A former colleague on the FT (no names, but he now runs the UK’s Office for Budget Responsibility) used to muse that a useful all-purpose headline for any story about an emerging market economy was “[Insert Name Of Country Here]: Structural Reform?”
Putting “Greece” into that formula after Syriza’s resounding victory in Sunday’s election, where do we stand? Every pundit in Europe is retailing some version of the insightful observation that it is all about whether Syriza — and its leader, Alexis Tsipras, Greece’s new prime minister (above) — can be induced to do enough structural reform to buy the fiscal leeway and debt relief it wants.
The problem with this view is that “structural reform” is a crude and unhelpful term. Read more
By Gideon Rachman
Syriza have won the Greek election. But, perhaps just as startling, the “far left” party is making considerable headway in the struggle to win over elite opinion in the west.
The triumph of the anti-austerity Syriza party in Greece’s general election has put back on the table the vexed question of what to do with Athens’ debt. Economists tend to disagree over how sustainable this burden really is: some point to the sheer size of the liabilities, saying Athens will never be able to pay them back. Others emphasise the favourable conditions which the Greek government has secured on official sector loans in two rounds of restructuring: these include heavily subsidised interest rates and a lengthening of the average maturity of the debt, which now stands at 16.5 years, double Italy’s or Germany’s.
One figure on which everyone tends to agree, however, is that Greece’s public debt is 177 per cent of gross domestic product, the highest level in the eurozone. Well, everyone but a private equity group and a number of accountants, who think the relevant figure could be as low as 68 per cent. Read more
Australia Day is typically when prime ministers attract positive headlines by doling out honours to people promoting good causes. But Tony Abbott, the gaffe-prone holder of the office, provoked a storm of controversy on Monday by awarding the country’s highest honour – knight of the order of Australia – to Prince Philip, the Duke of Edinburgh.
“I don’t get the priority the government had in nominating him,” said Bill Shorten, Labor leader. “It’s a time warp where we’re giving knighthoods to English royalty.” Read more
Davos is full of security barriers and screening to keep out intruders who might threaten the world’s leaders of governments and companies, but one managed to sneak through without a badge – the common cold.
By the end of the week of events at the World Economic Forum, many of the attendees were complaining of a streaming nose, a cough, and a nasty headache. The “Davos apocalyptic cold” was how one sufferer described it darkly. Read more
You cannot book an Uber car in Davos. That is no surprise, given that most World Economic Forum delegates prefer to take their own chauffeured limousines or the WEF’s free shuttle service. More surprising is the absence of Uber the company. I have heard it cited constantly this week – both in formal sessions and in informal conversations between participants – as an example of disruptive innovation. Uber also seems to have fielded a representative for every conference I’ve attended over the past past year. Not this one.
Holding the World Economic Forum in a ski resort in the Alps sounds like an eccentric decision. In fact, the choice of Davos as a location for the WEF is very clever. It is such a pain to get here that once the delegates are in Davos, they feel compelled to stay. If the WEF took place in a big city, there would be a lot more flitting in-and-out. Read more
If you want to get a sense of where power is shifting in the business world, tracking the Davos parties is a good place to start. A decade
ago it was the banking bashes which were the glitziest and coolest gigs in town. On Friday night, however, the hottest ticket in Davos was a midnight party organised by Salesforce. Read more
Davos likes a powerful newcomer. At her debut public session on Friday, Mary Barra, chief executive of General Motors since last January, projected exactly the profile of diverse, confident, innovative leadership that the World Economic Forum promotes, even though much of the corporate world (and therefore the Davos summit itself) is still plagued by time-serving, overpaid and unimaginative white men in suits.
She wooed the half-hour session by revealing which GM cars were in her driveway (a Camaro and “as the mother of two teenagers”, an Escalade), laying out how she would keep job-hopping younger staff at GM (“make sure they have career development and meaningful work”), and reminding the audience of her own one-company loyalty. “Others have described me as a ‘car girl’,” she said, correcting the interviewer’s implication that she uses that epithet herself. She prefers to say she’s “a person who loves vehicles”.
But Ms Barra’s first year was dominated by a recalls fiasco, and her future looks even more challenging. “We think there’s going to be more change in the next five to 10 years as there has been in the last 50,” she said.
Once again, I attended a small dinner of “friends of Europe”. We enjoyed a lively discussion of a number of recent and prospective policy decisions. And, again, we had a series of votes.
Here are the questions and the results of the votes. (Not everybody voted on all issues.) The answers suggest, most significantly, continued informed nervousness about the future of the eurozone, despite recent action by the ECB. Read more
Regulation is needed in the global art market because it is vulnerable to money laundering, tax evasion, trading on inside information and price manipulation, an FT Weekend lunch in Davos was told. Read more
I’ll say one thing about Chinese chief executives: they have a more colourful back-story than most of the developed world executives at Davos.
Ren Zhengfei, elusive founder of Huawei, the Chinese telecommunications group, made a rare public appearance at the World Economic Form on Thursday, in a one-on-one interview. Read more
It is a momentous day for the European Central Bank as it launches full-scale government bond buying. Mr Draghi started speaking at 13.30 GMT and the press conference usually lasts for an hour.
By Ralph Atkins and Lindsay Whipp
The proposals by David Cameron, the UK prime minister, to criminalise forms of encryption that would block intelligence services from reading messages from terrorist suspects have been criticised in Davos by a group of Harvard professors. Read more
There is no doubt what the big issue is at the World Economic Forum on Thursday – the European Central Bank decision on quantitative easing.
An early panel with a largely-US cast list was supposed to discuss the likely rise in US interest rates this year from zero. The panel was titled “ending the experiment”. But the experiment of trying to get people to talk about anything other than Europe lasted, according to my calculations, about 10 minutes. The rest of the hour was devoted to Europe and whether QE would work. Read more
Here’s one prediction if Alexis Tsipras and his radical left Syriza party win Sunday’s Greek parliamentary elections: 595 women with mops and rubber gloves are going to be very happy.
They are cleaners whom the outgoing government, led by Antonis Samaras of the centre-right New Democracy party, fired from their jobs at Greece’s finance ministry as part of its effort to cut public expenditure and root out clientelism.
The cleaners’ dismissal caused a right old uproar in Athens. Mr Tsipras, terming their treatment typical of callous measures adopted to please Greece’s EU and International Monetary Fund creditors, has promised to reinstate them.
Everyone I’ve met this week in the Athens political world is sure he will do exactly what he says. Long live the revolution! Read more