Legal blow makes Germany and Europe sicker 15 Nov 2023 Berlin’s top court blocked the government’s use of creative accounting for investments. That may jeopardise Chancellor Olaf Scholz’s $65 bln growth fund and mean less money for the energy transition. Europe’s biggest economy may also want more fiscal rigour from its EU peers.
Europe’s shrinking stash heralds economic trouble 14 Nov 2023 Euro zone households and companies have hoarded money since 2008 and now hold financial assets worth 63 trln euros. That cushioned the blow of higher interest rates and helped stave off a recession. But as mortgages and debts come due, growth may take a hit in 2024.
Japan’s rates tweak is careful and crafty 2 Nov 2023 The central bank changed its policy to allow higher 10-year bond yields. Unlike the US, it can afford to raise borrowing costs slowly as inflation is low. In this Viewsroom podcast, Breakingviews columnists explain why monetary tightening as others loosen may give Tokyo an edge.
Biden AI plan is one step in avoiding crypto trap 30 Oct 2023 The president’s new executive order aims to set regulatory guardrails for artificial intelligence. It still leaves a big hole for Congress to fill. Failing to set coherent rules risks the kind of piecemeal enforcement that hobbled crypto, but for a technology with higher stakes.
ECB’s rosy outlook is a recipe for economic pain 26 Oct 2023 Frankfurt policymakers think the euro zone will grow by 0.7% in 2023 and want to keep rates high to fight inflation. Yet most data point to stagnation or recession. A gloomier perspective would enable the European Central Bank to ease policy and help the bloc’s economy.
Europe’s rising bond vigilantes are necessary evil 11 Oct 2023 Debt costs for weaker states like Italy are jumping. Europe’s delay in agreeing new fiscal rules means hostile markets are the only credible check on government spending. Slowing growth and a hamstrung ECB means the backdrop may well get choppier.
Next EU chief will need cash more than trade wars 10 Oct 2023 Ursula von der Leyen kicked off her campaign to stay European Commission president by attacking China’s car subsidies. But what the bloc craves is a plan to grow its economy and enlarge eastwards, including finding $411 bln for Ukraine. A bigger, better Europe won’t come cheap.
The EU is stuck with its one-trick refugee policy 9 Oct 2023 Africans and Asians fleeing persecution could boost the European Union’s ageing workforce. But its leaders are so scared of nationalism at home they prefer to pay North African regimes to stop asylum-seekers crossing the Mediterranean. It’s a short-term fix, says Hugo Dixon.
Belated euro U-turn could be a winner for Sweden 6 Oct 2023 Top advocates of snubbing the single currency 20 years ago are now pushing for its adoption. The crown’s fall makes curbing inflation harder, and rate-setters are under the ECB’s spell. With low public deficit and debt levels, Stockholm may find joining late is better than never.
Polish cereal showdown goes against the EU grain 4 Oct 2023 A spat over Ukraine’s grain exports is the latest blemish on the European Union’s fraught relationship with Poland, the bloc’s sixth largest economy and biggest net recipient of EU funds. If upcoming elections push Warsaw further from Brussels, both sides have much to lose.
Meta’s EU subscription looks suspiciously pricey 3 Oct 2023 The Instagram owner may allow Europeans to pay $14 a month to avoid ads. It’s hard to see many users signing up, and the price is far higher than Meta’s regional revenue per user. Regulators and courts, which effectively pushed for this outcome, may get a phantom solution.
European listing exodus is just beginning 28 Sep 2023 Building materials firm CRH and packaging giant Smurfit Kappa are among a growing list of companies seeking to decamp from Europe to US exchanges. In this Viewsroom podcast, Breakingviews columnists discuss what is prompting groups to leave and why the rot is unlikely to ease.
EU regulators have tech giants in their sights 26 Sep 2023 Brussels is taking on the likes of Amazon and Apple with a slew of new rules aimed at curbing market dominance and taking back control over data. Former EU Commission economist Bertin Martens explains to The Exchange podcast how the industry giants could be forced to open up.
Irish listing rot is symptom of wider EU malaise 25 Sep 2023 Packaging giant Smurfit Kappa may follow CRH in ditching Dublin for the US. The exodus, along with other potential defectors, will erode over half of the $172 bln exchange’s value. Without meaty subsidies or a pan-EU capital market, global firms have little reason to stay.
China’s EV makers would steer around EU roadblock 14 Sep 2023 A Brussels probe may mean hefty tariffs on battery-powered cars imported from the People’s Republic. BYD, Nio and peers could start making them in the bloc, which accounts for a quarter of global EV sales. Focusing on Asia and Latin America, though, would make more sense.
Tariffs unfit to solve EU’s Chinese EV puzzle 13 Sep 2023 Ursula von der Leyen’s new anti-dumping investigation could result in punitive duties on China-made electric vehicles. But penalties are a bad fix for the EU’s green push. The bloc still needs the People’s Republic to help it phase out car pollution – and to buy Europe’s exports.
China is bitter medicine for Europe’s EV pivot 12 Sep 2023 Ditching EU combustion engines by 2035 requires carmakers like VW to rapidly boost sales of battery rides. That’s a challenge when electric cars are pricier than gasoline ones. Competition from China will lift take-up and force Western players to become more efficient.
Lagarde can stop fretting about rising salaries 11 Sep 2023 The European Central Bank chief worries that consumer prices will stay high because wages are growing at the fastest rate in 30 years. Yet raises are below inflation and slowing. In the past, the ECB cut rates even with strong labour markets. It may have to do so again soon.
EU steps up lengthy attack on winner-take-all Tech 6 Sep 2023 The European Commission wants technology giants including Apple and Microsoft to give rivals more access to key services and data. It’s a serious push against Big Tech’s ability to dominate markets and squeeze out competitors. Legal battles and compliance challenges look certain.
Europe faces dirtier inflation fight than US 6 Sep 2023 The euro zone is trying to emulate the United States by avoiding a recession and hefty job losses, despite raising rates. The bloc may only half succeed. Weak activity, scarce credit and higher borrowing costs all point to a downturn. European workers, though, could be spared.