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
• Syria’s young girls are facing assault, early marriage and being forced into prostitution as the refugee crisis spirals. The IRC, selected by the FT for its 2014 seasonal appeal, is seeking to protect and empower them
• A motley crew of ex businessmen, academics and pro-Russia activists has seized control in Ukraine’s rebel republics Read more
Like anyone familiar with the French definition of budgetary discipline, I didn’t spill my coffee in shock on Wednesday morning when Michel Sapin, finance minister, disclosed that France wouldn’t bring its public finances in line with EU-set targets until 2017 – two years later than previously agreed.
From the day of the euro’s launch in January 1999, it’s never been any different in Paris. No grande nation worth its salt would balance its budget on the orders of some bumptious bureaucratic bean-counter in Brussels. Read more
US-German relations strained over new spying allegations
Germany has summoned the US envoy following allegations that an agent working for Germany’s intelligence agency was spying for the US. Gideon Rachman is joined by James Blitz, former security correspondent, and Jeevan Vasagar, Berlin correspondent, to discuss what this means for already troubled relations between the Obama and Merkel governments, and how the two nations can resolve their differences in order to tackle the numerous shared geopolitical challenges they face.
Watching the World Cup from Brazil – as I did last week – it was impossible to miss the huge weight of expectations placed on the national team. Half the country – including some toddlers and dogs – seemed to be wearing the yellow jersey of Brazil. Some Brazilians told me that the players would use that pressure to inspire themselves to greater heights. That always seemed doubtful to me. And last night, we saw the opposite happen: the Brazil team crumbled under unbearable pressure and lost by an unthinkable amount. Read more
Today Germany and France will meet in their World Cup quarter final in Rio de Janeiro, the latest episode in one of Europe’s classic football rivalries. But off the pitch, a different duel is gripping the continent’s political scene: the one between Germany and Italy. Read more
There is a widening gap between Germany and its two principal English-speaking allies, the US and the UK, which ought to concern everyone who believes in the enduring need for a transatlantic alliance of democracies. Read more
Germany’s allies may think that Berlin is slow to engage with the rest of the world – and show some political muscle commensurate with its economic weight.
But the German public has the opposite view: in an opinion poll published on Tuesday, only 37 per cent support a more active German foreign policy with 60 per cent against. Read more
Do last week’s German constitutional court ruling lambasting – but failing to overturn – the ECB’s crisis-fighting bond-buying programme and Matteo Renzi’s ousting of Italy’s prime minister Enrico Letta have anything in common?
In the view of many ECB critics, particularly in Berlin, the two are not only related, but one may have caused the other. Read more
German Constitutional Court (Matthias Hangst/Getty Images)
We don’t like what the European Central Bank is doing – but if someone is going to drop a nuclear bomb on the eurozone, it won’t be us. This seems to be the main message in today’s judgment from Germany’s constitutional court on the ECB’s Outright Monetary Transactions programme.
The OMT is an initiative aimed at saving the eurozone with large-scale ECB purchases of the bonds of governments vulnerable on financial markets, in return for a commitment to deep-seated economic reforms. Germany’s Bundesbank and much of the German public have never warmed to the OMT – even though the programme has never actually been used and, some experts think, never will be.
So the German court’s judgment will come as a relief to Mario Draghi, the ECB president, and all those who hold that the OMT, unveiled in August and September 2012, is the single most important reason why Europe’s monetary union no longer appears in mortal danger. But mixed with this relief will be a feeling that the German court’s judgement is not entirely helpful – and that some of its arguments are not particularly well-founded. Read more
(Matt Cardy/Getty Images)
“A spectre is haunting the world: 1914.” So writes Harold James, a professor of history at Princeton in the latest edition of “International Affairs”. Professor James is certainly right that newspapers and learned journals are currently full of articles comparing international politics today with the world of 1914. I have written a few articles on that theme myself. Now, perhaps inevitably, there is a backlash. Joseph Nye, a professor at Harvard, has just published a piece on the 1914 analogy for Project Syndicate that notes: “Among the lessons to be learned from the events of 1914 is to be wary of analysts wielding historical analogies, particularly if they have a whiff of inevitability.”
So does the 1914 analogy actually make sense? Read more
♦ The conflict in South Sudan has exposed the naivety of those self-appointed cheerleaders of southern independence abroad, who argued that all other issues were secondary to sovereignty, says the FT’s William Wallis.
♦ It’s time to think more about Sarajevo and less about Munich when it comes to international affairs, argues Gideon Rachman.
♦ The New York Times looks at how Palestinians find fun and escape while facing everyday life in the Israeli-controlled West Bank and the Hamas-controlled Gaza.
♦ Germany is addressing the issue of integration and equality for its large Muslim population – state schools are offering classes on Islam in a bid to quell the radicalisation of Muslims and prejudice among non-Muslims. Read more
♦ Indian women are showing a new confidence and combativeness – a sign of India’s first genuinely popular feminist awakening.
♦ World Child Cancer helps bring birthday hopes to a young girl with cancer in Ghana – the FT’s Xan Rice tells her story and looks at how the work of the organisation.
♦ Count Anton-Wolfgang von Faber-Castell explains how his mid-size family firm, which makes wooden pencils, stays globally competitive against threats from sophisticated Chinese competitors, the stagnant euro zone economy and shifts in technology.
♦ Independent news website Mada Masr looks back at the life of dissident Egyptian poet Ahmad Fouad Negm who died yesterday: ” He seemed to never stop loving life and hating dictators and making jokes through the darkest of conditions.” Read more
♦ The FT’s Jeevan Vasagar looks at how farmers are reaping the rewards from Germany’s renewable energy boom. The Government appears to be on a collision course with farmers and renewable energy provides as it seeks to rein in generous subsidies.
♦ Sarah Lyall in the New York Times explores how the fates of Andy Coulson and Rebekah Brooks are diverging. Brooks walked away from News International with a $17.6m severance package. Coulson has moved out of London and according to one source, “He has lost everything, basically.”
♦ Also in the New York Times, Ben Hubbard looks at the pioneering Saudi women who are entering the workplace in the conservative Middle Eastern state – a significant shift in a country where women are severely restricted in all public activities.
♦ Finally, African Arguments has an interview with John Githongo, the man who revealed corruption in Kenya’s Kibaki administration in the early 2000s. He describes the current “democratic recession” in Kenya and a wave of new repressive legislation being passed. Read more