Politics

Joe Biden’s climate law is too valuable to repeal

18 Sep 2024

The outgoing president’s Inflation Reduction Act has spurred $500 bln in green investments in two years. Regardless of who replaces him, politicians, companies and utilities will want to protect lucrative tax credits. A Donald Trump victory might bend the law, but not break it.

BoE bond tinkering offers Labour a fiscal lifeline

18 Sep 2024

Governor Andrew Bailey will this week say by how much he wants to reduce the Bank of England’s balance sheet in 2025. If he sticks to 100 bln pounds, higher gilt redemptions and fewer sales will cut the BoE’s losses. That would give the government a much-needed fiscal boost.

Commerzbank’s UniCredit defences are built on sand

17 Sep 2024

German politicians fret that a key domestic lender may end up under foreign control, now its Italian rival holds 9%. Berlin’s 12% stake complicates that. But it has no legal mechanism to block a deal the ECB may support, and Deutsche Bank makes for a problematic white knight.

Under-fire workers spell trouble for US and Europe

17 Sep 2024

Unemployment remained low in both blocs even as interest rates rose. Staff hoarding and healthy profits averted layoffs. Now, though, US job vacancies are at the lowest since 2021 and euro zone CEOs want to hire less. If labour markets crack, recessions will be harder to avoid.

ASML faces bigger problems than China

16 Sep 2024

Fears of US tech export curbs have pummelled the $320 bln Dutch firm’s shares. A longer-term worry is that the growth of AI leads to new technologies, and less need for ASML’s machines that make chips smaller and efficient. That, more than trade wars, may hurt its rich valuation.

The European Union risks a sad, bad future

16 Sep 2024

The EU economy is stagnating, while Russia, China and even the United States may bully the bloc. There are potential fixes, as former European Central Bank boss Mario Draghi set out last week. But the EU and its members are currently in no position to implement them.

The UK’s finance-business chasm is as wide as ever

13 Sep 2024

British investors and regulators are fretting that capital markets do not adequately serve local companies. The long-running issue is rooted in the country’s outsized financial sector, which brings in 12% of GDP. Recent reforms will struggle to address the underlying problem.

China wins only token victory in EU car wars

13 Sep 2024

Spanish PM Pedro Sanchez wants Europe to drop duties on Chinese EVs, suggesting the Middle Kingdom’s plan to turn member states is working. But blocking the levy will be legally tricky, and Brussels’ credibility is at stake. Beijing faces a long road to upend the union’s plans.

Telegram and X expose tech platforms’ new reality

12 Sep 2024

The arrest of Pavel Durov, founder of the controversial messaging app, and the ban of X in Brazil shows state officials are not afraid to intervene in Big Tech. In this Viewsroom podcast, Breakingviews columnists debate what it means and how CEOs should manage the threat.

Germany gives DSV a sweet deal on freight takeover

12 Sep 2024

The Danish group will acquire Schenker, the logistics arm of indebted German railway operator Deutsche Bahn, for 14 bln euros, beating a higher CVC offer. Berlin may be hoping that an industry player will be a more stable owner. But DSV’s share price jump shows it got a bargain.

There’s no debate: big US spending is a tough sell

11 Sep 2024

Donald Trump and Kamala Harris squared off on immigration, abortion and, strangely, pets. Missing, however, were any grand fiscal plans. Promises of tax cuts and tariffs would cost the government less, after infrastructure, Covid-19 and other initiatives chewed up some $13 trln.

Orcel uses hammer to unpick UniCredit-Commerz lock

11 Sep 2024

The Italian bank’s CEO is eyeing a full takeover of the $16 bln German lender. Andrea Orcel is taking a blunter route than past M&A talks between the two banks, which used structures like a Frankfurt-listed subsidiary to appease Berlin. His way is more rewarding, but riskier.

UK bank tax would fall on shrinking shoulders

11 Sep 2024

Lenders fear that finance minister Rachel Reeves will tap them to help plug a fiscal ‘black hole’. Reversing a tax cut from the last government would be the simplest option. The high returns of NatWest, HSBC and Lloyds suggest they can afford it, but rate cuts may change that.

Draghi’s Europe plan collides with national crises

9 Sep 2024

The former Italian PM reckons the bloc must invest an extra $883 bln a year to catch up with the US and China. His report sensibly calls for telecom mergers and a common defence strategy. But the big lift will have to come from governments beset by their own issues.

Michel Barnier joins Macron’s last chance saloon

5 Sep 2024

French President Emmanuel Macron picked the former Brexit negotiator to form a government after inconclusive elections. The choice will antagonise the Left and divide the Right. It may buy Paris some time with Brussels on its budget. But the weak executive will have a short life.

VW row flags Germany’s creaking corporate model

5 Sep 2024

The $55 bln carmaker is battling unions as it tries to deepen a $11 bln cost-cutting programme. A complex shareholder base makes agreement harder. Such feuds are becoming more common as German consensus-driven governance faces a weak economy, trade wars and climate change.

Seven & i deal will test Japan’s financial renewal

5 Sep 2024

Couche-Tard’s takeover interest in the 7-Eleven owner is a pivotal moment for the country’s efficiency drive. In this Viewsroom podcast, Breakingviews columnists explain why Tokyo ought to wait to see how the target reacts before opining, and how a deal could easily turn hostile.

Oil’s new slump cuts across OPEC’s plan A

4 Sep 2024

Crude prices are off sharply, partly due to weak economic data and partly because a potential Libyan supply crisis appears to have been resolved. Yet OPEC plans to hike output in October. The producer group may have to choose between aggravating the selloff and its own unity.

Germany gets timing wrong with Commerzbank sale

4 Sep 2024

At first glance, the decision to offload shares in the 16 bln euro lender seems smart given a 130% share-price jump in three years. But the valuation is still low. And if long-rumoured M&A materialises, Berlin will forego its special influence and miss out on a takeover premium.

Trade War II will be easy to lose for China

4 Sep 2024

The hit to its exports from higher US tariffs threatened by Presidential nominee Donald Trump would be severe. Beijing’s failure to abide by the terms of past truces will make de-escalation hard to achieve, so will its determination to export its way out of a growth slump.