Politics

Needless Chinese haste risks Hong Kong waste

7 Nov 2016

Beijing has preempted the territory's courts by interpreting the Basic Law to prevent two independence activists from taking office. Markets are shrugging as black-clad youths protest, but long-termists in the financial sector should be more rattled about Hong Kong's future.

UK government court loss is no bar to hard Brexit

3 Nov 2016

Prime Minister Theresa May needs parliament's approval to trigger the EU exit process, judges ruled. She could win the vote even if she loses any appeal, and restricting May's negotiating position risks weakening her hand. The legal ruling is no roadblock to a damaging divorce.

Russia austerity budget is no antidote to low oil

2 Nov 2016

Moscow wants to freeze spending to cut the country’s deficit amidst a low oil price. Yet the three-year budget doesn’t tackle Russia’s dismal growth, or wasteful spending on damaging conflicts. And President Vladimir Putin may not stick to the cautious plan.

Scandal in Seoul masks bigger economic problems

3 Nov 2016

A furore over a quirky confidante is buffeting South Korean President Park Geun-hye. The regularity of such crises attests to poor governance. But that's only part of a larger challenge: avoiding Japan-style stagnation despite heavy debts, weak exports and an ageing population.

South Africa, land of the limping buffalo

2 Nov 2016

President Jacob Zuma faces a new probe over corruption allegations, just days after inflated charges against Finance Minister Pravin Gordhan were binned. Graft worsens South Africa's challenges, from unemployment to slow growth. Zuma himself is central to the problem.

Merkel’s climate-change zeal turns into hot air

2 Nov 2016

The German chancellor fought hard for tough global carbon reduction targets. Yet at home, implementation of the Paris accord is gridlocked by fears of job losses, and an important plan has been delayed. If Angela Merkel cools on fighting climate change, the world is in trouble.

MPS’ best bet is faulty Plan A

1 Nov 2016

The troubled Italian lender rebuffed a rescue plan from banker Corrado Passera, who says the board obstructed his efforts. With the clock ticking, MPS had good reason to stick with its current rescue plan. Yet Passera’s criticisms are valid.

Saudi finance minister reshuffle reflects reality

1 Nov 2016

Outgoing Ibrahim Alassaf served for 20 years in an increasingly disempowered ministry. Replacing him now is a nod to the more centralised control of Deputy Crown Prince Mohammed bin Salman, and that reducing Saudi's budget deficit is indivisible from wider policy on oil.

Hadas: The left behind can’t blame globalisation

31 Oct 2016

Has the rise of cheap labour in poor countries harmed unskilled workers in rich lands? Sure, but it’s a new twist of an old story - technological unemployment. Even though the problems are fairly easy to solve, governments continue to fail many of the latest losers.

South African U-turn on Gordhan is Pyrrhic victory

31 Oct 2016

The rand has recovered after the national prosecutor dropped fraud charges against the finance minister. Relief that Pravin Gordhan will stay on to repair the stuttering economy may be short-lived. The case has revived concern about political interference in state institutions.

Britain better off if Carney stays

31 Oct 2016

The governor’s tenure has become a test of the Bank of England’s status. If he left in 2018 the decision would spook foreign investors and embolden the bank’s domestic critics. Extending his term would signal that the British government still values independent monetary policy.

Britain’s Brexit airbag can’t cushion everyone

28 Oct 2016

Nissan’s UK plant will get state help if its competitiveness is harmed by Britain leaving the EU. Offsetting potential tariffs is unorthodox, but feasible and not especially expensive, even if rolled out to the whole industry. But picking winners also means picking losers.

Emperor Xi gets new clothes

28 Oct 2016

China's Communist Party named President Xi Jinping as its "core" leader - a title previously granted to icons like Mao and Deng. But Xi needs more than titles to implement tough reforms; he needs provincial allies and a viable vision for economic policy. He may have neither.

Resilient UK growth adds to policymakers’ quandary

27 Oct 2016

GDP rose by 0.5 pct in the third quarter as the economy barely broke its stride after Britain voted to leave the EU. The good news makes it harder for the government and Bank of England to justify a hefty stimulus. But if things do get worse their response may come too late.

South Africa’s real ratings test is yet to come

26 Oct 2016

Finance Minister Pravin Gordhan has cut GDP forecasts and predicted a higher deficit. His mini-budget shouldn’t heighten the risk of a sovereign downgrade. But if Gordhan’s Nov. 2 court appearance on questionable fraud charges prompts his resignation, junk status may soon follow.

Europe pushes Renzi in dangerous direction

26 Oct 2016

The European Commission is questioning Italy's 2017 budget, just ahead of a key referendum. Capitulation might weaken Prime Minister Matteo Renzi, who has little to lose by flouting Europe's rules. If Renzi falls or takes a pugilistic position, Europe is in for bigger battles.

Gutsy MPS turnaround tackles problems it can

25 Oct 2016

Italy’s sickly bank has devised an ambitious scheme to boost profitability and coax investors to back a 5 billion euro recapitalisation. There are some missing details, such as how a debt swap will work, but it’s a valiant turnaround plan. The main risks are outside MPS’ control.

Free trade can survive its Wallonian wobble

25 Oct 2016

The tiny Belgian region is holding up a trade pact between Europe and Canada. That doesn’t mean such deals are impossible, though - they just need even more time and creative thinking. The messy process also undermines the notion that ordinary people have no say in globalisation.

Berlin’s U-turn over Chinese bidders is worrying

24 Oct 2016

The government reversed its approval of the 670-mln-euro takeover of chip equipment-maker Aixtron. That looks like an attempt to protect Germany's tech industry, and backs up previous rhetoric. Shooting down the deal would hurt Aixtron, but the apparent wavering is more damaging.

Spanish government begins to make up for lost time

24 Oct 2016

The country's Socialist Party will allow acting Prime Minister Mariano Rajoy a second term, ending 10 months of political deadlock. His minority administration will now begin arduous tasks like cutting the budget deficit as the economy slows. A fractured parliament won't help.