Which of the eurozone’s 18 member states will be the weakest performing economy in 2015?
Italy, which has recorded no economic growth since 1999? Cyprus, which is still reeling from its financial sector collapse in 2012-13? Or some other hard-pressed southern European nation? No. In all probability, the sick man of the eurozone will be Finland.
The Finnish economy is in its third consecutive year of contraction. Any growth in 2015 will be not much bigger than a snowflake. The country will hold a general election in April. The question is whether the dark outlook will benefit The Finns, a populist-nationalist party which was known as the True Finns when it shocked Europe by coming third in the 2011 election with 19 per cent of the vote. Read more
Speaking on television earlier this year, Manuel Valls, the French prime minister, declared that his government’s budget would not be written to “satisfy Brussels”, adding – “We are a great nation . . . France is a sovereign country.”
The European Central Bank will today flesh out details of its plan to buy bundles of loans sliced and diced and repackaged into products known as asset-backed securities, alongside covered bonds.
With growth stuttering and inflation falling to a five-year low, some fuel for the eurozone’s recovery is much needed.
The ABS plan could provide it, freeing up space on banks’ balance sheets to spur lending to the region’s businesses and households.
Why is the ECB doing this now? Read more
By Gideon Rachman
At the beginning of the year, I gave a talk about “geopolitical risk” to a big conference of investors. I trotted briskly around the course: Russia, the Middle East, the South China Sea, the eurozone. Afterwards, I was having coffee with one of the other speakers, a celebrated private-equity investor, and asked him how much he thought about geopolitical risk.
The consensus, such as it is, on the eurozone crisis was neatly summed up on Monday by Hugo Dixon, author and editor at large of Reuters News: “The euro crisis is sleeping, not dead.”
What about the crisis in Greece? Over the past four to five years Europe, supported by the International Monetary Fund, has invested more time, effort and money in Greece than in any other struggling eurozone state. The aim is to reform a country so inefficiently governed, so riddled with corruption and so burdened with debt that it seemed, for certain spells in 2011 and 2012, to pose a threat to the eurozone’s survival.
So it seems reasonable to ask: if this time, effort and money have not changed Greece for the better, what has it all been for? Read more
As the televised brawls between Nick Clegg, the Liberal Democrat leader and deputy prime minister, and Nigel Farage, leader of the anti-EU Ukip party have recently shown, the quality of political discussion in Britain is rarely so low as when the topic in question is the European Union.
All the same, sanity and thoughtfulness on the EU issue can still be found in British public life. For this we should thank, among others, the House of Lords, the much misunderstood but invaluable upper house of parliament. Read more
♦ Farhan Bokhari speaks to those on the front line as the Taliban tightens its grip on Pakistan society.
♦ After annexing Crimea, Russia moves to carve up the spoils. Guy Chazan reports from Simferopol.
♦ Russia’s revanchism has to be stopped, even for Russia’s own sake, argues Martin Wolf.
♦ Putin’s well-trained, stealthy army is not like the feeble one that invaded Afghanistan, warns David Ignatius in The Washington Post.
Reuters’ Breaking Views asks whether the eurozone should heed Japan’s deflation lessons. Read more