Breakingviews

U.S. OK for IMF reforms could come just in time

December 17, 2015

Congress has wedged ratification of five-year-old changes into a deal to keep Washington running. The measures would give China and other emerging economies more say. With Venezuela one country that looks close to default, the IMF may soon need all the unity it can muster.

China will find schmoozing IMF was the easy bit

November 30, 2015

The yuan has made it into the global lender’s basket of reserve currencies, despite China’s patchy reform record and clumsy market interventions. For Beijing politicians, getting into the IMF’s club is itself a reward. Persuading investors to want more yuan will be tougher.

Energy subsidies will test Saudi’s pain threshold

October 29, 2015

The kingdom is considering how to claw back the $107 bln it foregoes each year by subsidising the price of domestic energy. Without that support, companies would be uncompetitive and subjects angry. But the impact of low oil prices makes giveaways an unaffordable luxury.

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: Syriza split best outcome for Greece

By Hugo Dixon
July 11, 2015

PM Alexis Tsipras secured overwhelming parliamentary backing for his U-turn on austerity and reform, but his party has splintered. A new government, which is more serious about implementing whatever bailout programme is negotiated with creditors, will now probably be formed.

Fed might fret about emerging market “spillback”

June 16, 2015

Weak investment and import demand in developing nations is threatening to drag down U.S. growth just as the Federal Reserve mulls raising interest rates. The central bank was able ignore the effects of its bond-buying on others. But a spillback could choke the American recovery.

Greece and creditors are not really far apart

By Edward Hadas
June 15, 2015

The brink keeps getting closer, but there’s agreement on broad principles. The fight is over 2 bln euros, 1 pct of Greek GDP and 0.02 pct of euro zone GDP. The damage from failure is many times larger. A deal can be done - if only politics and pride can be overcome.

Hugo Dixon: How Greece can cut a goodish deal

By Hugo Dixon
June 4, 2015

Athens’ creditors haven’t quite delivered an ultimatum. Greece can probably get somewhat less austerity and an indication of some debt relief if it plays ball. The PM’s best option is to make one last push for concessions, then sign the deal, even if it splits his party.

Grenada offers debt restructuring model for Greece

April 9, 2015

The Caribbean island is close to agreeing a deal with creditors after years of wrangling. The deal structure, including warrants and phased debt relief, is equitable, and provides incentives for reform. It looks like a decent model for Ukraine—or even Greece.

Rob Cox: Race to bottom of global subprime begins

April 7, 2015

A new Chinese-led financial world order is emerging to challenge the IMF and World Bank. Republican U.S. presidential hopefuls Rand Paul and Ted Cruz are in a way enabling the fledgling framework. The possible competition in the market for national aid money could be worrisome.