Italy’s Letta makes best of bad job

By Hugo Dixon
June 24, 2013

Italy’s new prime minister, Enrico Letta, is making the best of a bad job. After February’s inconclusive election, it looked like Italy’s dysfunctional political system might drag the country further into the abyss. There was a risk that nobody would be able to form a government, new elections would be called and that even these would end in a stalemate.

Turkey’s economy is vulnerable

By Hugo Dixon
June 17, 2013

Tayyip Erdogan seems to like the concept of “choking” things. At the weekend, Turkey’s prime minister sent riot police into an Istanbul park with tear gas and water cannons to clear out the protestors. A week earlier, he had threatened to “choke” an alleged “high-interest-rate lobby” of speculators who wanted to push interest rates up and suffocate the economy.

Euro zone mustn’t flunk bank cleanup

By Hugo Dixon
June 10, 2013

One reason the euro zone is in such a mess is that it hasn’t had the courage to clean up its banks. The United States gave its lenders a proper scrubbing, followed by recapitalisation, in 2009. By contrast, the euro zone engaged in a series of half-hearted stress tests that missed many of the biggest banking problems such as those in Ireland, Spain and Cyprus.

Arming Syrian rebels fraught with risk

By Hugo Dixon
June 3, 2013

The UK, France and maybe America are edging towards a policy of arming Syria’s “moderate” rebels if planned peace talks with the Assad regime don’t produce a breakthrough. The idea would be to tilt the civil war in favour of moderates and against both Assad’s Iranian-backed regime and al Qaeda-style jihadists. But the scheme, while superficially attractive, is fraught with risk.