European Union

The headquarters of the European Central Bank (ECB) are pictured during protest training organised by "NoG20 Rhein-Main" in Frankfurt

The European Central Bank has left interest rates unchanged in July as expected. The euro has picked up from its daily lows after Mr Draghi stuck to the script that the recovery still has plenty of way to go. The key message was that the eurozone still needs a “substantial” amount of stimulus to keep price growth at its current levels.

Key points

  • ECB main rate remains at 0.00%; deposit facility at -0.4%
  • No change to QE bond buying programme which runs till end of 2017
  • Euro enjoys a mild rally on Draghi’s comments

 

Germany European Central Bank

The European Central Bank has once again left interest rates and its quantitative easing programme unchanged following its governing council meeting.

Key points

  • ECB main rate held at 0.00%, deposit facility at -0.40%
  • QE bond buying programme runs till end of 2017 at reduced rate of €60 billion per month
  • Risks are still ’tilted to the downside’ says Draghi
  • Admits differences of opinion within council over strength of economic recovery
  • Draghi has a dig at Germany’s finance minister Schäuble over latter’s criticism of ECB

 

Holding image for blog

UK Prime Minister Theresa May has triggered Article 50, the process informing the EU of the UK’s intention to leave. Unless both sides agree to an extension, the notification will start a two-year period to agree a divorce deal before the bloc’s treaties cease to apply to Britain.

Key points

  • Theresa May tells MPs she has acted “on the democratic will of the British peoples”
  • European Council president Donald Tusk says “this is about damage control”
  • An annotated version of the Article 50 letter is here
  • Click here
    for an explainer on what happens next
  • For the FT’s indepth coverage visit our Brexit page

 

APTOPIX Germany European Central Bank

The European Central Bank has left interest rates and its quantitative easing programme unchanged at its governing council meeting on Thursday. The decision came against a backdrop of inflation reaching the bank’s goal of just under 2 per cent for the first time since early 2013.

Mario Draghi, ECB president, who was under pressure from the council’s hawks, stepped back from the prospect of more rate cuts.

Key points

  • ECB main rate remains at 0.00%, deposit facility at -0.40%
  • QE bond buying programme continues till at least end of 2017
  • Monthly QE due to drop from €80bn to €60bn from April as previously announced
  • ECB keeps long-term inflation forecasts unchanged
  • Draghi says “no signs yet of a convincing upward trend in underlying inflation”
  • Draghi takes more hawkish tone on monetary policy

 

By Gideon Rachman

For the most ardent supporters of Brexit, the election of Donald Trump was a mixture of vindication and salvation. The president of the US, no less, thinks it is a great idea for Britain to leave the EU. Even better, he seems to offer an exciting escape route. The UK can leap off the rotting raft of the EU and on to the gleaming battleship HMS Anglosphere.

EPA

The European Central Bank has left interest rates and its quantitative easing programme unchanged.

Key points

  • ECB holds main rate at 0.00%, deposit facility at -0.40%
  • QE bond buying programme to continue until at least end of 2017
  • Level of QE to drop from €80bn to €60bn per month from April as previously announced
  • Press conference starts at 13:30 GMT

By Gemma Tetlow and Elaine Moore

 

Trade, Trump and Brexit

This week, UK prime minister Theresa May laid out her plans for a ‘hard’ Brexit, as US president-elect Donald Trump expressed doubts about the EU’s future and promised a ‘quick’ US-UK trade deal. How feasible would such a deal be? And is the west retreating from a free trade model that has taken decades to roll out? Daniel Dombey, the FT’s Brexit editor, discusses with Brussels bureau chief Alex Barker and FT world trade editor Shawn Donnan.

Reuters

The European Central Bank has scaled back its quantitative easing programme from €80bn to €60bn a month from April 2017 and will extend it to the end of next year, in a move that responds to hawks’ concerns about ultra-loose monetary policy but which could unsettle markets. It has held rates as expected.

The ECB insists the step is not equivalent to the US move to gradually “taper” QE that unsettled markets in 2013, instead it argues the move could see it buy more bonds under the extended programme.

Key points

  • ECB holds rates at 0% but extends QE to December 2017
  • Level of bond buying programme cut to €60bn per month from April 2017
  • Asset purchase parameters broadened, including halving of minimum maturity to 1 year
  • Sovereign bond prices recover as Draghi insists tapering has not been discussed
  • Euro slides against the dollar

By Gemma Tetlow and Gavin Jackson

 

The EU’s trade conundrum

Wallonia, a Belgian region, has rejected the proposed Ceta trade deal with Canada, all but torpedoing the agreement for good. What does this mean for the EU’s trade liberalisation agenda, transatlantic trade and the UK’s Brexit negotiations? The FT’s world news editor Ben Hall speaks with Brussels bureau chief Alex Barker and our diplomatic correspondent, Arthur Beesley.

By Gideon Rachman

Later this week, EU leaders will meet in Bratislava — minus one country. The Slovakia summit will be the first to take place without the UK. But Britain will loom large in discussions, as Europe grapples with Brexit.

By Gideon Rachman

There was something distinctly presidential about Angela Merkel’s European travels last week. The German chancellor met 15 other EU leaders on a whistle-stop tour of the continent. It is the kind of speed-dating diplomacy that US presidents often undertake, as they build consensus and reassure allies.

Theresa May, the UK prime minister, says that “Brexit means Brexit”. But when will it actually happen?

The whole question of the timing of Britain’s departure from the EU is now open to question. Britain has still not triggered Article 50, which gives formal notification that the UK intends to leave and fires the starting gun for negotiations. The Sunday Times claimed recently that Article 50 may not be triggered until late next year because of a mixture of administrative chaos in the UK and political uncertainty caused by elections in France and Germany in 2017.

Given that it will then probably take a minimum of two years to negotiate the divorce, that would mean that Britain’s exit from the EU would not happen until the end of 2019. Over at the Independent, however, Andrew Grice makes the case that delaying Brexit this long is not politically feasibleRead more

By Gideon Rachman

At the Democratic convention last week, I experienced an uncomfortable feeling of déjà vu. Emblazoned across the arena was the rallying cry of the Hillary Clinton campaign — “Stronger Together”. It was a depressing reminder of “Stronger In,” the slogan of the losing Remain campaign in Britain’s referendum on EU membership.

Italy’s struggling banks pose a test for Renzi and the EU

Italy’s banking system is struggling in the wake of Britain’s vote to leave the European Union and ahead of stress tests this month. What does this mean for the future of Matteo Renzi, Italy’s prime minister, and for Europe’s wider economic prospects? Daniel Dombey puts the question to the FT’s Alex Barker and James Politi.

European rivals eye London’s banking business
How far will Frankfurt and Paris go to claim the business of the City of London once the UK has left the European Union? Which other cities are in the running and how many jobs does London stand to lose? Gideon Rachman puts these questions to Michael Stothard, the FT’s Paris correspondent and James Shotter, Frankfurt correspondent.Cancel

“Now it’s our turn!” So said Geert Wilders (above), leader of the far-right PVV party in the Netherlands, after the UK electorate voted in last week’s referendum to leave the EU.

In practice, there is next to no chance of a Dutch referendum on EU membership — certainly not under Dutch law as it stands. However, to say this is not to underestimate the serious political challenges that lie ahead in the Netherlands. Read more

By Gideon Rachman

All good dramas involve the suspension of disbelief. So it was with Brexit. I went to bed at 4am on Friday depressed that Britain had voted to leave the EU. The following day my gloom only deepened. But then, belatedly, I realised that I have seen this film before. I know how it ends. And it does not end with the UK leaving Europe.

By Gideon Rachman

I just want the EU referendum to be over now. The horrific killing of Jo Cox, only a week before the vote, will overshadow the result, whatever it is.

By Gideon Rachman

In the referendum campaign on Britain’s membership of the EU, each side has one trump card that they will play repeatedly until voting day on June 23. The Remain camp will talk about the economy. The Leavers will talk about immigration. Read more

Populism in Austria
Austria came within a whisker of electing a far-right candidate as its head of state this week. As EU leaders breath a collective sigh of relief, World News editor Ben Hall discusses the ramifications of the election with the FT’s Austria correspondent Ralph Atkins and Brussels bureau chief Alex Barker.