European Union

Brexit brinkmanship revives risk of worst outcome

7 Sep 2020

Talks with the European Union over a trade deal are at an impasse. Now Boris Johnson’s government is planning legislation which would undermine the prime minister’s exit agreement, the FT says. It may be a negotiating ploy. Even so, it means a chaotic Brexit is back on the table.

Ireland’s Golfgate can reveal a more responsive EU

24 Aug 2020

The Irish public are outraged about an elite golf jolly that flouted Covid-19 restrictions. One minister has resigned and European Commissioner Phil Hogan is under severe pressure. A swift departure would help Brussels look less like a technocratic refuge from popular politics.

Alstom can drive a hard bargain on Bombardier

10 Aug 2020

The French train maker hinted it will reassess an $8.2 bln buyout of its Canadian rival’s unit following surprise losses. A 20% price cut would allow CEO Henri Poupart-Lafarge to make an economic return. EU consent for a deal and Bombardier’s high debts strengthen his hand.

Euro moves a step closer to becoming a safe haven

22 Jul 2020

The EU’s 750 bln euro fund makes the bloc more resilient and creates easily traded common bonds, boosting the single currency’s appeal. Yet political splits are only patched up. It may take new crises to fix them. Only then will the euro stand a chance of supplanting the dollar.

EU deal offers model for future crises

21 Jul 2020

The bloc agreed to 750 bln euros of grants and loans backed by common funds to help pandemic-hit member states. Despite some concessions on size, the plan looks workable and creates incentives for reform. Europe has moved on from its messy handling of the euro zone debt crunch.

EU has fairness vs. speed dilemma on pandemic cash

17 Jul 2020

Brussels wants to use backwards-facing metrics like past jobless rates to assign 310 bln euros of Covid-19 grants. Basing handouts on EU states’ actual hits to GDP would be fairer, and may win richer countries’ support. For needier peers, that risks slowing down the recovery.

EU data ruling opens new front in tech’s cold war

16 Jul 2020

The bloc’s highest court blew up the legal basis on which companies transfer data to America. Privacy evangelists would have Facebook and others store personal information locally. A better solution would be a new U.S.-EU data protection deal, but Washington won’t like the terms.

Corona Capital: Mets star bidders, Robot slayers

10 Jul 2020

Concise views on the pandemic’s corporate and financial fallout: Power couple J. Lo and A-Rod are giving hedge fund manager Steve Cohen competition for the New York Mets baseball team; Covid-19 is accelerating automation of the meat industry.

Agnellis can win twice from EU auto merger probe

29 Jun 2020

Brussels is worried the union of Peugeot and Fiat, controlled by the Italian clan, will dominate van sales. High margins make it hard to justify outsized market share. Selling models to a smaller rival like Agnelli-backed CNH would boost competition and let the merger pass.

New City watchdog head fits UK’s Brexit challenge

22 Jun 2020

The financial regulator’s next CEO will be Nikhil Rathi, an ex-Treasury official who runs London’s stock exchange. His background suggests PM Boris Johnson sees the need to help Britain’s hub after the EU exit. That may also make it harder to resist pressure for lower standards.

Europe’s latest Apple bite is close to the core

16 Jun 2020

The EU’s antitrust tzar Margrethe Vestager worries that the $1.5 trln group’s app store and payments product hurt competition. With smartphones at saturation point, such add-on services underpin Apple’s rosy valuation. Shareholders should be more worried than in past probes.

Corona Capital: Goldman, Vroom, Deutsche Bank

9 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Goldman does too well in Britain; shares in online used-car sales outfit Vroom double on their market debut; and Deutsche Bank gets another shot at redemption in the U.S. market.

Christine Lagarde is having a good crisis

4 Jun 2020

The ECB boss will buy more assets and for longer than initially planned. She is as decisive as her predecessor, Mario Draghi, but luckier. Politicians are splurging to revive economies. Growth will recover faster because fiscal and monetary policies are pulling the same way.

Corona Capital: ZoomInfo IPO, U.S. trade

4 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: ZoomInfo goes public with a big pop despite Covid-19; and America’s goods-trade deficit with Europe will test Washington’s mood.

Corona Capital: Tech diversity, CNN’s middle age

1 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: As big U.S. technology companies’ CEOs speak out about racial inequality, working from home trends could give them a chance to make a real difference; and 24/7 news network CNN feasts on Covid-19 as it turns 40.

Europe’s bond taboo finally broken by pandemic

27 May 2020

Brussels wants to raise 750 bln euros to help EU members recover from Covid-19. Hard-hit Italy and Spain would get the lion’s share, chiefly in grants rather than loans. Though obstacles remain, the health crisis may have helped the EU overcome its aversion to joint deficits.

Franco-German motor nudges EU off virus crash lane

19 May 2020

The pair proposed a 500 bln euro fund to help pandemic-hit states. That recognises the need to share the fiscal burden and rely less on ECB boss Christine Lagarde. But market jubilance is premature. Opposition from northern countries means the plan will probably be watered down.

Review: Eurocrat’s unity dream faces virus reality

15 May 2020

In “Walking the Highwire” former EU Commissioner Olli Rehn reflects on the euro zone crisis and concludes the single currency needs more cooperation. The pandemic is an opportunity to do so. But a familiar reluctance to share financial burdens suggests the vision remains far off.

Free ECB money is little use for battered banks

1 May 2020

President Christine Lagarde launched yet another programme to slash funding costs for lenders. History suggests much of the benefit will flow straight to borrowers, as intended. Loading up on southern European debt would be profitable but risky, and may irk supervisors.

European banks’ bad-debt pain threshold

27 Apr 2020

The continent’s major lenders have bigger capital buffers and are getting help from regulators. However, their balance sheets are expanding and income is dropping, while many borrowers are at risk of default. This calculator shows what level of bad loans banks can safely absorb.