European Union

Italy finance chief’s calm words clash with policy

11 Jun 2018

Newly appointed Economy Minister Giovanni Tria soothed investors by promising to stick with the euro and cut debt. His comments are a marked departure from the radical government’s budget-busting promises. The economics professor’s orthodox stance may prove politically untenable.

Exclusive: “Quitaly clause” marks new risk level

8 Jun 2018

As Rome fumbles its single-currency bona fides, global investors are taking steps to protect themselves. In a possible legal first, lawyers added language to a share purchase deal to guard against Italy leaving the euro zone, “voluntarily or by means of expulsion”.

UK’s Brexit backstop only a partial step forward

7 Jun 2018

Britain has proposed a backup plan for avoiding a hard border in Ireland when it leaves the EU. Characteristically, it fudges how long the plan will last, and it still needs Europe to agree. Investors wondering whether Brexit will be mild or ruinous still have little to go on.

Telco rules expose EU’s fake digital single market

6 Jun 2018

Europe agreed to cap cross-border call charges and push member states to award longer spectrum licences. That won’t stop the bloc falling behind China and America’s 5G networks. In the ongoing absence of EU-wide spectrum auctions the telco market will stay fragmented.

Italy’s new cabinet draws inspiration from Trump

5 Jun 2018

Rome’s new radical ministers will run departments whose policies they campaigned against. From labour and pensions to infrastructure and health, iconoclasts of questionable competence are taking over. Such “Trumpismo” governance brings added risk to Italy.

Angela Merkel’s euro reform plan is inadequate

4 Jun 2018

The German chancellor wants an investment budget that would help poorer countries and a souped-up bailout fund. The ideas are a pale imitation of French leader Emmanuel Macron’s proposals. With monetary policy exhausted, the euro zone looks ill-prepared for the next crisis.

EU has political trump card in trade conflict

31 May 2018

The United States is imposing steel and aluminum tariffs on Germany and others. Europe has threatened levies against Harley motorcycles and Kentucky bourbon, among other goods. That hits Republican leaders’ bases as the party faces elections in November. It’s a smart tactic.

Mario Draghi may help more in Rome than Frankfurt

31 May 2018

Turmoil in his native Italy threatens the European Central Bank chief’s biggest triumph: saving the single currency. A eurosceptic government would weaken his promise to do “whatever it takes”. He might have more success challenging opponents of the euro as a domestic politician.

How the EU can help save Italy from itself

31 May 2018

A new radical government will cast doubt over euro membership and inflame migration tensions. Other EU countries could help ease voter discontent by tweaking the bloc’s fiscal rules, and taking more migrants. That won’t be easy, but it beats Italy leaving the single currency.

Only Italy can save itself from self-inflicted woe

29 May 2018

Investors are spooked by the prospect of a eurosceptic government pushing up debt, prompting an exit from the single currency. Contrary to 2011, Italy is the cause of the crisis, rather than a victim. A change of direction depends on voters, not the European Central Bank.

EU sovereign debt fix fails Italian test

24 May 2018

The European Commission wants to make it easier for investors to buy bonds that pool euro zone government debt. It’s part of a plan to reduce banks' exposure to indebted states. Recent Italian worries show such securities might help, but also why they are unlikely to work.

Italian radical agenda is a recipe for chaos

16 May 2018

A leaked plan by likely coalition allies 5-Star Movement and League says states should be able to exit the euro zone and cancel debt. That, along with a soaring budget and proposals for a shadow government, promise conflict with the EU. Bond markets are too complacent on Italy.

Mario Draghi struggles to ditch post-crisis policy

26 Apr 2018

Euro-zone growth is slowing before the European Central Bank boss can end asset purchases or join the Fed’s Jerome Powell in raising rates. One-off factors may be to blame now but a downturn is inevitable. Unusual policy will be the norm rather than the aberration in Europe.

Rail strikes will test French appetite for Europe

9 Apr 2018

President Emmanuel Macron’s plans to overhaul the state-run train company have sparked mass walkouts. He’s not the only one with much to lose. If voters turn against rail reforms, they may also blame EU laws that are forcing the pace of change and grow more critical of Brussels.

Basel tweak gives global banks another helping hand

22 Mar 2018

Global regulators have proposed relaxing the amount of capital banks must hold against some forms of market risk. If implemented, the changes would further shrink the 28 bln euro shortfall big lenders face under new rules. After a decade of tightening, watchdogs are easing up.

Europe’s data tax war is worthy but hard to win

20 Mar 2018

The EU may tax tech groups’ revenue. The bloc is right to argue that current rules overlook the value firms like Google extract from its citizens’ data. A crude levy on sales is far from perfect, but might add impetus to longer-term international reform efforts.

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.

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.