Post Tagged with: "European breakup"

How Brexit makes Britain poorer, forcing Carney to stay his hand

How Brexit makes Britain poorer, forcing Carney to stay his hand






The risk in the UK is an inflationary recession. For now, Mark Carney is resisting a rate hike. But how long will the Bank of England hold out? And how long can British consumers keep spending if real wages are falling? Two things would ease this pressure. One is some sort of fiscal support for real wages. The second is the fall in oil prices. As in the US, I see oil prices as key.

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Could the UK be headed for an inflationary recession?

Could the UK be headed for an inflationary recession?






The Bank of England kept its key policy rate unchanged at a record low 0.25% . Three dissents show how a weak currency and rising inflation are making it harder to keep rates low. The worst case scenario is an inflationary recession, which would topple Theresa May.






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Britain's Home Secretary Theresa May delivers her keynote address on the second day of the Conservative party annual conference in Manchester, northern England September 30, 2013.  REUTERS/Phil Noble (BRITAIN  - Tags: POLITICS SOCIETY) - RTR3FFSM

Why talk of a soft Brexit is misplaced






I have been hearing a lot of pundits talk about how the UK election changes the outlook for Brexit. And a lot of this stuff is misguided because the election doesn’t change the outlook in any discernible way. Here’s why.






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Anarchy in UK politics means lower yields and ends austerity as we know it

Anarchy in UK politics means lower yields and ends austerity as we know it






There are several threads I want to comment on in the wake of the UK general election. And from an economic standpoint, the conclusion that follows is that austerity in the UK has now lost its appeal politically. It also means lower yields for longer. Let me explain how I came to this conclusion.






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What Schäuble is really saying about Macron and Europe

What Schäuble is really saying about Macron and Europe






German Finance Minister Wolfgang Schäuble talked to German weekly Der Spiegel about the election of Emmanuel Macron as French President, and this interview is being widely quoted in the English-language press without benefit of a translation. Having read the article, I would say there is nothing extraordinary in his commentary. None of his positions have changed. Let me explain what he said below.






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More Europe

More Europe






At the height of the European Sovereign Debt Crisis, German leader Angela Merkel was openly calling for ‘more Europe, not less’. With Emmanuel Macron elected to the Presidency of France on that platform, Merkel has perhaps her only chance to make good on that vision. First she needs to get re-elected though. But if she gets that far — and her party’s election win last night in Schleswig-Holstein suggests she will — she has to meet Macron with a reformer’s fervour or lose Europe to nationalism.






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Some brief thoughts on Brexit negotiations and the Norway model

Some brief thoughts on Brexit negotiations and the Norway model






All negotiations are mechanisms to split the benefits of mutually acceptable outcomes. The point is to figure out if there actually is a mutually acceptable outcome, and then to get as much of the benefit for one’s side as possible. The threat of walking away from a deal is the most powerful tool in extracting benefits.






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Britain's Prime Minister Theresa May welcomes European Commission President Jean-Claude Juncker to Downing Street in London, Britain April 26, 2017. REUTERS/Hannah McKay

After Juncker-May, Britain as a tax haven is more credible






Right now, everyone is parsing what the ‘disastrous’ May-Juncker dinner means for UK-EU negotiations and for the British general election. My immediate thought, however, was about Britain as a tax haven. Let me outline why.






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France: What Macron means when he says the EU must reform or face Frexit

France: What Macron means when he says the EU must reform or face Frexit






At the weekend, French Presidential election frontrunner Emmanuel Macron told the BBC that EU leaders “have to face the situation, to listen to our people, and to listen to the fact that they are extremely angry today, impatient and the dysfunction of the EU is no more sustainable”. He then warned that if EU leaders do not correct this dysfunction, either France would exit the eurozone or the National Front would take over or both. I think what he says is true and let me explain why.






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Brexit is more important politically than it is economically

Brexit is more important politically than it is economically






Today’s news coverage is non-stop Brexit. And this is a big event. But it is the political implications which matter; the economic impact will be more muted.






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Not All Germans Love The Euro These Days

Not All Germans Love The Euro These Days






Bloomberg View had a good column today on the popularity of the European single currency. The article shows how the euro has gone from being unloved in Germany at introduction in 2002 to well accepted, while the opposite has happened in Italy and France. But behind the aggregates, deep fissures lie that tell a different story. Let me start the conversation on that story here.






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More on why Britain might not leave the EU and how a second referendum could happen

More on why Britain might not leave the EU and how a second referendum could happen






I have long suspected that an act of Parliament would be necessary to formally trigger Article 50. In an 8-3 verdict today, the UK Supreme Court affirmed this suspicion. Theresa May cannot invoke royal prerogative for the simple reason that leaving the EU is an act that has a tremendous impact on laws governing the UK. And the Supreme Court says these vast changes in UK law require an act of Parliament to decide. At the same time, the Court ruled that Wales, Scotland and Northern Ireland have no devolved powers here, They cannot veto the UK’s exit from the EU.






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