes single market and customs union at the beginning of the year, several indicators show.

Read: High-tech British firms eye U.S. listings in blow to post-Brexit London stock market

The outlook: Prime Minister Boris Johnson recently qualified as teething problems the many incidents and trade disruptions triggered by the start of Brexit. But from British fishermen to City of London finance professionals, many rather expect the government to act to try soften the blow.

The massive economic hit triggered by the COVID-19 pandemic may help hide the detrimental Brexit impact to the general population in the first half of the year. But it is hard to see how the government will be able to mitigate the consequences of being an outsider to the single market without taking steps back toward the EU and opening further discussions.

Read: Why Europe Needs More Fiscal Stimulus

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How Brexit is already taking its toll on the U.K. economy - MarketWatch