Franco-Italian diplomatic row may taint economics 7 Feb 2019 Paris recalled its ambassador in Rome to protest what it called baseless attacks. The fracas may hurt the countries’ ability to present a united front on revamping fiscal rules or bank reform. That would be a costly consequence of short-term electioneering before a European vote.
Derailed train M&A spells poor EU antitrust revamp 6 Feb 2019 Competition tsar Margrethe Vestager blocked Siemens and Alstom’s rail merger in defiance of Franco-German pressure. Paris and Berlin are agitating for rule changes and may back a replacement who will be more willing to create regional champions. That would be a mistake.
Siemens-Alstom is poor advert for EU champions 5 Feb 2019 German and French politicians are annoyed because the rail merger may be blocked. But their argument that the deal is needed to shield Europe from Chinese competition is flawed. The duo’s workers may also suffer. This is the wrong regional standard-bearer to promote.
Nissan’s real Brexit problems have not yet started 4 Feb 2019 The Japanese carmaker’s U-turn on building sports utility vehicles in northeast England owes more to falling demand for diesel engines than Britain’s impending EU exit. Still, a no-deal Brexit would make it nearly impossible for Nissan to justify current levels of UK production.
Atos payments spinoff flags parent’s bugs 30 Jan 2019 CEO Thierry Breton is handing shareholders a 2 bln euro chunk of the IT group’s stake in listed payments unit Worldline. Ideally, he’d give them the lot. Investors are left holding a subscale computing business with dicey U.S. prospects. Its lowly valuation is warranted.
British parliament opts to run down Brexit clock 30 Jan 2019 The vote to reopen talks with the European Union is unlikely to resolve the impasse. But it will delay the crunch moment for a few more weeks. The risks of Britain leaving without a deal are rising. Hopes lawmakers will intervene to prevent that outcome have suffered a setback.
Nasdaq’s Oslo Bors assault has Nordic edge 30 Jan 2019 The U.S. group is spoiling Euronext’s party with a $770 mln cash bid for the Norwegian bourse. The new offer carries a sweetener of just 5 pct but has the backing of two big local investors. Nasdaq’s larger presence in the region could sway investors and mean bigger synergies.
The end of gasoline-powered cars is nigh. Soonish. 28 Jan 2019 Sales of electric vehicles doubled last year while the overall market stagnated. China and California led the charge. The internal combustion engine still dominates, but demographics, governance and economics suggest that dynamic is not far from breaking hard.
Cox: Cannabis and impeachment on readers’ minds 28 Jan 2019 When asked which investment would outperform in 2019, participants at our Predictions events around the world chose Canadian weed stocks most over other assets. Most also put the chance of Congress impeaching Trump at 30 pct or higher. Consider some other surprising results.
Viewsroom: Global elite-lite takes Davos downer 24 Jan 2019 Pessimism reigns supreme at the annual gathering in the Swiss Alps thanks to trade wars, the U.S. government shutdown and rising populism. Several major leaders stayed away entirely. The event remains a networker’s dream, but self-awareness and problem-solving are sorely lacking.
Mario Draghi will deploy old tools in new slowdown 24 Jan 2019 The European Central Bank boss said growth may slow but offered no fixes. Resuming bond buying would be controversial, and a rate cut could hurt the financial sector. Renewing cheap loans to banks is his likeliest choice. The only question is how generous his terms will be.
EU “golden visa” alarm is too little too late 23 Jan 2019 Brussels is right to worry that dodgy tycoons can buy their way into Europe. But national governments are the only ones with the power to close these back doors. Given the benefits that countries such as Cyprus and Malta reap from such schemes, the gates will swing shut slowly.
Franco-German unity is dated gauge of EU progress 22 Jan 2019 The two countries plan to cooperate more on defence and culture. If only harmony extended to issues such as economic governance. And even when the pair speak as one, say on Alstom-Siemens’ rail merger, they don’t always get their way. But that is a sign of success, not failure.
EU can afford to shunt Siemens-Alstom to a siding 18 Jan 2019 Margrethe Vestager may well block the rail groups’ merger. That would rile German and French politicians yearning for a European champion to face down distant fears of Chinese dominance. But if the antitrust tsar pulls the plug, neither Siemens nor Alstom would suffer too much.
Brexit defeat will begin process of elimination 15 Jan 2019 Britain’s parliament is set to reject Prime Minister Theresa May’s deal to leave the European Union. The vote will offer few pointers about which alternatives they prefer, but will force politicians to test other ideas. With 73 days to go, their options are rapidly shrinking.
Italian banks have a 38 bln euro problem 15 Jan 2019 The European Central Bank has told euro zone lenders to deal with dud loans by a set date. For state-owned Monte dei Paschi, the deadline is 2026. If applied broadly that demand – and a slowing economy – would hinder Italian banks’ ability to deliver decent medium-term returns.
Basel capital deal gives banks only brief respite 15 Jan 2019 The Bank for International Settlements has halved a proposed increase in capital requirements for trading assets. Lenders’ cheer may be short-lived. Banks still have to comply with tougher rules on credit risk and face increased scrutiny of their leverage ratios.
Bond markets shrug off Danske dirty-money risks 11 Jan 2019 The bank at the centre of a money-laundering scandal saw its cost of issuing risky debt more than double. Still, its yields are far below those of Italy’s UniCredit. The troubles at the Danish lender may have further to run, and are harder to predict, than Rome’s political drama.
Ford’s European repair job may need outside help 10 Jan 2019 If boss Jim Hackett hits long-term profit targets, the carmaker’s market value could rise by $10 bln. Yet that requires implausible cost cuts. Partnering with or selling to a continental rival might be better. Peugeot’s purchase of GM’s European arm shows both sides can benefit.
Euro zone faces Franco-German growth whammy 9 Jan 2019 A drop in Gallic consumer confidence is worrying for a country that’s usually reliant on domestic demand. Meanwhile industry in Germany, an export champion, is feeling the strain from global trade tensions. Where the bloc’s two biggest economies lead, smaller peers will follow.