Europe/Middle East

  • Staying with the euro or leaving it won't solve Greece's problems.

    Greece's Problems Have Not Gone Away, Just the Headlines

    Greece leaving the euro is old news. Since the former Greek Prime Minister, Alexis Tsipras, agreed to a third bailout in July, the perception of Grexit as an immediate threat has subsided – or at least disappeared from commentary.

    Nonetheless, while appetite for Grexit outside Greece has abated, the traumatic seven months of wrangling over its bailout with Europe produced a significant domestic demand for a return to the national currency.

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  • New rules proposed for U.K. trade unions are onerous.

    Gauging the Need for U.K. Trade Union Rule Changes

    The Conservative government is introducing a bill that will restrict the right of trade unions to organise and take industrial action in the UK. It has been criticised by union leaders and politicians across the political spectrum. Here is why.

    The proposals are a response to a number of public sector strikes in recent years, particularly where workers taking industrial action affect third parties (who have no association with the dispute). This, for example, could include the travelling public in the case of rail strikes, or parents when teachers walk out of schools.

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  • Despite plans to close a tax loophole, investment in Ireland is strong.

    Ireland's American Investment Stream

    The European business environment might remain fragile, but recent figures illustrate how the Republic of Ireland continues to punch above its weight when it comes to attracting investment from overseas. US multinational firms have been the chief contributors to this success and since 2008 after the global financial crisis, corporate America’s investment has been five times larger than their investment in China and 16 times greater than that in India. It is worth noting too that US investment remains below pre-crisis levels in other EU countries such as Germany, Spain and France.

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  • The next labour leader is almost certainly socialist backbencher Corbyn.

    Left-wing Candidate Corbyn is likely Labour Leader

    The veteran socialist backbencher has risen quickly from obscurity and he is almost certain to become the opposition leader this weekend. His passionate rhetoric has blown away his rival centre-left candidates.

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  • The ECB succeeds in driving the euro lower.

    Draghi Speaks and the Euro Sinks

    The ECB is clearly the driver of the day, spurring a quick drubbing of the euro, pressing bond yields lower, and giving a fillip to equities.  The lower US yields and unwind of long euro cross-positions pushed the greenback below JPY120, though it has resurfaced above there.  There is scope for the dollar to rise back toward JPY120.50-70. 

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  • Did Greece alone manage to get itself in its current situation?

    How Did Greece Get Here?

    Greece has been struggling hard to meet the requirements needed to be a member in the Eurozone. Moreover, following the 2008 financial crisis in the US, Greece’s economy got smaller by 25% since 2009. Germany, France, Italy and Spain are the most important economies accounting for 29 percent, 21 percent, 16 percent and 11 percent of the Union’s GDP, respectively. The current economic crisis affecting some of the Eurozone peripheral countries is raising doubts over the euro’s future and it is the major obstacle to its growth.

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  • Greek PM Tsipras could emerge the winner of next month's election.

    Greece's Tsipras Could Still End Up PM

    Elections have become a national sport in Greece. The country has had five different prime ministers in the last five years.  My prediction is that this number is not going to change anytime soon.

    Greek Prime Minister Alexis Tsipras has resigned and called for new elections in a bid to consolidate his power and push through the country’s bailout deal.

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  • The Washington Consensus is that sanctions against Russia are working.

    Are Western Sanctions against Russia Working?

    The sanctions against Russia are working; but not for Russia, Ukraine, the EU, or even the US.  In the 2nd quarter, Russia’s GDP contracted 4.6 percent from a year earlier, following a 2.2 percent contraction in the 1st quarter. There were expectations of a severe contraction after the selloff in oil, currency crisis and the consequent plunge of consumer demand. But the plunge was worse than anticipated and most since 2009.

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  • Lifting sanctions on Iran has potential benefits, but also great risks.

    A Far From Certain Outcome

    Recently, I wrote on these pages that a remarkable turnaround was taking place in the President's fortunes. It's an impressive display of rising from the depths of falling popularity last fall, and it is starting to be felt in many areas, with major impacts on the future of energy.

    At his lowest point, the U.S. President was widely regarded as a lame duck, shedding influence and power, and on a downhill slide.

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  • Greece's creditors can claim a victory, but at what cost?

    When a Victory May or May not be a Win

    The third Greek bailout is not a solution to either Greece or its creditors. Dan Steinbock explains how the talks led to an unsustainable deal that is likely to ensure subdued growth, debt and unemployment in Greece, and the eclipse of austerity politics in Europe. 

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