Will the European Central Bank’s QE work?
Ben Hall is joined by Claire Jones and Ferdinando Giugliano to discuss the European Central Bank’s battle against deflation and whether its long awaited bond buying plan will work
Welcome to the FT’s rolling coverage of the 2015 World Economic Forum in the Swiss ski resort of Davos. Our correspondents will provide updates, insights and analysis over the coming days.
By Orla Ryan
Greece’s parliamentary elections on Sunday are set to put in power the nation’s most leftwing government, led by the radical Syriza party, and its youngest prime minister, 40-year-old Alexis Tsipras, since the second world war.
But some familiar names and faces will survive Syriza’s expected victory. Despite six years of economic slump, and despite the reappearance of serious concerns about Greece’s ability to stay in the eurozone, the old Greek political order is not about to be swept away in its entirety. Read more
Five minutes into Davos and I’m already sick of the word “context”. The organisers – in their unwisdom – have decreed that the theme for this year’s forum is the “New Global Context”.
The main effect of this is that every session seems obliged to have either the word “new” or the word “context” in its title – preferably both. So this morning we have an enticing choice between “the new energy context”, “the new digital context”, “the new growth context” and “the new China context”. Read more
By Gideon Rachman
The “global war on terror” was shot down in a hail of ridicule. Sceptics scoffed that President George W Bush’s GWOT was not global and it was not a war — since terrorism is a tactic, not an enemy. On taking office as US president in 2009, Barack Obama quietly dropped the term.
Hungary’s Viktor Orban has long been criticised for his war against the country’s troubled banks – since 2010, he has imposed Europe’s highest bank tax, introduced financial transaction levies and has forced banks to pay out billions of euros in compensation to borrowers for mispriced foreign currency loans.
But as the SNB decision to scrap the ceiling on the Swiss franc on Thursday sent the forint sliding a record low against the franc on currency markets, Mr Orban’s policies came in for some rare praise. Read more
The recent Sri Lankan presidential election was remarkable for several reasons.
First, Mahinda Rajapaksa, the over-confident incumbent, lost the vote, despite a booming economy. Second, Mr Rajapaksa – who was often accused of authoritarian and dynastic tendencies – seems to have accepted the voters’ verdict without a fight. His best riposte to those who accused him of not being a democrat may turn out to be the way in which he accepted unfavourable election results, and allowed his rival, Maithripala Sinisena, to assume power. The change of government in Sri Lanka also has a wider geopolitical significance. Read more
Turkish President Recep Tayyip Erdogan (R) and Palestinian President Mahmoud Abbas shake hands in front of 16 soldiers in historic garb at the presidential palace in Ankara (Getty)
The average foreign dignitary visiting Ankara might not expect to encounter an honour guard of 16 men resembling extras from a sword and sandals epic and lining the staircase of a gargantuan presidential palace.
So when Mahmoud Abbas, the Palestinian president, was confonted this week by the spectacle of the 16 soldiers in historic Turkic garb, even some Turkish officials confessed they initially thought the resulting images were the work of photoshop.
It was one of the more surreal sights to emerge from Turkey in recent times and has led to much hilarity on social media. But there was a point and purpose to the unusual costumes and their appearance may contain clues to Turkey’s direction of travel under President Recep Tayyip Erdogan, Mr Abbas’s host and the country’s paramount leader. Read more
France has been through a traumatic period following a spate of terror attacks that killed 17 people, which led to a wave of demonstrations by millions of defiant citizens in response. In the latest edition of the FT World Weekly podcast, Gideon Rachman is joined by Hugh Carnegy, a former Paris bureau chief, and Michael Stothard, one of the FT correspondents who covered the aftermath of the attacks, to assess the wider impact of the events and discuss whether France can ward off the forces of polarisation.
The biggest risk to the world over the next decade is that of international conflict, says the World Economic Forum’s 10th edition of its global risks report, which is published today in the run-up to the shindig of global policy-makers and business people in Davos next week.
“Twenty-five years after the fall of the Berlin Wall, the world again faces the risk of major conflict between states,” said Margareta Drzeniek-Hanouz, WEF lead economist. “Today the means to wage such conflict, whether through cyberattack, competition for resources or sanctions and other economic tools, is broader than ever.” Read more
It is five years since a massive earthquake tore through Haiti, leaving tens if not hundreds of thousands dead and sparking a huge aid effort from overseas governments and charities to feed, shelter and treat afflicted Haitians.
A total of $13bn, more than 10 per cent of the global annual government aid budget, was pledged over several years — about $10bn from governments, and the rest from private donors.
Looking back, what was the effect of all this assistance? Did it provide short-term relief? Did it put the Caribbean nation on the path to higher living standards, better governance and greater resilience to natural disasters? Or could the aid effort have been much more effective?
The verdict at this juncture is: don’t know. Read more
A top adviser at the European Court of Justice has said that the European Central Bank’s crisis-fighting Outright Monetary Transactions programme falls within policy makers’ mandate.
Q: That’s pretty much a green light for quantitative easing next week isn’t it?
Most euro area governments and investors are breathing a sigh of relief after Wednesday’s preliminary judgment from the EU’s highest court in favour of the European Central Bank’s sovereign bond-buying programme – the 2012 initiative that helped to bring the euro crisis under control.
But governments and investors, in and outside Europe, should keep in mind that the danger of a bitter, protracted struggle over EU constitutional law will now go up. This would pit Germany against other power centres in the EU. Read more
Within twenty years of the end of the second world war, the same European countries that had been sworn enemies during six years of bloody conflict committed themselves to a future of peace, prosperity and political and economic integration.
Some war crimes suspects slipped the net and avoided the Nuremberg trials, but their elusiveness did not interrupt or discredit the reconciliation process led by West Germany and France.
But two decades on from the wars that ripped apart the former Yugoslavia, it is impossible to make the case that reconciliation and integration are as advanced there as they were in western Europe by the mid-1960s.
The region’s societies, ethnicities and political leaderships remain bitterly at odds over how to assess the war crimes committed in Croatia and Bosnia-Herzegovina between 1991 and 1995.
By Gideon Rachman
A couple of days before the terrorist attacks in Paris, a book arrived at my office. I placed What’s Wrong with France? by Laurent Cohen-Tanugi on the shelves, alongside a line of similar titles: France on the Brink, France in Denial, France in Freefall and France’s Suicide.