Politics

Falling inequality hides rich nations’ failings

3 Oct 2016

The gap between the very rich and very poor has fallen since 2008 - even in developed countries. That’s the surprising finding of a new World Bank report. But a different measure shows rich countries are less good at sharing prosperity. Growth is too weak to mask this failure.

Germany gets economic rebalancing only half right

29 Sep 2016

The country no longer depends on exports for growth. Strong domestic demand is the key driver these days, a government-commissioned report says. Yet the current account surplus is still rising. Blame not only Angela Merkel’s fiscal restraint but also weak corporate investment.

Philippines tests patience with political risk

29 Sep 2016

President Rodrigo Duterte is the top risk to an economy in rude health. Despite a sensible financial agenda, his inflammatory language and bloody war on drugs has foreigners fleeing stocks. The worry is that Duterte's wild streak will prompt direct investors to pull out too.

U.S. election campaign wags global currency market

27 Sep 2016

Forex traders decided Hillary Clinton won the first debate. A stronger Mexican peso suggests President Trump is a bit less likely, while the safe-haven yen weakened. Further gyrations will follow. But as the Brexit referendum showed, markets are bad at predicting elections.

Debate affirms worst, best of candidates’ beliefs

27 Sep 2016

The U.S. Republican nominee was brash about his business and reiterated huge growth promises. Hillary Clinton was armed with policy and a sober jobs plan. Voters didn’t learn anything new in the first presidential face-off but it reinforced views on who is ideal to spur growth.

Corbyn is global symbol not of rage but confusion

23 Sep 2016

The UK Labour Party leader, facing re-election this weekend, has split the left in two. Divisive figures like Jeremy Corbyn and Donald Trump reflect a new difficulty in identifying heroes and villains. An old foe, globalisation, is in retreat, yet perceived inequality persists.

Irish budget handout spreads largesse beyond Apple

22 Sep 2016

The government may phase out an unpopular levy introduced during the financial crisis. A strong recovery gives it scope to part with a tax that brings in 8 percent of revenue. Offering goodies to workers may also quiet demands that it accept Apple’s 13 bln euros in back taxes.

Where Berlin’s voters go, Germany may not follow

19 Sep 2016

Angela Merkel's grand coalition lost power in the city, while right-wing populists won their first seats there. But an easing refugee crisis, and western Germans' loyalty to mainstream parties, suggest that the 2017 national election will bring less of an upheaval.

Globalisation needs better cheerleaders

13 Sep 2016

Free trade and capital flows are often blamed for disadvantaging workers in the West. A new study suggests they have not all fared as poorly as many believe, and that domestic policies can make a difference. Still, statistics and studies alone won’t shake globalisation’s bad rap.

Dear candidate: a letter to David Cameron

13 Sep 2016

The former prime minister is leaving the world of politics. His predecessor Gordon Brown now advises fund manager Pimco; Tony Blair before him took a role at JPMorgan. Cameron, who instigated Britain’s referendum on leaving the EU, may find the job market a harsher place.

Fed governor’s rate view helps her Treasury pitch

13 Sep 2016

Lael Brainard struck a dovish note on interest rates ahead of the central bank’s next meeting. She’s also a leading candidate to be Treasury secretary in a Clinton administration. Her soothing words could help mollify progressives suspicious of her past role in trade deals.

Chancellor: No hyperinflation, just Weimar malaise

13 Sep 2016

Central-bank money printing hasn't produced the spiralling prices that plagued the Weimar Republic. It has, though, delivered some of the social disquiet of 1920s Germany. Policymakers urging more extreme monetary actions need to exercise caution lest they get what they wish for.

Five Star scandal could boost Italian assets

7 Sep 2016

The radical political movement’s Rome mayor is on the ropes. That could reduce the risk of a 5-Star win at a national level, and encourage Prime Minster Matteo Renzi to consolidate power by calling elections. It could also reduce Italian debt’s penalty compared to Spain.

Global leaders test limits of spreading wealth

6 Sep 2016

“Inclusion” was the buzzword at the G20 conflab. A fairer distribution of the fruits of growth is urgent when globalisation is under attack in the West. The challenge for politicians is to reduce inequality within rich countries without the rest of the world suffering.

German protest vote could entrench Merkel

5 Sep 2016

In a regional election on the chancellor's home turf, the far-right Alternative for Germany won more votes than her own CDU. The populists' rise will increase political noise. Yet it also makes a continuation of Angela Merkel's current coalition after 2017 more likely.

Spain’s driverless economy will run out of gas

1 Sep 2016

The acting prime minister just lost a confidence vote; Spain has gone all year without a government. Yet the economy is doing remarkably well, even with no one at the wheel. It’s unlikely that can continue through 2017. Dysfunctional politics will take its toll.

Review: The limits of predicting China’s demise

19 Aug 2016

The country's prospects are bleak, David Shambaugh argues in "China's Future". His critique of the Communist Party's political flaws goes far deeper than most forecasts of economic collapse. Yet foretelling doom at some indeterminate point in the future still has limited value.

Emperor makes worrying emblem for ageing Japan

8 Aug 2016

Japan's 82-year-old Emperor Akihito suggests he might want to step down. His situation is unique but his people are greying rapidly too. That shift is shaping everything from workplace practices to monetary policy. An ageing world will need to watch Japan's experience closely.

Greece will prove if IMF mea culpa is genuine

29 Jul 2016

The international lender's handling of the Greek 2010 bailout is censured by an internal report. Some of the critique is dated and IMF boss Christine Lagarde says lessons were already learnt. The litmus test will be how trenchantly she insists on new debt relief for the country.

Theresa May may have saved EDF from itself

29 Jul 2016

The state-owned French utility’s 12 bln pound investment in nuclear reactors at Hinkley Point could unravel after the UK’s new prime minister initiated a surprise review of the high-risk, high-cost project. Pulling the plug would do UK taxpayers and EDF shareholders a big favour.