Europe will court shutdown with new parliament

December 27, 2013

Eurosceptics and fringe parties will make big gains in next year’s European Parliament elections. A U.S.-style deadlock is unlikely, but mainstream parties will have to compromise more, and passing laws will be harder. It will look more like the old-style Italian model.

China’s bureaucrats play online war games

December 23, 2013

Who controls the internet? The authorities can’t decide. The Ministry of Culture is an unlikely favourite, after it clamped down on unsavoury online games. It’s a tussle between the online entrepreneurship China says it wants, and the old-school bureaucracy it actually has.

China is moving closer to its “Dubai moment”

December 20, 2013

The emirate in 2009 shocked lenders who assumed it stood behind all local debt. As China shifts to a more market-based financial system, it will have to draw a clearer line between public and private loans. A system for protecting bank deposits is crucial to limiting the fallout.

The wrongs and rights of the euro banking union

December 19, 2013

The EU governments’ agreement on how to resolve failing lenders looks complex and hard to implement, and it could worsen the fragmentation of euro zone banks. But it is a start. And the final compromise lowers the political barriers to fixing the southern countries’ lending woes.

New German government to take chances on growth

December 16, 2013

With Wolfgang Schaeuble still in charge of Finance and the pro-European Social Democrats in a position of influence, Angela Merkel’s new cabinet brings continuity for Europe. But the SPD will control social policy. Its plans for welfare reforms may hurt long-term growth.

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

December 16, 2013

America produces a quarter of world GDP, China less than a tenth. But between them they will generate almost half the growth in global output next year. With Europe in the doldrums, Japan recovering and emerging markets subdued, the planet heavily depends on its twin engines.

HK inside-trade payout more deterrent than portent

December 13, 2013

A former Morgan Stanley banker must repay Hong Kong investors $3 million in illegal trading gains. The ruling is another warning for would-be insider traders. But few cases are quite so clear-cut. Investors hoping for a rush of future compensation payments will be disappointed.

Microsoft lucky to avoid Nokia’s India tax bill

December 12, 2013

An Indian court has allowed the Finnish company to include its Chennai factory in the sale of its devices business to Microsoft. While the $7.4 billion deal wasn’t at risk, the software giant dodges Nokia’s hard-to-assess tax liability. Vodafone wasn’t so fortunate.

Japan index: Abenomics momentum masks weakness

December 11, 2013

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.

Mandela’s successors can shape his economic legacy

By Edward Hadas
December 10, 2013

As world leaders remember a great statesman, they may ponder South Africa’s middle-income trap. Compared with other post-colonial economies, even stagnation would be a tribute to Mandela’s peace-making. It’s up to those who followed him to buck recent trends and escape the trap.