1 €1.1tn plan to save eurozone (Heather Stewart in
The Guardian) The European Central Bank launched what City experts called a
“shock and awe” plan to pump €1.1tn (£830bn) into the eurozone in a last-ditch
attempt to prevent the single currency bloc sliding into an intractable slump.
In the teeth of fierce political resistance from
Germany, ECB president Mario Draghi said he would inject €60bn of new money
into financial markets every month until at least September 2016. The bank will
use electronically created money to buy the bonds of eurozone governments –
quantitative easing – to try to boost confidence, push up inflation and drive
down the value of the single currency, helping to increase exports and
kickstart growth.
The €60bn-a-month price tag for the QE programme,
which will start in March, was larger than many in financial markets had
expected, and underlined Draghi’s determination to hold the 19-member currency
zone together. The banker, nicknamed “Super Mario” by traders, promised QE
would continue “until we see a sustained adjustment in the path of inflation”.
The ECB is meant to keep inflation below, but close
to, its target level of 2% – but prices have been rising at less than half that
pace for the past year, against a background of plunging oil prices and anaemic
growth. With average prices in the shops already falling across the single
currency area, the ECB hopes to avoid the threat of a deflationary spiral, in
which consumers and businesses slash spending while they wait for prices to
fall further, dragging the economy into a recession.
The long-awaited launch of QE will infuriate Berlin,
which views the policy as akin to a bailout for free-spending governments such
as Greece, and fears that it could allow inflation to get out of control. A
headline on the website of the newspaper Bild after the announcement read: “ECB
takes billions of debt off ailing euro states: What happens to my money now?”
2 Generational change near for Saudi Arabia (San
Francisco Chronicle) With the death of King Abdullah, the throne of Saudi Arabia
passed to another son of the country's founder as it has relatively smoothly
for the past six decades. But it brings the oil-rich kingdom one step closer to
a question that will test the unity of its royal family: Who in the next
generation will reign?
Abdul-Aziz Al Saud, who
united tribes and founded the kingdom that bears his name, had dozens of sons —
possibly more than 50 — from multiple wives. Power has passed among them, from
brother to brother, since his death in 1953. Crown Prince Salman, Abdullah's
half-brother, is now king.
But ranks of that
generation, largely in their 70s and 80s, are thinning. Soon, the throne must
go to the son of one those sons, potentially putting succession and power in
the hands of one branch of the family at the expense of the others. The health
of Salman, 79, is uncertain. He suffered at least one stroke that has left him
with limited movement on his left arm.
Abdullah sought to
ensure the transition goes without intra-family rivalries by formalizing the
Allegiance Council, a body made up of the living sons of Abdul-Aziz and some of
the prominent grandsons who vote to pick the king and crown prince. That legacy
could be tested sooner than expected. In any case, the question of the
generational shift in succession will jump to the fore.
3 South Africa’s
political denialism (Johannesburg Times) Denialism is a terrible thing. Not
only is it fundamentally dishonest, it obviates the need to find solutions to
pressing problems and crises. Thus, during the presidency of Thabo Mbeki, the
link between HIV and Aids was called into question and, as a result, critical
and sensible interventions were not timeously taken.
Official denialism was
back in evidence this week, when Gauteng's MEC for community safety, Sizakele
Nkosi-Malobane, insisted that the wholesale violence and looting being
perpetrated by Soweto residents against foreign shopkeepers was not xenophobia.
Journalists covering
the mayhem overheard the looters - men, women and children - screaming abusive
epithets at their victims; there was talk of driving "the dogs'' out. Some
of the victims told of being branded makwerekwere (a derogatory term for
foreigners) as they packed their belongings to leave Soweto, probably forever.
The Collins English
dictionary defines xenophobia as "hatred or fear of foreigners or
strangers, or of their politics or culture''. It is possible that thugs, even
business rivals who can't compete with foreign shopkeepers, are fuelling this
outpouring of hate.
If so, their efforts
have fallen on fertile ground in some poorer communities. The tragedy unfolding
in Soweto shames us all and betrays the legacy of Nelson Mandela. Have we
forgotten the terrible events of 2008?
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