Dec 19, 2013 12:33 UTC

The wrongs and rights of the euro banking union

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By George Hay 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The euro zone banking union was always going to have a difficult birth. European governments finally agreed on Dec. 18 the second of three key milestones – a resolution directive establishing a common approach for dealing with struggling lenders. As with most EU compromises, it is an imperfect reform. It was criticized by European Central Bank officials, including president Mario Draghi, and doubts remain. But the euro zone at least has the beginning of a banking union.

Dec 16, 2013 14:06 UTC

New German government to take chances on growth

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By Olaf Storbeck

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The most obvious symbol of the continuity Angela Merkel has wanted to showcase with her third cabinet is Wolfgang Schaeuble, who will keep his job as Germany’s Finance Minister in the new ruling coalition. That clearly shows that Berlin’s European policies will remain unchanged. Other EU governments will welcome a German team committed to keeping the euro zone together – if anything even more so, considering the pro-European Social Democrats’ influence in the new government.

Dec 16, 2013 03:41 UTC

U.S. and China will set global growth pace in 2014

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By Peter Thal Larsen and Robyn Mak 

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The United States and China will determine the pace of global growth in 2014. Though America accounts for a quarter of the world economy and China less than a tenth, the two countries will generate roughly half the expansion in overall GDP next year. With Europe in the doldrums, Japan still recovering and emerging markets subdued, the planet heavily depends on its twin engines.

Dec 13, 2013 10:44 UTC

HK inside-trade payout more deterrent than portent

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By Peter Thal Larsen

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

A group of nearly 300 Hong Kong investors are about to share an early $3 million Christmas present. That’s the amount former Morgan Stanley banker Du Jun has been told to pay the unwitting victims of his insider trading in 2007. White collar criminals should beware, but investors shouldn’t expect a rush of future payments.

Dec 12, 2013 10:03 UTC

Microsoft lucky to avoid Nokia’s India tax bill

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By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Microsoft is lucky to dodge Nokia’s tax bill in India. On Dec. 12, the Delhi High Court allowed the Finnish group to transfer its Chennai factory to the U.S. software giant as part of its planned $7.4 billion sale of its mobile handset business. While the overall deal wasn’t in doubt, Microsoft avoids Nokia’s hard-to-assess tax liability. If only Vodafone had been so fortunate.

Dec 11, 2013 06:33 UTC

Japan index: Abenomics momentum masks weakness

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By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

A second straight gain in October pushed the Breakingviews Abenomics index to its highest since the 2008 crisis. But Prime Minister Shinzo Abe must worry about the durability of the recovery. Wage gains aren’t yet large enough to compensate households for rising prices.

Dec 10, 2013 12:04 UTC
Edward Hadas

Mandela’s successors can shape his economic legacy

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By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

As world leaders gather to remember Nelson Mandela, they may ponder South Africa’s middle-income trap, with economic growth held back by poor education, inadequate investment and excessive corruption. Yet compared with other post-colonial economies, even stagnation would be a tribute to Mandela’s peace-making.

COMMENT

The threat of industrial and mineral “nationalization” is ever present in SA, and that specter is already hurting developmental momentum of its economy. Investors don’t like uncertainty.

Unfortunately, the wide-eyed idealists who initially occupy the political halls of emerging nations such as South Africa, reach too readily, heavily, and often into the pockets of what should be their economy’s saviors…its capital investors.

Then the politicians point fingers, blame conspiracies in general, and the U.S. or Eurozone specifically when capital-flight sets in.

My guess is South Africa will soon go the way of Venezuela and others.

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Dec 10, 2013 07:44 UTC

Narendra Modi could be India’s Shinzo Abe

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By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Narendra Modi could be India’s Shinzo Abe. If the recent state polls are any indicator of the electorate’s mood, the opposition politician will be prime minister of the world’s largest democracy by May next year. Just like his Japanese counterpart, Modi would oversee higher asset prices and revive growth, but struggle with structural reforms.

Dec 9, 2013 08:35 UTC

Banks’ taper rehearsal gives emerging markets hope

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By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The banking industry’s dress rehearsal for tapering by the Federal Reserve has given emerging markets hope.

Dec 6, 2013 02:12 UTC

Benefits of being “G-SIFI” seem to outweigh costs

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By Peter Thal Larsen

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

The benefits of being labeled “too big to fail” may just outweigh the costs. Since regulators first published their list of global systemically important financial institutions, or G-SIFIs, the banks concerned have boosted capital and tamped down balance sheets. But smaller lenders, particularly in Europe, have done the same without joining the club. And shareholders seem not to notice much of a difference.