Breakingviews

Dutch government felled by austerity boomerang

By Peter Thal Larsen

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

“Wie boter op het hoofd heeft, moet uit de zon blijven.” The Dutch proverb is particularly appropriate for the country’s right-of-centre government, which has collapsed after failing to agree big budget cuts. In English, it reads: “He who has butter on his head must stay out of the sun”.

Repsol has to fight Argentina’s oily expropriation

By Fiona Maharg-Bravo and Kevin Allison
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Argentina’s leftist government is taking control of YPF, the oil and gas company 57 percent owned by Repsol of Spain. Worse, the state is nationalizing only Repsol’s shares. Stakes owned by Argentina’s Petersen Group, and other minorities, will escape the expropriation.

It’s not yet clear what price Argentina will pay for the shares, but given that a state tribunal will decide, it’s safe to assume Repsol will get a raw deal. Nor is this small beer for the Spanish company. YPF has accounted on average for 63 percent of Repsol’s oil and gas production since 2007 and has contributed nearly 30 percent of its group operating income, according to Société Générale estimates. What’s more, Repsol’s exposure to YPF is actually larger than it looks. Argentina’s Petersen group still owes Repsol $1.9 billion after it struck a deal to buy shares from the Spaniards. Petersen has relied on dividends from YPF to service the loan. Now Argentina may redirect these dividends into capital investment at YPF.

Spain’s fiscal amnesty sends wrong message

By Fiona Maharg-Bravo

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

Spain has a large underground economy and the country faces an uphill struggle to shrink its budget deficit to 3 percent of GDP in 2013. But Prime Minister Mariano Rajoy’s decision to allow a temporary, no-questions-asked fiscal amnesty is wrong on several fronts. It is desperate and will be ineffective. A better approach would be to beef up resources on tax inspection.

Bo’s fall reveals China’s cult of anti-personality

By Edward Hadas

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

Crowds still stream past the body of Mao Zedong, preserved in a mausoleum in the centre of Beijing. Deng Xiaoping, Mao’s successor at the top of the Chinese Communist Party, had his ashes scattered at sea. Later leaders have been even more modest. Bo Xilai, the son of a revolutionary leader and formerly a rising star in Chinese politics, seems to have thought that personality cults could make a comeback. He has been proved wrong.

D.C. holds $23 bln fix for cash-strapped states

By Daniel Indiviglio

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

Washington may just hold a $23 billion fix for the nation’s cash-strapped states. That’s the upper limit of what could be raised if local governments were allowed to tax online retailers, according to the National Conference of State Legislatures.

Gun bubble reloads on Obama re-election fears

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

The gun bubble has reloaded on fears of a second term for President Barack Obama. His election in 2008 triggered massive growth in firearms sales. Buyers apparently expected the first Democratic White House in eight years to push for stricter gun control laws. That never happened, sending weapon sales tumbling – until now. The prospect of Obama’s re-election is boosting sales, and shares of gunsmiths, once again.

Europe unrecognizable from U.S. Republican rhetoric

By Martin Hutchinson

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

Europe is mostly unrecognizable from the U.S. Republican rhetoric. Presidential hopefuls Mitt Romney, Rick Santorum and Newt Gingrich, who face off again in Tuesday’s trio of primaries, often accuse Barack Obama of leading America to “European-style socialism.” The monolithic pejorative works to a point but conveniently overlooks the many economic achievements throughout the continent. On this matter, voters shouldn’t take the candidates seriously, and the candidates might do well to consider Europe more so.

Spain can’t avoid austerity conundrum

By Fiona Maharg-Bravo

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

It’s hard to get the population revved up for a general strike in a country with a 23 percent unemployment rate. Indeed, the one in Spain on March 29 – aimed at stopping the country’s recent labour reform – was relatively subdued. There is an air of inevitability about the upcoming austerity, to be outlined on March 30 in the conservative government’s first full-year budget. Too much austerity could be self-defeating and even unrealistic, but Prime Minister Mariano Rajoy doesn’t have much choice.

Obama backs healthcare defender – until he doesn’t

By Reynolds Holding 

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

Donald Verrilli may have had a Billy Martin moment. Despite the U.S. solicitor general’s stumbling effort defending President Barack Obama’s healthcare law before the Supreme Court this week, the White House gave him a vote of confidence. That’s what Martin, the volatile New York Yankees manager, used to get just before he was fired. Verrilli’s miss may not change the case’s outcome, but it costs him credibility – if not his job.

Rajoy’s poll loss no ground for wavering on reform

By Fiona Maharg-Bravo

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

International markets shouldn’t normally care about who wins the local elections in Andalucia. But the elections on March 25 were important enough for Spain’s Prime Minister Mariano Rajoy to delay the announcement of the 2012 budget until after they were held. The tactic didn’t work. The ruling People’s Party failed to get enough votes to govern, confounding opinion polls. But for the government’s reform drive, it’s a setback more than a disaster.