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Brexit Causes Foreign Crisis In Ireland

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Brexit Causes Foreign Crisis In Ireland

The prime minister of Dublin is feeling the pressure from economists. 

These economists have begun predicting lower growth for Ireland’s economy. 

Numerous companies have started to warn of the dire impact that Brexit is going to have.

Why Ireland?

Ireland is feeling the consequences from Brexit more so than any other country. 

This is due to the significant amount of trade and finance that intertwines Ireland and the United Kingdom. 

This year marked the one hundred anniversary of Ireland’s independence from Britain’s rule. 

However, Ireland remains deeply affected by the choices that their next door neighbor makes.

What is Being Said?

John Bruton, who served as the prime minister of Ireland from 1994 to 1997, stated that it was the most dangerous and the most difficult issue that Ireland has faced in the past fifty years.

Numerous exporters have warned that earnings and economic growth would fall in response to the decline of the pound. 

This is happening after the international bailout of 2010.

A banking meltdown occurred shortly after the rescue.

The 2016 European Economic Forecast shows the recent economic recovery of Ireland

It also indicates that they are not expected to return to their days of unsustainable growth. 

These numbers are found below:

1

Shares in Ireland have significantly declined. 

This is mostly because the United Kingdom is where the second most amount of Ireland’s exports go. 

The country also accounts for the biggest portion of Ireland’s services. 

The United States is the number one export destination for Ireland

On another note, Prime Minister Enda Kenny is fighting demands for reunification polls coming from nationalists in Northern Ireland. 

This is occurring as Kenny is trying to deal with losing a key ally within the European Union. 

The following chart shows the vote for whether or not Northern Ireland should be allowed to hold their referendum on whether they want to stay with the United Kingdom or join the Irish Republic.

Ireland has many reasons that would justify them in distrusting the European Union.

2

Some are saying that the Brexit vote is affecting Northern Ireland more than anywhere else. 

It is said that Northern Ireland’s biggest worry at the current time is whether or not conflict is going to come. 

Northern Ireland has remained relatively at peace since the referendum they had in 1998. 

Kenny is also dealing with members of his party trying to overthrow him. 

On top of all this, the only border between the United Kingdom and the European Union needs to be considered. 

According to Eoin Fahy, the consequences from Brexit are “mind-boggling”. 

Fahy works in the capital of Ireland at Kleinwort Benson Investors and is employed as the chief economist.

Can We Still Be Friends?

In 1973, both Britain and Ireland joined the European Economic Community. 

Ireland was attracted to join to escape the way that England was perceived by the country.

Over forty years later, these two nations are still intricately connected in the following ways:

  • Economically
  • Linguistically
  • Culturally

Ireland utilizes the Euro. 

The country does around forty-five billion dollars’ worth of trade with the United Kingdom. 

Around three hundred and eighty thousand Irish citizens that lived in the United Kingdom were allowed to take part in the vote on whether or not to leave the European Union.

Some the residents of Northern Ireland come from the United Kingdom. 

The following image shows the dynamics of the population in Northern Ireland:

3

When Ireland needed the bailout six years ago, the United Kingdom stepped up like a good neighbor and chipped in to help even though they are not part of the region that uses the Euro as their currency.

Last Wednesday, Theresa May took over as the prime minister of Britain. 

At this time, she spoke with the following leaders:

  • Enda Kenny (Ireland)
  • Angela Merkel (Germany)
  • Francois Hollande (France)

How Are the Companies Taking This?

Netwatch Systems, based in Carlow, southeast Ireland, was one of the many companies that thrived on the ties between Ireland and the United Kingdom. 

Netwatch systems is a video-surveillance company that monitors over five hundred different sites and sends a warning using live audio if an intruder is present. 

Some of the cities that they watch are Manchester, London, and Birmingham.

Netwatch came to the United Kingdom in 2007. 

Presently about one-fifth of all sales they make takes place in the United Kingdom. 

The 8 percent fall in the way the pound measures up to the Euro since the vote has deeply hurt the company.

One of the founders of the business, David Walsh, stated that everyone was shocked. 

He says that they have managed to make it through an eight recession and are now finding another knock on their door.

Plans?

How are the politicians and executives in Ireland going to react to the potential foreign-policy crises knocking at their door? 

This potential crisis eclipses both the recent bailout and the collapse of the banks. 

This possibility is what drove Kenny to begin creating a government unit back in 2015.

This unit was developed to come up with plans in case Brexit occurred. 

Proposals have involved the possibility of providing some exporters with support. 

However, the government has admitted that it’s hard to prepare plans before they can see what the overall effects of Brexit are going to be.

The most obvious issue comes in the way of a border.

This border stretches three hundred and ten miles from the north and the republic. 

It also stretches around sixty miles from Dublin to Derry along the eastern coast.

Unionist Celebrations

In Belfast last week the annual Unionist celebrations took place. 

This event illustrated the delicacy of the balance that still exists in Northern Ireland. 

This balance remained in the United Kingdom following the independence of Ireland back in 1922.

During the celebration, there were some incidents that took place. 

A few skirmishes took place between different Protestant and Catholic gangs. 

A fake bomb was also thrown out of a car window and into the parade’s path. 

Political Parties?

The main parties remain split over their view of Brexit. 

The Protestant Democratic Unionist Party are for the option of leaving and the Catholic Sinn Feign fighting to stay in the Union. 

Both parties run an executive in Belfast together. 

This executive was the result of an agreement in 1998 called the Good Friday Agreement that ended years of sectarian conflict. 

The manager remains neutral in the should we stay or should we conflict.

Kenny had an idea to create a Brexit forum of only Irish. 

Days after the vote to leave took place; Northern Irish opposition forced Kenny to throw out this idea. 

This action proved to be a misstep that resulted in Kenny’s party demanding he set a timetable to step down. 

This act also exposed the political fault line that currently exists between the south and the north.

According to Lee McGowan, if Brexit is not handled properly it could reveal the tensions that have always existed between unionists and nationalists. 

Lee McGowan is employed at Queen’s University in Belfast as a senior politics lecturer.

Border Control?

Border controls have mostly disappeared due to most of Northern Ireland’s violence having ended and the wide acceptance of the European market being mostly a single entity. 

Every day, around thirty thousand people cross a frontier that was once known for gun-running back when the Irish Republican Army was running its campaign for independence from British rule.

After the United Kingdom’s vote to leave the European Union, the possibility of a solid border remains on the forefront of most Irish minds, according to Charlie Flanagan. 

Privately, however, officials seem to be less concerned that his will happen. 

They argue that reintroducing border controls would help no one.

Peter Madden is a man who travels from South to North, from his home located in Meath to his garden supply job in Dungannon, twice a week. 

Madden says that he is not worried that border control will return. 

He also says he does not feel he has to worry that there will be guys hanging out of ditches with guns once again, either.

The following image shows the border between the Republic of Ireland and Northern Ireland. 

Northern Ireland is a part of the United Kingdom.

 

Economic Impact?

Madden is one of many that are more focused on the implications Brexit is having on the economy. 

The pound dropping is slowly making its way throughout the economy. 

It is affecting exporters, like Netwatch, all the way to farmers, like County Clare’s Eddie Punch.

Around forty percent of food exports for Ireland make their way to the United Kingdom. 

Because of this, agriculture appears to be the most exposed area to possible tariffs and the effects of Brexit.

Punch has one hundred and eighty cattle. 

He stated that Brexit’s impact could already be felt due to beef prices being dropped by meat processors.    

Punch is the head of a representative group containing about ten thousand farmers. 

He said that the meat processors are talking up the negativity to take advantage of the situation and get the prices farmers are charging for their cattle to drop.

Punch further stated that there is always some level of gamesmanship present, but when a story like Brexit comes around, this gamesmanship takes place a hundred times more than before the story occurred. 

He says that there have been utterly ridiculous offers and that some of the meat processors have flat out refused to buy the cattle in the first place. 

There are also studies showing that Brexit will have negative impacts on the United Kingdom’s economy. 

There are further links between a reduced GDP in the United Kingdom and the reduction of demands for Irish exports. 

If demands for Irish exports decreases, then the GDP in Ireland will fall as well. 

It is expected that the following areas of the Irish economy are going to be affected by the Brexit vote:

  • Trade
  • Foreign Direct Investment
  • Energy
  • Migration

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Opportunities for the Irish?

Bruton, the former prime minister, stayed up and watched the results of the Brexit vote before finally going to bed early on June 24. 

Martin Shanahan was in the air at the same time. 

Martin Shanahan, the head of IDA Ireland. 

IDA is the agency for the state that is in charge of winning investments. 

Shanahan sensed the shock and returned from New York to Dublin a day before he was supposed to.

Shanahan sent a steward to the cockpit so that they could check for the results. 

The IDA had pitched Ireland to some companies before the vote took place. 

One of which was Standard Chartered Plc. 

The IDA contacted thousands of clients within hours of receiving news of the way the majority went away. 

Shanahan said that the IDA was well prepared for the United Kingdom to vote the way they did. 

Right now the plan of action is for there to be an advertising drive underlining the advantages of Ireland within the United States and Europe. 

However, even this idea is not entirely straightforward. 

The fact is that the United Kingdom’s decision to leave the European Union could take away one of the key advantages overseas investors were provided with when investing in Ireland. 

This is the lower corporate tax rate of 12.5 percent. 

The United Kingdom has a 15 percent rate, which has currently been mooted by the United Kingdom’s government to offset the economic consequences of the Brexit vote.

The ‘Northern Liberal Club’, as it was labeled by one official in Ireland is going greatly to feel the loss of one of its principal members.

The United Kingdom and Ireland have worked together to lead the opposition against efforts lead by the European Union to harmonize the tax laws.

Both Ireland and the United Kingdom joined the European Union because they wanted to be a part of something bigger, according to Bruton. 

He said that when they both joined the union, it fostered a relationship between the two nations that was built on mutual and equal respect. 

He further states now that the United Kingdom has decided to go another way, the harmonizing relationship is at risk of being lost.   

Recap

Here’s a brief Recap of what Ireland concerns:

  • Diminishing economy
  • The possibility of tighter border control
  • Unrest
  • Demand for safe dropping
  • Fewer investment opportunities

What will happen between them and the United Kingdom now?

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Economy

STUDY: Number of Billionaires Doubles in Last Decade

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Number of Billionaires Doubles in Last Decade
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The number of billionaires has doubled in the past decade and the world’s wealthiest 2,153 people controlled more money than the poorest 4.6 billion combined last year, the charity Oxfam said Monday.

Meanwhile, unpaid or underpaid work by women and girls adds three times more to the world’s economy each year at least $10.8 trillion than the technology industry, the Nairobi-based charity said in its “Time to Care” report.

Women around the world work 12.5 billion hours combined each day without any pay or recognition, while the world’s 22 richest men have more wealth than all the women in Africa.

“It is important for us to underscore that the hidden engine of the economy that we see is really the unpaid care work of women. And that needs to change,” Amitabh Behar, CEO of Oxfam India, told Reuters.

“Our broken economies are lining the pockets of billionaires and big business at the expense of ordinary men and women. No wonder people are starting to question whether billionaires should even exist,” Behar said ahead of the annual World Economic Forum in Davos, where he will represent Oxfam beginning Tuesday.

“Women and girls are among those who benefit least from today’s economic system,” he added.

There will be at least 119 billionaires worth about $500 billion attending Davos this year, according to Bloomberg, with the highest contingents coming from the US, India and Russia.

“The very top of the economic pyramid sees trillions of dollars of wealth in the hands of a very small group of people, predominantly men,” the Oxfam report said.

“Their wealth is already extreme, and our broken economy concentrates more and more wealth into these few hands,” it said.

To highlight the inequality, Behar cited the case of a woman called Buchu Devi in India who spends up to 17 hours a day walking almost two miles to fetch water, cooking, preparing her kids for school and working in a poorly paid job.

“And on the one hand you see the billionaires who are all assembling at Davos with their personal planes, personal jets, super rich lifestyles,” he said.

“This Buchu Devi is not one person. I in India encounter these women on a daily basis, and this is the story across the world. We need to change this, and certainly end this billionaire boom.”

Behar said that to remedy the problem, governments should make sure above all that the rich pay their taxes, which should be used to pay for amenities such as clean water, health care and better schools.

“If you just look around the world, more than 30 countries are seeing protests. People are on the street and what are they saying? That they are not to accept this inequality, they are not going to live with these kind of conditions,” he said.

Source: New York Post
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Automobiles

Pump Prices to Edge up After Attack on Iranian General, but Long-Term Effect Unclear

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By Jeff Ostrowski, The Palm Beach Post, Fla.

Motorists soon will see the effects of President Donald Trump’s decision to kill a prominent Iranian general. Whether pump prices rise a little or a lot depends on how quickly international tensions intensify.

Florida gas prices climbed an average of 7 cents a gallon in the past three days and could increase an additional 5 cents, AAA – The Auto Club Group said Monday.

The 7-cent increase was coming even before the U.S. air strike Thursday that killed Iranian Maj. Gen. Qassem Soleimani. That hike was a result of a rise in the price of crude oil in December.

News of the targeted killing of Soleimani sent crude oil surging nearly $2 per barrel on Friday. An increase of that magnitude typically translates to a 5-cent hike at the pump, AAA said.

The U.S. benchmark for crude oil traded Monday just above $63 per barrel, the highest level since May 2019. The price of oil makes up about half the price of a gallon of gas.

“What happens in the Middle East can have a direct impact on Americans’ daily lives by influencing what they pay at the pump,” said AAA spokesman Mark Jenkins. “Crude prices rise when there’s a threat of war, because of concerns over how the conflict could hamper supply and demand.”

Oil analyst Tom Kloza of energy firm OPIS agreed that pump prices in Florida likely will rise about 5 cents a gallon in the coming days.

“Then I have a hunch that things are going to calm down,” Kloza said Monday. “I don’t think we’re looking at $3 gas.”

The national average pump price Sunday was $2.585, while the Florida average was $2.526, AAA said.

Kloza expects only modest increases in part because of the timing of the attack. January is always a slow month for gas consumption in the United States.

There’s also the reality that sanctions leave Iran unable to export oil. Complicating the calculus is Iraq’s response to the U.S. attack. The drone strike on Soleimani took place in Baghdad, and some Iraqi politicians considered the assault an affront to Iraqi sovereignty.

While there’s no Iranian oil supply to be disrupted by a war, Iraq is an important producer.

Trump keenly watches oil prices and realizes that a price spike might erode his support in this year’s presidential election, Kloza said.

At the same time, Kloza added, “This president has proven to be unpredictable.”

Trump’s response has been typically uneven. Delivering an official statement at the Mar-a-Lago Club in Palm Beach, Trump’s tone was measured. He said the targeted killing was designed to pre-empt Soleimani’s planned attacks on American diplomats and soldiers.

“We took action last night to stop a war,” Trump said Friday. “We did not take action to start a war.”

However, over the weekend, Trump took to Twitter to threaten attacks on Iranian cultural sites.

“The United States just spent Two Trillion Dollars on Military Equipment,” Trump wrote Sunday on Twitter. “We are the biggest and by far the BEST in the World! If Iran attacks an American Base, or any American, we will be sending some of that brand new beautiful equipment their way…and without hesitation!”

##IFRAME_1##Iran has vowed vengeance, but military experts say the nation isn’t powerful enough to wage a direct war against the U.S.

“It’s still far too early to know how much of an impact this conflict will have overall on prices at the pump,” AAA’s Jenkins said.

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Economy

Stocks Rally Despite Impeachment News

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Stocks rose on Thursday as investors looked past the news of President Donald Trump’s impeachment as well as mixed U.S. economic data.

The Dow Jones Industrials advanced 53.85 points to begin trading at 28.293.13

The S&P 500 recovered 4.93 points to 3,196.07

The NASDAQ added 19.39 points to Wednesday’s all-time record, at 8,847.12.

The S&P 500 is up nearly 7% since House Speaker Nancy Pelosi launched a formal impeachment inquiry in September.

Cisco Systems was the best-performing Dow component, rising 1.6%. The consumer staples and real estate sectors led the S&P 500 higher, gaining 0.4% each. Micron Technology shares also contributed to Thursday’s move higher. Conagra shares surged more than 14% and were on pace for their biggest one-day gain since Oct. 16, 1989.

Micron shares climbed 3.5% on the back of strong quarterly results. The chipmaker posted earnings per share and revenue that topped analyst expectations.

On the economic data front, weekly jobless claims fell to 234,000 from 252,000 the week before. However, economists expected claims to fall to 225,000.

Meanwhile, the Philadelphia Federal Reserve’s business conditions index fell to 0.3 in December from 10.4 in the previous month. Economists expected the index to slip to 8.

The Democrat-led House of Representatives voted Wednesday to impeach Trump for abuse of power and obstruction of Congress. Trump became only the third president to be charged with high crimes and misdemeanors and will now face a trial in the Republican-controlled Senate.

Prices for the 10-Year U.S. Treasury were lower, raising yields to 1.94% from Wednesday’s 1.93%. Treasury prices and yields move in opposite directions.

Oil prices gained seven cents to $61.00 U.S. a barrel.

Gold prices moved forward $1.80 at $1,480.50 U.S. an ounce. Copyright © 2019 Baystreet.ca Media Corp. All rights reserved.

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