Euro Zone

Brexit transition deal buys little but time

19 Mar 2018

The agreement that effectively keeps Britain in the European Union until 2021 gives businesses longer to prepare for departure. But key disputes about the UK’s future relationship with Europe, such as the Irish border, remain unsolved. And the risk of a chaotic exit remains.

Viewsroom: Trump slaps tariff fear on markets

8 Mar 2018

Imposing levies on steel and aluminum has lost the president his economic adviser, ex-Goldman No. 2 Gary Cohn. That has shocked investors out of complacency. Also: Italy’s elections leave fringe parties in charge. And big deals may be back on the agenda for the mining industry.

Mario Draghi faces tricky exit from bond buying

8 Mar 2018

The European Central Bank president has started laying the groundwork to end three years of asset purchases. But there’s a growing danger that his careful preparations will be thrown off course by U.S. protectionism, euro zone politics, or unwelcome market moves.

Euro zone reform faces green and red lights

5 Mar 2018

Germany’s new ruling coalition has cleared the way for reforms to strengthen the single currency area. Yet proposals to backstop banks and governments remain contentious. Italy’s new government adds uncertainty. With the ECB’s firepower waning, delay may prove costly.

Protest vote is big winner in Italy’s election

5 Mar 2018

The anti-establishment 5-Star Movement is set to win a third of votes in a poll that delivered a hung parliament. The radical League also surged. Together, they may have the seats to govern. But whatever coalition emerges, voters have clearly rejected traditional, pro-EU parties.

Corbyn turns soft Brexit into hard politics

26 Feb 2018

The Labour leader says Britain should stay in a customs union when it leaves the EU. Though his Brexit vision is fuzzy, it may appeal to voters and galvanise a parliamentary challenge to embattled Prime Minister Theresa May. UK political instability looks set to step up a gear.

German politics has become Europe’s weak link

15 Feb 2018

The country’s Social Democrats will ballot members on their coalition deal with Chancellor Angela Merkel. Party infighting means approval is not assured. A rejection could lead to a new vote or a minority government. Either would make it harder to push through European reforms.

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.

Voter frustration is Italian election’s trump card

12 Feb 2018

Five years of centre-left governments are ending on a high: growth has returned and 1 mln more Italians are employed. Yet prosperity is unevenly distributed and key economic reforms poorly understood. The country's Economy Minister walks Breakingviews through his priorities.

The Exchange: Italy’s finance boss

8 Feb 2018

Pier Carlo Padoan, who has run Rome's Ministry of Economy and Finance for the past four years and under its last two prime ministers, says Italy must continue economic reforms no matter who wins elections in March. Padoan also predicts no "Italian surprise" at the polls.

Corporate loans can propel Europe’s bank recovery

15 Jan 2018

Lending to companies has seen minimal growth in recent years, official data shows. A raft of positive economic data should provide the catalyst for increased demand. It would be a welcome way for slimmed-down lenders to give revenue a leg-up.

German workers may frustrate ECB’s inflation hopes

9 Jan 2018

Industrial staff in Europe’s biggest economy are striking for higher pay. They may, however, trim wage demands in return for flexible working. If pay pressures fail to flare in such a tight labour market, the European Central Bank can hardly count on them surfacing elsewhere.

Greek banks’ sour loans face reality check in 2018

5 Jan 2018

Lenders plan to shrink their bad debts by 37 pct over two years, including through sales. A recovering economy and falling government bond yields should help. But without a clearer picture of what buyers might pay, shareholders have little clarity over how much pain lies ahead.

Anti-euro debate rears its head in Italy

5 Jan 2018

Northern League leader Matteo Salvini has reiterated his opposition to the single currency. Growing Italian discontent with the EU could make an anti-euro stance a vote-winner in upcoming elections. Despite Europe’s economic revival, monetary union remains a political target.

Bond vigilantes will grab power from central banks

18 Dec 2017

Governments’ net debt issuance in 2018 is set to outstrip central bank buying for the first time in four years. That gives investors a welcome chance to hold profligates to account. Bond markets may, however, be prone to over-reaction as they rediscover their rusty powers of discernment.

Bank rules wrong way to fill EU green finance gap

13 Dec 2017

The European Commission wants lenders to help plug the 177 bln euro annual funding shortfall for low-carbon projects. Lower bank capital charges for "green loans" is a mistake, though. Fuzzy definitions will lead to loose lending, and capital ratios will become even more opaque.

ECB could use Steinhoff mess to improve QE

13 Dec 2017

The EU central bank risks a loss after acquiring the South African retailer’s securities in its bond-buying scheme. Even investment-grade debt can go bad, and the hit is manageable. But in this case the ECB could have avoided trouble by requiring two credit ratings, not just one.

UniCredit ups the ante on bad-debt cleanup

12 Dec 2017

Italy’s biggest bank by assets is vowing to run down a 33 billion euro portfolio of non-core loans by 2025. It also reckons it can withstand regulators’ drive to purge lenders’ bad credit, and still increase dividends. The move will put more pressure on rivals.

Britain heads for Brexit in name only

8 Dec 2017

Theresa May’s deal with the European Union averts a chaotic divorce for now. But a fudge about the Irish border exposes the difficulty of preserving trade while leaving the bloc. A transition phase will create scope for May - or another prime minister - to make new concessions.

France and Germany look too alike to bond market

6 Dec 2017

The gap between French and German bond yields this week hit its lowest since 2009. Plans to revamp the way the euro zone works may spur investors to overlook differences between countries’ public finances. But a lack of discrimination is premature, and stores up fresh problems.