European Union

Euro zone bank rally is built on sand

9 Jan 2020

The bloc’s 20 largest lenders, such as BNP and ING, are worth $84 bln more than in October. Investors believe the ECB is now done with rate cuts, which squeeze profit. But renewed trade frictions could change such thinking. And rising capital requirements will weigh on returns.

Margrethe Vestager will open tech’s walled garden

20 Dec 2019

The European antitrust chief’s multibillion-dollar fines had little impact on the 12-digit market values of Google, Facebook and others. She will weaken their grip on the internet more effectively in 2020 by imposing common standards that allow seamless use of rival platforms.

Italy and Germany will unite on EU tech taxes

19 Dec 2019

New European Commission chief Ursula von der Leyen will struggle to persuade Rome and Berlin to compromise over much-needed euro zone banking reforms. Her best bet is to pick another battle. A levy on technology giants’ revenue may help the EU rivals find some common ground.

Johnson’s big win unlocks Brexit black box

12 Dec 2019

The UK’s Conservative Party has won a large parliamentary majority. That means Britain leaves the European Union, and gives the prime minister room to compromise on a quick trade deal. Stocks and the pound have bounced. Johnson’s broader policy ambitions remain a mystery.

ECB feuding will have a new front in coming year

11 Dec 2019

Christine Lagarde took the helm of the European Central Bank with a promise to review strategy. A debate on how to define its price stability mandate will embolden those rate setters who are fed up of ultra-loose policies. The battle will be bitter and played out in public.

EU single market is better exported than muzzled

4 Dec 2019

The Netherlands wants the European Union to apply state aid rules to companies backed by foreign governments. That would hike Chinese import prices. Yet Europe’s economic heft gives scope to negotiate, and is better than breaking EU rules to create Siemens-Alstom-style champions.

European banks get glimmer of regulatory hope

3 Dec 2019

The bloc’s lenders are in the doldrums, partly due to easy monetary policy. But UniCredit’s plans to return 8 billion euros to shareholders point to the benefits of a gentler regulatory approach to capital buffers. Purists may object, but there is a case for placating investors.

Wobbly German coalition will sap EU reform energy

2 Dec 2019

Chancellor Angela Merkel’s coalition partners, the Social Democrats, elected leaders who want to rethink the basis of the alliance. Failure to agree may lead to a minority government or early 2020 elections. That would slow progress on key projects like European banking union.

ECB decisions would benefit from a bit more light

11 Nov 2019

The central bank’s policy-making process is less formal and transparent than peers. New boss Christine Lagarde could change that by holding formal votes. Publishing the results, as the Fed does, would raise problems. But disclosing anonymous tallies would still be an improvement.

EU banking union needs more than German concession

6 Nov 2019

Finance Minister Olaf Scholz is willing to consider an EU deposit insurance scheme. Countries like Italy may balk at some of his conditions. That such a sensible plan can take so long to come to fruition shows how far Europe is from rational policy making on financial regulation.

EU can afford to act tough on carbon border taxes

5 Nov 2019

Brussels wants to levy the same tax on CO2 emissions in imports as on products made in the single market. Trading partners will carp about protectionism. But the EU has economic heft, precedents for a tight-door policy, and growing impetus for action. There’s scope to be bold.

UK election makes Halloween ghouls of capitalists

31 Oct 2019

Labour leader Jeremy Corbyn kicked off his campaign by attacking figures like retail tycoon Mike Ashley and hedge fund manager Crispin Odey. His radical message distracts from Labour’s fuzzy stance on Brexit, and tycoons have few defenders. They face a frightening few months.

Brexit election is answer to the wrong question

30 Oct 2019

The December poll is a flawed second referendum on Britain leaving the European Union. Prime Minister Boris Johnson needs a majority to push through his deal; other parties have to set aside rivalries to stop him. As in 2017, divided voters could deliver an inconclusive result.

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.

Britain is not ready for Boris Johnson’s Brexit

23 Oct 2019

Parliament rejected the prime minister’s attempt to push through his flawed deal to leave the European Union by Oct. 31. What happens next depends on the EU, on lawmakers, and on Johnson himself. Another extension looks inevitable, an election remains the most likely outcome.

Christine Lagarde gets lucky with German ECB pick

23 Oct 2019

Berlin is set to nominate Isabel Schnabel to the central bank’s board. The university professor would bring economic expertise, and, judging by public comments, more open views on monetary policy than her Teutonic predecessor. The new ECB president would welcome both qualities.

EBRD opening is France’s chance at another top job

21 Oct 2019

President Emmanuel Macron has a good candidate to lead the bank: Treasury boss Odile Renaud-Basso. Repeating his success at landing Christine Lagarde at the ECB would ease the sting of Sylvie Goulard missing out on a big European Commission post. But it may not be plain sailing.

Johnson’s poor Brexit deal avoids worse outcome

17 Oct 2019

The UK prime minister secured an unlikely agreement to leave the European Union, but only by carving out Northern Ireland. Winning parliamentary approval for the economically costly plan will be hard. At least the chaotic exit Johnson had threatened is off the table - for now.

Markets show Boris Johnson benefits of Brexit deal

11 Oct 2019

Sterling and stocks in UK-focused companies rose after Britain’s prime minister and his Irish peer said they had a “pathway” out of their standoff. Agreement is far from certain, as is parliamentary approval. But the advantages of avoiding a chaotic departure are crystal clear.

Mario Draghi’s detractors prepare for next fight

10 Oct 2019

The outgoing ECB boss ignored technocrats’ advice not to resume bond buying, the FT says. The leaked guidance reflects increasingly vocal dissent. The central bank won’t reverse its looser policy any time soon. But incoming chief Christine Lagarde faces clear battle lines.