Politics

Le Pen’s post-euro pitch is naïve but beguiling

5 Jan 2017

Far-right presidential hopeful Marine Le Pen wants to reintroduce a national currency in France alongside the euro. Her plan would face huge obstacles and involve big risks. Yet the idea of a painless reversal of the single currency project may seduce voters in France and beyond.

Seoul’s top buyout firm dodges missile-shield hit

5 Jan 2017

MBK wanted to sell ING Life Korea for $3 bln. But Chinese buyers fled after a U.S.-South Korea defence pact riled Beijing.  So the private equity group plans to float it. After more than doubling the value of the once-struggling insurer, MBK can still profit nicely.

Breakingviews predicts a shaken-up world in 2017

3 Jan 2017

After the upheavals of 2016, governments, companies and investors face unfamiliar terrain. Once-unthinkable scenarios, good or bad, now seem possible. From the U.S. economy to European elections, from M&A to magic mushrooms, our financial insights offer a guide to the year ahead.

More EU banks will be bailed out rather than in

4 Jan 2017

Monte dei Paschi's 9 bln euro recap using public funds seems at odds with reforms making creditors pay. Various loopholes make it just about kosher. Yet these fudges - plus the difficulty of nailing down when a bank is truly bust - imply more states will pay for lender follies.

Germany’s thriving job market no solace for Merkel

3 Jan 2017

Unemployment has fallen to its lowest since 1981, and the number of people in jobs is at a record. Chancellor Angela Merkel presided over this happy state but will struggle to leverage it in upcoming elections. Voters are more focused on less predictable flows of migrants.

Millennial princes snatch at power in Gulf

3 Jan 2017

Ageing monarchs may hand greater powers to a younger, more progressive generation in 2017. Falling oil revenues and ballooning budget deficits are forcing sheikhdoms to make overdue economic and social reforms or risk financial meltdown. Millennial thinking could help.

Bank rate cuts are a key step in India’s recovery

3 Jan 2017

Admonished by Prime Minister Narendra Modi, banks are slashing lending rates up to 90 basis points. That is critical to kick-starting credit growth and thus the economy. But all the uncertainties created by a nationwide cash crunch mean it is too soon to cheer a revival.

Breakingviews predicts a shaken-up world in 2017

3 Jan 2017

After the upheavals of 2016, governments, companies and investors face unfamiliar terrain. Once-unthinkable scenarios, good or bad, now seem possible. From the U.S. economy to European elections, from M&A to magic mushrooms, our financial insights offer a guide to the year ahead.

Hadas: Russian Revolution won’t be the last

30 Dec 2016

Soviet communism initially looked like the future, but rapidly became a cruel failure. Its disappearance left big-government democratic capitalism as the sole surviving system. A century later, that hybrid model is now under global threat. It might not last another century.

India is gearing up to recapitalise its big banks

30 Dec 2016

The country's lenders already need $27 bln or more of capital. Now Premier Narendra Modi's scrapping of high-value banknotes could lead to a spike in bad loans at small businesses. That might rally support for a move and help Modi as he repositions himself as a champion of the poor.

Hadas: Four resolutions for a more humane economy

3 Jan 2017

Brexit and Donald Trump’s election are part of a rebellion against the social and economic establishment. Changes are needed to prevent a dangerous disintegration. Here are some suggestions: forget GDP, fight alienation, support communities and promote local decision-making.

China’s slow salt reform leaves sour aftertaste

29 Dec 2016

China is finally dissolving the world's oldest monopoly. The government's difficulty loosening its grip on the salt trade, which accounts for a tiny fraction of government revenue, suggests dim prospects for reform in more lucrative sectors such as tobacco or telecoms.

Korea scandal shows risk of pension giant

29 Dec 2016

Prosecutors detained the head of South Korea's $450 bln pension fund over suspicion that it voted for a Samsung merger under government pressure. The case highlights how the country's largest investor could be manipulated at shareholders' expense. Korea could use a safeguard.

U.S. company cash deluge will lift only some boats

28 Dec 2016

Slashing corporate tax rates may break the dam on $2.5 trln booked overseas. The actual amount repatriated could be less than half that, however. And while CEOs and politicians talk about more jobs and factories, it's best to brace for a flood of buybacks, dividends and deals.

Maduro will survive, just, on Venezuelan tightrope

28 Dec 2016

The economy is a wreck, but the country's inept leader has probably done enough to avoid being forced from office in 2017, unless by fellow Chavistas. A bond swap and army-led food programs helped. His gutting of institutions, though, risks violence that may yet be his undoing.

Saudi’s IPO gusher will lay dormant

28 Dec 2016

A $2 trillion flotation of oil producer Aramco, once planned for 2018, is likely to slip further down Riyadh's agenda. Politics makes the IPO complicated, and recovering oil prices make it unnecessary. While Saudi's bankers may wish it otherwise, postponing is the logical choice.

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.

China’s central bank will lose its longtime leader

28 Dec 2016

Zhou Xiaochuan will step down in 2017, part of a wider leadership reshuffle as President Xi further consolidates power. Investors will miss the affable technocrat, who helped steer the world's second-largest economy for 15 years. Any successor will lack Zhou's market credibility.

Macri sacrifice of finance chief buys limited time

27 Dec 2016

The Argentine president has scapegoated Alfonso Prat-Gay for the economy's failure to take off. His exit won't reduce 40 pct inflation and a bloated deficit. Macri's policies are sensible but not popular. The margin for error before October's midterm elections just narrowed.

Trump, conservatives will clash over Ex-Im Bank

23 Dec 2016

The president-elect's "America First" industrial policy should help the agency that finances foreign purchases of U.S. goods. It has been hobbled by Republicans who deride it as corporate welfare. After the Carrier deal, a collision with free-market capitalism looks inevitable.