European Union

Europe and U.S. clash over who bullies the bullies

16 Jun 2017

Germany has bristled at draft U.S. sanctions against Russia, claiming the global policeman is overplaying its clout. Europe is readying a big fine for tech giant Google for doing something similar. Bullies aren’t easily toppled, but countries are harder to rein in than companies.

Italian shipping deal torpedoes single market myth

16 Jun 2017

French President Macron is griping over Italian shipbuilder Fincantieri’s bid to buy a stake in a French firm. The deal could create an EU champion, but compromise French jobs. Macron is a fervent believer in Europe – but domestic concerns don’t sit easily with idealism.

Germany’s euro-bond allergy will be hard to cure

13 Jun 2017

France’s pro-European president, Emmanuel Macron, has given new hope to advocates of joint euro zone debt. But expect Teutonic resistance. Europe’s biggest economy is loath to give an implicit bailout guarantee to its own regions so will hardly extend one to other countries.

British parties all gain if they share Brexit pain

12 Jun 2017

The Conservative party’s loss of a majority weakens its hand in talks with the EU. Bringing Jeremy Corbyn’s Labour into talks could strengthen it, and cut the chance of a chaotic exit. The opposition may prefer to see its rivals implode, but Corbyn would get blamed for the mess.

New Irish leader is more like Renzi than Macron

5 Jun 2017

Leo Varadkar will be Ireland’s youngest prime minister, prompting comparisons with France’s Emmanuel Macron. Parallels with Italy’s former PM Matteo Renzi are more apt. His government is weak, and he could be at odds with Europe on Ireland’s chief challenges of Brexit and taxes.

Euro zone “safe” bonds would be anything but

31 May 2017

The European Commission has suggested creating low-risk securities by pooling sovereign bonds. The idea is to reduce banks’ exposure to governments. But risks would still be interconnected. Without a common tax base and joint liability, no pan-euro zone debt can be truly secure.

Euro zone bonds are taboo worth breaking

17 May 2017

Spain wants the bloc’s 19 governments to pool their debt. That idea is likely to be shunned by Germany. Yet mutualisation is happening anyway through bailouts and central bank largesse, and countries are less profligate than they were. Common bonds needn’t mean wayward spending.

EasyJet gives lesson in counter-cyclical aviation

16 May 2017

As European airlines engage in a costly battle for market share, the UK no-frills carrier is buying ever-larger aircraft. EasyJet’s cost advantage and the impending demise of weak rivals suggest boss Carolyn McCall is right to look beyond the short-term clouds.

Vivendi’s Havas deal hangs on new media logic

16 May 2017

The French media group reckons the convergence of advertising, distribution and content justifies its 3.9 bln euro offer for the ad firm. Yet the numbers don’t add up without heroic assumptions, and Havas customers may not take kindly to the new arrangement.

Macron faces stronger Merkel after state election

15 May 2017

France’s new president needs German support for his euro zone reform ideas. Angela Merkel’s challenger Martin Schulz is more supportive of tighter fiscal integration and more investment. The triumph for Merkel’s party in a regional poll suggests any changes will need her consent.

Britain gears up for immigration self-harm

15 May 2017

Theresa May is likely to stick with a vow to reduce annual net migration below 100,000, despite failing to hit it so far. The election gives the prime minister a golden opportunity to show the UK will keep growing post-Brexit. Renewing the pledge would apply an unhelpful brake.

Make Britain’s Brexit bill performance-related

3 May 2017

The EU may demand 100 bln euros from the UK for leaving the bloc. Some Britons want to pay nothing. Investment bankers ease impasses between companies by making part of the cost contingent on future performance. Linking the bill to UK GDP might enable both sides to claim victory.

French savers are a good bulwark against Le Pen

3 May 2017

Marine Le Pen’s anti-euro rhetoric will be a liability in Sunday’s election. Some undecided voters may share the far-right leader’s distrust of the EU. But ditching the single currency would be punitive for a country with the euro zone’s third-highest savings rate.

EU clearing spat epitomises perils of hard Brexit

2 May 2017

Brussels may try to restrict euro-denominated clearing in the UK, a report says. European regulators have long fretted over the fact that most of it occurs outside the euro area. A compromise is more than possible – but is harder to achieve if Britain leaves the single market.

UK election will test markets’ Brexit optimism

19 Apr 2017

Investors think Britain has a better chance of avoiding a damaging EU exit because Theresa May has called an early vote, a Breakingviews index based on asset prices shows. That view could be challenged by a campaign that will force the prime minister to clarify her policies.

EU veto could do LSE and Deutsche Boerse a favour

23 Feb 2017

It's a year since the two exchanges proposed joining forces. The European Commission will soon decide if the tie-up is anti-competitive. A thumbs-down would spare both sides the need to navigate post-Brexit political waters, and force them to do the sensible thing: wait.

ECB’s tough love is good for banks, bad for Italy

28 Dec 2016

The European Central Bank says Monte dei Paschi needs 9 bln euros of extra capital - up from 5 bln euros - after seeking state aid. Raising the bar is a prudent response to prolonged uncertainty. But it adds to Rome’s debt, and may push up the bailout bill for other banks.

Europe’s best antidote to populism is unpopularism

28 Dec 2016

Parties that promised to take on the elite had a roaring 2016. Even so, the withering of the moderate centre isn’t inevitable. In Greece the pendulum is swinging away from radical government. Liberals with sound economic policies can win – if they’re willing to make enemies.