10/2019 • 12 JANUARY, 2019 WEEKEND ISSUE
DAILY NEWS IN ENGLISH
Counting the cost of the US government shutdown But an extended shutdown could prove a drag
As the partial closure of the US government is set to become the longest ever, its immediate impact on the economy is negligible the American central banks says.
The United States is on track for what will become the countryʼs longestevergovernment shutdownif it continues through the weekend. A partial closure of government services during the Clinton administration ended after 21 days, which the current one will surpass on Saturday. About 800,000 federal workers are affected by the shutdown, and many will miss their first paychecks on Friday. But apart from the personal hardship, the wider impact of the shutdown on the US economy seems limited. Speaking at the Economic Club of Washington on Thursday, US Federal Reserve Chairman Jerome Powell said that past government shutdowns didnʼt last long and, hence, hadnʼt left a mark on the economy. "A longer shutdown is something we have not had," Powell, however, also said. "If we have an extended shutdown, I do think that it would show up in the data pretty clearly." Powell noted that for the time being the American central bank would have only limited data available to make predictions on the economy, especially about monetary policy decisions. About one-quarter of the federal government has been shut down since December 22 because of a dispute over $5.7 billion (€4.95 billion) in funding for President Donald Trumpʼs USMexico border wall. Trumpʼs dispute with Democrats is showing no signs of ending afterthe president walked out of a negotiating session with
Democratic leaders, who continue to reject his demand for funding. Meanwhile, data coming out of the White House suggest that the shutdown could reduce the United Statesʼ total economic output by an estimated tenth of a percentage point every two weeks. For context, the US economy is forecast to have grown by about 2.8 percent in the fourth quarter of 2018. Kevin Hassett, chairman of the White House Council of Economic Advisors, believes that the US unemployment figures could also rise this month, because federal employees furloughed during the shutdown are considered unemployed. "So when we see the January jobs number, it could be a big negative," Hassett told reporters earlier this month, adding that those workers would, however, ultimately get paid. Some economists also expect to see a big pullback in spending if government employees canʼt receive their paychecks. On balance though, they echo the Fedʼs view that the shutdown so far has had a minor impact on the economy. According to Goldman Sachs analysts, the ongoing shutdown will affect gross domestic product (GDP) by about 0.07 percentage points each week. "We do not expect the partial shutdown to have substantial effects on financial markets. We note that the shutdown is unrelated to the debt limit and has no implications for Treasury financing," the US investment bank said in a note.
Winter storms sweep across southern Germany and Austria
Saudi woman in Thailand flying to Canada, granted asylum
Germany books €11.2 billion budget surplus
Macedonian lawmakers vote to rename country North Macedonia
In Austria, at least eight people have died since the weekend, and a 9-yearold child was killed near Munich on Thursday when a tree collapsed under the weight of the snow. On Friday, a snow plow driver in southern Germany died when after his vehicle after it plunged into an icy river. The heaviest snowfalls in 20 years havecovered southern Germany and Austriaand parts of Czechia over the last week. Transport on road and rail has been affected, mainly by snow-laden trees.
Rahaf Mohammed Alqunun, 18, who last weekend barricaded herself in a Bangkok airport hotel room, alleging she had been abused by her Saudi family, boarded a Korean Air flight Friday, bound ultimately for Toronto. Thailand, which initially had threatened to deport her back to Saudi Arabia, said she was seen off by Canadaʼs ambassador. "Canada has been unequivocal that weʼll stand up for human rights and womenʼs rights around the world," Canadian Prime Minister Justin Trudeau said.
Even though Germany had taken in more in taxes and spent less than expected, resulting in abudget surplus of €11.2 billion ($12.8 billion), German Finance MinisterOlaf Scholzwarned, "The good times in which the state keeps taking in more taxes than expected are coming to an end." The budget surplus was Germanyʼs fifth in a row and the first in Scholzʼs tenure after taking over for Wolfgang Schäuble.
Over two-thirds of the parliament in Skopje voted in favor of renaming their country "North Macedonia" on Friday, passing the threshold required for amending the constitution in the Balkan country. The move aims to settlethe decades-long dispute with Greece over Macedoniaʼs name, with Athens claiming that the name implies territorial claims on the Greek province of Macedonia and accusing the authorities in Skopje of trying to link their Slavic nation with Alexander the Great.