European Union

Capital Calls: Sequoia, Heineken, Moneyball

31 Jul 2023

Concise views on global finance: The venture capital firm issues a refund to cryptocurrency investors; the $57 bln brewer slashes its operating profit outlook; Steve Cohen’s New York Mets baseball team and its whopping $364 mln payroll is a mess, but in sports beta is the alpha.

Lagarde hides velvet policy in iron talk

27 Jul 2023

After lifting borrowing costs to a record high, the ECB president sounded tough on inflation to persuade markets interest rates will stay elevated. But she also hinted the central bank could pause. Investors can prepare for a less aggressive monetary stance.

Amazon-EU web content spat is all about grey areas

20 Jul 2023

The $1.4 trln e-commerce giant is fighting Brussels’ decision to class it as a large online platform and hence face extra scrutiny. Given its size, Amazon’s challenge at first looks like a long shot. Yet the legislation’s vague language creates scope for disputes.

EU has to come clean on costs of green transition

18 Jul 2023

Europe’s race towards net zero carbon emissions will require energy investments of nearly 2% of GDP. And it will cause economic pain in the short term before benefits kick in. Unless governments explain how the bill will be shared, they risk a populist backlash.

European gas security rests on a fragile balance

14 Jul 2023

Mindful of last summer’s mad price rally, EU states have lots of the fossil fuel in storage. This, plus higher Chinese purchases, may keep European contracts below Asian ones. But that may prompt US cargoes of liquefied gas to head East, lifting European gas prices again.

History is against UK and Spanish telecoms M&A

12 Jul 2023

Vodafone and Orange have deals worth $40 bln on antitrust agencies’ desks. Europe has only once approved a similar merger without competitive remedies, which involved a tiny Dutch player. The telcos may have to make big concessions, undermining their tie-ups, or accept defeat.

Watchdog with teeth can help EU hunt unicorns

11 Jul 2023

Europe’s companies need capital to grow. Yet the bloc’s share of global capital markets is just 9%. A patchwork of national rules stymies Brussels’ efforts to foster cross-border investment. Creating home-grown corporate stars requires a securities regulator with real powers.

Recycling fail exacerbates EU’s metals conundrum

7 Jul 2023

The bloc is likely to miss a target to double its use of recycled material by 2030. That’s especially short-sighted given the growing threat of Chinese export restrictions on critical metals. Improving Europe’s ability to mine junk would help shield key EU industries.

Ukraine can rebuild without a Russian asset grab

30 Jun 2023

Using Moscow’s frozen assets to fund Kyiv’s $400 bln-plus recovery risks violating the rule of law. Suing Russian entities for the damages brought by the war is more promising. It allows Ukraine to build up claims that would be part of future peace talks.

Capital Calls: Digital euro, Thames Water

28 Jun 2023

Concise views on global finance: Brussels is in a new push to convince EU member states and the European Parliament to endorse a digital euro; Britain’s Thames Water could be placed into special administration.

Europe has more Russian lessons to learn

26 Jun 2023

Yevgeny Prigozhin’s failed mutiny rams home the EU’s need to protect itself from trouble abroad. Leaders meeting this week in Brussels are thinking in more geostrategic terms and may now agree a China policy. But until they act as a bloc they will lack clout, says Hugo Dixon.

EU phase-out of Huawei, ZTE is tricky but vital

20 Jun 2023

Commissioner Thierry Breton wants EU countries to end use of Chinese telecoms gear on national security grounds. Some states have already cut Huawei and ZTE from 5G networks. The EU survived decoupling from Russian energy, and it can manage this. But it requires German buy-in.

EU takes broad aim at ESG jungle

14 Jun 2023

Europe wants to rein in the industry for environmental, social and governance assessments by forcing firms to disclose their models and data. A plan to stop conflicts of interest may create compliance headaches. But more transparency and oversight should lead to better outcomes.

Big Tech throws down gauntlet on trustbusting

13 Jun 2023

Converging cross-border deal policing is a new challenge acquirers must navigate. Alphabet is the latest in the crosshairs. But Microsoft’s potential way around may be the start of new pushback. The $2.5 trln giant is likely going straight to court where it has a fighting chance.

Dutch chip export saga exposes EU shortcomings

13 Jun 2023

The Netherlands is limiting exports of high-end semiconductor gear to China, after a US push to curb Beijing’s AI and military prowess. While the EU will soon unveil a plan, it looks hard to strike the right power balance in the defense arena. Brussels needs a clearer role.

EU-UK clearing drama heads for prosaic finale

2 Jun 2023

The bloc is stalling on allowing UK firms to clear euro derivatives after 2025. That has set off a round of financial-stability finger-pointing. Costs may rise but systemic fears are overdone. If there were real danger, London could just pledge to follow Brussels’ rules.

ECB’s crisis tool works best if it’s never used

30 May 2023

The European Central Bank is touting its powers to buy sovereign bonds if they come under attack from the market. That has kept traders in check, so far. The trick for Frankfurt officials is to convincingly threaten to deploy emergency measures without ever having to.

AI speed benefits now apply to EU boycott U-turns

26 May 2023

On Wednesday Sam Altman threatened to quit Europe if it “over-regulates” his booming startup OpenAI. He’s now rapidly rowed back. As with their disruptive new technology, AI mavens may have a shrewder sense than older US peers of when to stop poking the Brussels bear.

Supply chain scrutiny may upend EU solar ambitions

23 May 2023

Renewable groups must forgo photovoltaic components from China’s Xinjiang to comply with forced labour curbs. Yet the region produces 35% of the pure silicon needed in panels, and US firms are scooping up the non-Chinese supply. Enforcing a ban may scupper EU green targets.

Transatlantic tech-tax truce is on a knife edge

23 May 2023

EU-US spats over levies on the likes of Amazon have taken a breather while a global pact advances. But sabres are rattling, led by French Finance Minister Bruno Le Maire. Washington may well be patient with the pace of promised rollbacks, but any new levies would break the truce.