Boris Johnson’s Unconservative Party

From Economist.com

print-edition iconPrint edition | LeadersSep 7th 2019

4-5 minutes
BORIS JOHNSON has been Conservative leader for little more than a month, and until this week had appeared in Parliament as prime minister only once. But that did not stop him carrying out the biggest purge in the party’s history on September 3rd. After a backbench rebellion led to a resounding defeat of his uncompromising Brexit policy, 21 moderate Conservative MPs, including seven former cabinet members and a grandson of Winston Churchill, had the whip withdrawn and were told they would not be allowed to stand as Tories at the next election.

It was the most dramatic step in a long process: the transformation of Britain’s ruling party from conservatives into radical populists. The capture of the Tories by fanatics determined to pursue a no-deal Brexit has caused the party to abandon the principles by which it has governed Britain for most of the past century. With an election looming, and the Labour opposition captured by an equally radical hard-left, the Tories’ sinister metamorphosis is terrible news.

Brexit Bulletin: Victory, But at What Price?

Theresa May is now a technicality away from starting Brexit.
by Simon Kennedy  and Tim Ross
9 February 2017, 9:30 π.μ. EET

Theresa May was celebrating on Wednesday night as the House of Commons voted overwhelmingly to approve starting the Brexit process.

Not only that, but the government managed to avoid any amendment to its 137-word bill, leaving it on track to invoke Article 50 by the end of March. The unelected House of Lords will now debate the legislation, but doesn’t have the authority to derail it.

Brexit Secretary David Davis hailed the 494-122 vote as “historic” and said it was time for the county “to unite to make a success of the important task at hand.” Former UKIP leader Nigel Farage was exultant, as was one-time Tory leadership hopeful Andrea Leadsom.

German Finance Minister tells paper euro zone will fall apart if don't follow rules

 Tue Dec 20, 2016 | 4:52am EST

Reuters

German Finance Minister Wolfgang Schaeuble, asked about Greece's plans to pay pensioners a Christmas bonus while it is in the midst of a bailout program, told Die Zeit paper that the euro zone would fall apart if countries did not stick to the rules.

Political Risks Leave Euro-Pound Analysts Most Divided on Record

by Anooja Debnath  and Charlotte Ryan
20 - 12 - 2016, 9:54 π.μ. EET

Bloomberg

For analysts trying to plot the course of the pound against the euro in 2017, the key decision is judging which side of the English Channel will see greater political turbulence.

Strategists are trying to pinpoint whether the U.K.’s exit process from the European Union or the rise of populism in the rest of Europe carries the bigger risk. The dichotomy is evident in Bloomberg’s survey of currency analysts, where the range between the highest and lowest year-end forecasts for euro-sterling is the widest going into a new year since at least 2006.

Markets stabilise after Italian referendum

5-12-2016
BBC

The euro was hit after Mr Renzi announced his intention to resign. At one stage the euro hit $1.0505, its lowest level against the US currency since March 2015.
But it rebounded from that low to stand at $1.0634, a fall of just 0.3%.
Shares in Italian banks opened lower before recovering ground.
The troubled Monte dei Paschi was down by more than 5% in the first few minutes of trade, but then rebounded and had edged into positive territory. Shares in Unicredit and Intesa also fell sharply at first before recovering.

Greece to continue bailout talks, aiming to finish before December 5

Tue Nov 22, 2016 | 1:42pm EST

Reuters

Greece will continue talks with international creditors on fiscal and labor reforms, aiming to wrap up the second review of its bailout program by early next month ahead of a euro zone finance ministers' meeting, government officials said on Tuesday.

Mission chiefs of the creditor institutions overseeing the program's implementation - the euro zone's ESM rescue fund, the European Central Bank, the International Monetary Fund and the European Commission - left Athens on Tuesday, leaving remaining issues to be resolved by technical staff and via teleconference.

Here's When the Dollar and the Euro Are Expected to Hit Parity

Forbes

by  Lucinda Shen  @ShenLucinda  NOVEMBER 21, 2016, 10:59 AM EST

Good news for dollar bulls. Bad news for the global economy.
The euro and the U.S. dollar could be trading one-for-one next year as Europe struggles with political uncertainty and the U.S. is expected to go on a fiscal splurge.

In a note late last week, a team of analysts from Goldman Sachs predicted the two currencies will reach parity by the fourth quarter of 2017. The dollar has risen 4.4% against the euro, and 2% against a basket of world currencies since Donald Trump won the U.S. presidential election Nov. 8. The euro is currently trading at $1.06.

A Falling Euro Is Neither A Collapse Nor A Disaster - It's The Solution

NOV 20, 2016 @ 05:35 AM
Forbes

Tim Worstall ,   CONTRIBUTOR
I have opinions about economics, finance and public policy.

Opinions expressed by Forbes Contributors are their own.

The Express is getting rather overeager to tell us that a falling euro/dollar exchange rate is a collapse, an imminent disaster. When, of course, a change in exchange rates is the cure for what ails economies. That’s rather the point of having them in the first place rather than just the one world currency. So that if one economic area is doing differently than some other we can let the exchange rate take the strain of adjustment, rather than having to do that internal devaluation. You know, as the euro itself has forced Greece and Finland to do?

May's changing vocabulary signals shift from 'hard Brexit'

Nov 18, 2016 | 7:48am GMT

Reuters

By Elizabeth Piper | LONDON
There is a recognisable repetition in Theresa May's speeches about Britain's decision to leave the European Union: "Brexit means Brexit", making "a success of it" and getting "the best deal" for Britain are some of her stump phrases.

But a closer look at her speeches suggests her position on key aspects of Brexit has evolved since she took office in the aftermath of the June 23 vote to leave.

Together with public comments by ministers in her Conservative government, the changes appear to suggest May has shifted from favouring a "hard Brexit" - a clean break with the EU's single market of 500 million consumers - to supporting continued membership of that market if possible.

Obama Urges Europe to Address Its Debt Crisis

Leaders should favor growth over austerity in response to rising populism, president says

The Washington Post

By CAROL E. LEE and  NEKTARIA STAMOULI
Updated Nov. 15, 2016 12:14 p.m. ET
123 COMMENTS
ATHENS—President Barack Obama urged Europe to resolve lingering issues from its debt crisis, saying on Tuesday that leaders should favor growth over austerity, as part of their response to the rising populism in Western countries exemplified by the election of Donald Trump.
Mr. Obama made the appeal after meeting with Greek Prime Minister Alexis Tsipras, who said it is time for Greece to receive significant debt relief from Europe.

Euro founding father Otmar Issing warns about project's future

By Colletta Smith and Mark Syred
BBC 5 Live
7 November 2016

BBC News

Prof Otmar Issing told the BBC's Wake up to Money that faultlines across the eurozone remain, citing economic weakness in Greece, Portugal and Italy.
The European Central Bank's first chief economist also warned about the impact of negative interest rates.
And he said political pressures threatened central banks' independence.
Prof Issing told the BBC that structural problems in the eurozone and dwindling public support in some countries were still major problems.

EU Sagas of Greece, Transaction Tax Back in Focus: Brussels Beat

Bloomberg

  Jonathan Stearns

October 10, 2016 — 1:00 AM EEST

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Two European Union financial sagas return to the spotlight this week. One is Greece. The other is the financial transaction tax being pursued by 10 EU governments.
During much of last year, it would have been reasonable to bet that the FTT initiative had a better chance of succeeding than Europe’s efforts over half a decade to keep Greece in the euro area. Concerns about the health of Deutsche Bank AG and other European lenders add to the reasons why that’s no longer the case -- and just how far the tables have turned will be on display when EU finance ministers gather in Luxembourg on Oct. 10-11.

EU enters brave new world of bank bail­ins

By Hugo Dixon

January 4, 2016

Reuters

The author is a Reuters Breakingviews guest columnist. The opinions expressed are his own.

The European Union entered a brave new world of bank “bail­ins” at the start of 2016. Europe has wasted so much taxpayers’ money on bailing out bust banks in recent years that it is right to try to get investors to help foot the bills in future. However, the tough new regime carries big political risks. The key new rule is that no bank can be bailed out with public money until creditors accounting for at least 8 percent of the lender’s liabilities have stumped up. So­called bail­ins typically mean wiping out creditors’ investments, slashing their value or converting them into shares in the bank. Uninsured depositors could get caught along with professional investors.

The Case for Euro-Optimism

By ULRICH SPECKOCT. 6, 2015

The New York Times

WASHINGTON — Europe is declining, disintegrating, collapsing — for many observers, the only question left is how long this ugly drama will last. Across the Continent, optimism about the future of the European project is in short supply.

Perhaps the lone holdout is Germany, where Chancellor Angela Merkel continues to tell her critics that, from the Greek financial meltdown to the refugee crisis, a common solution is at hand. “We can achieve that,” she has said.

Italy is the most likely country to leave the euro

Washington Post

By Matt O'Brien July 30 at 2:56 PM

What do you call a country that has grown 4.6 percent—in total—since it joined the euro 16 years ago? Well, probably the one most likely to leave the common currency. Or Italy, for short.

It's hard to say what went wrong with Italy, because nothing ever went right. It grew 4 percent its first year or so in the euro, but almost not at all in the 15 years since. Now, that's not to say that it's been flat the whole time. It hasn't. It got as much as 14 percent bigger as it was when it joined the euro, before the 2008 recession and 2011 double-dip erased most of that progress. But unlike, say, Greece, there was never much of a boom. There has only been a bust. The result, though, has been the same. As you can see below, Greece and Italy have both grown a meager 4.6 percent the past 16 years, although they took drastically different paths to get there.

A “Merkel Plan” for Europe

JAN 19, 2015

By Bill Emmott

http://www.project-syndicate.org/commentary/europe-modern-marshall-plan-by-bill-emmott-2015-01

LONDON – Ever since Europe’s economic crisis erupted more than four years ago, politicians and pundits have clamored for a grand solution, often invoking the example of America’s postwar Marshall Plan, which, starting in 1948, helped to rebuild Western Europe’s shattered, debt-ridden economies. But the political moment has never been ripe. That could be about to change.

Europe’s situation today bears some similarities to the 1940s. Burdened by the public debts resulting from past mistakes, eurozone governments know what they need to do but not how to do it. They mistrust each other too much to collaborate. Meanwhile, demand in most of the European Union is weak, ruling out the economic growth needed to repay debts and offer hope to the 25 million unemployed.

New Europe’s Old Ghosts

JAN 9, 2015 6

Mazower Marc

http://www.project-syndicate.org/commentary/europe-nationalism-russia-germany-conflict-by-mark-mazower-2015-01

NEW YORK – The past stalked Europe in 2014. When the year started, the centennial of the Great War’s outbreak attracted much commemorative energy. But, as it progressed, disturbing parallels appeared – not to 1914, but to some of the nastier features of the interwar years.

From Scotland and Catalonia to the borders of Ukraine, the politics of nationality flared, while Europe’s economy stagnated – hostage to a German inflation phobia that dates back to 1923. And, as the year unfolded, a new geopolitical tug of war between the continent’s two early-twentieth-century giants, Germany and Russia, became apparent, while Europe’s amnesiac political elite seemed to be fumbling on one front after another.

No Exit for Greece

By JOSEF JOFFEJAN. 12, 2015

The New York Times

HAMBURG, Germany — Another Chapter 11 for Greece, the third in five years — and no exit in sight. The Greeks won’t do the eurozone the favor of absconding from the common currency. Never mind that they should never have been accepted in the first place, when they cooked the books to look prim and proper.

Not even Alexis Tsipras, the leader of the radical leftist Syriza party, wants out. Apparently on track to win the snap elections on Jan. 25, he has vowed: “We will stick with the euro, no doubt.”

Greek Elections, Democracy, Political Trilemma, and all that

08/01/2015 by Dani Rodrik

From the site http://www.socialeurope.eu/

Two-and-a-half years ago I wrote a short piece titled “The End of the World as We Know It” which began like this:

Consider the following scenario. After a victory by the left-wing Syriza party, Greece’s new government announces that it wants to renegotiate the terms of its agreement with the International Monetary Fund and the European Union. German Chancellor Angela Merkel sticks to her guns and says that Greece must abide by the existing conditions.

ECB Pauses to Observe Results of Recent Stimulus Measures

Rates on Hold, as Policy Makers Set to Buy Bonds and Asset-Backed Securities to Help Economy

The Wall Street Journal

By BRIAN BLACKSTONE CONNECT

Updated Oct. 2, 2014 1:41 p.m. ET

NAPLES, Italy—The European Central Bank took no new action on Thursday, despite inflation weakening to a five-year low, signaling it will wait to see if stimulus measures undertaken in recent months lift the eurozone’s weak economy.