Euro Zone

EU fight against tax havens has flaws

5 Dec 2017

The bloc has put 17 jurisdictions, including Panama and South Korea, on a blacklist for failing to fight tax abuses. European Union countries, however, are free to decide what steps to take against offenders. A laudable drive can be undermined if some choose a lenient approach.

Northern Ireland is Brexit’s Gordian knot

17 Nov 2017

Avoiding a hard border in the region is an aim of all sides in the Brexit talks. The least-worst fix is for Europe to treat Northern Ireland the way it does Norway. That’s only possible if pro-UK politicians in Belfast can be made to see the economic necessity.

Euro zone boom stimulates reform complacency

14 Nov 2017

From Germany to Italy, growth is picking up in the once-troubled region. Rosy conditions should endure: investment and employment are still catching up after years of crisis. The risk is that politicians avoid tough decisions to prepare the incomplete bloc for the next downturn.

ECB haste risks slowing its bad-loan cleanup

10 Nov 2017

The central bank overstepped its authority with proposals to impose stricter rules on banks for non-performing loans, the EU’s parliament says. The ECB is right to target European lenders’ 840 billion euro mountain of bad debt, but its clumsy move may set back the effort.

Catalan banks fairly punished for wrong reason

4 Oct 2017

The prospect of Catalan independence has hit Barcelona-based lenders CaixaBank and Sabadell. A schism from Spain and the EU could trigger deposit runs and losses, but the risk of that is low. Stagnant interest rates and weak profitability are a bigger threat than self-rule.

Macron’s European vision too honest for own good

26 Sep 2017

The French president set out comprehensive proposals to overhaul defence, taxes, social policy and more. Though he deserves credit for articulating Europe’s potential, his detractors have many targets to attack. Candour about EU integration makes such dreams harder to realise.

Italy’s 5-Star puts respectable face on radicalism

25 Sep 2017

The protest movement, doing well in opinion polls, has named a 31-year-old lawmaker as its leader. Luigi Di Maio’s cool appeal contrasts with founder Beppe Grillo’s vitriolic style and may win over moderate voters in 2018. But going mainstream could undermine its basic appeal.

What we’ve learned about Brexit so far

19 Sep 2017

Britain’s divorce from the European Union is reaching the critical stage where talks are meant to shift from principle to detail. Progress is being slowed by bickering, technicalities and economic fog. Despite the risk of Brexit fatigue, five clear lessons stand out.

EU foreign investment review raises bar for China

13 Sep 2017

Brussels has proposed a pan-European scheme to vet sensitive purchases by other countries. Unlike the U.S., rulings will be non-binding. Even so, the People’s Republic will find it harder to buy up EU infrastructure and technology. It’s another reason for Beijing to open up.

Hadas: EU single economy eases way for separatism

13 Sep 2017

Catalan and Scottish nationalism have bubbled up recently. Besides sentiment, the European Union has played a part. The super-national single market not only provides economic protection, but opens up a new vision of sovereignty. It’s the same idea Brexit fans have rejected.

Campaign for euro zone budget is a distraction

13 Sep 2017

The single currency area needs a way to absorb future economic shocks. But comments from European Commission chief Jean-Claude Juncker show that a common tax-funded budget would be a stretch. Better to tweak fiscal rules, deepen financial reform and beef up Europe’s bailout fund.

Merkel’s past omissions will return to haunt her

12 Sep 2017

Germany’s Chancellor has for 12 years failed to invest enough, prepare for costly climate change goals, or tailor the welfare state to an ageing population. An economic upswing is hiding fault lines but Merkel’s past inactivity will exact a high price in the next downturn.

5-Star’s softer stance on euro is clever tactic

4 Sep 2017

The radical Italian party sees a referendum on euro membership as a last resort, one of its top lawmakers says. The apparent U-turn could help soothe markets and business before upcoming elections. There’s room to backtrack, but 5-Star is holding up and getting more nuanced.

Italian markets dance anew to Berlusconi discord

23 Aug 2017

Chased out of power in 2011, Silvio Berlusconi is spooking investors with talk of a parallel currency. The ex-PM’s plans look more like posturing than policy. His own finances wouldn’t obviously benefit from Italy leaving the euro. Yet Berlusconi remains too important to ignore.

Euro rally will only speed its own reversal

21 Jul 2017

The single currency has hit a two-year high against the U.S. dollar. That will depress import prices when inflation is still too low. Any hint that a stronger exchange rate will prompt the European Central Bank to leave monetary policy loose for longer will push it down again.

Greek bonds are a bet on euro zone support

18 Jul 2017

Athens wants to issue bonds just after receiving another bailout tranche. If Greece had to finance itself at market rates it would struggle to stay solvent. But debt relief from European governments and ECB bond-buying will reduce the risk. Investors may find the wager appealing. Full view will be published shortly.

Macron’s choice: Europe or Gallic exceptionalism

13 Jul 2017

The French President and Germany’s Angela Merkel are keen to revamp the euro zone. It’s hard for Macron to be a role model as long as France’s budget deficit is too big – and harder still given the pressure to cut taxes quickly. This fiscal dilemma is the euro zone’s problem.

Brexit assurances give EU citizens scant comfort

26 Jun 2017

The government has told Europeans they will not be forced to leave the United Kingdom. That’s welcome. But many grey areas will depend on the judgement of overworked bureaucrats. Worse still, any pledges could be rendered invalid if Britain crashes out of the EU without a deal.

Macron has the levers to transform French economy

18 Jun 2017

The Gallic president’s talent for upending politics is beyond doubt after his party won a huge parliamentary majority. He now has a free hand to pass labour and tax reforms. His legacy hinges on whether he can lay the foundations for future prosperity without jeopardising growth.

Greece still dancing to Europe’s political discord

16 Jun 2017

Euro zone governments have rewarded Greek reforms and austerity with 8.5 bln euros of loans and promises of future relief. Political factors, including German elections, mean losses must remain vague. The lack of clear debt restructuring denies Greece the boost it needs.