European Union

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.

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.

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.

Brexit leak nudges UK towards softer withdrawal

30 Jan 2018

State papers reportedly show the country will lose in every scenario after it leaves the EU. That will inflame tensions within the Conservative Party and government. Sadly for anti-Brexiteers, the upshot is more likely a less abrupt schism than a scrapping of the entire process.

EasyJet’s life is about to become harder

23 Jan 2017

Rivals’ misery helped boost the budget airline’s revenue in the last three months of 2017. New boss Johan Lundgren is optimistic passenger numbers will grow but may run out of beginners’ luck. Rising fuel costs and a fightback by Ryanair make rosy promises difficult to deliver.

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.

Sutherland embodied ups and downs of globalisation

8 Jan 2018

Former European Commissioner, trade chief and BP chair Peter Sutherland, who has died at 71, worked to make it easier for goods, capital and people to cross borders. His triumphs were blotted by corporate failures. Yet his legacy deserves to survive the current backlash.

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.