Italy’s flat-tax talk rests on shaky ground 26 Jan 2018 Silvio Berlusconi and his centre-right allies want to replace progressive income taxation with a flat levy. Italy’s fiscal code needs a revamp: it’s unjust and complex. But the idea won’t fly without budget cuts. A serious pledge to fight tax cheats is also missing from the debate.
Viewsroom: Trump solar tax is more burn than balm 25 Jan 2018 The U.S. president seems to be trying to right past trade wrongs. But business has long since moved on, meaning tariffs on washing machines and solar panels will do more harm than good. Also, Merkel and Modi disappoint in snow-ravaged Davos. Plus: Spotify’s Wall Street snub.
Mario Draghi is ill-equipped for currency wars 25 Jan 2018 The European Central Bank chief took a potshot at the United States for flouting an international agreement not to manipulate currencies. The rate-setter has limited policy room to resist a strong euro. European politicians who take up the cudgels risk escalating the fight.
Xi Jinping wannabes flub their lines at Davos 25 Jan 2018 Leaders including Emmanuel Macron of France and Germany’s Angela Merkel predictably spoke up for global cooperation ahead of Donald Trump’s finale. Unlike the Chinese president last year, however, their rhetoric fell flat. Competition for investment further muddles the message.
Fiat Chrysler powers ahead in carmaker wacky races 25 Jan 2018 Its shares are the industry's best performer of the past year, and its multiple leaves sleeker rivals for dust. Yet earnings are only so-so. Investors may be expecting a sale, or only clocking short-term results. It's a tricky lead for CEO Sergio Marchionne's successor to defend.
Rupert Murdoch’s next foe: Sky hedge fund holdouts 25 Jan 2018 The tycoon’s Fox looks set to deflect regulators’ objections to his bid for UK TV group Sky. But hedge funds could block the deal. The deep pockets of Disney, soon to own Fox, and the hope that cheaper soccer rights will boost Sky’s profit may stir them to seek a higher price.
City’s #MeToo moment is tipping point and catalyst 25 Jan 2018 The charity behind a men-only London dinner where female hostesses were groped has closed down. The scale of justified public censure means such events have no future. But the furore may also give new impetus to appoint more women to boards and redress gender pay inequality.
Activists beat bearable retreat in Clariant feud 25 Jan 2018 White Tale has surprisingly sold its stake in the Swiss chemical maker to SABIC. That may be a recognition its bid to shake up the group would fail. Exiting now may leave some money on the table, but the hedge fund consortium has probably made a decent return.
Romer exit flags World Bank’s human capital limits 25 Jan 2018 The academic known for his work on economic growth is leaving the bank after just 15 months. The attempt to shake up a staid institution fits his theories’ emphasis on new ideas. But his brash manner shows how organisations can be less than the sum of their inputs.
Uber plan highlights SoftBank’s addiction to debt 25 Jan 2018 The Japanese group might raise funds by borrowing against its shares in the U.S. ride-hailing app, or in British chip designer ARM, a report says. That’s plausible: SoftBank prefers maximum financial firepower. Extra layers of leverage will introduce fresh complexity and risk.
Hadas: Carillion and the danger of low prices 24 Jan 2018 Debt-heavy UK contractor Carillion collapsed because it wasn’t charging enough. Uber can keep distorting taxi markets with loss-making fares until its backers lose hope. And Amazon’s cross-division support unfairly harms competitors. Cheap prices can cause expensive trouble.
Banks have new reasons to fear digital disruption 24 Jan 2018 Wannabe fintech disruptors are out in force at Davos. Regulation and poor returns helped protect big lenders up to now. Renewed interest in financial services from the likes of Amazon and Apple poses a bigger threat. Banks will need to either join forces or partner with Big Tech.
Mnuchin opens door to new era of currency wars 24 Jan 2018 The U.S. Treasury secretary said a weaker dollar was good for his country in some ways. True, but the break with what his predecessors have asserted since 1995 raises the risk the greenback will be used as a trade weapon. That would be bad news for foreign holders of U.S. debt.
EU makes Qualcomm bid more attractive, less likely 24 Jan 2018 Regulators fined the company $1.2 bln for paying Apple not to buy chips from its rivals. Such levies reduce Qualcomm’s potential profitability, and make a $105 bln bid from rival Broadcom more alluring. Yet it suggests trustbusters may look askance at the combined firm’s power.
Breakdown: Why Steinhoff’s complexity may save it 24 Jan 2018 An accounting scandal has exposed the retailer’s warren-like structure. Creditors who are owed close to 11 billion euros face a fight for repayment. But the prospect of a messy restructuring may help keep Steinhoff afloat for now. Breakingviews offers a guide through the maze.
Suez public sector blowback makes for sorry trend 24 Jan 2018 Shares in the French water group fell 16 percent after a profit warning. Utility-like groups with long-term public contracts typically enjoy a low cost of capital. But having governments as clients is no safeguard, as Veolia and Carillion have already shown.
UK pension watchdog needs new tools, and backbone 24 Jan 2018 Prime minister Theresa May vowed to punish groups that fail to protect retirement benefits, like collapsed outsourcer Carillion. New tools could include fining companies or curbing payouts. But the regulator can do more with the powers it already has to make companies fill gaps.
Spotify puts IPO bankers on “disruption” playlist 23 Jan 2018 The music-streaming service may list its stock in New York without raising money or using underwriters. With private funding plentiful and business models asset-light, other tech groups could follow. It’s another threat to the high fees U.S. banks charge to take companies public.
Murdoch’s Sky bid will ride out regulatory storm 23 Jan 2018 The UK competition authority said Fox’s offer for the broadcaster would give Chairman Rupert Murdoch excessive media clout. It may yet call for the deal to be blocked. But Disney’s bid for Fox alters the dynamics. Ring-fencing Sky News could allow the media mogul to get his way.
Four steps to rehabilitating Barclays 23 Jan 2018 The UK bank has shed over a tenth of its market value in a year despite cutting costs and increasing capital. To close the discount, boss Jes Staley needs to rev up a misfiring investment bank, boost payouts to investors, resolve U.S. litigation and survive a UK regulatory probe.