Government & Agencies

Germany faces tricky call on Siemens Energy aid

26 Oct 2023

The $6 bln firm’s shares slumped 34% on fears banks might not issue guarantees for its projects. Berlin would usually expect investors like parent Siemens, which has a 25% stake, to step in. Yet as Europe ramps up clean energy, there’s a case for state help for existing players.

Israel’s fossil fuel boon becomes less clear-cut

19 Oct 2023

The country’s rapidly rising gas exports were billed as a way to replace 10% of the Russian supplies lost by Europe. UAE oil giant ADNOC has also bid to buy local fossil fuel assets amid improving relations with the Gulf state. Israel’s war with Hamas complicates both objectives.

EU-US steel unity may come at a high cost

19 Oct 2023

Europe could soon join the United States in whacking tariffs on other alloy producers. EU leaders and Joe Biden may want to shield firms like ArcelorMittal from Chinese imports. But helping the 130 bln euro industry could weaken global trade rules, and the bloc’s climate policy.

UK infrastructure fix is cheaper than it looks

18 Oct 2023

Britain should spend up to 80 bln pounds a year revamping its economy, government advisers say. The private sector has to do most of the heavy lifting, but the state can assist. Offering tax relief to businesses that invest will help – and cost less than Downing Street fears.

Saudi is wild card in Middle East’s new turmoil

18 Oct 2023

War in Israel complicates Crown Prince Mohammed bin Salman’s modernisation push. He must consider the oil market, rivalry with Iran, overseas investment, and the views of 32 mln citizens. How the Gulf’s biggest economy proceeds has big implications for the region – and the world.

The financial ramifications of US-China tensions

17 Oct 2023

The rivalry between the world’s two largest powers is having an impact on almost every aspect of global business and finance. In this episode of The Exchange podcast, Jared Cohen from Goldman Sachs discusses how investors should approach geopolitics, and the limits of decoupling.

Putin and Xi’s strengthening bond has a weakness

17 Oct 2023

The Russian president’s expected meeting with his Chinese peer re-ups their “no-limits” friendship. Beijing is gorging on cheap crude and sending goods to its sanctions-hit neighbour. However, the thriving $190 bln bilateral trade is eroding Moscow’s economic sovereignty.

Poland’s warmer EU ties may come with frozen funds

16 Oct 2023

Centre-left leader Donald Tusk is likely to be the new PM after Sunday’s election. Ending the nationalists’ rule will bring closer relations with Brussels. But to release 35 bln euros in EU aid, the new government will still have to get past right-wing President Andrzej Duda.

Europe’s rising bond vigilantes are necessary evil

11 Oct 2023

Debt costs for weaker states like Italy are jumping. Europe’s delay in agreeing new fiscal rules means hostile markets are the only credible check on government spending. Slowing growth and a hamstrung ECB means the backdrop may well get choppier.

IMF’s bond vigilante script is ripe for a rewrite

10 Oct 2023

The International Monetary Fund wants politicians to close the fiscal taps. Yet it’s also warning about a sharp slowdown in global growth. Markets are worried about debt levels but without spending and investment the world will stagnate.

Next EU chief will need cash more than trade wars

10 Oct 2023

Ursula von der Leyen kicked off her campaign to stay European Commission president by attacking China’s car subsidies. But what the bloc craves is a plan to grow its economy and enlarge eastwards, including finding $411 bln for Ukraine. A bigger, better Europe won’t come cheap.

Capital Calls: Finnair

6 Oct 2023

Concise views on global finance: The state-backed airline is planning to raise 600 mln euros through a rights issue – almost as much as its current equity.

Polish cereal showdown goes against the EU grain

4 Oct 2023

A spat over Ukraine’s grain exports is the latest blemish on the European Union’s fraught relationship with Poland, the bloc’s sixth largest economy and biggest net recipient of EU funds. If upcoming elections push Warsaw further from Brussels, both sides have much to lose.

Wanted: House Speaker willing to do impossible job

4 Oct 2023

US leader Kevin McCarthy was kicked out of his job for brokering a deal to keep the government open with a stopgap bill. The task of agreeing to a budget – which includes a dispute over $120 bln in 12 different measures – remains. Only now it has hurdles that favor Democrats.

Germany risks letting a good crisis go to waste

3 Oct 2023

Europe’s largest economy is on track to shrink this year. The immediate causes are lower exports to China and higher energy prices. But decades of under-investment will continue to crimp growth unless Berlin ditches its hostility to fiscal stimulus and comprehensive reforms.

Bond blues kick the fun out of racy stocks

2 Oct 2023

Yields are rising for the wrong reason – persistent inflation rather than growth. That’s pushing shares down as well. Some companies will suffer more. Those with higher portions of cash flows coming in the future, like technology firms, are most vulnerable.

Peak China may pose peak danger

2 Oct 2023

A glance through history suggests great powers are a threat whether they are rising or falling. China may be especially dangerous as its economic growth slows. It is riling its neighbours. Investors would be wise to assign a greater weight to this fat tail risk, says Hugo Dixon.

Capital Calls: US government shutdown

29 Sep 2023

Concise views on global finance: Civil servants, who already earn 24% less than the market rate, lose their pay when Washington closes. Legislators, meanwhile, keep collecting their $174,000 salaries. Having skin in the game would help focus congressional minds.

To fix Britain, Labour will need new debt rules

29 Sep 2023

Tight fiscal curbs leave PM Rishi Sunak with no room for tax cuts or investments in the likes of rail link HS2. If Labour wins an election likely in 2024, it could hike spending via a broader metric based on the UK balance sheet. That could spur growth without spooking markets.

A Putin friend in Slovakia could disrupt the EU

28 Sep 2023

Former PM Robert Fico is leading in the polls ahead of Saturday’s election. He wants to stop support for Ukraine and opposes sanctions on Moscow. Even with only 0.7% of the European Union’s GDP, a member state governed by a Russian ally could seriously mess up the bloc’s work.