Monday, May 26, 2014

Eurosceptic 'earthquake' and the future of EU; China scrapping 6m cars; India banks require expensive Modi fix; World's best 'cities of opportunity'

1 Eurosceptic ‘earthquake’ and the future of EU (Martin Jay in Khaleej Times) Voters across Europe who went to the polls have returned a staggering and unprecedented vote in both France and Britain. Eurosceptic and far-right parties seized ground in elections to the European parliament, in what France’s PM called a “political earthquake”.

The French National Front and UK Independence Party both performed strongly, while the three big centrist blocs in parliament all lost seats. The outcome means a greater say for those who want to cut back the EU’s powers, which have grown considerably in the last decade.

But the nightmare for the old elite in Brussels is not the rough time it will get on a daily basis from a growing minority of gadflies in the EU village. It’s more about how their own popularity has dwindled and whether the new sceptic parties will gain momentum for the next five years. If they do, it could mean the end of the EU altogether or at least it being replaced by a streamlined version which just manages a single trade block but leaves it to Member States themselves to take each other to court in the WTO when rules are breached.

In such a set up, an EU parliament would be redundant. In fact, it already is. A minor factoid. The European parliament is the only assembly in the world which is prevented from proposing any legislation — a body of 22,000 individuals, none of whom are elected but as an all-empowering administration more or less runs the entire EU machine. But the old guard in Brussels just doesn’t get it.

http://khaleejtimes.com/kt-article-display-1.asp?xfile=data/opinion/2014/May/opinion_May49.xml&section=opinion

2 China scrapping 6m cars (BBC) China plans to remove six million vehicles, that do not meet exhaust emission standards, by the end of the year as a way of improving air quality. More than 300,000 vehicles will be decommissioned in the capital Beijing. Recent findings from the state's environmental agency showed that 31% of the air pollution in Beijing comes from vehicle exhaust fumes. Next year, the government plans to scrap up to five million vehicles from other regions.

Fighting pollution has emerged as a priority for China's leaders as they try to reverse damage done by decades of manufacturing-driven growth, which has sacrificed the nation's air, water and soil qualities. In Beijing, the municipal government has previously offered subsidies to car owners to voluntarily turn in their ageing vehicles to be scrapped.

In addition to removing vehicles which contribute to air pollution, experts are calling for quality upgrades in fuels, which can also help mitigate air pollution and smog. After years of denying the issue existed, the central government earlier this year accepted that pollution was of genuine concern. It now publishes figures for the air quality in China's major cities, and in 2013 promised $275bn to tackle the issue in the next five years, setting targets for air quality improvements.


3 India banks require expensive Modi fix (Abheek Bhattacharya in The Wall Street Journal) Even before Narendra Modi was sworn in as India's prime minister Monday, shares in its government banks have been Modi-fied. Investors betting on a broad economic revival have pushed shares of the biggest government-owned bank, State Bank of India, up more than 50% this year. Yet a real turn for lenders like SBI requires a commitment Mr. Modi hasn't made—a massive injection of state funds to shore up capital levels.

India's numerous state banks control three-quarters of the lending market and are stuck in a bad-debt morass. Getting them out of it will be necessary for the moribund economy to really take off. Take SBI's case. If it had to write off the nonperforming loans it hasn't already set aside provisions for, plus loans restructured to ease terms for borrowers, it would wipe out 69% of common equity as of March.

To get banks lending again, Delhi needs to drum up big-time cash. To provide reserves for a reasonable 50% of problem loans from about 25% currently would cost $33 billion. Tack on requirements to meet global capital norms by 2019, and the banks need another $61 billion in order for loans to grow 20% a year, just below the past decade's average. According to Wall Street Journal calculations, that amounts to 4.7% of this year's estimated GDP. India's total budget deficit was around 4.6% of GDP last fiscal year.

http://online.wsj.com/news/articles/SB10001424052702304587704579585742916482638?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304587704579585742916482638.html

4 World’s best ‘cities of opportunity’ (Julie Balise in San Francisco Chronicle) San Francisco is the second best city in America and fifth-best worldwide for business and cultural opportunity, according to a recent survey from PricewaterhouseCoopers. London took the top spot on the “Cities of Opportunity” report, followed by New York.

PwC ranked the 30 cities based on 10 key indicators: intellectual capital and innovation; technology readiness; city gateway; transportation and infrastructure; health, safety, and security; sustainability and the natural environment; demographics and livability; economic clout; ease of doing business; and cost.

The lowest-scoring cities were Nairobi, Jakarta, and Mumbai. PwC used data from global development organizations, like World Bank, national statistics organizations, like the U.S. Census Bureau, and commercial data providers. Data was collected during the third and fourth quarters of 2013.


http://blog.sfgate.com/techchron/2014/05/26/san-francisco-ranks-fifth-worldwide-for-opportunity/?cmpid=hp-hc-bustech#23637101=0

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