Slower China growth plan begs for labour reform 6 Mar 2017 Beijing has set a GDP growth target for 2017 of 6.5 pct as it seeks to revive stalled reforms and cut industrial overcapacity. Yet the leadership still wants unemployment below 4.5 pct. This aggressive goal, alongside an inflexible labour policy, could create new problems.
Saudi Arabia’s Asian pivot looks defensive 3 Mar 2017 A rare royal visit to the region shows the oil-rich kingdom’s vulnerability. Declining U.S. demand and competition from Iran and Iraq make Eastern customers more important. Saudi can offer something rivals can’t - splashy investments and the IPO of its state oil producer, Aramco.
Schulz woos German voters with wrong reforms 2 Mar 2017 Angela Merkel’s Social Democratic challenger wants to roll back some of the labour market reforms pushed through 15 years ago by his own party. This plays well with voters but may harm Germany’s growth prospects. Abandoning excessive fiscal rigour would be the better U-turn.
Northern Ireland may bolster case for own spinoff 2 Mar 2017 If Thursday’s elections produce a stalemate, London may have to rule the thorny region directly. The 9 bln pound cost per year of propping up the region is likely to grow after Brexit, but a united Ireland is problematic too. The north is a prize no one wants.
Local election results mark peak for Theresa May 24 Feb 2017 The prime minister’s Conservatives confirmed their lead over rivals Labour with a landmark by-election victory. Acrimonious Brexit negotiations and squeezed incomes will test May’s popularity in the coming year, though. Not calling an early general election could prove a mistake.
Britain’s takeover regime is worth exporting 24 Feb 2017 “Put up or shut up” rules tightened after Kraft’s Cadbury deal have led to more deals where the bidder makes a firm offer, UK data shows. Generali, currently being stalked by Intesa Sanpaolo, will be envious. It would benefit if something similar was implemented in Italy.
Hadas: Statistical tricks are easy and dangerous 23 Feb 2017 The Trump administration might take up the new autocratic practice of fiddling with standard economic measures. That’s easy to justify, because the data really are arbitrary and can be misleading. But falsifying disagreeable official numbers is a modern kind of tyranny.
Le Pen’s French referendum pledge is tall order 21 Feb 2017 The far-right politician’s promise to hold a plebiscite on EU membership and leave the euro is spooking investors. To call such a vote, however, she would have to find constitutional loopholes. That would be an even bigger challenge than winning France’s presidential race.
UK government wakes up to downside of gig economy 17 Feb 2017 Work created by the likes of Uber flatters Britain's unemployment rate. That was convenient to politicians after the financial crisis. The less palatable implications of a surging gig economy are now dawning on Westminster – a potential 3.5 billion pound gap in tax receipts.
Italy’s bank fudge takes EU rules to the limit 16 Feb 2017 The government wants to put 5 bln euros into two small banks. That's as much as their common equity. As with Rome's Monte dei Paschi debacle, it's hard to square with European rules that only allow governments to help viable banks.
Hadas: How the liberal economy got lost 13 Feb 2017 As President Trump puts his promises on trade and migration into noxious practice, cowed elites are debating how their ideas failed. The big causes are forgotten history, ideological hubris, bad finance and excessive self-interest. Fixing those flaws is essential to any revival.
Daniel Tarullo gives banks generous parting gift 10 Feb 2017 The tough Fed governor is resigning five years before his term expires. Tarullo was the most influential architect of post-crisis financial reform, including the stress tests. His successor may be in better position to roll back regulation than any attempt to reform Dodd-Frank.
Investment drought is about more than spreadsheets 9 Feb 2017 Companies’ reluctance to invest is one of the main conundrums facing policymakers. A new Bank of England survey suggests old habits and crisis memories play a bigger role than any shortage of finance. It’s another reminder that loose monetary policy can only achieve so much.
Crisis anniversary offers $30 trln sanity check 7 Feb 2017 That's one estimate of the cost of the financial meltdown that started 10 years ago with HSBC's $1.8 bln subprime mortgage loss. With talk of a regulatory rollback in the air, the anniversary offers a timely reminder that exuberance and loose standards can cause painful damage.
UK housing policy may be answering wrong question 7 Feb 2017 The British government has some ideas to build 250,000 homes every year. But as real rents in England are below 2005 levels and the stock of surplus housing is higher, shortage of supply may not be the biggest issue. Managing rents, not house prices, should be the focus.
Cox: Politics biggest enemy of Paris Brexit hopes 7 Feb 2017 The City of Lights has been on a charm offensive with London’s financial castaways. And the pitch made to dozens of U.S., Chinese and Japanese firms – not to mention French expats – is convincing. What is less persuasive is the complacency around the Republic’s presidential race.
Ireland could join Britain in EU departure lounge 6 Feb 2017 Dublin’s unequivocally pro-Brussels stance may be tested if politics unmoors it from key trading partners like the UK and U.S. A tough Brexit deal, along with an inflated EU budget bill caused by tax inversions, could raise tricky questions about Ireland’s true interests.
Review: The hollow promise of ending GDP worship 3 Feb 2017 Switching from the touchstone of economics to broader measures of value would be more truthful and could make the world a fairer place, Lorenzo Fioramonti argues. But his optimistic vision overlooks the inevitability of growth and integration – and humans' competitive drive.
Greece is in a mess but not at the brink 3 Feb 2017 The government, its European creditors and the IMF are all being unreasonable in their own way over a bailout needed by July. The most sensible option would be for the IMF to withdraw. More likely is that if a compromise can't be found, the ruling Syriza party calls an election.
Infrastructure builds Gary Cohn’s White House role 2 Feb 2017 The former Goldman president is drafting a plan to build roads and smart grids, which may be more doable than tax reform. His strong presence and chutzpah make him a Trump favorite. Fixing bridges and airports would solidify his leadership in economic policy over other aides.