The Londoner

Mario Monti’s announcement last Saturday that he plans to resign his post as Italy’s prime minister earlier than was previously expected has thrown Italian politics, and the whole Eurozone, into renewed turmoil. Monti, a Yale-educated technocrat and former EU commissioner, took over in November of last year after market pressure forced Silvio Berlusconi to quit in order to prevent the ignominy of Rome having to apply for an international bailout. The plan was for him to serve the rest of the parliamentary term, until elections scheduled for no later than April 2013. But last week, Berlusconi’s PdL (People of Freedom) party, which had been backing the Monti government, pulled its support, just as its exceedingly controversial 76-year old billionaire leader declared that he would make one more run for the premiership (he has been elected three times already in the span of nearly two decades). This led directly to Monti’s announcement that he will go as soon the 2

Why a US-EU trade pact would be historic China's model of state-run capitalism needs a massive challenge from the two giant market economies. Obama must win a US-EU trade pact in his second term. President Barack Obama takes his seat for an East Asia summit last month in Cambodia. Next to him is China's outgoing premier, Wen Jiabao. Obama said there is a need to "establish clear rules of the road" for trade and investment. For Mr. Obama, one priority should be to ensure that the world’s nations adopt the ideal of openness in their economic ties. That ideal, which the United States championed after World War II, is now being eroded as more developing nations look to China ’s model of state-run capitalism for growth. The Chinese model relies heavily on protecting industries; government-guided banking; and manipulating markets, currency rates, and data. If every nation practiced such economic nati

  European governments neared a deal on Wednesday to give the European Central Bank new powers to supervise banks across the bloc after Germany signaled a readiness to compromise on the scope of the ambitious financial reform. Last week German Finance Minister Wolfgang Schaeuble had clashed openly with his French counterpart Pierre Moscovici over key elements of the plan, but with time running out to meet a year-end deadline, they narrowed their differences, raising hopes of a breakthrough. Agreement on a common bank supervisor is a crucial first step towards a broader "banking union", or common euro zone approach to dealing with failing banks that in recent years have dragged down countries like Ireland and Spain. "We think that we have a good chance to reach a deal today," Schaeuble told journalists ahead of a meeting in Brussels with his European Union peers. "My intention is that we find a solution to the

Chancellor Angela was by all acounts relieved to see the back of Silvio Berlusconi when he stepped down in 2011. Now, however, she and other European leaders are horrified at the prospect of his return to the pinnacle of Italian politics. Not again! Just 13 months ago, European heads of state and government joined forces to usher Italian premier Silvio Berlusconi into retirement. Chancellor Angela Merkel and then- French President Nicolas Sarkozy marshalled all of their persuasive powers to clear they way for a reform government in Rome under the leadership of Mario Monti. Now, with Prime Minister Monti having said over the weekend that he would resign as soon as he pushes through a key budget law, Italy's least serious politician is back. And Europe is groaning in displeasure. The French leftist paper Libération wrote "The Mummy Returns," a reference

The secrets of the Nordic model that has appeared immune to the crisis engulfing the rest of Europe The European Union’s southern member states – Greece, Italy, Spain and Portugal – have become the sick men of Europe, helping to turn the EU into one of the sicker regions of the world. In contrast, Denmark, Finland, Norway and Sweden have stood out by keeping much of their reputation and self-confidence intact, as well as retaining decent growth figures. This has been achieved without swingeing budget cuts or reneging on social obligations. These countries still exhibit the combination of efficient production, high tax and high living standards that has been called a ‘third way’ or ‘Nordic model’ in the past, and which is now seizing attention again for its apparent crisis-busting properties. The misfortunes of Iceland – the smallest Nordic country – arguably prove th

Europe clearly has bipolar disorder. Its summits demand a single-minded focus on austerity, to correct past budget excesses. Then many of its politicians, most especially France’s Francois Hollande, reject such notions out of hand and seem determined to return to the fiscal profligacy that created today’s financial crisis. Neither course is very helpful. The latter spendthrift route has already proved unsustainable, a verdict recently reached by the credit rating agencies in response to President Hollande’s seeming embrace of the old ways. The former austerity risks a vicious cycle in which fiscal restraint creates economic decline, which enlarges deficits and evokes still more restraint. Greece’s latest agony, as well as recession elsewhere on the continent, speak loudly to this dysfunction. Europe and France in particular need a different mix. Recent news certainly makes clear the fruitlessness of austerity alone. The Eurozone broadly has sunk deeper into recession. A

The Irish have an expression, "to put on the poor mouth" -- meaning to exaggerate the severity of your circumstances in order to gain sympathy, charity, and perhaps forbearance. In the aftermath of the collapse of Ireland's construction bubble in 2007, the country did exactly that and received a package of loans from the European Union and the International Monetary Fund (IMF) that will last until 2014. For years, Dublin has sought to ingratiate itself to the European authorities, arguing privately that it would default on its loans absent a deal on the 64 billion euros of banking debt that past governments had run up. At long last, Ireland is beginning to move beyond putting on the poor mouth. The country's prime minister, Enda Kenny, recently graced the cover of Time , accompanied by the headline "The Celtic Comeback," and the Financial Times called Ireland's finance minister one of the best in Europe. The nation's largest banks c

It is a culmination of the so-called “reconquest”, which in the 1990s saw European companies invest heavily in Latin America. What then seemed risky bets are now proving to be an El Dorado . Ravaged by the eurozone recession, such companies are increasingly using their Latin American operations to repair troubled balance sheets at home. This is especially true for Spanish and Portuguese companies, for which Latin America accounts for 15 per cent and a third of revenues respectively, according to Morgan Stanley. “The expansion of Spanish companies into Latin America was their first step to become global. Now it has become their way to survive,” said José Antonio Ocampo, a Columbia University economics professor and former Colombian finance minister. Santander , Spain’s biggest bank, has been among the most opportunistic. It raised $7bn in 2009 when it listed its local subsidiary in Brazil . Last month, it raised a further $4bn when it did the same in Mexico. Both operati

By Guillermo Ortiz F  or many observers who lived through the constant debt-rescheduling processes of Latin American countries in the 1980s it is difficult to regard the latest episode of the Euro-Hellenic drama without experiencing a sense of déjà vu. Last week, once again, a new plan was devised by the troika of the European Commission, the International Monetary Fund and the European Central Bank to keep Greece funded and avoid default in the short term, while its economy continues to plummet with no end in sight. After two rescue programmes, along with the largest debt restructuring in history, Greece remains insolvent and eurozone leaders refuse to recognise the need for a new approach. To achieve solvency, a serious debt-relief plan, conditional on structural reform, should be implemented to shift the emphasis from fiscal austerity to recovering economic growth and restoring market confidence. It is time for the IMF to assert a commanding role away from Eu

Britain should “pare down” it relationship with the European Union then put it to a vote in a referendum, the London Mayor Boris Johnson said today. Mr Johnson said returning Britain to a “single market” relationship with the European Union was both “essential and deliverable”, but said if voters did not like it they could opt to leave the EU altogether. He said it was “high time” that the British people had a chance to vote on the issue. In the next few weeks David Cameron is expected to set out his approach to Britain’s relationship with Europe in a key note speech. He is expected to announce a referendum on Britain’s relationship with Europe after the 2015 election but is resisting calls for an in/out question. But in remarks which are unlikely to be welcomed either in Downing Street or Brussels, Mr Johnson said he believed Britain should abandon the goal of being “at the heart of Europe” and instead demand a “common sense” relationship. This would see the UK involved in

(Reuters) - Swiss bank UBS AG is nearing a deal to settle claims some of its staff manipulated interest rates and could reach agreement with U.S. and British authorities by the end of the year, a person familiar with the matter said on Monday. UBS is expected to pay more than $450 million (279 million pounds) to settle claims some of its employees submitted false Libor rates, the New York Times reported earlier. Britain's Barclays Plc was fined $453 million in June for manipulating Libor benchmark interest rates, and remains the only bank to settle in the investigation, which led to the resignation of the bank's chairman and chief executive. U.S. and UK regulators, which released their settlements with Barclays at the same time, are working together on the UBS investigation and could release an agreement by the end of the year, although the timing could slip into next year,

All my life I've been a Europhile . My dad worked for a Belgian company. I was a high school exchange student to Switzerland in 1958. My first posting as a Foreign Service officer was as vice consul to Rotterdam . I lived in Brussels for five years in the 1970s as head of Scott Paper Company's European marketing operations. I take my family to Europe frequently and maintain a wide range of work and other activities there. Through all the vicissitudes of mid-night negotiations, I admired the dedication and vision of the negotiators who were building the European Union . I believed in the vision of a united Europe and welcomed the advent of the Euro as a major step along the way. When the recent crisis first broke three years ago, I welcomed it, thinking that surely it would be a catalyst for Europe to move to full financial integration and to greater political integration on the way toward realizing the vision of a truly united Europe. I was wrong, and I have come to real

Italian Prime Minister Mario Monti has walked away from negotiations with Italy's labor unions and announced that he is going to move ahead with reforming the country's notorious employment laws—with or without union consent. If Rome is spared the fate that recently befell Athens, mark this as the week the turnaround began. Italy's labor laws are some of the most restrictive in the Western world. The totemic Article 18 all but bans companies with more than 15 employees from involuntarily dismissing workers, regardless of the severance offered. Mr. Monti has proposed replacing this job-for-life scheme with a generous system of guaranteed severance when employees are dismissed for "economic reasons." In most of the free world, this would count as a useful, albeit mild, reform. Among other weaknesses, the new law would not affect a worker's right to challenge his dismissal in court when fired for disciplinary reasons—an unreciprocated gift to the unions.