Euro Zone

Mario Draghi’s tacit advice to Christine Lagarde

24 Oct 2019

The outgoing ECB boss says his successor needs no guidance. But his last big news conference contained clues. First, never give up, though economic risks are rife. Second, turn the page on infighting. Third, be wary of financial bubbles. Fourth, expect brickbats, whatever you do.

German ECB exit could make Lagarde’s life harder

26 Sep 2019

Sabine Lautenschlaeger resigned from the European Central Bank’s board. With no reason given, it is all too easy to blame the premature departure on discontent over recent monetary easing. Incoming boss Christine Lagarde’s room for manoeuvre may be shrinking before she starts.

Hadas: The right Brexit is still no Brexit

28 Aug 2019

Three years and two prime ministers after a divisive referendum, the UK is as far as ever from a national consensus on how to leave the EU. A decision to stay now would be economically sensible, globally responsible - and politically no harder than any variety of separation.

EU’s 100 bln euro tech fund scratches wrong itch

23 Aug 2019

Brussels officials, sad about not having their own Google, are cooking up an investment vehicle to fund home-grown unicorns. The bloc’s history suggests the main result will be a lot of squabbling. More important, lack of money isn’t what holds back European tech startups.

EU budget pact is ready for 21st century reboot

4 Jul 2019

Italy argues that EU fiscal rules elevate stability over growth. They are complex and don’t encourage productive investment. Removing funds spent on research or green energy from deficit goals could help. Yet Rome’s budget plans show politicians’ priorities often lie elsewhere.

Time to look beyond Europe for next IMF boss

3 Jul 2019

The international lender’s chief has always been European. Christine Lagarde’s exit will be a chance to drop the outdated convention. Any hope of salvaging the multilateral system means giving emerging and developing economies more clout. Competence matters more than nationality.

Dixon: Bold PM can bring virtuous circle to Greece

3 Jul 2019

Liberal conservative Kyriakos Mitsotakis is expected to replace leftist Alexis Tsipras as prime minister after Sunday’s election. If he roots out the bad practices that have bedevilled Greece for decades, the country could finally enjoy an investment-led recovery.

EU’s debt warning to Italy is just opening salvo

5 Jun 2019

The European Commission says the country’s borrowing, which grew to 132% of GDP last year, could justify unprecedented sanctions. That move would need the support of EU governments, and Rome has some wiggle room. But political and economic signs point to a future showdown.

Cox: “China does it” is a bad antitrust argument

23 May 2019

Sheryl Sandberg says Facebook shouldn’t break up since its Middle Kingdom rivals never will. France and Germany pushed hard for an anti-competitive train merger because of a looming Chinese monopoly. Western values should guide competition law, not Beijing’s Communist Party.

Swiss tax reform will earn it EU brownie points

20 May 2019

Voters in the Alpine nation have backed a plan to axe fiscal favours for some 24,000 multinationals. Some companies may now find it less appealing to set up shop in Switzerland. But the move averts the bigger threat of it ending up on a European Union list of tax havens.

Guest view: An EU election that really matters

20 May 2019

The vote that takes place across the European Union this week is, more than ever before, one on the bloc's future, writes Fabrizio Pagani of Muzinich & Co. And the outcome may catalyse change in countries that have an unstable political outlook, such as Italy and Britain.

Italy’s debt conundrum will again rear its head

10 Apr 2019

Rome has admitted its economy will barely grow in 2019, a climbdown from forecasts. That makes it harder to keep debt in check, cut income tax, and avoid sales tax rises. EU Brexit distractions only delay the eventual choice between popular support and a new financial storm.

“Japanisation” of ECB will blight Europe’s banks

25 Mar 2019

Weak economic activity is raising the chances of the European Central Bank copying its Japanese counterpart, which has kept rates ultra-low for two decades and adopted ever more radical measures to boost inflation. Lenders in Japan show European peers the heavy toll that takes.

With friends like Draghi, banks don’t need enemies

7 Mar 2019

European Central Bank President Mario Draghi is going to offer lenders new long-term loans. But his plan to keep policy rates at record lows for longer makes their lives harder. And if growth turns out to be as weak as the ECB now expects, more of the loans they make may go bad.

Mario Draghi is boxed into being generous to banks

5 Mar 2019

The European Central Bank boss is expected to announce more cheap loans in the coming months. New regulations may otherwise cause a credit crunch just as the euro zone economy is slowing. Monetary policymakers will have little choice but to paper over a two-tier banking system.

Jerome Powell’s boon is Mario Draghi’s bane

11 Feb 2019

Inflation in the U.S. and the euro zone is easing and looks set to subside further. That will help the Federal Reserve boss justify a pause in rate hikes, but is a headache for his European Central Bank peer who has yet to tighten monetary policy and has less room to manoeuvre.

Franco-German unity is dated gauge of EU progress

22 Jan 2019

The two countries plan to cooperate more on defence and culture. If only harmony extended to issues such as economic governance. And even when the pair speak as one, say on Alstom-Siemens’ rail merger, they don’t always get their way. But that is a sign of success, not failure.

Euro faces tough adulescence

31 Dec 2018

The currency enters its third decade with flaws that date back to conception. They were fully exposed after early market successes gave way to a teenage existential crisis. These weaknesses have the power to ruin adulthood as the drug of cheap central bank money slowly runs out.

Italy saves EU budget battle for another day

13 Dec 2018

Spooked by hostile markets, Rome’s anti-austerity government is offering to cut its 2019 budget deficit goal. The U-turn could help avoid EU fines. But if the new targets are achieved by simply delaying promised freebies, tensions with the EU and investors may return next year.

Alexis Tsipras mistimes Greek pre-election gamble

7 Dec 2018

After nearly a decade of bailout-related austerity, the prime minister is promising giveaways ahead of a 2019 vote. There’s a case for spending more. But Italian jitters and the end of the European Central Bank’s bond-buying make this a bad moment to test investors’ patience.