Greek vote can bear gifts for debt investors 22 May 2023 A big win by Kyriakos Mitsotakis in Sunday’s polls makes him odds-on to stay as Greece’s premier. That will help the $200 bln economy continue its rebound after crises in the 2010s. Forthcoming investment-grade status is another reason for Greek sovereign debt to keep rallying.
Strongmen are riskier the more they stay in power 22 May 2023 Autocrats often seduce investors with promises to be good for business. But Turkey’s Tayyip Erdogan, Russia’s Vladimir Putin and Xi Jinping in China show this effect doesn’t last. The longer leaders stick around, the greater the risk of poor decisions, says Hugo Dixon.
G7 says “de-risking”, China hears “containment” 22 May 2023 Wealthy democracies argue they’re diversifying, not decoupling, from the world’s second-largest economy. Yet Beijing sees them hobbling strategic industries, undercutting its global leadership and boosting defence budgets. “Escalation” or “retaliation” are more accurate synonyms.
Thai Inc shakeup could follow shock election win 22 May 2023 The winning party remains upbeat it can form a government. Institutional reform is top of Move Forward’s agenda, but its wish list includes breaking up monopolies and cutting state concessions. The $500 bln economy needs a competitive upgrade. It will come at tycoons’ expense.
Benched legislation has hidden costs 19 May 2023 Washington is laser-focused on raising the debt ceiling. But as spending debates rage, Congress’s back burner is getting crowded. Pending legislation, like one that secures bank services for cannabis businesses, enjoy broad support, but the window for easy passage is closing.
Capital Calls: US gifts Big Tech 19 May 2023 Concise views on global finance: The US’s high court left internet firms’ liability protections untouched in two Thursday rulings. For Twitter, Meta and Google, business as usual is the ideal outcome.
Russia sanctions become a high return investment 19 May 2023 As older penalties lose their bite, Western powers are preparing a new round of measures to tighten the screws on Vladimir Putin. That will hurt the Kremlin and be a marginal sacrifice for Europe, which no longer depends on Moscow for its energy – a good cost-benefit balance.
Erdogan part three would be worse and the same 18 May 2023 The Turkish president is in a heated battle to lead the battered country. In this Viewsroom podcast, Breakingviews columnists discuss the risks Turkey faces if he stays in office, his rival’s offering and how the outcome of the election will impact the rest of the world.
Debt conundrum gives Italy weak hand in EU talks 18 May 2023 The pandemic and the war have taken the country’s indebtedness off investors’ radar. Yet high interest rates, slower growth and a budget deficit mean Rome will struggle to cut its fiscal burden. That makes it harder for PM Giorgia Meloni to ask for lenient European rules.
Debt-ceiling talks are more theater than substance 16 May 2023 The few areas being discussed on Tuesday – food stamps and drilling permits - are hot political buttons. But they would shrink the deficit by only 2%. Lawmakers either have a long way to go to solve the debt problem, or they are favoring pet projects at the expense of insolvency.
Turkey votes for long-term market instability 15 May 2023 With President Erdogan and his rival set for a May 28 runoff, uncertainty is the main upshot of the country’s elections. That prolongs the agony for a $900 bln economy plagued by 44% inflation and wild fiscal policies. An even weaker lira and warier foreign investors will ensue.
Rich world has three ways to win over global South 15 May 2023 Leaders from the Group of Seven, who gather this week, need to develop a stronger pitch to poorer non-aligned nations. A strategy based on peace, prosperity and protecting the planet could work. It’s more effective than delivering lectures on democracy, says Hugo Dixon.
Thailand’s election could be a lose-lose scenario 12 May 2023 Sunday’s vote might deliver victory for pro-democracy parties or return the junta-backed government to power. No matter who wins, old hostilities will escalate. While both sides plan populist handouts, neither has an inspiring economic agenda.
Rebuilding Ukraine depends on luring private money 10 May 2023 International agencies and allied governments are taking care of the war-torn country’s immediate needs. An estimated $400 bln reconstruction bill, however, requires additional investors. Economic incentives and new laws would help attract them even before Russia’s invasion ends.
Workforce shifts stress need for migration rethink 9 May 2023 A Trump-era rule barring migrants seeking US asylum at the Mexico border ends this week. Arrivals are expected to double. With an aging US workforce and a job market in desperate need of workers, legislators have the opportune time to finally fix broken immigration policy.
Credit Suisse debacle raises oversight question 9 May 2023 Swiss authorities hailed the state-backed rescue of the stricken lender by UBS as a commercial solution that will be light on domestic taxpayers. Banking professor and former SNB official Urs Birchler tells The Exchange podcast why the quick fix is far from ideal.
EU debt’s credibility problem is worsening 9 May 2023 Borrowing costs of the bloc’s jointly issued bonds have risen above those of similarly rated sovereigns. The EU’s inability to deliver on promised joint revenues is exacerbating the impact of higher rates. That in turn reinforces investor fears that Brussels debt isn’t permanent.
Geopolitics is shrinking India’s risk premium 9 May 2023 Indian tycoons and financiers are sitting back as the titans of global business come to them. The country’s growing importance as a potential alternative investment destination to China shifts the focus away from the challenges of doing business, and onto what it can offer.
Joined-up G7 is best China deterrent 8 May 2023 To discourage the People’s Republic from invading Taiwan, US allies in Europe must first agree it’s in their vital interest to do so. Then Group of Seven leaders, who meet in Hiroshima this month, need to cut dependence on China while ramping up their defences, says Hugo Dixon.
Beijing expects foreigners to trust, not verify 5 May 2023 Officials say they welcome overseas investors while they raid due-diligence firms and restrict corporate and economic data. China’s confidence in its attractiveness and ability to fund its own companies is not baseless. Yet it’s a risky time to take foreign cash lightly.