Rebellious Germans ignore Greek silver lining 19 Aug 2015 German Chancellor Angela Merkel is facing a revolt from her own party over the Greek bailout. The fear that Greece is a bottomless pit is fair. But it’s not all lost money: nearly a third of the 86 bln euro loaned will repay debt to public creditors, including Germany.
Hugo Dixon: Greece may not need debt haircut 17 Aug 2015 No single measure, such as debt to GDP, adequately captures how unsustainable Athens’ balance sheet is. Most other yardsticks show Greece needs debt relief. But cutting the face value of its borrowings is probably not required.
Greek bank bail-in threat starts to recede 13 Aug 2015 Savers have rightly feared their deposits may get turned into equity. Draft proposals for Athens’ new bailout imply this may be unnecessary. It probably isn’t enough to entice private investors, but boosting depositor confidence is an important step in clearing up Greece’s mess.
Greece deal leaves euro intact but fragile 11 Aug 2015 Athens may get its bailout after Prime Minister Alexis Tsipras gave in to reform demands. Quitting the euro is much less likely. It suggests currency union can bear the near-exit of a peripheral state. Economic rifts between core members, though, remain the big future risk.
Europe’s trustbusters threaten to upend Hollywood 10 Aug 2015 Big filmmakers may be failing to give European pay-TV subscribers fair access to their content, says the EU. If the charges stick, movie studios may lose pricing power. And Tinseltown could be obliged to rethink production values in light of likely lower revenue.
Hugo Dixon: Euro zone doesn’t need political union 3 Aug 2015 The Greek crisis has triggered renewed calls for a euro zone government, budget and parliament. But such a political union isn’t needed, desirable or achievable. Instead, the euro zone needs more market-based solutions to thrive.
BuzzFeed investors could be playing Price is Right 30 Jul 2015 The digital publisher and Vox are poised to get fresh capital from NBC. BuzzFeed’s $250 mln share would value it at $1.5 bln. That’s not far off the price of recent media deals. With the promise of millennials and advertisers strong, this begins to look like a reality show.
Varoufakis gives Greece the gift of a scapegoat 29 Jul 2015 The former finance chief’s alarming tales of trying to hack state computer systems might be just what the debt-stricken country needs. Ask China, which has long recognised the value of a strategic purge. Rogue elements breed discord, but once expelled, they can create more unity.
Euro Disney pricing is rational. It may still lose 29 Jul 2015 The European Commission thinks the amusement park’s nation-by-nation pricing policy goes against single market principles. Euro Disney is just looking for efficient ways to sustain its business. But the sound economics is up against political power. The latter is likely to win.
Hugo Dixon: The optimist’s guide to Greece 27 Jul 2015 There are so many ways things could go wrong in Greece that it’s easy to miss how things could also go right. The good scenario involves the ECB buying up Greek bonds, the lifting of capital controls and a deal on debt relief – all by year-end.
Tide flows against UK’s pro-EU campaigners 24 Jul 2015 Polls right now suggest Brits want to stay in Europe. Yet the rough handling of Greece and a proposed transatlantic trade deal are alienating left-leaning voters. Meanwhile, potential sops to those worried by immigration are very unlikely to placate eurosceptics on the right.
Investors are too bullish on $7 bln drinks-can bid 21 Jul 2015 Europe’s trustbuster is looking hard at the planned takeover of UK-based Rexam by Ball of the U.S. That’s unsurprising. The new entity would control around two-thirds of key markets. A deal may yet go through. Still, Rexam shares over-egg the chances of success.
German anti-euro infighting boosts single currency 20 Jul 2015 While the euro zone is holding together, feuds over Islam and xenophobia have torn apart Germany’s anti-euro AfD. That leaves pro-European voices unchallenged in Berlin. There are sharp debates on how Europe should work, but the country remains an anchor of political stability.
Greek anger reflects fall, not level, of income 16 Jul 2015 The bailout plan was approved, with bitterness all round. Economist Branko Milanovic’s comparison with Portugal helps explain the ire. The average Greek has consumed more over the last 20 years, but now has less. The political effect of the drop is much worse than the economics.
Schaeuble looks immune to Varoufakis-style exit 15 Jul 2015 Like his former Greek colleague, Germany’s finance minister has become a liability. After openly calling for Grexit and then questioning an agreed deal, he is not the man to lead future negotiations. The catch is German political realities mean Angela Merkel needs him.
Greek exit talk leaves euro investors unperturbed 15 Jul 2015 A taboo was broken when Germany suggested Athens could leave the European monetary union, albeit temporarily. In theory, if one country can exit, so can another. But markets aren’t pricing in any redenomination risk. Greece is being treated as an exception, not a precedent.
IMF gives Greek debt relief a helpful shove 15 Jul 2015 The International Monetary Fund’s conclusion that Greece’s debt is less sustainable than it was is a statement of the obvious. It’s unlikely to prevent Angela Merkel from winning approval for the country’s latest bailout. But Germany will eventually have to accept the hard truth.
Hugo Dixon: Greek PM shouldn’t waste crisis 15 Jul 2015 Now that Alexis Tsipras’ Syriza party is splitting, he can form a credible and stable new government. That could put relations with Greece’s creditors onto a constructive footing and turn the economy around. If Tsipras squanders the chance, the country will be doomed to failure.
Germany’s Greek bullying can be a one-off 14 Jul 2015 The Athens diktat is a risky deviation from German self-constraint in Europe, and would be toxic if it became a new leitmotif. But Berlin’s brute force method was provoked by a misguided Greek strategy that hit trust. German over-assertiveness can remain the exception.
Hugo Dixon: Euro zone should take over Greek banks 14 Jul 2015 Instead of lending money to Athens so it can recapitalise its stricken banks, the creditors should pump money directly into the lenders themselves. This will help sever the doom loop between the Greek state and its banks. It will also make Greece’s debt more sustainable.