Hugo Dixon: How a Greek debt deal could work 15 Jun 2015 Athens has struggled to get its euro zone creditors to talk about debt relief. That’s because it is not the most urgent issue. But if the negotiators resolve the immediate crisis, debt relief should come onto the table. Then they will need creative ideas. Here’s one.
Spain deserves top Eurogroup job 12 Jun 2015 Luis de Guindos is vying with incumbent Jeroen Dijsselbloem to lead the euro zone finance chiefs. The Spanish economy minister’s Dutch counterpart has done fine, but Guindos has experience and the right nationality. Yet Spain is taking a risk by pushing his candidacy so hard.
Engines of growth give carmakers a green problem 11 Jun 2015 Rising demand for gas guzzling SUVs puts Daimler, BMW and Audi in a bind. Bigger, faster cars are boosting profits but cancel out most of the progress on emissions control, new German data shows. Tightening European rules on pollution may see carmakers having to apply the brakes.
Hugo Dixon: What sort of man is Tsipras? 8 Jun 2015 The next days will define Greece’s PM. He must choose between saving his country and sticking with a bankrupt ideology. If he is brave and smart, he can secure a few more concessions from creditors and a goodish deal for Greece. If not, he will drag Greece into the abyss.
Bundesbank squeezed by euro’s design flaws 3 Jun 2015 The ECB’s quantitative easing rules reflect the incomplete unity of the single currency. They’re forcing the German central bank to buy more of its government’s bonds than the market can easily provide. In May, the mix of maturities purchased probably added unwanted volatility.
Immigration is crucial to euro zone’s fortunes 2 Jun 2015 The flow of people into the single currency area could account for most of the region’s GDP growth over the next few years. Migration magnifies trends. The slower flow of new workers made the recession worse. A speed-up could turn a tepid recovery into a surprisingly strong one.
Hugo Dixon: Greek ultimatum is a bad idea 1 Jun 2015 Some say the euro zone and IMF should present Greece with a take-it-or-leave-it offer, set a deadline, and threaten to cut off its banks if it doesn’t agree. This could play into the hands of Greek nationalists who would argue that foreigners were again bullying Athens.
Greece cries wolf, genuine beast may lurk 26 May 2015 Greek ministers are threatening a default on IMF loans. They might be bluffing, like Aesop’s shepherd boy. That scamp found that lying does not pay. The Syriza government may know more about extreme game theory, but it could end up out of the euro zone, or mauled by the ECB.
Spain starts confusing political transformation 26 May 2015 Local election results intensify the decline of the ruling People’s Party. In Barcelona and Madrid, coalitions backed by leftist Podemos upstarts could emerge as winners. November’s general election may clarify the political order. Meanwhile, investors will fear paralysis.
Debt extension could help Syriza but hurt Greece 22 May 2015 Europe could split off payments owed to Greece from its second bailout, according to reports. The move could break an impasse over reform talks and avoid a messy default. Yet Europe would have less leverage over the Syriza-led government and the Greek economy would suffer.
UK can use bank reform as EU bargaining chip 22 May 2015 France objects to Britain adopting its own extra-tough bank structural reform, reports say. But there’s little to gain from ring-fencing retail lenders, and a flexible UK can negotiate a better deal with Brussels. A British retreat could kill two birds with one stone.
Hugo Dixon: EU reform is more than renegotiation 18 May 2015 David Cameron needs to realise this as he builds up to the referendum on the UK’s membership of the EU, which could take place as early as next year. The UK prime minister may get little from set-piece renegotiation of Britain’s EU relationship; reforms are more promising.
Athens and Europe should rethink their Greek myths 15 May 2015 Both debtor and creditors are telling tales which leave out key facts. The incomplete and incompatible narratives make agreement on the next bailout harder, and the risk of a crisis greater.
Hugo Dixon: Greece seemingly has no Plan A or Plan B 11 May 2015 It owes around 324 billion euros. The government doesn’t seem to have a credible plan for reaching agreement with its creditors. Nor does it appear to have thought out how to default while containing the collateral damage.
ECB’s bank board-crashing makes sense – to a point 7 May 2015 The euro zone’s financial stability gnomes will observe board meetings. Handled right, the ECB should glean extra insight – after all, corporate culture starts at the top. But regular sessions with board committees may reveal more about how Frankfurt’s 123 charges really operate.
Brussels gains by bashing Gazprom 22 Apr 2015 The European Commission belatedly charged the Russian gas giant with abusing dominant positions. Gazprom has other, bigger headaches. But watchdogs gain credibility by taking on such a politically sensitive target. And Europe shows its commitment to a joined-up energy market.
Greek bargaining position stronger than it looks 22 Apr 2015 Athens may well not repay its ECB debt by July. But things would only get really nasty – via capital controls and bust Greek banks – if member states deem this a hard default. If they choose to, Greek leader Alexis Tsipras could blame them – and lead his country out of the euro.
EU migration policy is economically short-sighted 20 Apr 2015 For many desperate and poor people, Europe is the nearest safe place to go to make a living. A sensible migration policy would recognise the region’s international appeal and manage the reality. But inward-looking politics make for bad economics and heighten the risks to life.
EU’s competition sprawl as worrying as Google’s 15 Apr 2015 Europe has accused the web giant of favoring its own shopping search results and broadened the case to include its Android mobile operating system. Investigations and appeals may take a decade. Brussels’ ambitious lack of focus is similar to what threatens ever-expanding Google.
U.S. throws monetary policy stone from glass house 10 Apr 2015 A new report from the Treasury criticizes excessive economic reliance on central banks in Japan and the euro zone and calls for more fiscal action. That’s rich, considering the Federal Reserve’s balance sheet has ballooned nearly fourfold since 2008 and Congress is paralyzed.