U.S. Economy Slowed to 1.5% in Q2
The U.S. economy grew 1.5 percent in the second quarter as consumption and investment slowed down and unemployment remained above 8 percent. These numbers heightened concerns that Europe will weigh on the country, and that the possible expiration of tax cuts and other easing policies will hurt it even more. This figure may force U.S. president Barack Obama to defend his record, despite a survey that shows most of 40 leading economists think the job market would be in much worse shape without his administration’s response to the financial collapse, namely the stimulus and bailout packages. The White House said today that for the fiscal year ending September 30, the deficit will be of $1.2 trillion, less than previously estimated. It also lowered its forecast for the next decade, saying it will be $240 billion less than initially predicted. Still, analysts say it is not enough to balance the books.
European Markets on the Rise
European stocks markets continued to rise today after German Chancellor Angela Merkel and French president François Hollande said they, too, would do their utmost to keep the Eurozone intact. Their comments came a day after European Central Bank president Mario Draghi said the ECB would do “whatever it takes to save the euro,” and two days after ECB Governing Council member Ewald Nowotny suggested the central bank could help boost the European bailout fund. Bloomberg News also reported today that Draghi will meet with Jens Weidmann, the president of the Bundesbank (Germany’s central bank), to discuss new easing measures. He already has the support of the Spanish, French, and German governments, and he’s trying to bring central bankers around to his proposals in order to present a united front to the markets. It may not be an easy task, as the Bundesbank reiterated today that it opposed bond purchases. U.S. Treasury secretary Tim Geithner will meet on Monday with Draghi and German finance minister Schäuble.
Olympics Games Officially Open
The Olympic Games opened in London today with a spectacle overseen by filmmaker Danny Boyle, of Trainspotting fame. It celebrated Britain with references to many icons of its culture, from the Queen’s corgis and Mary Poppins to the country’s beloved National Health Service. This is the third time the city hosts the Olympics: the first one in 1908, the second in 1948 (pushed back four years because of World War II). This year, 10,500 athletes (46 percent of whom are women) are expected to compete for 302 gold medals. The new stadium cost £500 million ($775 million), part of the $15 billion Britain is expected to spend on the games. This should bring a welcome relief to a country whose economy shrank 0.7 percent in the second quarter, but it may not be enough, The Economist reports: of the money that was poured into tickets, most came in 2011. And infrastructure spending already happened. Tourists will probably plan around the games, and sports fans typically make short trips. GDP growth could see a 0.2 percent uptick in the third quarter, not much more, said the Bank of England.
Syria: Fighting in Aleppo Continues
Syria remained mired in conflict as Aleppo, a Northern city close to the Turkish border and the country’s commercial capital, turned into a battlefield. Syrian forces sent helicopters to fire on the population, killing at least twelve people, and international observers began to fear a government siege around the town. Meanwhile, Iklhas Badawi, a member of parliament representing a district of the city for president Bashar al-Assad’s party, defected and went to Turkey. On Wednesday, the Syrian ambassador to Cyprus and her husband, a former envoy to the United Arab Emirates, also left. The Syrian government admitted Monday to having chemical and biological weapons. Today, the Washington Post reports that it was able to develop them thanks in part to Iran’s expertise in the matter. It also obtained equipment and chemicals from European businesses, supposedly for industrial use. No international intervention is planned at this stage, but there is concern about a mass killing of civilians in Aleppo. Even still, a general who left the Syrian army now says the government is close to folding as the military is facing a serious supply crisis. Mohammad al-Zobi says Assad will stay in power “one or two months, at most.” See how the conflict has evolved and how deadly it has become here.
Weekend Read: What Can Mississippi Learn from Iran?
Treating the unhealthiest Americans by importing an idea from Iran. Dr. Aaron Shirley, former Civil Rights leader, found inspiration in Iran’s health care system to provide intensely personal care to rural populations in Mississippi. In the New York Times Magazine.