Post Tagged with: "European breakup"

The global economy is hitting its stride right now

The global economy is hitting its stride right now

Most of the recent economic news from developed economies has been good. European growth, in particular, seems to have accelerated. Nothing I see in the economic data causes me worry. So I am cautiously optimistic that this upturn will last at least through 2018. So let me go through the data, my outlook and my concerns.

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Brexit was a cry of financial pain and not the influence of the old

Brexit was a cry of financial pain and not the influence of the old

There has been much debate on the determinants of the vote for Brexit. This column uses newly released data from the Understanding Society study to examine the characteristics of individuals who were for and against Brexit. Unhappiness contributed to the vote to leave the EU, but this was driven by feelings about individual financial situations rather than a general dissatisfaction with life. Brexit does not appear to have been caused by the old – only those under the age of 25 were substantially pro-Remain.

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Why the downside risks of Brexit are mounting

Why the downside risks of Brexit are mounting

While the UK economy did better than predicted in 2016 in the immediate aftermath of the referendum vote on leaving the European Union, growth has since stalled and inflation has risen. Beginning in January, I have been saying that risks from Brexit are rising. Let me reiterate that case below. Now, because this is such a contentious subject, with Britain […]

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Germany’s coalition talks are sowing the seeds of the euro’s breakup

Germany’s coalition talks are sowing the seeds of the euro’s breakup

For years now within Germany’s policy circles, there have been many who have pushed for an ‘expulsion’ or ‘voluntary exit’ mechanism for the Eurozone. I am now hearing this position advocated by FDP head Christian Lindner, a potential finance minister in the new German governing coalition. I believe this affects Italy the most and sets up an existential crisis down […]

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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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