Biden’s subsidies are working a little too well 15 Mar 2024 The US president’s incentives for chips and clean energy have provoked a competitive scramble and raised the cost of building factories – which cuts the handouts’ real value to recipients like Intel. The risk is that investment zeal sets the scene for future gluts.
Europe will struggle to unite if Ukraine loses 11 Mar 2024 Jean Monnet, one of the European Union’s founders, predicted it ‘will be forged in crises’. Russian success in Ukraine could be the wake-up call the bloc needs to forge closer security ties. But it could also fragment under the strain. All the more reason to ramp up support now.
Musk vs. Altman is a battle everyone loses 5 Mar 2024 The Tesla boss's complaint that OpenAI ignored obligations to the human race distracts from a bigger problem. Existential issues are best overseen by democratic governments, because to leave them to techno-libertarians and private contracts is absurd. AI is no different.
Kyiv’s defence requires European supply-side shock 5 Mar 2024 Europe is not producing the 2 mln artillery shells Ukraine needs, and missile plants are idle. Meanwhile, its stockpiles are shrinking, threatening the region’s ability to defend itself. To crank up production lines, manufacturers will need a steady flow of government orders.
How to solve Europe’s defence riddle 5 Mar 2024 At 360 bln euros, the bloc’s military expenses are three times Russia’s. Yet fragmented defence systems are a problem, Bruegel senior fellow Guntram Wolff tells The Exchange podcast. To improve scale and boost aid for Ukraine, Europe should consider more joint debt.
Europe defence push requires clearing M&A barriers 27 Feb 2024 The region is hiking military spending to aid Ukraine and become less dependent on the US. Yet governments are squandering investment on incompatible weapons and systems. Creating more regional champions, like aerospace giant Airbus and missile maker MBDA, is a top priority.
How a syndicated loan can funnel cash to Ukraine 26 Feb 2024 Western allies could extend credit backed by Kyiv’s claim for war damages against Russia, and then use $300 bln of frozen assets to pay off the loan if Moscow refuses to pay reparations. The widely recognised principle of ‘set-off’ can help overcome legal and practical hurdles.
Capital Calls: BAE Systems 21 Feb 2024 Concise views on global finance: The $46 bln British defence company is forecasting slower year-on-year earnings growth in 2024 despite reporting record orders.
Europe defence requires more than a $75 bln boost 16 Feb 2024 Non-US NATO members will spend 2% of GDP on their militaries in 2024. Yet the extra $75 bln a year it entails remains below what Europe will need. Ukraine, technological advances and US wavering mean their true requirement is more like 3% of their output.
Renk’s IPO bang masks troubled world 7 Feb 2024 Shares in the German tank-gearbox maker soared 23% on the first day of trading. That and the Athens airport operator’s strong market debut suggest calmer IPO waters. Yet Renk’s success stems from heightened geopolitical tensions. That should keep investors on alert.
Political push would unlock EU defence M&A spree 10 Jan 2024 Despite decades of gradual consolidation, Europe’s military industry is fragmented. The sound balance sheets of players like Thales or Leonardo make them fit to team up. A key merger hurdle would be removed if war at the borders pushes governments to align their defence policies.
US defense minnows will storm the barricades 20 Dec 2023 Even as conflict in Ukraine leads American arms makers to boost production, the political mood is turning against giants like Lockheed Martin. With half the $415 bln handed to American defense contractors not receiving a competitive bid, newcomers will make battlefield gains.
Israel’s robust economy faces a major stress test 10 Oct 2023 The Middle East state’s thriving tech sector and strong institutions have helped it weather past security crises. Its latest one is much bigger, though. One key indicator will be whether foreign capital can retain its recent enthusiasm for investing in the $500 bln economy.
Renk blowup points to winter of IPO discontent 5 Oct 2023 The defence contractor pulled its $2 bln listing in Frankfurt. A slump in defence stocks and a selloff in bond markets explain the abrupt decision. But given the company’s growth prospects and cautious pricing, its failure is likely to deter would-be followers.
Capital Calls: Biotech alarm, Spotify’s tightrope 25 Jul 2023 Concise views on global finance: Pharma supplier Danaher’s reduced forecast contrasts biotech doldrums against broader market exuberance, in a warning sign for investors; the Swedish music streamer is caught between margin-hungry investors and music labels.
Drone IPO gives wings to India’s defence industry 11 Jul 2023 IdeaForge’s shares have nearly doubled since their debut, giving the government supplier a $586 mln valuation – or 151 times trailing earnings. It’s a bet that New Delhi will upgrade its military amid tensions with neighbours. India’s defence stocks look primed for takeoff.
Putin’s problems are only minor boost for Ukraine 29 Jun 2023 The Russian president restored a semblance of calm in Moscow after an aborted mutiny. In this Viewsroom podcast, Breakingviews columnists debate what this means for the country’s invasion of its neighbour. It’s helpful, but not necessarily transformative, for Kyiv’s resistance.
Markets are far from pricing in peace 26 Jun 2023 Germany’s Rheinmetall and other defence shares fell after an aborted Russian mutiny. Domestic instability may shorten the Ukraine war, curtailing lucrative contracts. Yet chaos in Moscow, Western tensions with China and rising cyberthreats will keep the world amply unsafe.
Europe has more Russian lessons to learn 26 Jun 2023 Yevgeny Prigozhin’s failed mutiny rams home the EU’s need to protect itself from trouble abroad. Leaders meeting this week in Brussels are thinking in more geostrategic terms and may now agree a China policy. But until they act as a bloc they will lack clout, says Hugo Dixon.
Guy Hands’ misery offers bondholders a free lunch 16 May 2023 The Terra Firma owner lost a legal fight with the UK, which wants to end a controversial housing privatisation. That could force Hands to sell properties and repay 4 bln pounds of debt at a premium to its market price. It’s the kind of bet the former bond trader might have loved.