Gutsy MPS turnaround tackles problems it can 25 Oct 2016 Italy’s sickly bank has devised an ambitious scheme to boost profitability and coax investors to back a 5 billion euro recapitalisation. There are some missing details, such as how a debt swap will work, but it’s a valiant turnaround plan. The main risks are outside MPS’ control.
Free trade can survive its Wallonian wobble 25 Oct 2016 The tiny Belgian region is holding up a trade pact between Europe and Canada. That doesn’t mean such deals are impossible, though - they just need even more time and creative thinking. The messy process also undermines the notion that ordinary people have no say in globalisation.
Berlin’s U-turn over Chinese bidders is worrying 24 Oct 2016 The government reversed its approval of the 670-mln-euro takeover of chip equipment-maker Aixtron. That looks like an attempt to protect Germany's tech industry, and backs up previous rhetoric. Shooting down the deal would hurt Aixtron, but the apparent wavering is more damaging.
Spanish government begins to make up for lost time 24 Oct 2016 The country's Socialist Party will allow acting Prime Minister Mariano Rajoy a second term, ending 10 months of political deadlock. His minority administration will now begin arduous tasks like cutting the budget deficit as the economy slows. A fractured parliament won't help.
Defiant losers are becoming a costly problem 20 Oct 2016 Pro-EU campaigners and Britons who live near airports have challenged the will of the majority. Donald Trump may not accept U.S. election results. In finance, companies regularly face and resolve such insurrections. Solutions are similar in politics, but harder to implement.
Final debate leaves American assets less secure 20 Oct 2016 The candidates faced off for the last time before the election. The event was supposed to focus on entitlements and the economy. Instead, voters got little substance, more rancor – and no commitment by Donald Trump to accept the will of the people. America just got a bit riskier.
Italy’s flawed hero needs more than Obama backing 19 Oct 2016 Prime Minister Matteo Renzi's reforms have been praised by the outgoing U.S. president. Yet polls suggest he may soon lose an important constitutional referendum. That would be a shame: Renzi has made mistakes, but his reforms are needed, and a divided Italy needs his dynamism.
RBS’s Russian goof sets tone for UK state meddling 18 Oct 2016 The UK lender is reviewing a decision to stop banking a supplier of Russian broadcaster RT. It could just be a business matter, but RBS’s 73 pct state holding makes it seem political. If a post-EU Britain is heading for more use of subsidies, such confusion will recur.
Inflation shows up at wrong time for Mark Carney 18 Oct 2016 UK consumer prices are rising at their fastest pace in nearly two years. It should be a proud moment for the Bank of England chief, who has been struggling to achieve exactly this. Unfortunately, the pound’s fall is going to give him a bit too much of what he wanted.
Thailand can ride out succession pain 13 Oct 2016 The late King Bhumibol was a unifying force in a divided nation. Yet the military has tightened its grip of late. That makes a fresh power struggle, and accompanying economic turmoil, less likely. It also means the junta's grand public-spending plans should survive.
China’s “social credit” makes for fearful economy 13 Oct 2016 China wants to use big data from courts, banks and government bureaus to purge miscreant firms and people from economic life. Better credit scoring would help cut fraud, but this proposal blurs social, political and economic criteria. The results will be unfair and inefficient.
Infidelities and Buffett dominate U.S. debate 9 Oct 2016 Donald Trump sought to deflect criticisms of his comments about women by citing the Oracle of Omaha as a rich sycophant of his rival, Hillary Clinton. The IMF called on nations to do more to spur growth. The candidates focused more on past transgressions than the future of the economy.
British bosses threatened with velvet handcuffs 6 Oct 2016 Theresa May will soon make it easier to hold firms liable for staff wrongdoing. Jittery board members will have kittens. Yet an analogous development - the scope for UK firms to agree U.S.-style deferred prosecution agreements rather than enduring guilt - could soften the blow.
British PM’s attack on QE sends wrong signal 6 Oct 2016 Theresa May has criticised the effects of ultra-low interest rates and promised changes. She's right that monetary policy alone cannot revive growth. If the government wants to boost the economy, the solution isn’t to undermine the Bank of England - but to lift spending.
Deutsche’s pain a sign bank regulation is working 4 Oct 2016 Jitters about the German lender have revived memories of the 2008 crisis. But eight years of reform have left Deutsche - and the rest of the banking system - better equipped to absorb a shock. The relative calm in financial markets suggests that regulators got some things right.
Falling inequality hides rich nations’ failings 3 Oct 2016 The gap between the very rich and very poor has fallen since 2008 - even in developed countries. That’s the surprising finding of a new World Bank report. But a different measure shows rich countries are less good at sharing prosperity. Growth is too weak to mask this failure.
Germany gets economic rebalancing only half right 29 Sep 2016 The country no longer depends on exports for growth. Strong domestic demand is the key driver these days, a government-commissioned report says. Yet the current account surplus is still rising. Blame not only Angela Merkel’s fiscal restraint but also weak corporate investment.
Philippines tests patience with political risk 29 Sep 2016 President Rodrigo Duterte is the top risk to an economy in rude health. Despite a sensible financial agenda, his inflammatory language and bloody war on drugs has foreigners fleeing stocks. The worry is that Duterte's wild streak will prompt direct investors to pull out too.
U.S. election campaign wags global currency market 27 Sep 2016 Forex traders decided Hillary Clinton won the first debate. A stronger Mexican peso suggests President Trump is a bit less likely, while the safe-haven yen weakened. Further gyrations will follow. But as the Brexit referendum showed, markets are bad at predicting elections.
Debate affirms worst, best of candidates’ beliefs 27 Sep 2016 The U.S. Republican nominee was brash about his business and reiterated huge growth promises. Hillary Clinton was armed with policy and a sober jobs plan. Voters didn’t learn anything new in the first presidential face-off but it reinforced views on who is ideal to spur growth.