UK’s post-Brexit industrial plan lacks ambition 27 Nov 2017 The government has promised to boost research spending, improve education and upgrade infrastructure. Leaving the EU makes this more important, but less affordable. Even if Britain was not breaking from its largest partner, however, the goals would be strangely short of oomph.
India rating upgrade confirms Modi on right track 17 Nov 2017 Moody's unexpectedly upgraded the country's credit rating for the first time since 2004, in a major boost to Premier Narendra Modi. This recognises that, despite short-term disruption and some negative sentiment, recent reforms will fundamentally improve the economy.
Venezuela’s Maduro enters alternate reality 3 Nov 2017 The OPEC member's socialist leader wants to restructure the ailing country's foreign debt, putting an alleged drug trafficker in charge of working out how. U.S. sanctions make any refinancing virtually impossible. But even default might not drive the hapless president from power.
UK student loan sale has costly Corbyn hedge 31 Oct 2017 Britain is pushing ahead with the sale of 4 bln pounds of loans, despite Labour leader Jeremy Corbyn’s promise to ease student debt. Investors will get compensation from a complex scheme if government policy changes. That further strains the logic of the sale.
Hadas: Greed is best indicator of financial crisis 26 Oct 2017 New research casts small-time property investors as the secret villains in the 2007 U.S. house price collapse. As usual, the love of leverage was the root of financial distress. Balance sheets are stronger today, but investors still haven’t learned the virtue of moderation.
Beijing’s dollar bonds seek to reprice China risk 26 Oct 2017 A $2 bln sovereign dollar bond sale is the country’s first since 2004. Despite rating downgrades, the two-part deal is priced aggressively, with slim premiums to U.S. Treasuries. Local banks can guarantee demand, which could artificially cut borrowing costs for Chinese issuers.
Change at the top is Bank of Italy’s best option 20 Oct 2017 Governor Ignazio Visco’s uneven track record during the country’s banking crisis undermines the case for renewing his term. Sniping from politicians challenges the central bank’s independence and could hobble his replacement. But even if Visco stays he risks being a lame duck.
Viewsroom: President Xi Jinping’s moment 17 Oct 2017 The Chinese Communist Party’s 19th National Congress kicks off this week. Delegates at the week-long confab will select new leaders, including for key financial and economic posts. But the spotlight will be on Xi and whether he can consolidate his power and extend his reign.
Exchange Podcast: Luke Bronin 12 Oct 2017 Hartford is one of America's poorest cities in one of its richest states. And it's about to get worse for Connecticut's capital as Mayor Luke Bronin wrestles with a fiscal crisis that's likely to end in a bankruptcy filing. Rob Cox dropped in to hear his vision for reviving Hartford.
Trump gets Puerto Rico priorities in a muddle 4 Oct 2017 The president’s vow to wipe out the U.S. commonwealth’s debt sent its bonds plunging. The devastation wrought by Hurricane Maria may necessitate another restructuring. But it doesn’t address the island’s problems. Its citizens need money, supplies and services, not distraction.
U.S. will pay for Puerto Rico one way or another 26 Sep 2017 The already-bankrupt commonwealth is reeling from the devastation wreaked by Hurricane Maria. Blackouts may persist for months even as a $72 bln debt bill looms. Without swift and generous aid from Washington, a mass exodus for the mainland will only increase the ultimate cost.
Macron’s European vision too honest for own good 26 Sep 2017 The French president set out comprehensive proposals to overhaul defence, taxes, social policy and more. Though he deserves credit for articulating Europe’s potential, his detractors have many targets to attack. Candour about EU integration makes such dreams harder to realise.
Italy’s 5-Star puts respectable face on radicalism 25 Sep 2017 The protest movement, doing well in opinion polls, has named a 31-year-old lawmaker as its leader. Luigi Di Maio’s cool appeal contrasts with founder Beppe Grillo’s vitriolic style and may win over moderate voters in 2018. But going mainstream could undermine its basic appeal.
China can afford to shrug off credit downgrades 21 Sep 2017 S&P just dinged the sovereign rating. Banks have been marked down too. Worries about rising debt are justified, but the market’s non-reaction shows how differently China’s economy is wired. State control and plentiful savings mean Beijing will escape most of the usual fallout.
What Carney can learn from Yellen 21 Sep 2017 Fed Chair Janet Yellen showed rate-setters can shock markets even when they stick to the script. That’s a lesson for the Bank of England’s Mark Carney, who has talked up a rate rise this year. Like her, he may have to hike without having solved a host of economic puzzles.
Breakdown: Colour-coding Germany’s election 18 Sep 2017 GroKo, black-green or Jamaica? Angela Merkel is almost certain to win a fourth term, but the race to be her partner is wide open. The outcome matters for Germany – and for Europe. Breakingviews decodes the colourful jargon, and looks at the consequences of different outcomes.
Saudi reform rethink points to Aramco IPO risks 7 Sep 2017 The kingdom may water down plans to overhaul the economy. That could have implications for the partial privatisation of Riyadh’s most prized asset. If much-vaunted reforms can be delayed, so can a problematic sale that is unlikely to deliver the desired $100 bln windfall.
5-Star’s softer stance on euro is clever tactic 4 Sep 2017 The radical Italian party sees a referendum on euro membership as a last resort, one of its top lawmakers says. The apparent U-turn could help soothe markets and business before upcoming elections. There’s room to backtrack, but 5-Star is holding up and getting more nuanced.
Trump may unite Congress – against him 31 Aug 2017 The U.S. runs out of money in a month and the president is attacking lawmakers in his own party. That could prompt Republicans and Democrats to work together to keep the lights on. Plus: Rupert Murdoch could be overpaying for Sky.
ECB weakens Italy doom loop by bending bond rules 16 Aug 2017 The European Central Bank is buying more Italian bonds than its rules allow. That helps lower the country’s borrowing costs and allows its banks to cut exposure to their sovereign. With elections and political risks looming, it may have to take an ever more pragmatic approach.