Breakingviews

Impossible trinity gives China a difficult choice

August 26, 2015

Not even the People’s Republic can go on cutting interest rates, keep the yuan stable, and allow capital to flow freely. It must choose two out of three. Huge foreign exchange reserves give Beijing some room to muddle through, but not enough to reverse self-fulfilling outflows.

Hugo Dixon: Greece may not need debt haircut

By Hugo Dixon
August 17, 2015

No single measure, such as debt to GDP, adequately captures how unsustainable Athens’ balance sheet is. Most other yardsticks show Greece needs debt relief. But cutting the face value of its borrowings is probably not required.

Greece deal leaves euro intact but fragile

August 11, 2015

Athens may get its bailout after Prime Minister Alexis Tsipras gave in to reform demands. Quitting the euro is much less likely. It suggests currency union can bear the near-exit of a peripheral state. Economic rifts between core members, though, remain the big future risk.

Yuan devaluation raises currency war anxiety

August 11, 2015

China’s central bank weakened its currency by almost 2 pct against the U.S. dollar in what it called a “one-time correction.” A deflating mainland economy may justify further depreciation. That would put pressure on other countries, raising the risk of tit-for-tat moves.

Singapore at 50 ought to loosen up

August 7, 2015

Pragmatic policy and hard work helped the city-state attain a level of prosperity unimaginable five decades ago. Future success depends on dialling back state capitalism and paternalism, and spawning more entrepreneurs. Few will bet against Singapore continuing to defy the odds.

Asia’s sly austerity makes debt challenge worse

August 5, 2015

The region’s companies and households are nursing a debt hangover. Blame China’s credit binge and cheap Western money. But tight fiscal policies are pushing the region in the wrong direction by worsening an economic slowdown. It’s time for governments to loosen the purse strings.

Hugo Dixon: Euro zone doesn’t need political union

By Hugo Dixon
August 3, 2015

The Greek crisis has triggered renewed calls for a euro zone government, budget and parliament. But such a political union isn’t needed, desirable or achievable. Instead, the euro zone needs more market-based solutions to thrive.

Edward Hadas: Stop knocking the euro

By Edward Hadas
July 22, 2015

Ben Bernanke thinks the single currency is failing. He is not alone. But the former Fed boss is too short term and too financial. The euro zone has tough structural economic problems. The currency is different. Its future is political, and bright.

IMF’s new head economist is imaginative realist

By Edward Hadas
July 21, 2015

Maurice Obstfeld will bring a nuanced approach to the global lender. The Berkeley professor emphasises the importance of strong institutions and is doubtful about pure market dogma. His pragmatic respect for the nuances could help both developing economies and the euro zone.

Hugo Dixon: Mario Draghi is having a good war

July 20, 2015

The ECB president has done almost everything he can to keep Greece in the euro without breaking the central bank’s rules. Although Draghi has been attacked by Athens for asphyxiating the country and hardliners for showing excessive leniency, he has got the balance about right.