European Union

Catalan banks fairly punished for wrong reason

4 Oct 2017

The prospect of Catalan independence has hit Barcelona-based lenders CaixaBank and Sabadell. A schism from Spain and the EU could trigger deposit runs and losses, but the risk of that is low. Stagnant interest rates and weak profitability are a bigger threat than self-rule.

Europe faces bigger tax foe than Amazon and Apple

4 Oct 2017

The bloc’s antitrust chief ordered Luxembourg to collect 250 mln euros from the e-commerce giant. She is also pursuing Ireland over a 13 bln euro Apple case. The EU is winning the loophole battle. But a bigger war to level the global tax playing field may meet U.S. intransigence.

Macron’s European vision too honest for own good

26 Sep 2017

The French president set out comprehensive proposals to overhaul defence, taxes, social policy and more. Though he deserves credit for articulating Europe’s potential, his detractors have many targets to attack. Candour about EU integration makes such dreams harder to realise.

Italy’s 5-Star puts respectable face on radicalism

25 Sep 2017

The protest movement, doing well in opinion polls, has named a 31-year-old lawmaker as its leader. Luigi Di Maio’s cool appeal contrasts with founder Beppe Grillo’s vitriolic style and may win over moderate voters in 2018. But going mainstream could undermine its basic appeal.

Theresa May embraces “extend and pretend” Brexit

22 Sep 2017

Fifteen months after Britain voted to leave the European Union, the prime minister still has no coherent idea how to deliver it. Her proposal to keep things as they are until 2021 lowers the risk of a chaotic Brexit. If accepted, the temptation will be to delay further.

EU foreign investment review raises bar for China

13 Sep 2017

Brussels has proposed a pan-European scheme to vet sensitive purchases by other countries. Unlike the U.S., rulings will be non-binding. Even so, the People’s Republic will find it harder to buy up EU infrastructure and technology. It’s another reason for Beijing to open up.

Campaign for euro zone budget is a distraction

13 Sep 2017

The single currency area needs a way to absorb future economic shocks. But comments from European Commission chief Jean-Claude Juncker show that a common tax-funded budget would be a stretch. Better to tweak fiscal rules, deepen financial reform and beef up Europe’s bailout fund.

Dixon: No escape from debtors’ prison for Greece

11 Sep 2017

Alexis Tsipras is desperate to avoid surveillance of his actions by the country’s creditors when its third bailout ends next August. The best the Greek prime minister can hope for is to move from a high-security unit to an open prison – and only if he behaves.

EU’s antitrust creativity drive hits roadblock

6 Sep 2017

A case that slapped chipmaker Intel with a $1.3 bln fine has been punted back to a lower court. This is a blow for antitrust tsar Margrethe Vestager, who has tried to get as innovative in policing tech giants as the companies are themselves. Proving abuses will be harder.

5-Star’s softer stance on euro is clever tactic

4 Sep 2017

The radical Italian party sees a referendum on euro membership as a last resort, one of its top lawmakers says. The apparent U-turn could help soothe markets and business before upcoming elections. There’s room to backtrack, but 5-Star is holding up and getting more nuanced.

Italian markets dance anew to Berlusconi discord

23 Aug 2017

Chased out of power in 2011, Silvio Berlusconi is spooking investors with talk of a parallel currency. The ex-PM’s plans look more like posturing than policy. His own finances wouldn’t obviously benefit from Italy leaving the euro. Yet Berlusconi remains too important to ignore.

Britain tries Trojan Horse trade tactic in Ireland

17 Aug 2017

The EU wants the Northern Ireland border issue resolved before the UK’s wider exit terms can be agreed. New proposals from London effectively couch Britain’s trade agenda in concern for the peace process. Having Dublin onside raises the chances of Britain getting what it wants.

ECB weakens Italy doom loop by bending bond rules

16 Aug 2017

The European Central Bank is buying more Italian bonds than its rules allow. That helps lower the country’s borrowing costs and allows its banks to cut exposure to their sovereign. With elections and political risks looming, it may have to take an ever more pragmatic approach.

Shipyard spat shows Macron will put France first

31 Jul 2017

The French president angered Italy and exposed the limits of his ardor for the European Union and free markets by nationalising STX France. The silver lining is that he has a better chance of pushing through reform if he makes a show of protecting jobs and the national interest.

EU deposit freeze idea is counterproductive

31 Jul 2017

A proposal to stop customers’ withdrawing funds from a failing bank is under discussion. That may give regulators more time to work out a stricken lender. But extending the scheme to insured depositors would only make retail clients jumpier and bank failures more likely.

RBS gains more than consumers from state aid fudge

27 Jul 2017

The UK bank will pay over 800 million pounds to hang on to a lending arm that European antitrust authorities wanted it to offload. The boost to competition is hard to assess. But the Treasury-negotiated deal hauls RBS closer to becoming a normal bank – at a good price.

EU play for primary dealers may speed their demise

26 Jul 2017

Banks that buy EU debt directly from governments might have to move jobs out of London after Brexit to retain the privilege, Reuters reports. Such strong-arm tactics may drive some out of a business that has already grown less appealing and force a rethink of how bonds are sold.

Daimler could be next on the break-up autobahn

26 Jul 2017

The German carmaker is thinking of turning its divisions into legally separate entities. Engineering group Siemens did that with its healthcare unit, which it plans to list. Carving out Daimler’s trucks could unwind a long-standing conglomerate discount of perhaps 30 bln euros.

Euro rally will only speed its own reversal

21 Jul 2017

The single currency has hit a two-year high against the U.S. dollar. That will depress import prices when inflation is still too low. Any hint that a stronger exchange rate will prompt the European Central Bank to leave monetary policy loose for longer will push it down again.

Britain gets taster of capital markets disunion

19 Jul 2017

EU lawmakers may ban securitisation of loans where the borrower’s income isn’t proven. It’s a step towards the capital markets union Britain championed before its Brexit vote, yet one that will mostly affect UK borrowers. Britain can try and change the rules – but not for long.