Aug 13, 2014 07:19 UTC

Japan’s GDP sacrifice is price well paid

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By Andy Mukherjee 

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

Japan’s GDP sacrifice is a fair price for much-needed fiscal correction.

The country’s output plunged an annualized 6.8 percent in the second quarter from the previous three months, according to the Cabinet Office’s preliminary reading. The decline, which stock market investors had expected and therefore largely ignored, was a direct consequence of the April 1 hike in Japan’s sales tax, the first since 1997. Raising the levy by 3 percentage points prompted households to curb spending by a massive 19 percent.

Aug 12, 2014 13:47 UTC

German stocks price in sanctions tail-risk

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By Olaf Storbeck

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

The German economic mini-miracle is on hold. Thursday’s announcement of second quarter GDP, which was not affected by Russian trade hostilities, will probably show a decline from the weather-boosted beginning of the year. Investors are looking for worse. The 8.7 percent drop in the DAX stock index since July 3 puts it among the worst performers of major European stock markets.

Aug 11, 2014 11:54 UTC

Pure politics can’t revive Italy’s coma economy

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By Neil Unmack

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

The minus sign in front of Italy’s latest GDP number was a reminder that Europe’s fourth-biggest economy remains stuck in a perma-recession. GDP has hardly increased in the last 15 years, and the 0.2 percent decline in the second quarter was the 11th fall in the last 12 periods. Matteo Renzi, the new prime minister, has offered only political changes. For the economy, much more is needed.

Aug 7, 2014 14:21 UTC

Ushering Eric Cantor to revolving door

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By Rob Cox

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

The following is a fictional letter that could be circulated in the corridors of K Street, the canyons of Wall Street and the hedgerows of the Hamptons this summer:

Aug 7, 2014 07:13 UTC

China index: Beijing cleans up skies, not its act

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By Katrina Hamlin

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

Skies above China’s big cities are turning blue, as its economic warning lights flash red. Across the country, PM2.5 readings – a measure of small particulates in the air – fell by 6 percent year on year in the first six months, Greenpeace reported in July. Beijing even scored the city’s least smoggy month since January 2011 according to data from the U.S. Department of State. Dirty industrials are leaving town and shutting down – but that’s just a quick fix.

Aug 5, 2014 06:00 UTC

Microsoft’s China dream sorely strains credibility

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By Ethan Bilby

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

Xbox gamers fear the “red ring of death”, a flashing light that can herald system failure. Microsoft, which makes the consoles, must be awaiting a similar sign in China. After 22 years, the tech giant has achieved little in the country, which looks to account for around 2 percent of revenue. Cloud services may multiply that over time, but political headwinds are raising the cost of business – possibly too high.

Aug 4, 2014 18:45 UTC

Vladimir Putin is the new bad weather

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By Richard Beales and Jeffrey Goldfarb

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

Vladimir Putin is not just bad news but also bad weather. Unrest in Ukraine has become the bogeyman to replace snow when a company’s profit hopes need to be managed downward. Just ask Volkswagen or McDonald’s. The World Cup goes the other way, helping Twitter and maybe Walt Disney. The message could be muddled in four years when Russia and soccer converge.

COMMENT

Putin is waiting for winter to come.In the whole game his hand is up.Release of oil from US is expensive due to transport cost and is not enough for whole EU and Ukraine.Putin can bear sanctions with support of Asian countries.I am not prorussian but the so far events indicate.

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Jul 30, 2014 13:08 UTC

EU will find Russian sanctions worth the pain

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By Pierre Briançon

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

It took time for European Union leaders to agree on tough economic sanctions against Russia. The EU is slow. Its members have conflicting interests. Their economies don’t all have the same exposure to Russia. Yet they have finally agreed with the United States on a list of measures to punish Russian banks and oil companies. The already weak EU economy will suffer in return. But over time, Europe will find that the sanctions were worth the pain.

COMMENT

I agree with this article.

No wanted any trouble with Russia–either in Europe or the US.

There has been a political tug-of-war between the Russia and the West in the Ukraine for some time. Russia has been fixing elections and supporting pro-Russian candidates in the Ukraine. Ethnic Ukrainians have been given candidates who are puppets of Russia and Putin.

Putin’s claim that the US is at fault for meddling in Ukrainian politics is another big Putin line. Russia has been meddling in Ukrainian politics long before the US got involved–and the Orange Revolution was a manifestation of ethnic Ukrainian dissatisfaction with Russian control.

I hope the world has learned by now that dictators who choose to bully other nations need very clear signals (short of war) that their behavior is unacceptable. The absence of clear signals (sanctions that hurt) is invariably seen by the dictator as tacit approval or acceptance of their bullying–and leads to more egregious behavior.

Hitler’s rise is a case study in how ineffectual responses by European nations encourages future violence.

Europeans, of all people, should remember their history.

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Jul 30, 2014 08:20 UTC

China’s political purges call for financial sequel

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By John Foley

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

The formal investigation of China’s former security chief Zhou Yongkang, almost ten months after he was last seen in public, makes compelling viewing. What is needed next is a financial sequel.

Jul 29, 2014 15:54 UTC

MetLife CEO should revel in his anonymity

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By Rob Cox

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

Quick, who’s the chief executive of MetLife? That the name Steve Kandarian doesn’t roll off the tongue for almost anyone who isn’t deeply steeped in the insurance business is probably a good thing for his shareholders. How he handles his company’s inevitable designation later this week as a systemic threat to the financial industry could change that. A Jamie Dimon-style public spat with regulators would be foolish. Better to speak softly, and keep the CEO’s relative anonymity intact.