The Digital Single Market strategy was launched with great fanfare last year with the aim of creating an online consumer market of over 500 million people and to give encouragement to the growth of European digital companies large enough to compete with the Googles and the Alibabas. The implicit trade-off in this agenda was that the interests of cross-border consumers and companies should be prioritised over businesses using national, more traditional business models. Developments this week suggest that this trade-off is no longer at the heart of the EU approach.
So the European Parliament’s view on the so-called EU-US Privacy Shield has landed. This is sensitive territory and the Commission and industry feared that even this non-binding resolution could have political impact and a potential knock-on effect if it were too critical. As it turns out, they were worried unnecessarily.
The European political establishment breathed a sigh of relief when the former Austrian Green leader Alexander Van Der Bellen won that country’s Presidential election by a razor-thin 0.7% margin a couple of days ago. Although Van Der Bellen is himself an outsider, he was more palatable to the mainstream, and his victory prevented FPO candidate Norbert Hofer from becoming the EU’s first far-right head of state.
Another week, another banking union/disunion issue. A draft set of European Commission proposals in the public domain this week seem to confirm the intent not to seek explicit EU harmonisation of minimum eligible liability requirements (so-called MREL) for bail in. This is an EU counterpart for TLAC, although applicable to all banks, not just SIFIs, and accounted in different ways and on different scope.
Right after John Kerry met with the CEO’s of Europe’s largest banks last week in London, HSBC’s chief legal officer reflected the general mood among UK banks when he said that his firm had “no intention of doing any new business involving Iran”. Given that this was the point of the meeting, one wonders why Kerry bothered showing up.
On Monday 9 May 2016 at 23:10 something remarkable happened. For the first time since 1882 coal made no contribution to UK electricity generation. At the same moment, Germany, Europe’s leader in renewable energy and home to the Energiewende (‘energy transition’), was generating three quarters of its electricity from a mixture of hard coal and even more polluting lignite (see Figure 1).
Fitch Ratings this week concluded that Brexit would increase political risk across Europe by boosting populist political parties, including many who are Eurosceptic, and by changing the political centre of gravity in the EU. There is not much to disagree with in that. As the referendum debate grinds on, however, it is also worth considering some of the ways in which the political risks for the rest of Europe will feed back and impact on the UK following a vote for Brexit.
So Dilma Rousseff is gone, at least for now. Over the next 180 days, Vice President Michel Temer will set out an economic agenda focused on the consolidation of public accounts and on business-friendly market reforms, while Dilma’s impeachment trial continues. This begs the question of how much Temer can realistically hope to achieve in the 180 days he has in power. The answer depends on what he and his allies see as being really at stake.
The IMF’s ‘Article IV’ assessment of the UK economy is dominating headlines for its roundly negative assessment of a vote to leave the EU - but beyond its Brexit judgments, the report is a telling insight into the IMF’s current outlook on some key policy questions.
The EU’s Competition Commissioner Magrethe Vestager announced yesterday she had blocked the proposed merger of Hutchison’s Three and Telefonica’s O2 in the UK. This marks a clear departure from the policy of her predecessor, Joaquin Almunia, who had approved a series of mergers which reduced the number of mobile competitors in national markets from four to three. In contrast, Vestager asserted that only having three mobile competitors in the British market would have had a negative impact both on investment in mast infrastructure and on retail prices for British consumers.