New EU debt rules have way to avoid past mistakes 4 Apr 2023 The European Union’s old stability pact was a poorly fitting straitjacket, yet recrafting it is politically fraught. The bloc now aims to replace strict diktats with medium-term goals. A successful framework can revive growth. But it will only work if countries follow it.
Europe throws ignition cars a thin lifeline 28 Mar 2023 A last-minute EU deal will exempt autos running on carbon-neutral propellants from a 2035 combustion engine ban. That may help sports carmakers like Ferrari. Such fuels are costly and energy-intensive. Brands betting big on electric rides, like VW, will struggle to change tack.
Capital Calls: Saudi and Credit Suisse, EU patents 27 Mar 2023 Concise views on global finance: The resignation of the chairman of Saudi National Bank, Credit Suisse’s largest shareholder, may prompt a quiet period for other investors; big companies want Europe’s new system for registering intellectual property to cover more countries.
EU and US green arms race misses bigger picture 16 Mar 2023 The European Union’s response to Joe Biden’s Inflation Reduction Act gives member states leeway to push back with their own green subsidies. Yet plans for production targets are misguided. To decarbonise while managing China risks, it’s better to seek common ground with the US.
EU power rejig may only solve tomorrow’s problem 14 Mar 2023 Spooked by the 2022 gas crisis, the European Commission wants to boost long-term electricity contracts at fixed terms to shield consumers. That’s wiser than splitting the whole power market. Yet while it might aid green investment, it won’t curb prices in the short term.
UK begins long and uncertain road back from Brexit 27 Feb 2023 Rishi Sunak agreed a deal over Northern Ireland trade with the European Union. If the UK leader can get it past his own party, it should improve relations and collaboration. Closer links will need bigger compromises than Sunak can stomach, but his deal is symbolically important.
A post-Erdogan Turkey could come in from the cold 27 Feb 2023 Investors shunned the country as the president let inflation rip. He strained relations with the West by cosying up to Putin and did too little on climate change. An opposition win in coming elections, more likely after the recent earthquake, may change all that, says Hugo Dixon.
Rolling EU debt would boost investment and markets 21 Feb 2023 European Union bonds to fund 900 bln euros in pandemic aid have cheered investors. The bloc needs ongoing debt sales to buoy traders’ confidence, invest cross-border and challenge the U.S. dollar. Separating borrowing plans from spending rows could make the politics possible.
ECB’s inflation-fighting hose may have a blockage 20 Feb 2023 The central bank has hiked rates by 3 percentage points since July, pushing up corporate borrowing costs and squeezing demand for credit. Yet firms and households have longer-term debt than in the past. That means tighter monetary policy will take a while to cool the economy.
Hydrogen is elemental to U.S.-EU green compromise 10 Feb 2023 Joe Biden’s Inflation Reduction Act has raised fears of a transatlantic subsidy spat. The sustainably produced version of hydrogen may be a way to de-escalate tensions. Because it’s a potential jobs engine rather than a current one, both sides have scope for a face-saving deal.
China ban would slow, not halt, Western solar push 3 Feb 2023 Reacting to the chip war, Beijing may ban the export of technology for making solar panels, a $235 bln sector it currently dominates. Yet the West already has green energy know-how. Creating a rival industry without Chinese expertise may be slower and costlier but not impossible.
Italy may hold key to unlock EU green subsidies 1 Feb 2023 Europe’s response to the U.S. green-subsidy surge now hinges on tapping existing budgets, rather than new money. Ursula von der Leyen wants to channel unspent pandemic billions into tax credits and tweak state aid. Italy’s Giorgia Meloni may be the one to broker a deal.
Euro zone can afford to keep fiscal taps running 31 Jan 2023 The bloc’s governments pumped up spending by 3.75% of GDP over the past two years to cushion the blow of Covid-19 and higher energy prices. Now they are closing the spigots. That’s a mistake. Manageable debt costs leave room to support growth – and help the ECB fight inflation.
European gas savings success hides darker reality 27 Jan 2023 Spurred by soaring prices, the continent used 12% less of the fossil fuel in 2022. Despite a push to conserve energy, much of the drop was due to companies switching to other pollutants or shutting plants. Gas-hungry sectors like chemicals and steel face a protracted struggle.
EU debt fears hinder U.S. green subsidies riposte 24 Jan 2023 Ursula von der Leyen has pledged a European response to protectionist U.S. energy handouts. The European Commission president can improve permitting speed and offer token subsidies. But her best weapon, a permanent form of the EU-wide pandemic bond-sale programme, is far off.
UK has wrong approach to EU-style strike limits 16 Jan 2023 British PM Rishi Sunak wants to force minimum service levels during public sector strikes, as exist in the rest of Europe. But the plan is too broad and coercive, looking like a knee-jerk reaction to the current unrest. It needs to be better thought-out, in a pacified atmosphere.
The fog in the English Channel is clearing a bit 16 Jan 2023 Britain won’t rejoin the EU soon, despite voters’ regrets over Brexit. But if the two sides resolve a Northern Ireland dispute there could be progress on topics such as climate, foreign policy and financial services. Much may have to wait for a new UK government, says Hugo Dixon.
Global energy prices face a turbulent 2023 12 Jan 2023 The cost of natural gas has halved from a peak last year thanks to warmer weather and bulky European stores. In this Viewsroom podcast, Breakingviews columnists discuss why it’s too early for companies and households to rule out further supply shocks and price volatility.
Cheaper gas is temporary salve for Europe Inc 9 Jan 2023 Warm winter days and enough reserves to offset Russian imports have halved the fuel’s cost. Yet Europe’s energy security also hinges on abundant liquefied natural gas purchases. As China’s fuel-guzzling economy reopens post-Covid, industrial giants like BASF may still suffer.
European inflation control is a double-edged sword 6 Jan 2023 Prices in Spain or France have risen less than in other big euro zone economies. One reason is lower dependence on Russian energy, but government price controls also helped smooth the shock. The risk is that suppressed inflation will catch up after the crisis subsides.