1 South Korea to pump $10bn into economy (Stephen
Evans on BBC) South Korea's government has proposed pumping billions of dollars
into its economy as it struggles with falling exports and an outbreak of Middle
East Respiratory Syndrome (Mers). A fresh stimulus package put forth last week
worth 11.8tn Korean won ($10.5bn) is part of a larger economic stimulus plan
worth 22tn won.
South Korea is targeting a growth rate of 3.1% for
the year. Analysts say even with additional stimulus it may not achieve its
target. South Korea's export-led economy has been hit by slowing global demand
for its goods, together with sluggish consumer demand at home. The proposed
injection of funds is an attempt to counter the impact of a flagging economy
with government spending.
As the governments in London and Berlin stick
tightly to "austerity" and reining in public spending as economies
slow down, South Korea goes in the opposite direction and increases government
borrowing to spend and pump the economy up. South Korean growth this year is
forecast to be just over 3%. For many developed economies, that would be
satisfactory but for South Korea it is far slower than they have come to
expect.
This deceleration is caused primarily by the slowing
of the Chinese economy but the outbreak of Mers raises a fear for the future.
Accordingly, some of the extra spending is targeted at hospitals and clinics
which failed to cope when the illness first appeared. Tourism, as an industry
hit hard by the outbreak, will also get some money. But the detail does not seem
as significant as the big picture: South Korea is rejecting the economics of
Europe. Who's right?
2 China freezes IPOs to stop market plunge (The
Guardian) China has frozen share offers and set up a market-stabilisation fund,
according to reports, as Beijing intensified efforts to pull stock markets out
of a nose-dive that is threatening the world’s second-largest economy.
The report that Beijing has suspended initial public
offerings (IPOs) came a few hours after major brokers and fund managers
collectively pledged to invest at least $19bn of their own money into stocks.
China’s government, regulators and financial
institutions are now waging a concerted campaign to prop up the nation’s two
main share markets, amid fears that a meltdown would rock the financial system
and inflict heavy losses across an economy where annual growth is already
running at a 24-year low.
Almost $3 trillion in market value - more than the
entire economic output of Brazil - has been wiped out since markets went into
reverse last month, posing a bigger headache for many global investors than
even the Greek debt crisis. The sell-off is especially worrying because the
bull market had been built on a mountain of speculative loans. Some analysts
suggest total margin lending, both formal and informal, could add up to around
4 trillion yuan ($645bn).
The freezing of IPOs can lend support to a falling
market because large amounts of money are frozen when subscriptions are taken,
drying up liquidity in the market. Large IPOs have been cited as a reason for
triggering the recent plunge. Beijing has unleashed a barrage of official
policy moves over the past week, including an interest rate cut, a relaxation
of margin-lending rules and additional bank liquidity. But these efforts have
so far failed to convince investors.
3 After 99 years, Chile win Copa America (Jonathan
Wilson in The Guardian) After 99 years, it came down to Alexis Sánchez against
Sergio Romero from 12 yards. The Arsenal forward attempted a Panenka, scuffed
it badly, and scored anyway as the goalkeeper dived to his left.
Misses from Gonzalo Higuaín and Éver Banega in the
shootout proved decisive and, finally, Chile, one of the four participants at
the inaugural Copa América, had a first international trophy. For Argentina the
drought goes on: 22 years since their last trophy and an increasing sense that
this gifted generation of players will remain unfulfilled.
Where better to achieve that first win than at home,
asked Claudio Bravo on Friday. Few stadiums in the world have such symbolic
value as Santiago’s Estadio Nacional in being representative of their nation.
Behind the goal at one end a block is left perpetually empty, the benches still
as they were in 1973 when the stadium was used as a prison camp after the coup
through which Augusto Pinochet seized power.
It was here that November that Chile kicked off
against no opposition in a notorious World Cup qualifying play-off after the
USSR refused to take to the field in a stadium in which leftists had been
murdered a matter of weeks earlier. Above it is the legend Un pueblo sin
memoria es un pueblo sin futuro – a people without a memory is a people without
a future.
Some, it seems, got carried away in their
nationalist fervour, with Lionel Messi’s family having to be moved into a
television cabin at half-time after being abused and having objects thrown at
them in the stands. There were further reports that his elder brother, Rodrigo,
was punched.
The one change Sampaoli made was to push the
midfielder Marcelo Díaz extremely deep, almost as a third centre-back, which
freed Gary Medel to leave the back-line and pursue Messi at times when he
dropped deep. Messi had his quietest game of the tournament – his 63 touches in
normal time were his fewest of this Copa América.
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