Advantage Macron. With a solid majority of around 355 out of 577 seats in the French National Assembly according to an Ipsos poll update at 20:53h Paris time, France’s new president has a unique opportunity to reform his country and strengthen the EU27 and the Eurozone in the process. Although Macron’s centrist REM party did not do quite as well in the second round of the parliamentary read more
Britain is a great country. Combining a charming quirkiness with flexible markets for labour, services and goods as well as an admirable openness for skilled migrants, Great Britain today has the most dynamic economy of all major European countries as measured by its trend rate of GDP growth. Its superb armed forces, its top-notch intelligence services and its competent bureaucracy allow Britain to punch well above its read more
THE BIG PICTURE: TRADING PLACES
Over the last seven decades, Germany and France have taken their turns at the top. (West) Germany enjoyed its post-war economic miracle in the 1950s before France caught up in the 1960s and 1970s. Following a German rebound after 1985, Germany became the sick man of Europe from 1995 to 2005 while France moved ahead. Thanks to its “Agenda 2010″ reforms of read more
THE POSITIVES
• The staunchly pro-European reformer Macron is in the pole position to be the next French president. He is better suited to defeat Le Pen than Fillon would have been.
• The result is more than a risk avoided. It offers a genuine chance to reform France and strengthen the Eurozone and the EU.
• More than two points behind Macron, Le Pen got less support than polls had read more
Today, the UK will file for divorce from the European Union. This is the worst setback ever for the process of European integration that started with a six-nation coal and steel community in 1952. Over the last 12 months, we have written extensively about the potential impact on the UK and the EU. Below, we summarise our key views in 10 bullets:
Brexit is inevitable. After the two-year read more
The world is entering a period of heightened opportunities and risks. On balance, we expect the switch from political gridlock between the US Congress and the White House to results-oriented co-operation between a Republican majority in Congress and a Republican US President to yield serious pro-growth reforms that will outweigh the damage which Donald Trump’s protectionist inclinations, his “rule by Twitter” and his other unconventional traits may read more
Brexit will do some significant damage to the British economy. Greater London is the services capital of Europe. Today, companies take advantage of the great conveniences of Britain’s light-touch regulation, its competent administration, its deep pool of qualified labour and the English language to offer their services across Europe from a British base. That role will be somewhat diminished by a hard Brexit. Of course, Britain can read more
Brexit, Trump, Italy. For the third time within six months, a major political risk has materialised as Italian voters rejected Renzi’s constitutional reform by roughly 60% to 40%. That small Austria rebuffed its right-wing populists and chose a solidly pro-European candidate as its new figurehead president on the same day is no more than a consolation prize in this context.
Italy has missed a splendid opportunity to reform read more
A few weeks ago, a fund manager called to tell me a weird story. At a conference he had attended a little earlier, the famous Yanis Varoufakis had loudly complained about me, accusing me of having “doctored data” to smear him. Hmmh, I had not paid any attention to the musings of Varoufakis since he had moved from the Greek finance ministry to the global lecture circuit. read more
Populism, protectionism, nationalism and the erosion of the political middle ground: In Europe more so than in the US, some aspects of Donald Trump’s successful election campaign evoke memories of the dreadful 1930s. In this report, we ask how close the parallels are and what key risks we need to watch.
After the Brexit vote and the triumph of Trump, the echo of the early 1930s read more
