Markets too sanguine about Italy

By Hugo Dixon
March 11, 2013

The markets are too sanguine about Italy. The country’s politics and economics are messed up – and there are no easy solutions. And while Rome does have the European Central Bank as a backstop, it may have to get to the brink before using it.

Spain probably won’t catch Italian flu

By Hugo Dixon
March 4, 2013

One knee-jerk reaction to Italy’s shock election was to worry about contagion to Spain. As Rome’s bond yields shot up last Tuesday, Madrid’s were dragged up in sympathy. These are the two troubled big beasts of the euro zone periphery and an explosion in either of them could destroy the single currency.

Italy could reignite euro crisis

By Hugo Dixon
February 26, 2013

Can the Italians be serious? That is likely to be the reaction of financial markets and the country’s euro zone partners as they ponder a disastrous election result, which could reignite the euro crisis. More than half of those who voted chose one of two comedians: Beppe Grillo, who really is a stand-up comic; and Silvio Berlusconi, who drove Italy to the edge of the abyss when he was last prime minister in 2011. Both are anti-euro populists.

Banks must probe clients’ motives

By Hugo Dixon
February 11, 2013

Should an investment bank worry about a client’s motive when it engages in a complex and potentially suspicious transaction?

MPS saga not just a local affair

By Hugo Dixon
January 28, 2013

The Monte dei Paschi di Siena saga is not just an Italian affair. Revelations that complex financial transactions used by the country’s third largest bank had the effect of hiding losses are causing a political storm in Italy.

Bersani may not be bad for Italy

By Hugo Dixon
December 3, 2012

The last Italian prime minister whose surname began with a “B” – Silvio Berlusconi – was a disaster. The country’s next leader’s name is also likely to start with a “B”.

Is Hollande more like Rajoy or Monti?

By Hugo Dixon
November 19, 2012

Is Francois Hollande more like Mariano Rajoy or Mario Monti? In other words, is the French socialist president condemned to be always behind the curve with reform like Spain’s conservative prime minister? Or can he get ahead of it like Italy’s technocratic premier?

Spain and Italy mustn’t blow ECB plan

By Hugo Dixon
September 10, 2012

The European Central Bank’s bond-buying scheme has bought Spain and Italy time to stabilise their finances. But if they drag their heels, the market will sniff them out. It will then be almost impossible to come up with another scheme to rescue the euro zone’s two large problem children and, with them, the single currency.

Confidence tricks for the euro zone

By Hugo Dixon
July 23, 2012

The euro crisis is to a great extent a confidence crisis. Sure, there are big underlying problems such as excessive debt and lack of competitiveness in the peripheral economies. But these can be addressed and, to some extent, this is happening already. Meanwhile, a quick fix for the confidence crisis is needed.

Successful summit didn’t solve crisis

By Hugo Dixon
July 2, 2012

Cuando despertó, el dinosaurio todavía estaba allí. “Upon waking, the dinosaur was still there.”