America could use a UK-style wage injection 23 Mar 2020 The $1.8 trln stimulus stuck in Congress has flaws, not least no stringent rules on retaining workers. It may also only last for 10 weeks. A British plan to help pay salaries would address such drawbacks in one shot and avoid more rounds of partisan squabbling by lawmakers.
Guest view: End Iran sanctions on moral grounds 23 Mar 2020 The Islamic Republic was in desperate straits even before becoming the first state outside China to be badly hit by the coronavirus. U.S. sanctions are making its fight even harder. Taking the moral decision to roll them back would send a powerful signal, argues Chandran Nair.
Hadas: Trillion-dollar platinum is uber-real money 23 Mar 2020 Two precious coins can skirt any U.S. debt limit. The ingenious idea demonstrates the absolute power of governments to create money, for good and for bad. In the coronavirus crisis, extra money is the best way to ration available production. Later, it could cause problems.
Late German virus budget lacks neighbourly gesture 23 Mar 2020 Finance Minister Olaf Scholz unveiled a 756 bln euro plan to defend Europe’s biggest economy from Covid-19. That’s bigger as a proportion of GDP than those announced by European peers but he waited too long to act. His silence on joint euro zone bonds is also disappointing.
Hong Kong signals virus battle will be a long slog 23 Mar 2020 The city has been lauded as an example of how to contain Covid-19. A second wave of infections, though, has prompted new tough measures including a tourist ban. It’s a sober reminder for the world that getting back to a post-outbreak normal will be a complicated and bumpy ride.
China’s rate caution is conscious uncoupling 23 Mar 2020 The central bank is holding lending benchmarks steady as global peers slash. Bad debts and capital flight risk make big fiscal and monetary moves more dangerous than in 2009. That pushes the burden for stimulus to the government. Either way, structural imbalances will get exacerbated.
Senate stock trades add to post-virus reform list 20 Mar 2020 Several U.S. lawmakers sold shares after briefings on Covid-19. One is even married to the New York Stock Exchange chairman and downplayed the disease. It looks like another case of the powerful benefiting during the outbreak. Congress can tackle it by banning stock ownership.
Trump can make oil markets balance in his favour 20 Mar 2020 To hike low crude prices, the U.S. President needs a big producer to cut supply. He already has leverage over Saudi Arabia and more scope to threaten Russia with sanctions. Add in output curbs by shale, and a path exists to keep American producers afloat but oil values in check.
Review: A loose cannon on the deck of the world 20 Mar 2020 Saudi Arabia’s decision to launch a full-on oil price war is destabilising, risky and aggressive. But as Ben Hubbard’s new book shows, it’s a signature move for Crown Prince Mohammed bin Salman. It seems unlikely that his kingdom will become any less repressive – or volatile.
Corporate bailouts should be quick, big and wide 20 Mar 2020 From large airlines to small restaurants, companies are pleading for state support to cope with plunging revenue. Governments can help by swiftly offering a cheap loan to any business that wants it. It’s the best way to prevent a severe downturn from becoming a prolonged slump.
Trade war truce sabotaged by virus battle 20 Mar 2020 Removing tariffs could provide an estimated $170 bln boost to the ailing global economy, yet any rollbacks hardly seem imminent. The White House just slapped fresh duties on Airbus. Relations with China are also worsening. Such intransigence only makes a bad situation worse.
Quarantine hits home for Canada’s Trudeau 18 Mar 2020 The border with the U.S. is closing. The Canadian prime minister – himself in Covid-19 isolation – also unveiled a fiscal aid package worth about 3.6% of GDP, way short of, say, the UK’s response to the pandemic. As everywhere, though, it’s a down payment on an unknown price.
Britain’s mega-bailout is just a good start 18 Mar 2020 Finance minister Rishi Sunak promised 350 bln pounds in loan guarantees and support for stricken businesses. Though details are slim, the package worth 17% of GDP is suitably large. The next step is to get cash directly to those who need it most. Until then, fear will dominate.
Cash handouts signal surprising ascent of Mnuchin 17 Mar 2020 Donald Trump wants to send cash to Americans after weeks of downplaying the virus. Other countries are likely to follow. The president’s U-turn looks partly down to Treasury Secretary Steven Mnuchin. He has unexpectedly become a steadying hand in a chaotic White House.
Bond market minor casualty of Macron’s war footing 17 Mar 2020 Yields on French debt rose after the French president announced 45 billion euros in crisis spending to help business. Like Italy, France is bending fiscal rules to mobilise against Covid-19. Opening state coffers makes sense, even if it worsens longer-term debt to GDP outlook.
EU virus fight requires tricky state aid trade-off 16 Mar 2020 Airlines and other companies hit by the Covid-19 crisis need government support to survive. The widespread shock means Brussels must act faster and be more generous than in the global financial crisis. Clear rules on payouts and how money is spent can reduce moral hazard risks.
Three things the EU can do to cushion virus blow 12 Mar 2020 The 27-nation bloc lacks central spending power to fight the economic shock caused by the health crisis. But it’s not powerless. Relaxing fiscal rules and restrictions on state aid would give states freedom for more emergency measures. Looser bank regulation is another quick win.
Turkey’s Erdogan faces new economic policy nemesis 12 Mar 2020 Former minister Ali Babacan has launched a party. There’s no election until 2023 but a conflict with Russia and market turmoil could derail Ankara’s economic plans. Cogent alternatives to President Tayyip Erdogan’s counterproductive policies will begin to win over voters.
Donald Trump is rising risk factor in virus battle 11 Mar 2020 The U.S. president’s address to the nation sparked more market panic. A $50 bln pledge for small businesses hit by Covid-19 is good, but his speech lacked public-health remedies, was full of mixed messages and focused on a Europe travel ban. He’s missing both diagnosis and cure.
Virus adds edge to Democratic healthcare debate 11 Mar 2020 The party’s top two presidential candidates have very different ideas for overhauling the U.S medical system. Bernie Sanders’ national health service plan would cost some $12 trln more than Joe Biden’s goal to augment what’s already in place. Covid-19 puts the issue center stage.