:00:00. > :00:18.for the latest financial news with World Business Report.
:00:19. > :00:20.Tightening border controls in Europe - what are
:00:21. > :00:23.the economic consequences after 30 years of the free movement of people
:00:24. > :00:27.And more money in your pocket - Japan's Prime Minister announces
:00:28. > :00:31.a 3% increase in the minimum wage but will the Japanese save it or
:00:32. > :01:02.We start with a system that has been in place for almost 30 years.
:01:03. > :01:04.Since the mid-90's Europeans have enjoyed the freedom to move
:01:05. > :01:06.between EU countries without border controls or checks.
:01:07. > :01:10.Indeed freedom of movement, goods and services is the bedrock of its
:01:11. > :01:14.But, the terror attacks in Paris and the current migrant crisis has cast
:01:15. > :01:22.The Schengen Agreement - as the model is formally known - abolished
:01:23. > :01:25.border controls in 1995 - allowing passport-free travel for 400 million
:01:26. > :01:35.The only exceptions being the UK and Ireland who opted
:01:36. > :01:45.And it's that control that countries across Europe
:01:46. > :01:54.Germany, Austria, Denmark and other states have all
:01:55. > :01:57.tightened border security in response to the influx of
:01:58. > :02:01.And following the Paris terror attacks, France has put in place
:02:02. > :02:03.checkpoints on major routes into Belgium with drivers and passengers
:02:04. > :02:06.Passengers have also been searched on some cross-border trains.
:02:07. > :02:08.But, the worry is that wholesale tightening
:02:09. > :02:10.of border controls could impact commerce between member states.
:02:11. > :02:13.It's estimated being in the Schengen area boosts bilateral trade by 0.1%.
:02:14. > :02:17.It's a hot topic ahead of a meeting later in the week -
:02:18. > :02:20.with no clear answer on how to increase security in Europe while
:02:21. > :02:32.With me is Vasileios Douzenis a Consultant at Europe Economics.
:02:33. > :02:38.Thank you for being on the programme. We have outlined how it
:02:39. > :02:48.works and the changes that have been made. Your thoughts on Schengen,
:02:49. > :02:53.should it be changed? Just to provide some thoughts on the context
:02:54. > :02:56.behind the Schengen. Schengen is currently the second biggest
:02:57. > :03:06.European project after the euro. Recent statements by the U
:03:07. > :03:20.Commissioner for home affairs reaffirmed how significant Schengen
:03:21. > :03:26.is. These statements attack the very centre of what it is. We need to
:03:27. > :03:34.reaffirm the significance for policymakers that is attached to it
:03:35. > :03:39.and speak to its future. Measures, short-term measures like a border
:03:40. > :03:43.controls have been seen in the past. They have been increasingly
:03:44. > :03:49.observed now. The extent to which they will be short-term or a lead to
:03:50. > :03:56.long-term changes, this is debatable. But the correct focus is
:03:57. > :03:59.to focus, rather than on the complete demolition of the Schengen
:04:00. > :04:10.agreement, is to focus on structural changes. These are the main areas
:04:11. > :04:15.this could lead to a facts. Is it possible to quantify the boost to
:04:16. > :04:23.economic activity that Schengen provides? It is possible to
:04:24. > :04:34.quantify. But it is confounded by a number of caveats and problems. I
:04:35. > :04:40.can quickly think of three impact areas from which to gain estimates.
:04:41. > :04:44.The first impact area, for example, is the negative impact that border
:04:45. > :04:49.controls would have on the marginal traveller across borders. Travellers
:04:50. > :04:57.for business purposes or for personal leisure. In particular,
:04:58. > :05:04.those who are a bit more elastic in regards to their preferences.
:05:05. > :05:10.Individuals travelling at particular peak hour times, these will be
:05:11. > :05:16.particular challenges with delays at the borders exacerbated. That is one
:05:17. > :05:22.of the areas. The second impact area will be the immediate cost that is
:05:23. > :05:33.incurred to introduce and enforce border controls. Especially in an
:05:34. > :05:42.area of austerity. Development can create fictions within government.
:05:43. > :05:52.We will have to leave it there, thank you for coming in. Now we can
:05:53. > :05:53.talk about Japan. Japan will raise the minimum wage
:05:54. > :05:56.by 3% each year from next fiscal year as part
:05:57. > :05:59.of a package of policies aimed at strengthening consumer spending
:06:00. > :06:01.and stoking economic growth. Ali Mooore is in our
:06:02. > :06:14.Asia Business Hub in Singapore It is good to see you. So it is all
:06:15. > :06:22.good in theory, the question is, will the Japanese are out and spend
:06:23. > :06:28.it, or will they say that? It is one I certainly cannot answer. Nobody
:06:29. > :06:32.can just yet. It is a reform that many people have been looking for to
:06:33. > :06:35.try and get the economy moving. Despite all the fanfare that has
:06:36. > :06:41.been around Abenomics, the country is slipping back into recession. The
:06:42. > :06:46.hope is that they will inspire more people to open their wallets and
:06:47. > :06:51.spend. That will drive inflation and hopefully that inflation to the
:06:52. > :06:56.central bank's target of 2%. But to give you an idea of what happens in
:06:57. > :07:04.practice, Japan's average minimum wage is $6.36 per hour. 80% increase
:07:05. > :07:14.will not buy you much more than a bowl of noodles. -- make
:07:15. > :07:26.in Australia, it is a comparatively generous $12.57. In the UK, $10.12.
:07:27. > :07:30.In Singapore, no minimum wage. Japan's government is committed to
:07:31. > :07:37.winding back regulations. It is trying to encourage more capital
:07:38. > :07:42.expenditure. It is going to bring forth corporate tax cuts. They hope
:07:43. > :07:45.these measures will boost growth. But as you started this
:07:46. > :07:51.conversation, it all depends on whether they spend or save. All the
:07:52. > :07:52.measures being taken to try and get the economy going.
:07:53. > :07:55.A unit of Deutsche Bank will pay more than $31 million to the U.S.
:07:56. > :07:57.Justice Department to avoid possible prosecution for helping
:07:58. > :08:01.Deutsche Bank's Swiss unit offered a number of services
:08:02. > :08:03.and permitted some practices that it knew could assist US taxpayers
:08:04. > :08:06.in concealing assets and income from the Internal Revenue Service,
:08:07. > :08:22.The price of iron ore, the key ingredient for making steel,
:08:23. > :08:24.The slump in global commodity prices has affected several countries where
:08:25. > :08:27.oil production forms a major part of the economy.
:08:28. > :08:29.The IMF has warned Angola about its public finances, estimating
:08:30. > :08:33.that debt will climb sharply to 57% of GDP by the end of the year.
:08:34. > :08:36.The BBC's Tanya Beckett caught up with Isobel Dos Santos, the daughter
:08:37. > :08:38.of the Angolan President and Africa's richest woman.
:08:39. > :08:41.She started off by asking her about what she believes to be the biggest
:08:42. > :08:56.Definitely it is still something we need to do more of. We have been
:08:57. > :09:00.looking at this very seriously. We have a better enrolment rate in
:09:01. > :09:06.schools. We have a better literacy rate. We have been investing in new
:09:07. > :09:13.universities. Education is still the gap. If anyone wants to help
:09:14. > :09:18.Africa, they need to look at universities and help us gain more
:09:19. > :09:22.knowledge. Also knowledge on things like agriculture or general skills
:09:23. > :09:30.like construction. And this raises the question as to business in
:09:31. > :09:37.Africa, what responsibilities they have to the community is now working
:09:38. > :09:46.in. We have seen a change in mindset. Africa as a whole is
:09:47. > :09:51.attracting short-term investments. People who want to come in and have
:09:52. > :09:56.a good exit strategy. Now we have seen a shift in that. People setting
:09:57. > :10:03.up businesses are thinking of long-term plans. They are going more
:10:04. > :10:09.local. They are going into agreements with universities and
:10:10. > :10:13.training facilities. That is very important, that change of mindset.
:10:14. > :10:19.Do you closely observe the rise of the middle class in your travels
:10:20. > :10:25.around Africa? Very much so. How do you observe that? When you go to an
:10:26. > :10:32.African city, the number of cars are striking. We are experiencing
:10:33. > :10:38.traffic jams and having to address those issues. But in a way, that is
:10:39. > :10:42.just the fact of people having more money and being able to have their
:10:43. > :10:48.own car, their own house, being able to start their own business. We also
:10:49. > :10:54.have seen their is a number of homeowners in Africa are growing.
:10:55. > :11:06.That is World Business Report, I will see soon.
:11:07. > :11:09.A Scottish National Party MP has resigned the party whip as she
:11:10. > :11:13.faces a police investigation into donations missing from a campaign