Government & Agencies

German consumer is poor substitute for China trade

21 May 2024

Consumption is up but won’t be enough to lift the country out of its funk, with growth of just 0.2% this year. Exports to the People’s Republic are threatened by worsening relations between Brussels and Beijing. Meanwhile a split Berlin government looks unable to launch reforms.

President’s death makes Iran even less predictable

20 May 2024

The demise of Ebrahim Raisi removes an obvious replacement for the ageing Ali Khamenei as Supreme Leader. Despite a recent attack on Israel, the Islamic Republic’s top figure is a known quantity. The risk is that Iran’s role in a febrile Middle East becomes even harder to gauge.

New Caledonia to Macron: it’s the economy, stupid

20 May 2024

Deadly riots prompted the French president to impose a state of emergency in the Pacific Ocean territory, which holds 5% of world nickel reserves and gives Paris a strategic outpost in the region. To revive the island, a new economic deal would work better than an army crackdown.

Pricey stocks overlook the world’s troubles

19 May 2024

Trade tension between the US and China will dampen growth, while rising defence spending means higher taxes and lower profits. Equity markets, now at record highs on both sides of the Atlantic, aren’t cheap. Add in these headwinds and investors have more downside than upside.

The dollar and the yuan are polar opposites

16 May 2024

The strong greenback and questions over a Chinese devaluation reflect the contrasting outlooks for the two economies. In this Viewsroom podcast, Breakingviews columnists debate why Beijing is unlikely to push down its currency and why the dollar will remain elevated.

China tests EU resolve on export trade fight

14 May 2024

France’s Emmanuel Macron got little to show from President Xi Jinping’s European tour this month. In this Exchange podcast, MERICS expert Grzegorz Stec explains the difficulty of managing ties with Beijing and why balancing risk and business opportunity is so tricky.

Putin war economy plans require a reality check

13 May 2024

The Russian president named an economist as defence minister after setting multi-year targets to boost industrial production in a state of near autarchy. Vladimir Putin’s view of a country that would become the world’s fourth richest while mired in a long conflict is far-fetched.

The world can survive a strong dollar – for now

13 May 2024

The greenback has gained 17% against major currencies in three years. Other countries avoided repeating past crises through better fiscal policies and less foreign borrowing. But in the long run a mighty buck will put economies under stress, especially in emerging markets.

BBVA’s hostile $13 bln M&A bet faces long odds

9 May 2024

Chair Carlos Torres Vila is going ahead with his all-share offer for Sabadell despite a rebuff from the smaller Spanish bank’s board. Yet Madrid firmly opposes a deal, and BBVA’s sliding stock is denting the bid’s appeal. Success seems unlikely.

New ASML CEO’s job is harder than it might look

9 May 2024

The $360 bln Dutch firm is the sole maker of machines that produce the most advanced chips for Intel and TSMC. New boss Christophe Fouquet effectively runs a monopoly. But he still faces risks from staff retention, China-US spats, and as-yet-opaque risks to ASML’s domination.

BoE cavalry will arrive too late for Rishi Sunak

8 May 2024

After a local polls rout, the UK prime minister badly needs an economic boost before this year’s national elections. But Bank of England Governor Andrew Bailey will only cut rates when inflation drops from the current 3.2%. By then, it could be too late for the government.

How investing in news can make sense

7 May 2024

The media industry has been struggling since the digital era and VC-led initiatives like BuzzFeed and Vice failed. Yet betting on independent outlets can reap decent financial rewards, Harlan Mandel, who runs a specialised impact fund, tells The Exchange podcast.

China property fix aims to restock speculation

6 May 2024

Reducing unsold inventory is Beijing’s latest directive and replaces the mantra “houses are for living in, not for speculation”. It’s a prelude to removing some investment curbs. Allowing people to get rich off the sector is a necessary evil to restore overall confidence.

UK watchdog name-and-shame plan is worth the risk

3 May 2024

City leaders hate a Financial Conduct Authority proposal to reveal the identity of firms it probes. In theory, it could taint a company that later gets cleared. But the FCA’s cautious track record offers comfort, and it needs tools to cut a 41-month average investigation period.

France’s Atos entrée heads for fuzzy denouement

2 May 2024

The French state wants to buy the defence assets of the IT group, which is trying to restructure 4.9 bln euros of debt. It should then be easier to sell what’s left of Atos. But it’s unclear how or when Paris might marshal private buyers to recoup its outlay of up to 1 bln euros.

Von der Leyen’s China plan is all bark and no bite

30 Apr 2024

To keep her job atop the European Commission, Ursula von der Leyen will talk tough but wield a small stick towards Beijing. Open supply lines from the People’s Republic are key to Europe’s economic well-being. Brussels’ rhetoric will likely be harsher than sanctions and tariffs.

China can stay on sidelines in BHP-Anglo battle

30 Apr 2024

The People’s Republic may not kick up a stink about a merger like it did with the Aussie miner’s 2008 Rio tilt. Suppliers of copper are more fragmented than those of iron ore, Beijing’s M&A interventionism has matured, and friends like South Africa can lead any deal opposition.

Sánchez’s psychodrama leaves Spain at loose end

29 Apr 2024

PM Pedro Sánchez is staying on after threatening to resign over a court probe into his wife’s dealings. He appears weakened before a series of elections, raising doubt on his ability to push for reforms and ensure the country remains the fastest-growing major European economy.

China is better off doing nothing for TikTok

29 Apr 2024

Beijing has signalled it would rather ByteDance's video app be banned in the US than sold. Unlike Huawei, the company's technology is neither strategic nor desirable. Having a final say over TikTok's fate might be useful political leverage, but retaliation fears look overblown.

Ukraine’s $61 bln lifeline is not enough

29 Apr 2024

The United States last week cleared a vital aid package, but Kyiv still needs a medium-term funding plan to withstand Russia’s onslaught. Mobilising Moscow’s $320 bln of frozen central bank assets to provide compensation for war damages should be central to this.