Syrian migrants cross under a fence into Hungary at the border with Serbia, as the government started to construct a 175-km-long fence to halt the flow of migrants. Laszlo Balogh / Reuters
Syrian migrants cross under a fence into Hungary at the border with Serbia, as the government started to construct a 175-km-long fence to halt the flow of migrants. Laszlo Balogh / Reuters

Germany opts for refuge, not barriers



The wealthiest countries of Europe have mostly been spared the humanitarian burden of Syria’s long and seemingly intractable conflict. More than four years into the civil war, geographic proximity rather than the ability to shoulder the burden has been the primary determinant of who bears the brunt of the biggest refugee crisis since the Second World War.

In this context, Germany made a brave decision this week when it opted to quietly suspend itself from the Dublin Regulation, a European Union rule that requires refugees to claim asylum in the first country they reach within the union. The regulation is designed to prevent “asylum shopping”, where refugees seek to apply in the EU country most likely to be sympathetic to their case. The consequence has been to place the refugee burden most heavily on the countries nearest the conflict. These are also among the least wealthy in Europe.

Germany will now welcome Syrian refugees, regardless of which EU country they reached first. By one analysis, it will take 800,000 migrants this year – roughly eight times as many Syrians as were estimated to be in the country at the start of this year. While the greatest burden will remain on Syria’s immediate neighbours, Lebanon, Jordan and Turkey, this ought to lessen the effect on Greece, Italy, Bulgaria and Hungary.

These EU frontier countries have sought to stem the influx. Bulgaria, for example, has had 25,000 applications for asylum in the past two years – more than in the previous two decades – and has enhanced the capacity of its border police, installed cameras and motion sensors, and is extending a security fence along 160km of its border with Turkey. Hungary is rushing to complete a barbed-wire fence along its border with non-EU Balkan countries to shut the asylum-seekers out.

Germany’s change of direction on Syrian refugees is both commendable and equitable. As the richest country in the EU, it is shouldering its share of the humanitarian burden instead of leaving it to some of the union’s least robust economies. It’s an example some other European countries, and those further afield, could follow.

Responding to the refugee crisis by building walls and border fences is a tacit admission of failure to find a political solution. As Germany knows all too well, walls eventually fall. With no end in sight to Syria’s nightmare, the developed world has a responsibility and duty to help ease the suffering of the innocents caught in the middle.

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Four reasons global stock markets are falling right now

There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:

1. Rising US interest rates

The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.

Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”

At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.

2. Stronger dollar

High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.” 

3. Global trade war

Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”

4. Eurozone uncertainty

Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.

Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”

The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”

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Israel Palestine on Swedish TV 1958-1989

Director: Goran Hugo Olsson

Rating: 5/5