The notion that economies generating current account surpluses are necessarily better positioned than those running deficits is commonplace. This flawed thinking has become more noticeable of late in relation to China and Germany, which are revered for their strong growth and debt metrics. However, in a special feature article in Business Monitor Online today, we… [Read more]
(*Give or take a couple of centuries) While surveying the globe for key risks, I couldn’t help but notice that some of the world’s oldest countries are facing critical tests over the next decade that could redefine them for a long time to come. If handled successfully, the crises could give them a new lease… [Read more]
After several postponements over the course of 2010, Iranian President Mahmoud Ahmadinejad finally announced on December 19 that his subsidy reform programme (which is, in effect, a subsidy phase-out programme) would begin immediately. Subsidies cost the government billions of US dollars every year, and Iran’s fiscal situation is so dire at the moment that Ahmadinejad… [Read more]
President Barack Obama’s announcement of a US$50bn transport infrastructure plan on September 6 must be viewed in the political context in which it was unveiled, namely the run-up to the November mid-term elections. The potential for the plan to be approved by Congress is small, especially considering public and political consensus against increasing the public… [Read more]
The last few weeks have marked a low point in French President Nicolas Sarkozy’s time at the Elysee Palace, and the pressure is unlikely to let up any time soon. Although his embattled Labour Minister Eric Woerth was ‘acquitted’ over a tax cover-up by the Finance Ministry on Sunday, accusations that both Woerth and Sarkozy… [Read more]
In keeping with its promise to deliver an emergency budget within 50 days of coming to office, the UK’s Conservative-Liberal Democrat coalition government today unveiled a painful package of fiscal reforms to get public finances back on an even keel. Delivered by Chancellor of the Exchequer George Osborne before parliament, the budget proved to be… [Read more]
Sovereign risk roared back on to the agenda this week after Fitch Ratings agency downgraded Greece’s sovereign issuer default rating to ‘BBB+’ on December 9. We discuss the tactical market implications for the eurozone and the strategic risks posed by further downgrades in the region going forward.
