Welcome back to our Weekly Roundup where we share headlines and brief summaries of notable news stories from around the world, along with a link for those seeking further information.
These articles provide a quick and easy way for readers to stay up to date with current legal and business affairs.
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Eurozone in deepest contraction on record
Figures released by Eurostat (the statistics office of the EU) showed that in the second quarter of 2020, GDP was down by 12.1% in countries that use the single currency and by 11.9% in the EU.
These were by far the sharpest declines observed since Eurostat began recording the figures in 1995.
In the first quarter of 2020, GDP had decreased by 3.6% in the euro area and by 3.2% in the EU.
The graph below goes back to the first quarter of 2008, and the effects of the global financial crisis can be seen on the left-hand side, but it is dwarfed by the scale of the decline we are witnessing in 2020.
The full report from Eurostat can be read by clicking here.
A report on the finding from BBC News can be found here.
U.S. GDP collapses by 32% in Q2 2020
The U.S. economy shrank by an annual rate of 32.9% between April and June, its sharpest contraction since the end of the second world war, when the records began.
The figures, revealed on Thursday, showed the coronavirus pandemic’s heavy toll on the country’s economy.
For context, U.S. GDP shrank 8.4% in the worst quarter of 2008, the height of the last recession, according to Credit Suisse, and the previous record came in 1958 when economic growth fell 10% during the Eisenhower recession.
You can read a report from The Guardian here.
U.S. Federal Reserve leaves rates near zero
In a statement on Wednesday, the U.S. Federal Reserve announced that rates would be left unchanged near zero, and made clear that it will work to bolster the economy as the pandemic hurts business activity and the job market.
In their statement the Fed said that it is “committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.”
Jerome H. Powell, the Fed chair, predicted a long road ahead as a recent spike in virus cases saps momentum from the nascent economic recovery.
“The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in keeping the virus in check,” Mr. Powell said at a news conference following the Fed’s two-day meeting, noting that infections have surged since late June and the “pace of recovery looks like it has slowed.”
Or, if you’d prefer, you can watch the full statement delivered by Jay Powell here.
Pandemics now more likely to appear in standard force majeure clauses
In-house lawyers are more likely to include pandemics in their standard force majeure clauses following the COVID-19 crisis, a survey conducted by business law firm Mason Hayes & Curran LLP has found.
The survey of nearly 80 in-house lawyers from both the public and private sector shows that the typical contractual approach taken by lawyers is being re-examined, and there is a shift in what might be considered typical or “on-market” positions.
Most suppliers (57 per cent) and customers (52 per cent) do not currently specify a pandemic or epidemic or similar disease event as a relief item in their standard force majeure clauses.
Of these respondents, more than a third of suppliers (37 per cent) and most customers (56 per cent) plan to include pandemics, epidemics or similar circumstances as a relief item in the future.
You can read the full report from Irish Legal News by clicking here.
Major banks switch to online internships
Major banks such as Deutsche Bank, HSBC, Standard Chartered, and UBS have started recruiting students and graduates for virtual internships for the first time in the U.S.
The online training programs offer courses in e-learning, problem-solving, and networking, that aim to prepare interns for a digital work environment.
Standard Chartered, for example, has recruited 300 interns in 15 markets for its global program. For 60% of interns, the entire program will take place online, with the remainder participating in a combination of virtual and in-person events.
The bank says it has created 500 roles that will primarily be filled by its 2020 interns.
“This continued commitment to our internship program despite the current environment is not only the right thing to do, but also ensures our future workforce is ready to embrace a digital state of work,” said Melissa Angerson, head of early careers at Standard Chartered.
You can read the report from CNBC here.
Major U.S. oil companies’ earnings slammed by coronavirus pandemic
America’s biggest energy companies delivered their worst set of quarterly results of the modern era, weighed down by the slump in oil prices and the global collapse in demand due to Covid-19.
Bloomberg reported on Friday afternoon that “the extent of what was disclosed [on earnings calls on Friday morning] was at certain points almost breathtaking.”
Chevron announced multibillion dollar writedowns on its assets for the second time in a year, and said it will cut the equivalent of 5% of its worldwide output during the current quarter.
Exxon, not so long ago considered an almost unassailable profit-making machine, told investors its ambitious slate of expansion projects will be delayed and revealed it had failed to generate any operating cash flow in the second quarter.
You can read the full report from Bloomberg here.
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