Foreign investment — that sounds like a good thing, doesn’t it? Certainly, governments love to boast about it.
But there’s a serious downside. No, not the basic fact of foreign ownership. If an overseas company creates jobs, builds capacity and pays its taxes here, then that’s to be welcomed. Far better a foreign investor than a British asset-stripper.
No, the real problem is the impact on exchange rates. When overseas interests buy up British companies, property or other assets, they typically need to pay for their purchases in pounds. A net inflow of foreign capital therefore increases demand for our currency, pushing up its value — and thus making British exports more expensive. ...
The lockdown recession will have devastating effects on employment. And as Kathleen Henehan of the Resolution Foundation points out, the least advantaged young people will get the worst of it:
Emergency measures like the furlough scheme will go some way to help existing workers, but they won’t do much for school leavers and graduates struggling to get their first jobs — or a replacement job after being made redundant.
An extended period of mass employment will have long-term scarring effects on those most directly impacted — setting them up for decades of economic disadvantage. To rescue a potentially lost generation, there’s a case for a state programme to provide the missing jobs directly. ...
New legislation has just come into force authorising the use of sobriety tags. These are ankle-attached monitoring devices that can detect evidence of alcohol consumption in the sweat of any person wearing one.
They will be used in England and Wales to help enforce alcohol abstinence orders on convicted offenders.
Critics will say that this is a cheap sticking-plaster solution — one that fails to address the underlying causes of crime. But for a lot of crime, alcohol is the underlying cause. If removing it from the equation prevents re-offending then that’s half the battle won (or all of it, from the victim’s point of view). ...
Can the European Union save itself? Yesterday, the FT published a chart that sums up the whole existential crisis. It shows all state aid approved by the EU during the Covid pandemic. Remarkably, just one country accounts for half of it: Germany.
Despite its comparatively light exposure to the virus, the strongest economy in the Union is getting the most help.
Most of this is self-funded, but there are obvious consequences for European solidarity. What makes the situation all the more intolerable is that the constraints of Eurozone membership prevent the weaker economies from helping themselves. There are limits on what they can borrow; they can’t make their own decisions on monetary measures like quantitative easing; and they can’t export their way to recovery through currency devaluation. Even the safety valve of sending their unemployed to find jobs elsewhere in Europe is subject to the effects and after-effects of lockdown. ...
Yesterday, the Government launched a “comprehensive plan to reopen, restart and renew the housing market.”
That’s just as well because a lot of us could be moving before long. The Covid-crisis is rewriting our economic geography — and the effects are likely to outlast the pandemic itself.
This week, Twitter told its employees that they could still work from home even after the lockdown:
The “forever” bit sounds like some eternal punishment, but let’s focus on the immediate consequences.
Where people work goes a long way to determining where they live. If enough employers follow Twitter’s example, then that means millions of workers no longer tied to a daily commute. Suddenly, urban centres (plus their suburbs and satellite towns) aren’t the only option. You can escape to the country, but keep your big city job. ...
Stay alert! Sounds exciting, doesn’t it? A definite hint of derring-do.
Real life, though, is far from adventurous. Forget ‘stay alert’, for most of us it’s still ‘stay at home’.
Lockdown may have loosened, but not in a fun way. More of us can go to work now. We can all take as much outdoor exercise as we like. I haven’t seen the guidance on eating dust, but I dare say it’s off the ration. Seeing friends and family, however, remains heavily restricted.
We think of ourselves as a liberty-loving nation, but seven weeks in and we’re still extraordinarily compliant. The protests we’ve seen in America have not been echoed here. Strangest of all, we’ve had remarkably little dissent from the UK’s small, but normally energetic, band of libertarian wonks. ...
Are “authoritarian states better equipped than democracies to tackle the climate crisis?”
Astonishingly, 53% of young Europeans (aged 16-29) seem to think so. This compares to 42% for the 30-49 age group and just 35% for the 50-69 age group.
These figures come from a poll conducted by the Bertelsmann Foundation for the Europe’s Stories project at Oxford University. The project’s leader, Timothy Garton Ash, contrasts this against another finding which was that an “astonishing 71% of Europeans are now in favour of introducing a universal basic income”:
Garton Ash wasn’t the only one to be both delighted and dismayed by the poll results. For instance, here’s a reaction from Rutger Bregman, the Left-wing intellectual of the moment: ...
The most important story of the week? No, not the extramural activities of Professor Lockdown. Rather, it was a verdict handed down on Tuesday by the German Constitutional Court.
I know, that sounds deathly dull and the actual verdict (110 pages of Deutsche-legalese) was even duller. Who’s going pay attention to any of that when there’s bonking boffins to read about?
Except that this really matters. Wolfgang Munchau calls it “the German version of Brexit.” A slight exaggeration, perhaps — Germany isn’t quitting the EU just yet. But the ruling does appear to rewrite the relationship between the EU’s member states and its federal institutions — in particular, the European Central Bank (ECB). ...