Cyprus plan B targets more deserving victims 22 Mar 2013 The stricken state’s politicians are to vote on a new rescue plan. Stuffing some large depositors into a bad bank is fairer than taxing small savers. But a Cypriot plan to set up a multi-billion euro sovereign fund looks rickety and isn’t impressing the country’s euro partners.
Forget a flood of telco deals after EU thaw 21 Mar 2013 The EU is rightly easing up on the sickly sector. But competition concerns seem likely to prevent an M&A bonanza. Until the “single market” Brussels wants becomes a reality, many local deals will consolidate markets too much. And cross-border ones will lack financial sense.
EU can save its jobless youth 13 Mar 2013 A 14 pct drop in 15 to 24-year-olds with jobs doesn’t equate to the “lost generation” some describe. History suggests most of the young unemployed will join the workforce eventually. But full job recovery depends on many detailed reforms, and European politicians need to try harder.
Microsoft case shows how tech monopolies get fixed 6 Mar 2013 European regulators have fined the U.S. software giant yet another $731 mln for anticompetitive behavior, this time for not giving users a choice of browsers, as agreed. Neither Microsoft nor the EU acted on the offense too swiftly. Rivals, however, moved much more aggressively.
Bonus-rule get-arounds would invite retribution 5 Mar 2013 If the banking industry is true to form, it will try to find legal ways of dodging proposed European rules capping bonuses as a percentage of base pay. And it could succeed. But the victory will eventually lead only to more trouble for an industry the public loves to hate.
Tip bankers like waiters 1 Mar 2013 Forget Europe’s bonus caps for bankers. Why not put a ceiling on salaries and let clients reward good service, just as they do in restaurants? Banker pay could shrink to a more realistic level. After all, this is a business that likes to boast about serving its customers.
UK’s EU problem becomes more pressing 1 Mar 2013 European Council President Herman Van Rompuy threw cold water on Britain’s request to renegotiate European treaties, just as a eurosceptic party pushed the UK conservatives to third place in a by-election. David Cameron may have to pen a clear EU policy sooner than he thought.
Time to think of salaries for performance 28 Feb 2013 The EU is curbing the ratio of bonus to salary for bank staff. In most businesses, such a rule would simply capture economic reality. If pay reflects performance, salaries should usually comprise most of the package. Banks are different - because their business models are flawed.
EU bonus lesson: self-regulate or worse follows 28 Feb 2013 Caps on the ratio of fixed to variable banker pay are being imposed at just over 1:2 depending on how much bonus is deferred. Regulating income is an unwelcome post-crisis milestone. It is also a warning to banks and big business: self-regulate or get misguided rules from above.
Riposte: Bank bonuses deserve to be capped 19 Feb 2013 The question on bankers’ pay is not whether it’s too high, but how best to make it lower. Ideally, market forces and capital regulations will do the job, but progress is slow. Bonus limits are crude, but likely to be effective. A new EU rule could start a downward race.
Central banks are globalisation’s new enemy 15 Feb 2013 Nearly every part of the economy is becoming more global. Trade is already so free that the proposed U.S.-EU Trade and Investment Partnership would produce only modest gains. So why are central banks stuck in a nationalist past? They’re in urgent need of globalised thinking.
Loyalty dividends offer antidote to short-termism 12 Feb 2013 The EU is mulling plans to combat short-termism among institutional investors. One idea, to give shareholders variable voting rights, could create harmful inequalities and governance headaches. But rewarding loyalty through higher dividends is sensible and fair.
UK shouldn’t quit the EU – it should join the euro 4 Feb 2013 After a bad crisis, the UK isn’t close to qualifying for the single currency, and the current prime minister isn’t tempted. But the reasons given for the last official rejection, in 2003, now look weak. The economic case against an independent pound is stronger than ever.
More Europe can mean less bureaucracy for the UK 31 Jan 2013 In his big speech on Europe, the UK’s prime minister said unnecessary regulation was stifling British competitiveness. But would-be isolationists ignore the reality that separation also raises impediments to growth. Take the much-maligned Schengen border accord, for example.
European carbon market doesn’t need a supply fix 29 Jan 2013 Collapsing carbon prices have policymakers racing to shore up the EU’s emissions trading scheme. But even if the value of permits fell to zero, the level of emissions would stay below the limit agreed for 2020. Authorities should rethink the cap, not fiddle with supply.
Robin Hood tax is proving Cameron wrong on Europe 23 Jan 2013 The financial transaction tax that 11 EU countries want to implement is a case study of David Cameron’s self-defeating approach to Europe. Refusing to engage with its partners means London will bear the consequences of decisions taken without the UK’s participation.
Hugo Dixon: UK faces five years of limbo-land 23 Jan 2013 The promise of referendum on Britain’s membership of the EU by end-2017 means a long period of uncertainty which will be bad for investment. It also heightens the risk of a “Brexit”. There is an opportunity here, however, to press for more competitiveness and less centralisation.
Cameron bets big on confused European ideas 23 Jan 2013 The British prime minister’s vision of a largely economic European Union may play well at home, but is far too simplistic for today’s EU. The UK referendum on membership is a pointless distraction. It will reduce British clout in Europe and discourage business activity.
Goodwill is accounting at its most confused 22 Jan 2013 A European regulator has complained that goodwill writeoffs are inadequate. Inconsistency is one issue. The main problem is that the rules make no sense. They rely on a melange of traditional cost-based record-keeping, doubtful financial theory and blind trust in markets.
Cameron’s speech could leave Europe indifferent 17 Jan 2013 The UK prime minister will explain his European strategy at last on Friday. He’s expected to demand reforms and threaten to leave the EU if he can’t get a deal. Other member governments may just yawn. They are losing interest in the possibility of a “Brexit”.