“President Trump’s trip outside the United States….”

President Trump’s trip outside the United States

From 19 – 21 May: The first stop of Trump’s marathon trip was in Saudi Arabia.  Trump delivered a speech on how Muslim nations and the US can partner to counter Islamic State and Iran.  The US and Saudi Defense Ministry negotiated a package of about $110 billion in defense deals.

On 22-23 May: President Trump’s next stop was Israel.  President Trump and Prime Minister Benjamin Netanyahu met and said that there is an unprecedented opportunity to achieve a Mideast peace agreement as hostile Arab nations join with the Jewish state to confront Iran, their rival. Furthermore, the President visited holy sites and President Abbas.

On 24 May: Trump met Pope Francis.  In a statement the Vatican said that the talks focused on peace, health care, education, immigration and international affairs.  This was the first ever meeting with the Pope.  The two leaders have different views on a range of issues.   President Trump also met Prime Minister Paolo Gentiloni.

On 25 May:   Trump in Brussels, visits the NATO’s headquarters to meet fellow NATO leaders.  The bombing in the UK will stress the call for NATO to become more engaged in fighting global terrorism.

On 26-27 May: Trump meets world leaders in Sicily for a G-7 summit that shall include debates on climate change and free trade.

US Budget Proposal

Meanwhile in the US, Trump has budget plans that could dramatically reduce the US government role in society with $3.6 trillion in spending cuts over the next decade. The budget proposal would raise $500 million in fiscal year 2018 by draining the Strategic Petroleum Reserve and as much as $16.6 billion in oil sales over the next ten years. The proposal also seeks to boost government revenues by drilling the Arctic National Wildlife Refuge.  This will end the practice of sharing oil royalties with the Gulf of Mexico and selling off government-owned electricity transmission lines in the West.

Germany

According to the Institute for Economic Research, business confidence rose to 114.6 in May which is the highest level since 1991 from a 113 level in April. Consumer spending, investment and exports all helped to push the economy to a 0.6 percent growth in the first quarter which is the fastest in a year. Furthermore, spending on new equipment increased at the fastest pace since the end of 2015 according to the statistics office.  With the positive data showing that the region is on track European stocks have advanced.  Germany, the largest European economy has been the key to the European area recovery.

Greece

On Monday EU ministers met up in Brussels to seek compromise with the International Monetary Fund on debt relief for Greece which is the state with the highest debt in the EU. The IMF is reluctant to participate in bailout unless the EU ensures that the EUR 315 billion debt load is sustainable.

Brexit Position

The governments of the 27 remaining nations approved the mandate for the EU’s chief negotiator Michel Barnier in Brussels. For weeks, discussions have focused on which types of negotiations can begin and the size of Britain’s exit bill.  In her speech Theresa May warned against jeopardizing the Brexit negotiations by electing Labour party leader Jeremy Corbyn. According to her, the stakes in this election are too high.   There are reports that the bloc wants to begin talks on 19 June, eleven days after the election.

Terror Attack in the UK

A suicide bomber killed 22 people and at least 59 people were wounded at a pop concert in the northern city of Manchester to which Islamic State claimed responsibility. It is described as the worst terrorist attack in 12 years.  Campaigning for the next month’s election was suspended.  After meeting top security officials, Prime Minister Theresa May announced that intelligence analysts had raised the terrorism in the UK as “critical” from “severe” the highest level for the first time in ten years.  Theresa May also confirmed that the 22 year old suicide bomber Salman Ramadan Avedi who carried out the attack in Manchester Arena was born and raised in the UK and that UK security services are working to establish if he formed part of a larger group.

China

Moody’s has cut the rating on China’s debt for the first time since 1989 from Aa3 to A1 on Wednesday citing the possibility of a “material rise” in the debt of the economy and the burden that will place on the finances of the state. The outlook was changed from a negative to a stable one.  The stocks and the yuan slipped in early trading. According to Bloomberg Intelligence total outstanding credit increased to about 260 percent of GDP at the end of 2016 up from 160 percent in 2008.  According to the International Monetary Fund China’s external debt is low by international standards at around 12 percent of Gross Domestic Product and a downgrade would not be as disruptive as a country which is reliant on international funding.  The move by Moody has put China in parallel in their rankings with countries including Japan, Saudi Arabia and Estonia.

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