The Exchange: Austerity in the age of populism 8 Mar 2019 Fiscal restraint is going out of fashion. In his new book “Austerity”, Harvard professor Alberto Alesina sets out to explain when it’s needed. He tells Breakingviews of the hidden long-term risks of U.S. President Donald Trump’s policies and why Italy’s debt risks are not over.
Tech to disrupt supply chains more than trade wars 2 Jan 2019 U.S. President Donald Trump’s tariffs give global companies an incentive to manufacture locally. But the shift was already underway because of new technologies like automation. Carmakers and pharma groups will localise more production in 2019 even if tensions over commerce abate.
EU rebels will lay siege to Brussels 2 Jan 2019 The global anti-elite backlash will reach the European Parliament in May. Nationalist parties will gain a bigger voice in the assembly, making decision-making messy. Sceptical voices could even infiltrate the European Commission. It’s another test for the European project.
Weed, China, guns and money lead most-read stories 27 Dec 2018 We promised 2018 would bring “Froth and Frustration,” and that’s just what readers got. Other topics that piqued your interest: Rising populism in Italy, Brazil and France; Broadcom’s doomed bid for Qualcomm and the sale of Refinitiv by Breakingviews’ parent. Plus, fake meat.
Italy’s Trump card shows bond market fragility 24 Aug 2018 The U.S. President offered to buy Italian debt, according to one newspaper. Donald Trump may want to help a eurosceptic government but has limited scope to mitigate the damage that Rome’s policies are inflicting on domestic asset prices. Help is better sought closer to home.
Cox: Italy’s new Caesars have outdone Donald Trump 21 Jun 2018 The country’s newly elected bosses have quickly mimicked the U.S. president’s style by breaking conventions and proposing radical immigration, economic and trade policies. They’ve even gotten into spats with neighbours - and Canada. But making Rome great again will be harder.
Hadas: Irresponsible companies feed bad politics 20 Jun 2018 Two new studies show rising markups and major tax-shifting at successful corporations. Winner-take-most industries push up inequality, squeeze governments and ultimately drag down growth – all economic nutrients for populism. Cures are available, but prospects are not bright.
Italy has room to bluff its way with Europe 21 May 2018 The likely government’s plans to boost spending and keep Monte dei Paschi state-owned break European rules. A revived economy, low rates and weak EU leadership give it a better hand than previous rebel Greece. And Europe needs to avoid a clash that could end the single currency.
Hadas: Billy Graham’s great missed economic chance 26 Feb 2018 The evangelist, who died last week, lived through a global debate over the Christian responsibility to help society. He put preaching before activism. If he had spoken out – as many European Catholics did – America might have a stronger welfare system now, and less populism.
Italy’s electoral race has a dark horse 15 Feb 2018 Opinion polls suggest the March 4 poll will produce a conservative or broad right-left government that will maintain the status quo. But new voting rules make predictions harder than usual. A post-election alliance of anti-EU parties is improbable – but not impossible.
Latam’s turn from populism will be put to the test 15 Dec 2017 Demagogues of right and left will test the region's recent embrace of pro-business pragmatism in 2018. Presidential elections in Mexico and Brazil will feature firebrands keen to exploit voter anger at corrupt elites and lawlessness. The center, if it holds, will emerge stronger.
Market shows faith in U.S. institutions, not Trump 16 Aug 2017 The president disbanded his advisory councils after a raft of CEOs quit. They are the latest to abandon a leader who has been defied by Congress, courts and the military. These bodies will be crucial in ensuring the nation’s stability. Investors so far appear confident they will.
Argentina gives Macri a narrow vote of confidence 14 Aug 2017 The president’s nemesis and predecessor Cristina Fernandez did not fare as well as expected in Sunday’s primary election. The peso’s strength in response shows the markets back Macri’s reforms. But Fernandez’s tally is a reminder the economic recovery is not reaching the poorest.
Latin America needs leaders who can say “adios” 4 Apr 2017 A reluctance to cede power is a common failing in a region known for strongmen and weak institutions. Protesters who torched Paraguay’s Congress over the issue last week had the right idea, if wrong method. Rulers’ refusal to let go clouds prospects in Ecuador and Venezuela too.
Mexico drives a train through Trump border wall 29 Mar 2017 The $2 bln purchase of a Florida railway by miner Grupo Mexico is a timely reminder that the countries' relationship is not all one-way traffic. The outward-looking Mexico the deal exemplifies is better for U.S. business than the more hostile neighbor Trump's wall plan portends.
Latin America trumps populism – for now 22 Feb 2017 Ecuadoreans denied a first-round election victory to their leftist president's chosen successor. As in Brazil and Argentina, that opens the door to a traditional pro-business candidate. But growing U.S. demagoguery gives the region's politicians an excuse to ramp up nationalism.
U.S. immigration crackdown bets the farm 22 Feb 2017 The new president is moving hastily to deport more illegal workers as part of his America-centric policy. In the process of trying to protect industries like manufacturing, stricter rules will hit an agricultural sector already suffering from labor shortages and falling profit.
France’s Macron is gifted risky centre ground 23 Jan 2017 The presidential hopeful looks increasingly like the lone mainstream candidate in the country's coming election. It's a huge opportunity to attract voters turned off by more radical solutions from the left and right. Yet appearing conventional carries its own dangers.
Amazon doormat spat reveals nationalist wild card 12 Jan 2017 An Indian minister threatened to rescind visas of Amazon staff unless its Canadian website halted sales of doormats resembling the country's flag. The doormats quickly vanished, but politicians pandering to jingoist Twitter shaming is a real and rising global business risk.
Castro embodied the weakness of strongmen 26 Nov 2016 The charismatic Cuban leader resembled other paternalistic caudillos of right and left in his outsized ego, which ultimately stymied his people. Cubans, like other Latin Americans, need institutions more than saviors like Fidel. Venezuela's leaders are another example.