The world this week
Barack Obama expelled 35 Russian diplomats and imposed new economic sanctions in retaliation against Russian hackers’ interference in America’s election. American intelligence agencies say that Russia released stolen e-mails of Democratic Party officers in order to aid the campaign of Donald Trump. Vladimir Putin declined to strike back, winning praise from Mr Trump. See article.
A gunman attacked a nightclub in Istanbul during New Year’s Day festivities, killing at least 39 people. Islamic State claimed responsibility. Turkish religious authorities who had criticised new year’s celebrations as un-Islamic condemned the attack. It came two weeks after a policeman shouting “Don’t forget Aleppo!” fatally shot the Russian ambassador to Turkey. See article.
Relations between Israel and America became strained when John Kerry, the soon-to-retire secretary of state, said that the Israeli government was undermining the prospects for a “two-state solution” with the Palestinians. His comments came soon after America abstained in the UN Security Council vote that criticised Israel’s construction of settlements. See article.
Politicians in the Democratic Republic of Congo struck a deal in which elections will be organised in 2017 and President Joseph Kabila will step down by the end of the year. Mr Kabila himself has not signed the deal, however.
Argentina’s president, Mauricio Macri, dismissed the finance and treasury minister, Alfonso Prat-Gay. He left apparently because of disagreements over the structure of the economic team. Mr Macri split the finance ministry into two. Luis Caputo, the new finance minister, will be responsible for borrowing. A new treasury minister, Nicolás Dujovne, will oversee tax and spending.
A battle between gangs at a prison in the Brazilian state of Amazonas left 56 inmates dead. Some were decapitated; severed limbs were stacked by the entrance. See article.
Odebrecht, a Brazilian construction company, and Braskem, a petrochemical firm in which it owns a stake, pleaded guilty to bribing officials and political parties to win contracts in Latin American and African countries. The companies agreed to pay a penalty of at least $3.5bn, the largest settlement ever in a global bribery case.
Stockmarkets had a good 2016. The S&P 500 rose by 10% over the 12 months and the Dow Jones by 13%. The FTSE 100 recovered from its Brexit wobbles to end 14% up; Russia’s RTS index soared after the election of Mr Trump to finish 52% higher; and Brazil’s Bovespa rose by 39%, despite, or because of, the defenestration of the president. But Italy’s main index fell by 10%, and China’s Shanghai Composite never fully recovered from its turbulent start to 2016, ending the year 12% lower. See indicator.
Donald Trump picked Jay Clayton, a legal expert on mergers and acquisitions, to be the next head of the Securities and Exchange Commission.
The European Central Bank raised its estimate of the capital shortfall at Monte dei Paschi di Siena to €8.8bn ($9.1bn). The troubled Italian bank has requested a bail-out from the government after running out of time to raise new capital privately.
Shortly before Christmas, Deutsche Bank agreed to pay $7.2bn to settle with America’s Department of Justice for mis-selling subprime mortgage securities, about half the amount the regulator had initially sought. Credit Suisse agreed to pay $5.2bn to resolve claims. But Barclays rejected a settlement, prompting the department to file a lawsuit. See article.
Ford made a U-turn when it scrapped plans for a new factory in Mexico to build compact cars, and diverted some of the investment to a plant near Detroit to produce electric vehicles. Ford stressed that this was a commercial decision. Donald Trump had criticised the proposed Mexican factory when he campaigned on the theme of saving American jobs.
Meanwhile, Paul Ryan, the most senior Republican in the House of Representatives, said that Congress was not going to raise tariffs, portending what may be one of his biggest fights with Mr Trump.
Luis Videgaray was rehabilitated in Mexico’s government by being appointed foreign minister. Mr Videgaray resigned as finance minister after suggesting that Donald Trump visit Mexico last year, a hugely unpopular move at the time.
Japan’s prime minister, Shinzo Abe, paid his first visit to the American naval base at Pearl Harbour. He expressed “sincere and everlasting condolences” to those who died in Japan’s attack on it 75 years ago. Soon after, however, his defence minister, Tomomi Inada, paid a visit to Yasukuni Shrine in Tokyo where Japanese war criminals are honoured among the war dead.
The British government appointed Sir Tim Barrow, a former ambassador to Russia, as its new ambassador to the EU, three months before it is due to trigger negotiations over Brexit. This followed the early exit of Sir Ivan Rogers from the job. His resignation note decried “muddled thinking” by ministers. See article.
This article appeared in the The world this week section of the print edition under the headline "The world this week"
Barack Obama expelled 35 Russian diplomats and imposed new economic sanctions
Relations between Israel and America became strained
battle between gangs at a prison in the Brazilian state of Amazonas left 56 inmates dead.
a Brazilian construction company, and Braskem, a petrochemical firm in which it owns a stake, pleaded guilty to bribing officials and political parties to win contracts in Latin American and African countries
The S&P 500 rose by 10% over the 12 months and the Dow Jones by 13%
Russia’s RTS index soared after the election of Mr Trump to finish 52% higher;
China’s Shanghai Composite never fully recovered from its turbulent start to 2016,
Deutsche Bank agreed to pay $7.2bn to settle with America’s Department of Justice for mis-selling subprime mortgage securities,
Ford made a U-turn when it scrapped plans for a new factory in Mexico
Japan’s prime minister, Shinzo Abe, paid his first visit to the American naval base at Pearl Harbour.