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DAILY BRIEFING

DAILY BRIEFING

Balking at Balkan babies

Written by Sabina Kadić-mackenize, associate partner
Edited by Kevin Pringle, partner
27 August 2020

Good morning,

As news broke last week that UK tourists returning from Croatia would need to quarantine after arrival, a mass exodus began from the country.

Some 20,000 British tourists were affected, with a high proportion leaving the sun and sirnica behind in a bid to get home before the UK government’s new quarantine rules kicked in.

While the circumstances of the prompt exit may be quite exceptional, people leaving the Balkans behind in their droves is nothing new. 

For decades now, Croatia, along with its neighbours, has struggled to convince its young, educated and economically viable people to stay put.

report by the Westminster Foundation for Democracy found that with the highest emigration rates in Europe, the western Balkans face a range of economic and social consequences because of the young leaving to find a better life abroad.

According to government figures, an estimated 230,000 people left Croatia for the 11 “core EU countries” of western Europe between 2013 and 2016. The most popular destination is Germany. You can see why, then, in a country with a population of 4.2 million, this is somewhat problematic.

But there may be a solution on the horizon. With a falling birth rate as people balk at Balkan babies, and with mass emigration and a so-called “brain-drain” unlikely to subside any time soon, the mass influx of migrants into the Balkan corridor – so often labelled a crisis – may actually provide the answers.

Here’s what we know: migration boosts the working-age population, migrants arrive with skills and contribute to human capital development in the countries they settle in. They’re essentially a replacement for the lost supply of labour. They’re often flexible, willing to do any job, and in turn contribute to growth and competitiveness. All this before we even consider their contribution to multiculturalism and ethnic diversity.

In the same week that thousands of British tourists left Croatia and crossed the channel (by air) to the safety of their homes, thousands of migrants replaced them – roughly 700 a day cross into the country.

If a study by the Paris School of Economics is anything to go by, each of them has the potential to benefit the country’s economy within five years of arrival. The study, based on analysis of 30 years of data from 15 countries in western Europe, found that soon after a spike in migration, which the Balkan corridor is arguably still experiencing, the overall strength and sustainability of the country’s economy improves.

So, it may be less of a case of solutions on the horizon, but rather at the border.

News

A category four hurricane is expected to cause an “unsurvivable” storm surge, extreme winds and floods as it hits the US, the National Hurricane Center has announced. The storm is approaching Texas and Louisiana with maximum sustained wind speeds of 150 miles per hour (240km/h). As a result, half a million residents have been told to leave the area.

The embattled European trade commissioner, Phil Hogan, has resigned after causing an outcry over breaches of coronavirus rules during a golfing event in Ireland. On Wednesday night, Phil Hogan published a statement apologising to the Irish people and the EU commission for the breaches, ending his attempts to oppose the controversy and keep his post.

A new scheme is set to pay coronavirus sufferers and their contacts to self-isolate amid concerns that increasing numbers are refusing to quarantine because of financial worries. People on low incomes who test positive for the virus will get £13 a day during their 10-day quarantine period, and people who have come into contact with them will receive £182 for 14 days of isolation. For now, the scheme will only apply to areas where there are high numbers of coronavirus cases.

Business and economy

Former Australian prime minister Tony Abbott is being lined up to become a UK government trade advisor, prompting widespread criticism from the Labour Party. A controversial right winger and climate change sceptic, he is expected to become a member of the Board of Trade which was revitalised by former international trade secretary Liam Fox. (£)

Commercial landlord Grosvenor has announced that it will be paying for its Mayfair and Belgravia tenants to continue offering half price meals throughout September to boost visitor numbers in central London. Several UK restaurants have also confirmed that they will continue the Eat Out to Help Out scheme into September with their own money because of how successful it has been. The list includes: Burger and Lobster, Prezzo, Pizza Pilgrims and Aqua Kyoto.

One in 20 employees are not receiving the pension they are due, according to new research by the think-tank Resolution Foundation, showing that agency workers, part time and temporary staff and the low paid are at much greater risk of being excluded from work. It is estimated that 800,000 employees have either not been enrolled or are receiving contributions below the legal minimum. (£)

Columns of note

Writing in The Telegraph, Hasan Chowdhury argues that while the government has just made a decision on imposing facial coverings at schools, some schools had already started taking matters into their own hands by installing sophisticated technology to help prevent the spread of Covid-19. He warns, however, that unless backed by clear justification of necessity and oversight, surveillance technologies can be a source of serious concern. (£)

In the Financial Times, Laura Pitel delves into the history of the Gallipoli battle, which saw tens of thousands of Allied forces and their Ottoman adversaries losing their lives in the first world war. A source of national pride, the story of Gallipoli has provided president Erdogan with a convenient historical narrative claiming that foreign powers are aiming to cause havoc in the country, Pitel argues. (£)

Cartoon source: The Guardian

Markets

What happened yesterday? 

Asian stocks slipped on Thursday amidst fresh worries about US-China relations and ahead of a speech by Federal Reserve Chairman Jerome Powell later in the day. As a result, Hong Kong’s Hang Seng slid one per cent and Japan’s Topix index fell 0.5%. In the US, the Dow Jones Industrial Average climbed 0.3% to 28,331.92 and the S&P 500 gained 1.02%, at 3,478.73. The Nasdaq Composite index also rose 1.73%, at 11,665.06.

In London, stocks closed higher boosted by positive headlines around US-China trade and the US economy. The FTSE 100 100 ended the session up 0.14% to 6,045.60.  and the FTSE 250 was one per cent firmer at 17,753.57 after reporting results that beat expectations. 

In terms of commodities, gold lost 0.5% to $1,945.98 an ounce.
 
In company news: 

Gatwick Airport has announced significant company-wide restructuring plans, including cutting up to 600 jobs in light of the dramatic impact the coronavirus pandemic has had on its passenger and air traffic numbers. The number of job roles being removed from across the business account for approximately 24% of its current workforce.

The Mexican restaurant chain Wahaca is set to shut 10 of its 28 restaurants in the UK in a bid to shore up cash. The chain said rents in certain locations had risen by up to 70% over the past five years, with business rates increasing by 30 to 40%. (£)

On a more positive note, DIY tool firm Screwfix has announced that it will open 30 new stores in the UK by the end of January, creating 300 job roles, with an additional 10 stores being opened in the Republic of Ireland, leading to the creation of up to 160 new jobs.

What’s happening today?

Finals
Hays

Interims
Anglo Pacific
Grafton Group 
Macfarlane Grp.
Puretech
Total Produce
WPP

AGMs
ANGLE
Kodak Minerals
Northern 3 Vct
UK Commercial Property Trust

Int. economic announcements
(09:00) M3 Money Supply (EU)
(13:30) GDP (Preliminary) (US)
(13:30) Continuing Claims (US)
(13:30) Initial Jobless Claims (US)
(15:00) Pending Homes Sales (US)

Source: Financial Times

did you know

The Ostrich has the biggest eyes in the whole animal kingdom. Each eye is bigger than its brain.

Parliamentary highlights

House of Commons

In recess until 1 September

House of Lords 

In recess until 2 September 2020.

Scottish Parliament 

Portfolio Questions (Virtual): Economy, Fair Work and Culture; Education and Skills

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