Finland’s Uniper hit best seen as defence spending 12 Jul 2022 Helsinki wants Berlin to rescue the ailing German energy group, but limit the hit to Finnish owner Fortum. Germany doesn’t agree. Finns would be better off seeing any dilution from a forthcoming capital hike as part of the cost of de-Russifying. Like the cost of joining NATO.
BlackRock climate resilience faces political test 11 Jul 2022 The $10 trln asset manager’s advocacy of sustainable investing could backfire if Republican critics win the U.S. midterm elections. Billions of dollars of funds and advisory mandates are at stake. BlackRock can afford to hold its ground, but only so far.
What an honest British prime minister would say 11 Jul 2022 Conservative politicians who helped precipitate Boris Johnson’s downfall are now vying to replace him. Several have spoken about the need for honesty, integrity and realism. If they mean what they say, they should start with these five points, says Hugo Dixon.
Raging crisis puts Sri Lanka’s creditors on spot 11 Jul 2022 Protesters are forcing out the president after petrol pumps ran dry. It removes one obstacle to an IMF rescue. Now bondholders need to swallow big losses on Colombo’s $50 bln of foreign debt. An ugly global economy means citizens and lenders face a long, hard road to recovery.
Japan’s Kishida inherits growing China headache 11 Jul 2022 The Prime Minister’s party increased its majority in Sunday’s election after former leader Shinzo Abe was shot. It’s now easier for Fumio Kishida to crank up defence spending and attack waning competitiveness. The former will anger China’s leaders; the latter will amuse them.
Unlike markets, real U.S. economy is blasé on Fed 8 Jul 2022 Employers added a robust 372,000 jobs in June. Stocks fell on worries that would spur a more hawkish central bank in its inflation fight. But consumers are still spending and businesses are short of workers. The more oblivious they appear, the more it pushes the Fed to be severe.
Shinzo Abe’s assassination leaves Japan undone 8 Jul 2022 The polarising politician who dragged the country out of decades of deflation was gunned down in the street on Friday. His Abenomics agenda will outlive him, as most of the challenges he tried to solve endure. Without Abe’s charisma, however, tackling them may get harder.
Chinese stimulus requires morale booster 8 Jul 2022 Local governments may front-load $220 bln of bond sales to help fill an estimated $1 trln funding gap. Infrastructure outlays have been restrained so far; officials worry wasteful investment will hurt their careers. Getting them to spend means reducing punishment for bad choices.
Boris Johnson exit is beginning of end for Brexit 7 Jul 2022 Campaigning to quit the EU propelled the outgoing prime minister to high office; his three-year tenure showed the costs of that decision. The UK still faces lasting economic and diplomatic damage. But the idea of using Brexit to realign British society will depart with Johnson.
France Inc could turn a profit from EDF takeover 7 Jul 2022 President Macron’s administration may have to fork out 7 bln euros for full control of the energy giant. But spinning off its renewable arm could recoup that cash. And the nuclear branch’s long-term investment needs and associated risks are more suited to public ownership.
Kraft Heinz grocer war, China’s creaking economy 7 Jul 2022 Tesco has pulled products made by the $47 bln baked bean producer over price rises. In this Viewsroom podcast, Breakingviews columnists debate how this loss of variety could open the door for rivals to expand. Also, the People’s Republic’s means of hitting economic goals.
Boris Johnson’s woes obscure deep UK divisions 6 Jul 2022 The UK leader’s grip on office is slipping after senior cabinet members resigned. But his exit saga masks disputes over key issues like taxes, state intervention and relations with the EU, amid the UK’s singular economic mess. A new leader will find them even harder to reconcile.
Capital Calls: Amazon/Just Eat Takeaway 6 Jul 2022 Concise views on global finance: The $1.2 trillion e-commerce giant is reprising its deal offering Prime subscribers membership of UK food delivery outfit Deliveroo with the U.S. arm of its $3 billion Dutch rival.
Henan displays China’s economic cracks all at once 6 Jul 2022 The province of 100 million is clumsily covering up economic stress. Local officials hacked Covid-19 tracking apps to conceal bank runs and silence investors even as they report rosy data. Beijing’s push to deliver 5.5% GDP growth this year implies more misdirection to come.
Uniper investors head for bailout they don’t merit 5 Jul 2022 The 4 bln euro German utility’s value has been smashed by its need to expensively replace Russian gas. Given Berlin is mulling a way to spread this cost, Uniper shares may yet rebound. The outcome may wind up being more generous than its main Finnish shareholder deserves.
Inflation finally kills shaky U.S. trade-war logic 5 Jul 2022 President Biden is close to axing some of the levies on $350 bln in Chinese imports, partly driven by a belief they hurt consumers. A better reason would be that they never succeeded in changing China’s ways in the first place. That ought to inform fresh tariff discussions too.
Italy starts countdown to risky life after Draghi 5 Jul 2022 The 5-Star party may bring down Mario Draghi’s coalition government. A crisis would hurt growth and raise the chances of a less EU-friendly executive. Worse, market jitters due to rising political uncertainty may complicate the European Central Bank’s efforts to tame bond yields.
Macron’s travails could turn into fiscal mess 5 Jul 2022 The French president’s electoral platform was bound to stress the state budget. Now a deadlocked parliament may only agree on increased spending and more tax cuts. With borrowing above 110% of GDP, and no credible plan to control public finances, Paris’s debt looks vulnerable.
Capital Calls: EU bank windfalls 4 Jul 2022 Concise views on global finance: The European Central Bank is worried banks will pocket a windfall on special loans when it starts raising rates. But deciding whether the bonanza is too big is a political choice.
Capital Calls: Kohl’s future, Aerojet fight 1 Jul 2022 Concise views on global finance: The U.S. retailer walked away from a deal with Franchise Group, leaving it to weather a potential recession alone. Meanwhile, Aerojet CEO's victory against her executive chairman culminates in a board mess.