Current Affairs for IAS Exams - 30 June 2015

Current Affairs for IAS Exams – 30 June 2015

::National::

Foreign law firms will soon operate in India

  • The Centre will in a phased manner soon open up India’s non-litigious services and international arbitration legal services to foreign law firms.

  • The proposal for the reform will be put up for approval in early July to a Committee of Secretaries after which it will be taken up by the Cabinet chaired by Prime Minister Narendra Modi.

  • The government was keen to announce the liberalised policy in January during the visit of U.S. President Barack Obama. However, the move was postponed after resistance from the domestic legal services industry.

  • After two years, India and the European Union will resume negotiations in August on the proposed Free Trade Agreement.

  • “Both sides have agreed that negotiators must meet… The EU chief negotiator will be available for negotiations sometime in August.

‘Minimum Support Price hike can boost pulses production’ (Register and Login to read Full News..)

::International::

Euro is nothing but a shaky idea

  • The world is going bonkers over whether Greece will default on the 1.6 billion euros that it needs to pay the International Monetary Fund(IMF) today. All together the country owes 240 billion euros to the troika of European Commission, European Central Bank(ECB) and IMF.With the default, chances are Greece will have to exit from the Eurozone and stop using euro as its currency.

  • Irrespective of whatever happens to Greece, euro continues to remain a shaky idea. In order to understand this point, we need to go back a little in history.

  • The European Union (EU) was established by the Maastricht Treaty signed on December 9 and 10, 1991. After the formation of the EU, the members became bound to start a monetary union, which would share the same currency, by January 1, 1999.

  • The EU introduced the euro first in non-physical form (traveller's cheques, electronic transfers, banking, etc.) on January 1, 1999. On this day, 11 member countries of the EU started using euro as their currency. Meanwhile, Greece joined the Eurozone, as countries which decided to use the euro as their currency came to be referred to as, on June 19, 2000 and gave up its currency, the drachma.

  • The Eurozone was essentially a monetary union without being a political one. Hence, while the monetary policy of the entire zone was managed by the European Central Bank based out of Frankfurt, every government ran its own fiscal policy and had its own budget.

  • East and West Germany merged together as Germany in 1990. Massive investments were made to modernise the Eastern part and to integrate it with Germany’s industrial heartland.

  • Between 1990 and 2010, nearly 1.6 trillion euros have gone from west to east to pay for all kind of things from pensions and salaries of government employees, to build roads and cities, and factories.

  • One of the impacts of this transfer of money was that wages in the Eastern part started to go up and converge towards the Western part.

  • This led to unit labour costs in Germany going up by 17.6% from 1990 to 1995. During the same period the labour cost in what would become the Eurozone rose at the rate of 11.5% on an average.

  • Higher labour costs made German exports uncompetitive and the share of the exports as a portion of the GDP fell from 1991 to 1993. This led to an increase in unemployment from 4.2% to 8.2%.

Asian Infrastructure Investment Bank takes shape

  • India and 49 other founding members of the Asian Infrastructure Investment Bank (AIIB) on Monday signed articles that determine each country’s share and the lender’s initial capital. The remaining seven founding members can sign the agreement before December 2015.

  • The signing ceremony took place in Beijing at the Great Hall of the People. The AIIB is expected to focus on infrastructure development in Asia, and unlike the existing International Monetary Fund and World Bank, is unlikely to restrict lending on political considerations.

  • Following the ceremony, China’s President Xi Jinping welcomed the heads of delegations from the Bank’s 57 prospective founding members. A special ministerial meeting was also held in the afternoon chaired by Chinese Finance Minister Lou Jiwei.

  • According to an AIIB press statement, the Bank will be headquartered in Beijing, and will have an initial authorised capital stock of $100 billion.

  • Reflecting regional character of the Bank, its regional members will be the majority shareholders, holding around 75 percent of shares.

  • The AIIB is expected to become operational by the end of the year.

  • India had signed the Memorandum of Understanding for Establishment of AIIB in October 2014 along with 21 regional founding members.

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Sources: Various News Papers & PIB

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