Italy shakes off the Berlusconi stigma

November 28, 2011

Angela Merkel and Nicolas Sarkozy will treat Mario Monti, conspicuously, as an equal at their three-way meeting today. The days when Italy was shunned because of its shady leadership are past. The rehabilitation will help Monti at home, as he pushes through difficult reforms.

Fed’s stress-test revamp brings good and bad news

November 28, 2011

Submitting top U.S. banks to awful scenarios will force them to preserve precious capital, possibly delaying dividends. However, the tests will take time. And fear of scrutiny may cause U.S. lenders to speed their withdrawal from the euro zone, worsening the continent’s woes.

Investors start to notice Germany is in euro zone

November 28, 2011

Neither an undersubscribed Bund auction nor yields crossing the 2 percent threshold is a sign of total panic. Still, Germany is looking less like a safe haven. That makes sense - it would struggle if the euro came unstuck. All the more reason for EU leaders to stop squabbling.

France isn’t ready for recession

November 29, 2011

The government’s budget is based on rosy forecasts and neither of the two leading presidential candidates is willing to speak of more austerity. But that is exactly what might be required if high government bond yields tip the euro zone into a full-blown recession in 2012.

Egypt fosters false economic expectations

November 29, 2011

In the post-Mubarak era, the Muslim Brotherhood’s call for “social justice” is now popular with every political force. But the concept means different things to rich and poor. Delivering the democratic dividend will be hard for any new government. Failure may lead to more unrest.

Myanmar forms centre of economic love triangle

December 1, 2011

A visit from Hillary Clinton marks the end of Myanmar’s pariah status, but there is much work to be done before the country can offer investors sustainable returns. With the United States, China and India all jockeying for position, capital flows may come too quickly.

The real UK plan B: protecting against euro chaos

December 2, 2011

Pundits say Britain needs an alternative strategy to boost growth. What’s really needed is a contingency plan to handle a euro explosion. The central planks should be for the government to keep adequate fiscal firepower to handle a crisis and to recapitalise the country’s banks.

Hard to find cheer in Russian election result

December 6, 2011

A weak showing by Putin’s ruling party would be a triumph of democracy if the opposition was credible and elections spurred bolder reform. But with oil money flowing, the easiest way for the leadership to regain popularity is with short-sighted moves that store up pain for later.

Irish tiger-turned-tortoise may need more help

December 8, 2011

Despite several years of austerity, the country has announced more cuts. Next year’s budget deficit is still forecast at a huge 8.6 percent of GDP. Ireland has adjusted rapidly and its industry is competitive. But it may still need more support from the euro zone and IMF.

Putin’s Russia may not be so stable after all

December 8, 2011

Even though protests against the prime minister party’s vote-rigging have been modest, they show the regime’s vulnerability. The system is corrupt and democracy badly lacking. Stability a-la-Putin requires a strong economy, but growth is slowing. What if Russians have had enough?