European Union

Norway gas lifeline for Europe is the smart move

9 Sep 2022

The staunch NATO ally supplies 25% of the European Union’s gas needs and nearly half Britain’s. A trebling of oil cash and record profit at energy giant Equinor give Norway scope to cut the EU some slack on gas prices. The discount size is less important than the gesture.

EU has ways to learn to live with less gas

6 Sep 2022

The closure of a key Russian pipeline leaves Europe facing a 20% shortfall in fuel supply. Measures to cut demand like lower temperatures in homes and incentives for companies to use less energy may soften the blow. More gas-dependent nations like Italy must now work harder.

Europe’s energy cap requires surgical precision

1 Sep 2022

The EU wants to curb surging power costs to avoid a recession. Capping wholesale gas prices will unavoidably dampen the market’s clear signal to reduce demand. Doing the same to electricity prices, especially in a focused and temporary way, looks smarter.

Reality will tame next Italy PM’s spending plans

11 Aug 2022

Giorgia Meloni is on track to lead Rome’s next government. Her rightist political alliance favours big tax cuts, fiddling with 200 bln euros of European recovery funds and state intervention in Italy Inc. High public debt and EU vigilance will puncture its wildest trial balloons.

ECB plays with fire while unspooling its hose

21 Jul 2022

President Christine Lagarde hiked interest rates by 0.5%, double the amount she flagged last month, and unveiled a vague tool to control euro zone bond yields. If monetary tightening hastens an economic slowdown, the central bank will need its new powers sooner rather than later.

ECB risks forgetting 1990s currency crisis lessons

18 Jul 2022

President Christine Lagarde may soon unveil the central bank’s tool to control sovereign bond yields. Struggles with semi-fixed exchange rates before the euro offer a cautionary tale. To fend off speculative attack, authorities are best off keeping targets and methods vague.

Japan’s post-Abe future, Europe’s currency problem

14 Jul 2022

The assassination of former Prime Minister Shinzo Abe is an end of an economic era. In this Viewsroom podcast, Breakingviews columnists debate how his party’s success could bring about big spending. Also, the euro’s decline is a problem for central bank chief Christine Lagarde.

Euro weakness forces itself on ECB’s agenda

12 Jul 2022

The single currency is nearing parity with the dollar for the first time in 20 years. It’s due to the U.S. economy’s strength and fears of a continental gas crisis. It also reflects the European Central Bank’s late response to inflation, which a weak euro makes harder to fight.

EU crypto rules will cheer banks and deter minnows

6 Jul 2022

Europe’s digital asset legislation set clearer guidelines on cross-border transactions. That’s good for big banks keen to mix it with the likes of Coinbase and Binance. But while those bigger crypto beasts are able to swallow higher compliance costs, smaller fry will struggle.

Italy starts countdown to risky life after Draghi

5 Jul 2022

The 5-Star party may bring down Mario Draghi’s coalition government. A crisis would hurt growth and raise the chances of a less EU-friendly executive. Worse, market jitters due to rising political uncertainty may complicate the European Central Bank’s efforts to tame bond yields.

Saving energy now is an EU no-brainer

28 Jun 2022

The bloc has hiked LNG imports by 50% to replenish storages and cut its Russian gas dependency. But if Moscow turns off the taps, Germany could sink into recession. All the more reason to kick off energy-saving measures this summer and try to curb gas prices by cutting demand.

Ukraine needs grants more than long-term loans

22 Jun 2022

EU leaders are debating ways to help Kyiv finance its $5 bln monthly budget deficit from the Russian invasion. So far, it has met all its financial obligations. But Ukraine’s allies shouldn’t add to its debt burden. Better that they borrow in order to help Kyiv out with grants.

Lagarde will struggle to do a Mario Draghi

21 Jun 2022

Euro zone bond markets have stabilised since the ECB president pledged to buy bonds. That raises the chance that investors cowed by her Italian predecessor’s promises won’t need her to intervene much. Just as well, given interest rates and political risks make it harder to do.

UK’s Northern Ireland ploy is economic folly

14 Jun 2022

Boris Johnson is threatening to tear up the bespoke pact he agreed for the province in his Brexit deal. The prime minister’s position with the EU is weakened by the fact that Belfast is thriving under new trade rules. More political uncertainty may undermine the region’s success.

EU women-on-boards plan only scratches the surface

8 Jun 2022

The bloc wants listed companies to reserve 40% of non-executive director roles for females. That’s lame, when 60% of graduates are women. And groups with diverse boards tend to deliver higher returns. It’s time for the EU to set a target for full gender parity in the boardroom.

Europe’s energy subsidies help Putin and pollution

8 Jun 2022

EU leaders are trying to cushion the blow of rocketing energy bills. But keeping a lid on gas prices encourages consumption, which enriches Russia and hinders decarbonisation. Better focus public support on poorer households, and push harder on energy efficiency.

ECB’s farewell to QE may prove premature

8 Jun 2022

The European Central Bank may on Thursday confirm plans to end its 3 trln euro asset purchase programme and raise rates in July. Weaker economies’ borrowing costs are already soaring. A mere hint that bond-buying could resume if yields jump may not be enough to keep markets calm.

Oil embargo will hurt Putin more than EU

31 May 2022

Europe will halt 75% of Russian crude imports now and 90% by year end. Replacing the lost fuel will hike EU consumers’ red-hot energy bills. Moscow can sell oil elsewhere but may still lose more than a third of its most lucrative export revenue source, hurting its war machine.

Seizing oligarch assets is a slippery slope

26 May 2022

The EU hopes to confiscate $31 bln of yachts and villas from blacklisted billionaires. Washington is mulling similar steps. However wrong Russia’s invasion of Ukraine may be, short-circuiting the criminal process to seize property risks weakening trust in Western rule of law.

ECB caught in a rate quagmire of its own making

20 May 2022

The European Central Bank may raise rates in July but is divided on how high it should go. By then, weakening growth will make it harder for President Christine Lagarde to end the eight-year era of negative rates. Moving earlier to curb inflation would have avoided the dilemma.