By Neel Shah and Rishi Shah
ITALY CHALLENGES THE EU
In October, the EU rejected the draft budget made by the Italian government and demanded re-submission of an altered budget. However, the deadline for re-submission, November 13th passed with no new budget having been submitted.
The EU has a set of fiscal rules for Eurozone members, notably that fiscal debt can’t exceed 3% and that public debt can’t exceed 60% of GDP. However, the increased spending within the budget threatens the second limit of the EU fiscal policy. The government, rather than working with the EU (as they have done in previous years, where the rules have been relaxed) have confronted Brussels. This marks heightening Euroscepticism in Italy, following the current government of the Five Star Movement and the right-wing League.
However, it is uncertain whether the European Commission will take action. Although they have begun proceedings against Italy, the Commission has been reluctant to penalise nations within the Eurozone in the past. For example, in 2016, the Commission ‘fined’ the Portuguese and Spanish governments €0, having backed down due to the risk of Euroscepticism. One thing seems certain, Italy will not bow down until the EU take the first step, with the north of Italy backing for increased financial control.
CLIMATE CHANGES AND INDUSTRY: AN UNHEALTHY RELATIONSHIP
A new report was released this week commenting on the damaging effects of industry on the environment. However, there was a hint of optimism in the report, where it was concluded that it is possible to reduce emissions and prevent catastrophic climate change. The negative externalities of industry need to be prevented.
For the climate change sceptics, notably Mr Trump, the report also highlighted how it will cost the US economy hundreds of billions of dollars by the end of the century, if there is continued growth in emissions at record breaking rates. The report, written by the US government, stated that the effects of climate change are already evident and there are examples of the harm caused. The global temperatures are close to increasing beyond internationally agreed limits.
The report mentioned that the fact that the rate of change of the Earth’s climate is the fastest ever, hence showing climate change isn’t a natural phenomenon, instead human-induced. There has been the melting of land-based ice, and the expansion of oceans as temperatures increased, and this has led to average sea levels along the US coast to increase by around 9 inches since the early 20th century.
It also mentions the damaging effects of wildfires, poor air quality and many other environmental problems in the US.
TUITION FEES - ARE THEY TOO HIGH?
Research from a university think tank has shown that less than half of revenue from tuition fees is spent on teaching. This is important as a review in post-18 education funding, commissioned by the Prime Minister, is examining how to redesign university fees, with suggestions that fees may be cut to £6,500.
The think tank report days only 45% of tuition fee income is spent on teaching, with the rest spent on services or administration. For example, at Nottingham Trent, 8% is spent on professional services, including high-level pay.
The report also suggests differing levels of dependence on university fees, with only 15% of income for Cambridge, but 83% at Falmouth. This puts financial pressure on universities to recruit, especially if fees are cut in some universities.
The Public Accounts Committee stated that loans with a value of £3.5 billion were sold off to private investors for £1.7 billion in the last year, with many MPs sceptical that this would be a good deal for taxpayers. Research from the Committee and from the Higher Education Policy Institute have been used to examine whether students are being overcharged or not. Although the full value of the loan will not be obtained, the Public Accounts Committee have suggested that in this case, there was too little return, calling for increased transparency.
BITCOIN BUBBLE: THE DOWNWARD SPIRAL
The now infamous cryptocurrency, the Bitcoin, has fallen below $4,000. This continued fall puts losses at for Bitcoin investors at 72 per cent for this year. The spiral that has caused this, will likely continue to push down the price. The low confidence in the currency means the people sell their bitcoins off. This means that the demand is lower and the price falls. Hence, the remaining owners of Bitcoin lose confidence and they also sell. This has caused the downward spiral with confidence and price plummeting in unison. Moreover, the low confidence is also caused by the regulatory scrutiny, always questioning whether it is legal to use, or whether any major industry can ever implement it.
Many believe that Bitcoin as previously overvalued, and as people got into a craze of purchasing it, the price sky rocketed. Perhaps the current plummet is returning it to its correct price, where it will remain steady. Or perhaps the future will be that of the “Tulip Mania,” which is the 400-year-old story of tulips becoming extremely lucrative in Holland and then going out of fashion, crashing the bulb price.
There are many possible outcomes for the price of the Bitcoin, I believe that the most likely is that Blockchain technology will prosper and transform into new cryptocurrencies, eliminating the flaws of Bitcoin, with this change so too will Bitcoin disappear.