Breakingviews on Twitter
Search League Tables

Tuesday, 28 June 2016

BREAKINGVIEWS

After Dieselgate, VW faces new big bad

28 June 2016

A $15 bln settlement with U.S. regulators all but buries the German carmaker’s emissions fraud. Now for the next crisis: falling sales. Since Britain plunged Europe into uncertainty, markets have priced in a 13 pct drop in 2017 earnings. That calls for zealous cost-cutting.

Football Soccer - England v Iceland - EURO 2016 - Round of 16 - Stade de Nice, Nice, France - 27/6/16 Iceland fans before the match

Football apart, UK has no reason to envy Iceland

28 June 2016

The Nordic nation outshone England on the pitch but its EU trade ties are nothing to emulate. It has the single market access that Britain already enjoys, only without any say over the rules. Nor can it dodge the free movement of people or contributions to the bloc’s budget.

Ulf Mark Schneider, chairman of the management board of Fresenius SE addresses the company's annual news conference in Bad Homburg near Frankfurt.

Nestle no closer to the medicinal Kit Kat

28 June 2016

The Swiss consumer giant’s new boss spent the last decade running medical company Fresenius. It’s a nod to the convergence between food and healthcare. But it makes more sense when the transfusion runs the other way. Nestle’s unhealthy governance, meanwhile, remains untreated.

A woman is reflected on a wall with a company logo of Baosteel Group at an office in Shanghai, July 24, 2011. Chinese steel giant Baosteel Resources and an Australian partner launched a $1 billion takeover bid for Australian explorer Aquila Resources in a

Steel deal will test China's reform mettle

28 June 2016

Combining Baosteel and Wuhan Steel would create a global giant. If cost and capacity cuts followed, that would underline how serious China is about industrial reform, and suggest a flood of cheap exports could recede. For now, though, it’s easy to be sceptical.

U.S. Republican presidential candidate Donald Trump in Fort Wayne, Indiana, U.S., May 1, 2016.

Trump and UK's Leave campaign are peas in a pod

27 June 2016

Like the Brexiteers, the presidential nominee says things often disproven by facts. He makes promises without plans to enact them. When these prove unworkable, there’s regret and backtracking. By invoking NATO’s future, the stakes may be as high or higher for a Trump victory.

A Colleger (R) wrestles with an Oppidan during the Eton Wall Game at Eton college in Eton November 17, 2012.

Britain was lost on the playing fields of Eton

27 June 2016

The school’s alumni include outgoing Prime Minister David Cameron and Boris Johnson, who hopes to replace him. The Duke of Wellington supposedly attributed his victory at Waterloo to an Eton education. Cameron’s folly in calling an EU referendum suggests less desirable aspects.

Britain's Chancellor of the Exchequer George Osborne speaks at a news conference in central London, Britain June 27, 2016.

Austerity has no place in post-Brexit Britain

27 June 2016

Chancellor George Osborne has since 2010 aimed to cut public debt and deficits in the name of financial stability. He may now need to row back to cope with any post-vote economic slowdown. Investors’ reaction so far suggests his fiscal rigour was over-zealous in the first place. 

A resident walks past boarded up houses in inner city Liverpool.

Post-EU Britain could address North-South divide

28 June 2016

Ditching EU state aid rules means Britain can in theory set different corporate tax rates around the country. That could ease regional economic disparities - a key flashpoint from the referendum. The catch is such a move would require a cleaner break with the single market.

WEF

China has more to lose from Western turmoil

28 June 2016

As voters in developed countries reject globalisation, Premier Li Keqiang has called for more international economic cooperation. That makes sense: rising protectionism and resistance to foreign investment will hurt Chinese business and exacerbate its own economic slowdown.

iPhone 6

China's innovators set to ratchet up patent wars

28 June 2016

Homegrown firms have been busy building a war chest of patents. A recent ruling in Beijing against a design of Apple’s iPhone suggests local tech rivals are increasingly willing to wield them too. As competition for market share heats up in China, more skirmishes will follow.

The DAX Index board is pictured at the stock exchange in Frankfurt, Germany, June 24, 2016, after Britain voted to leave the European Union in the EU BREXIT referendum.

Sterling destined for more measured misery

27 June 2016

After voting to quit the EU, Britain faces an economic slowdown that will warrant more monetary easing, a pickup in inflation, and huge political uncertainty. It’s a toxic mix for any currency. Spectacular plunges in the pound will give way to steady falls to new lows.

A pumpjack brings oil to the surface in the Monterey Shale, California, April 29, 2013. The vast Monterey shale formation is estimated by the U.S. Energy Information Administration to hold 15 billion barrels of technically recoverable oil, or four times t

"Frack Master" suit is a sign of bezzle shrinkage

27 June 2016

The U.S. SEC says Chris Faulkner inflated his shale-oil company’s prospects, then blew $80 mln of investors’ money on dodgy expenses. Hard times tend to reveal bad boom-era behavior. The oil patch’s lax governance makes it an obvious place for regulators to hunt for culprits.

Brokers react on a trading floor at BGC, in the Canary Wharf financial district of London, Britain June 27, 2016.

The City's future is in lap of EU gods

27 June 2016

Britain’s Leave vote could strip so-called passporting rights from domestic banks and asset managers. One solution is to claim the UK merits equivalent status as its rules match Europe’s. But even if euro peers okay that, London will lose control over future policy-making.

Features

Mark Zandi

Guest view: U.S. inaction on Puerto Rico risks chaos

27 June 2016

The island territory can no longer make debt payments, its economy is in free fall, foreclosures are surging and citizens are fleeing, says Moody’s Analytics Chief Economist Mark Zandi. To avoid a humanitarian crisis, the Senate needs to pass the PROMESA act without delay.

Samantha Acriche

Review: "Gray Rhino" rambles into financial lexicon

24 June 2016

A new book uses the nose-horned beasts as a metaphor for obvious threats ignored by corporate and political leaders. Myriad examples enlisted by author Michele Wucker are engaging, but the solutions come off oversimplified. The gray rhino may not keep pace with the black swan.

Columns

Hugo Dixon

Dixon: Follow Merkel on Brexit - and keep cool

27 June 2016

While other EU leaders are pressing Britain for a quickie divorce, the German chancellor is advocating a more measured approach. This is right. There’s no need to rush as the EU can protect itself from the immediate fallout. There’s even a chance the UK could change its mind.

Rob Cox

Cox: How about a referendum on ending referendums?

23 June 2016

Rather than take hard decisions, politicians are putting issues like Brexit, constitutional reform and even peace treaties directly to the people. How democracy works best is an ancient debate, but plebiscites undermine the representative variety. They’re also bad for business.