https://www.scmp.com/rss/265815/feed The euro zone crisis was triggered in 2009 when Greece's debts, left by its previous government, reached a record 300 billion euros, leaving the southern European economy with debt levels more than four times higher as a proportion of gross domestic product than the official euro zone cap of 60 per cent of GDP. Since the original problems were uncovered, Greece has been bailed out twice, and lenders have also had to rescue Ireland and Portugal. In the latter half of 2012. Cyprus also required a... en https://assets.i-scmp.com/static/img/icons/scmp-meta-1200x630.png https://www.scmp.com Bloomberg Bloomberg Malta’s “golden passports” programme for wealthy investors violates European Union rules on citizenship, the bloc’s top court ruled in a case that could have transformed the EU into a haven for affluent foreigners at a time when President Donald Trump wants to entice them to the US. The tiny island nation’s offer, which granted nationality to investors, among them Russian and Middle Eastern tycoons, celebrities and sports stars, contravenes EU law, the European Court of Justice ruled on... https://www.scmp.com/news/world/europe/article/3308382/maltas-golden-passports-ruled-illegal-eu-court-trump-woos-wealthy-investors-us?utm_source=rss_feed https://www.scmp.com/news/world/europe/article/3308382/maltas-golden-passports-ruled-illegal-eu-court-trump-woos-wealthy-investors-us?utm_source=rss_feed Tue, 29 Apr 2025 09:59:08 +0000 Since the global financial crisis of 2007-08, private credit – nonbank lending from institutional investors direct to businesses or individuals – has gone from strength to strength. In Europe and the United States, it now forms an established part of the corporate financing firmament as banks pull back from traditional lending. According to Macquarie Asset Management in November 2023, the global private credit market is now estimated at around US$1.2 trillion, with annual fundraising growing... https://www.scmp.com/special-reports/article/3302662/no-longer-niche-how-private-credit-transforming-apac-lending-landscape?utm_source=rss_feed https://www.scmp.com/special-reports/article/3302662/no-longer-niche-how-private-credit-transforming-apac-lending-landscape?utm_source=rss_feed Mon, 17 Mar 2025 09:00:17 +0000 China concluded its third plenum last month, which came off the back of lower-than-expected second-quarter GDP growth of 4.7 per cent. The outcome of the plenary session was a disappointment, once again, for Western analysts who seem bent on pressing China for more stimulus to boost its gross domestic product. Economic development is a tenet of China’s social contract. President Xi Jinping warned, in his new year speech, that “some enterprises had a tough time”, and “some people had difficulty... https://www.scmp.com/opinion/china-opinion/article/3275350/why-chinas-gdp-growth-needs-be-read-against-its-social-contract?utm_source=rss_feed https://www.scmp.com/opinion/china-opinion/article/3275350/why-chinas-gdp-growth-needs-be-read-against-its-social-contract?utm_source=rss_feed Sun, 25 Aug 2024 21:30:14 +0000 China has been one of Europe’s “incredibly important” investors and the two economies should continue to work together on finance despite geopolitical tensions, according to the chief financial officer of the euro zone’s permanent rescue fund. Kalin Anev Janse, CFO of the European Stability Mechanism (ESM), an intergovernmental fund, said Europe “will not forget” the contributions made by Asia, including China, to help the continent overcome the financial crisis more than a decade ago. Anev... https://www.scmp.com/news/china/diplomacy/article/3243939/europe-will-not-forget-euro-zone-rescue-fund-official-recalls-asias-help-2010s-financial-crisis?utm_source=rss_feed https://www.scmp.com/news/china/diplomacy/article/3243939/europe-will-not-forget-euro-zone-rescue-fund-official-recalls-asias-help-2010s-financial-crisis?utm_source=rss_feed Tue, 05 Dec 2023 14:30:10 +0000 Giorgio Napolitano, who died on Friday aged 98, was one of modern Italy’s most important presidents as he steered the country away from the brink of default during Europe’s debt crisis and later out of political paralysis. A career politician who joined the Italian Communist Party (PCI) in 1945, the mild-mannered, bespectacled Napolitano was picked by parliament to become Italy’s 11th president in 2006 and re-elected for a then-unprecedented second term seven years later. He stepped down in... https://www.scmp.com/news/world/europe/article/3235553/giorgio-napolitano-president-who-steered-italy-through-europes-debt-crisis-dies-98?utm_source=rss_feed https://www.scmp.com/news/world/europe/article/3235553/giorgio-napolitano-president-who-steered-italy-through-europes-debt-crisis-dies-98?utm_source=rss_feed Fri, 22 Sep 2023 19:14:58 +0000 The head of the European Parliament on Thursday vowed “a wide-ranging reform package” to clean up the legislature amid a corruption scandal linked to World Cup host Qatar. The parliament’s speaker, Roberta Metsola, said the plan “will include a strengthening of the parliament’s whistle-blower protection systems, a ban on all unofficial friendship groups, a review of the policing of our code of conduct rules, and a complete and in-depth look at how we interact with third countries”. She said she... https://www.scmp.com/news/world/europe/article/3203476/eu-parliament-chief-vows-big-reforms-amid-corruption-scandal?utm_source=rss_feed https://www.scmp.com/news/world/europe/article/3203476/eu-parliament-chief-vows-big-reforms-amid-corruption-scandal?utm_source=rss_feed Thu, 15 Dec 2022 13:33:52 +0000 Who would blame anyone for thinking that Europe is finished? Russian President Vladimir Putin might have achieved his aim to crack European unity, with the economy suffering on a number of fronts. The war in Ukraine, the energy crisis and political turmoil in Italy are throwing the European Union into chaos and it’s no surprise that the euro is in deep trouble. The recent test below parity for the euro against the US dollar is the least of its problems and could mark the first step towards the... https://www.scmp.com/comment/opinion/article/3186443/ukraine-war-energy-crisis-and-italys-political-turmoil-call-euros?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3186443/ukraine-war-energy-crisis-and-italys-political-turmoil-call-euros?utm_source=rss_feed Mon, 25 Jul 2022 19:30:23 +0000 Growth in home prices in the United Kingdom has trailed peers in the European Union (EU), but has provided Hongkongers buying property in London and other British cities more value for their money. According to a study published by Knight Frank recently, since June 23, 2016 – when 52 per cent of British voters shocked the world by deciding that London should go it alone – house prices across EU member states have risen by 39.3 per cent on average, with almost half the rate of growth occurring in... https://www.scmp.com/business/article/3182825/boost-hong-kong-buyers-uk-home-prices-have-trailed-those-eu-states-six?utm_source=rss_feed https://www.scmp.com/business/article/3182825/boost-hong-kong-buyers-uk-home-prices-have-trailed-those-eu-states-six?utm_source=rss_feed Thu, 23 Jun 2022 11:34:04 +0000 As German Chancellor Angela Merkel prepares to step aside after 16 years in office, Germany, Europe and the world are entering a new, more uncertain phase – one that will be significantly shaped by her legacy. But which one will it be? Arguably Merkel came to the euro’s rescue in the wake of the 2008 crash and the European debt crisis. But she leaves office with Europe looking less united, facing economic uncertainties and showing greater rigidity towards the outside world. With Europe’s... https://www.scmp.com/comment/opinion/article/3139815/angela-merkel-prepares-bow-out-who-will-hold-euro-zone-together?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3139815/angela-merkel-prepares-bow-out-who-will-hold-euro-zone-together?utm_source=rss_feed Mon, 05 Jul 2021 14:00:33 +0000 We criticise more than praise. Good news is no news. Fiery or flowery rhetoric cannot disguise the fact that most politicians have not delivered what they promised. Hence, we should praise those leaders who look dull but have performed spectacularly.  Angela Merkel is due to step down soon as chancellor of Germany after 16 years at the helm. If she leaves office at the end of this year, she will have served in that position longer than her mentor, Helmut Kohl, who served from 1982 to 1998. Kohl... https://www.scmp.com/comment/opinion/article/3137815/angela-merkel-praise-germanys-no-nonsense-leader?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3137815/angela-merkel-praise-germanys-no-nonsense-leader?utm_source=rss_feed Fri, 18 Jun 2021 18:30:00 +0000 On the face of it, the mounting concern over the financial health of China Huarong Asset Management, a distressed debt manager majority-owned by China’s finance ministry, bears little resemblance to the panic that engulfed financial markets a decade ago when Greece’s debt default and possible exit from the euro zone fanned fears about the stability and integrity of Europe’s monetary union. While the euro zone faced an existential crisis in 2011-12, exacerbated by full-blown sovereign and bank... https://www.scmp.com/comment/opinion/article/3132435/why-uncertainty-over-china-huarong-has-echoes-europes-debt-crisis?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3132435/why-uncertainty-over-china-huarong-has-echoes-europes-debt-crisis?utm_source=rss_feed Thu, 06 May 2021 06:30:17 +0000 Given the way the euro has been rallying in the foreign exchange markets over the past three months, you would be forgiven for thinking the currency has become a beacon of stability in uncertain times. You couldn’t be further from the truth. The rebound in the euro is simply the flip side of the US dollar being undermined by growing uncertainty about the upcoming US presidential election in November and how the US authorities are coping with the coronavirus crisis. Global investors are simply... https://www.scmp.com/comment/opinion/article/3098555/european-economies-mired-recession-euro-living-borrowed-time?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3098555/european-economies-mired-recession-euro-living-borrowed-time?utm_source=rss_feed Mon, 24 Aug 2020 10:45:15 +0000 It should have been a productive year for relations between Asia’s biggest economy and Europe. China had secured an interim truce in its protracted trade war with the United States in January. And it had turned its focus back to the European Union, seeking to reassure Brussels that its interests would not be damaged by the trade deal with Washington. EU leaders meeting in Brussels in December had discussed an ambitious agenda on climate change and the economy, calling for cooperation from... https://www.scmp.com/news/china/diplomacy/article/3077389/coronavirus-crisis-puts-chinas-year-europe-hold-amid-growing?utm_source=rss_feed https://www.scmp.com/news/china/diplomacy/article/3077389/coronavirus-crisis-puts-chinas-year-europe-hold-amid-growing?utm_source=rss_feed Sat, 28 Mar 2020 10:00:13 +0000 It would be difficult to match the eloquence of columnist Roger Cohen’s moving “Requiem for a Dream” published in The New York Times last month. The apparent end of that dream signalled by Britain’s departure from the European Union is something to be mourned in Asia as well as Europe. This is true in the economic and monetary as much as in the political sense – perhaps even more so. There was a time not so very long ago when the EU was seen as model for future East Asian economic integration... https://www.scmp.com/comment/opinion/article/3049543/why-asia-too-mourns-brexit-and-end-european-dream?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3049543/why-asia-too-mourns-brexit-and-end-european-dream?utm_source=rss_feed Sun, 09 Feb 2020 17:00:14 +0000 Portugal’s incumbent Prime Minister Antonio Costa’s Socialists won a general election on Sunday after presiding over a period of solid economic growth following years of austerity, near total results showed. The Socialist Party (PS) took 37 per cent of the vote, followed by the centre-right Social Democrats (PSD) with 28 per cent, with 98 per cent of constituencies counted, according to the interior ministry. That means the PS, which has governed for the past four years with the support of two... https://www.scmp.com/news/world/europe/article/3031793/portugals-socialists-led-incumbent-prime-minister-antonio-costa?utm_source=rss_feed https://www.scmp.com/news/world/europe/article/3031793/portugals-socialists-led-incumbent-prime-minister-antonio-costa?utm_source=rss_feed Sun, 06 Oct 2019 23:32:03 +0000 China pledged to respect EU rules and standards as the summit with Central and Eastern European countries concluded on Friday, with Premier Li Keqiang praising Greece for officially joining the group – making it “17+1”. Li said the growing platform was an important “supplement” to Beijing’s relationship with the European Union, on the heels of the EU-China summit in Brussels on Tuesday. The EU is China’s largest trading partner, with both sides trading more than €1.5 billion (US$1.9 million)... https://www.scmp.com/news/china/diplomacy/article/3005983/china-says-it-respects-eu-laws-and-standards-161-becomes-171?utm_source=rss_feed https://www.scmp.com/news/china/diplomacy/article/3005983/china-says-it-respects-eu-laws-and-standards-161-becomes-171?utm_source=rss_feed Fri, 12 Apr 2019 15:34:07 +0000 A recession in Europe would hit demand for Chinese exports and could lead to a further narrowing of China’s trade balance, analysts have said. Existing concerns that Europe was on the verge of a recession were stoked on Friday by new data which shows the bloc’s manufacturing sector is struggling. The euro zone purchasing managers index (PMI) showed that manufacturing contracted in March, at a rate not seen in nearly six years. Along with the already weak performances of major European economies... https://www.scmp.com/economy/china-economy/article/3003362/chinas-fragile-trade-economy-could-be-risk-eu-outlook-goes?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3003362/chinas-fragile-trade-economy-could-be-risk-eu-outlook-goes?utm_source=rss_feed Tue, 26 Mar 2019 11:16:15 +0000 There is no shortage of economic indicators pointing to continued weakness in China and the euro zone. On Monday, the publication of data on Chinese car sales – which in 2018 suffered their first annual decline since the early 1990s – showed that passenger vehicle wholesale sales fell by almost 18 per cent year on year in January, the sharpest drop since the market began to contract last July. The bleak figures came on the heels of data showing that producer prices slowed in January for the... https://www.scmp.com/comment/insight-opinion/united-states/article/2187059/economies-china-and-europe-are-faltering-where?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/united-states/article/2187059/economies-china-and-europe-are-faltering-where?utm_source=rss_feed Thu, 21 Feb 2019 15:03:38 +0000 “The centre cannot hold”, a line from the W.B. Yeats poem, The Second Coming, has become a classic op-ed aphorism in an epoch of ascending demagogy. To extend it beyond domestic politics, the line could be used on the European Union. Indeed, in 2019, the EU may not hold.  Possible future scenarios about the EU abound, yet it will hardly take a Cassandra to call out the ominous omens. By mid-spring, Brexit – orderly or disorderly – will shave 15 per cent off the EU’s gross domestic product. If... https://www.scmp.com/comment/insight-opinion/world/article/2183246/why-brexit-may-be-least-eus-worries?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/world/article/2183246/why-brexit-may-be-least-eus-worries?utm_source=rss_feed Wed, 23 Jan 2019 12:00:45 +0000 This year is turning out to be an unusual one for investment. Despite no major economic or financial stress in the advanced economies, cash outperformed most other asset classes. The valuation “de-rating” in global equities so far this year has been as severe as 2000 and 2008, the last two bear markets, even as corporate earnings continue to be solid. Asia investors may feel defeated and deflated, begging the question of how economic fundamentals could turn out in 2019. Developed economies’... https://www.scmp.com/comment/insight-opinion/hong-kong/article/2174501/2018-cash-outperformed-most-other-asset-classes?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/hong-kong/article/2174501/2018-cash-outperformed-most-other-asset-classes?utm_source=rss_feed Fri, 23 Nov 2018 02:30:45 +0000 Global markets seem to have sunk into a collective amnesia over problems which have dogged the euro and European financial stability for years. The single currency might have plateaued out around the US$1.20 mark versus the US dollar, but the euro’s failure to make stronger gains out of the dollar’s recent troubles reveal underlying relative weakness. The euro’s inability to win over investors in a bigger way will come back to haunt it.  Europe’s economy seems to have recovered from the dark... https://www.scmp.com/comment/insight-opinion/article/2143962/europes-financial-position-still-perilous-years-after-debt?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/article/2143962/europes-financial-position-still-perilous-years-after-debt?utm_source=rss_feed Mon, 30 Apr 2018 03:39:17 +0000 German Finance Minister Wolfgang Schaeuble, the warhorse of the debt crisis, attends his final meeting of euro zone ministers on Monday as variously the most loathed or loved figures in EU politics. Schaeuble, 75, is the acerbic architect of euro zone austerity, who over eight years of financial turmoil in Europe imposed his tough-love vision of how to run an economy with hard-up and often desperate partners such as Ireland, Portugal and most dramatically, Greece. One of Germany’s most popular... https://www.scmp.com/news/world/europe/article/2114412/wolfgang-schaeuble-warhorse-wheelchair-who-relished-being-europes?utm_source=rss_feed https://www.scmp.com/news/world/europe/article/2114412/wolfgang-schaeuble-warhorse-wheelchair-who-relished-being-europes?utm_source=rss_feed Sun, 08 Oct 2017 05:48:22 +0000 It is impossible to accurately assess the fragility of the financial system during any given period. The history of financial crises suggests that the risks are the greatest after a long period of optimism. The rapid expansion of credit relative to income or gross domestic product means that banks have taken on more risk. This accurately describes what happened during the 2009 financial crash and what China is trying to avoid. The entire behavioural and economic definitions of a bank run,... https://www.scmp.com/business/banking-finance/article/2098433/failing-banks-must-be-allowed-fold-markets-can-regain?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/2098433/failing-banks-must-be-allowed-fold-markets-can-regain?utm_source=rss_feed Thu, 15 Jun 2017 05:23:38 +0000 You really wouldn’t want to be in the European Central Bank’s shoes right now. It is stepping through a minefield, tiptoeing between perilous politics, conflicting economic signals and deep divisions about where euro zone monetary policy should be heading. There is little consensus other than for the ECB to play safe and stick policy in neutral gear over the next six months, while Europe tussles with critical national elections in Germany, France and Holland, which could carry grave risks for... https://www.scmp.com/business/global-economy/article/2078371/ecb-faces-daunting-uphill-battle-raise-interest-rates?utm_source=rss_feed https://www.scmp.com/business/global-economy/article/2078371/ecb-faces-daunting-uphill-battle-raise-interest-rates?utm_source=rss_feed Mon, 13 Mar 2017 06:45:54 +0000 Doomsday may be creeping up again, but you would never guess so considering the seemingly endless appetite for global risk assets right now. Europe is heading into a perfect summer storm, but global investors remain in party spirits. It is unlikely to last too much longer. The writing is on the wall for the euro in the next few months and so too is the eight-year bull market for global equities and credit. Europe is facing up to a horror show of risk in the next few months and European unity and... https://www.scmp.com/business/global-economy/article/2070333/germanys-deutsche-mark-could-make-surprise-return-currency?utm_source=rss_feed https://www.scmp.com/business/global-economy/article/2070333/germanys-deutsche-mark-could-make-surprise-return-currency?utm_source=rss_feed Mon, 13 Feb 2017 02:19:01 +0000 For the next two months, all eyes will be on the US presidential election. While Hillary Clinton, the candidate of the Democratic Party, is expected to win the contest, which takes place on November 8, her Republican opponent, the unabashedly populist Donald Trump, is only six points behind his adversary and could still win the election. Yet while US politics will dominate the headlines for the next 10 weeks, investors would be well advised to pay close attention to the other big political risk... https://www.scmp.com/business/global-economy/article/2012238/never-mind-trump-merkels-exit-big-political-risk?utm_source=rss_feed https://www.scmp.com/business/global-economy/article/2012238/never-mind-trump-merkels-exit-big-political-risk?utm_source=rss_feed Thu, 01 Sep 2016 08:45:30 +0000 For once, the European Central Bank has been doing the right thing. Regularly blamed for not doing enough, or being too late with policy solutions, the ECB’s monetary super-stimulus is finally paying dividends. Euro-zone growth is outpacing its Group of Seven (G7) partners and the bloc’s unemployment rate has fallen dramatically. Understandably it is building hopes for sustainable recovery ahead. Things are clearly looking up after years of economic poor health and crisis in Europe. Thanks to... https://www.scmp.com/business/global-economy/article/1942619/why-europes-success-could-prove-be-its-undoing?utm_source=rss_feed https://www.scmp.com/business/global-economy/article/1942619/why-europes-success-could-prove-be-its-undoing?utm_source=rss_feed Mon, 09 May 2016 08:21:28 +0000 In Europe spring is in the air and even in the downtrodden euro zone there are some brighter signs of life. The euro zone is not out of the woods yet and still has a very long way to go before sustainable recovery is safely secured. But at least there is some encouraging evidence that the European Central Bank’s economic tonic is starting to work. All is not lost just yet. The euro zone had a very bad time of it during the 2007-2009 global crash and then put global markets through the wringer... https://www.scmp.com/business/article/1933433/encouraging-signs-economic-life-euro-zone?utm_source=rss_feed https://www.scmp.com/business/article/1933433/encouraging-signs-economic-life-euro-zone?utm_source=rss_feed Mon, 04 Apr 2016 01:13:10 +0000 Things seem to have gone very quiet around the euro currency in recent months. It appears to have found some much needed stability after years of extreme market mayhem with its very survival on the line at times as the euro zone has lurched from one crisis to another. This new-found stability is deceptive. The currency is not out of the woods in terms of deep-rooted economic and political problems, which threaten to resurface as the euro zone stands at the threshold of another global economic... https://www.scmp.com/business/global-economy/article/1907973/it-going-be-game-over-euro-year?utm_source=rss_feed https://www.scmp.com/business/global-economy/article/1907973/it-going-be-game-over-euro-year?utm_source=rss_feed Sun, 31 Jan 2016 10:43:59 +0000 The head of the euro zone’s bailout programme is planning to issue non-euro denominated bonds, including yuan bonds, for the first time, as part of a multi-decade plan to help stricken member states back on their feet. Klaus Regling, the soft-spoken managing director of the European Stability Mechanism said he wanted to broaden the international interest in the bonds; a roll over and repayment programme scheduled to run until 2056. “We will probably start with one (currency). It may be the (US)... https://www.scmp.com/business/companies/article/1881726/eu-planning-issue-non-euro-even-yuan-bond-aid-member-states?utm_source=rss_feed https://www.scmp.com/business/companies/article/1881726/eu-planning-issue-non-euro-even-yuan-bond-aid-member-states?utm_source=rss_feed Sun, 22 Nov 2015 05:15:00 +0000 “The European Union is not going very well,” admitted Jean-Claude Juncker, President of the European Commission on October 22, although you might not know it judging by the scale of investor demand for euro zone members’ government paper that has led to negative yields on many of the member nations’ 2-year sovereign bonds. That said, markets have reacted rationally, understanding the European Central Bank’s (ECB) efforts to ease the euro zone’s economic problems, including a possible expansion... https://www.scmp.com/business/markets/article/1873080/anti-austerity-populism-may-be-rise-euro-zone?utm_source=rss_feed https://www.scmp.com/business/markets/article/1873080/anti-austerity-populism-may-be-rise-euro-zone?utm_source=rss_feed Sun, 01 Nov 2015 04:00:30 +0000 A group of Greek lawmakers opposed to the country’s bailout programme abandoned the governing party, Syriza, as Prime Minister Alexis Tsipras moved to force an early election to shore up his position. The lawmakers, whose names were read out on Friday by a deputy parliament speaker on television from Athens, will be called "Popular Unity" and led by former Energy Minister Panagiotis Lafazanis, the group said. Tsipras stepped down as prime minister on Thursday evening, triggering a process that... https://www.scmp.com/news/world/article/1851437/greek-syriza-partys-far-left-faction-breaks-away-form-new-party-25?utm_source=rss_feed https://www.scmp.com/news/world/article/1851437/greek-syriza-partys-far-left-faction-breaks-away-form-new-party-25?utm_source=rss_feed Fri, 21 Aug 2015 08:00:30 +0000 Greece and its international lenders want the country's struggling banks to be recapitalised by the end of the year, Greece's finance minister said, a move that would avoid new rules forcing large depositors to pay for some of it. Euclid Tsakalotos said that both sides discussing a new bailout for Greece were on the same page regarding the speed needed for recapitalisation. "We discussed the recapitalisation issue of Greek banks. [Creditors] want, as do we, to complete the process soon … by the... https://www.scmp.com/business/global-economy/article/1847730/greece-lenders-see-need-recapitalise-banks-year-end?utm_source=rss_feed https://www.scmp.com/business/global-economy/article/1847730/greece-lenders-see-need-recapitalise-banks-year-end?utm_source=rss_feed Sun, 09 Aug 2015 13:00:45 +0000 Greek Prime Minister Alexis Tsipras contained a rebellion in his left-wing Syriza party to win parliamentary approval on Thursday for a second package of reforms required to start talks on a financial rescue deal. A first set of reforms that focused largely on tax hikes and budget discipline triggered a rebellion in Syriza last week and passed only thanks to votes from pro-EU opposition parties. The bill that lawmakers voted on early Thursday covered rules for dealing with failed banks and... https://www.scmp.com/news/world/article/1842996/greek-pm-alexis-tsipras-keeps-lid-party-rebellion-pass-bailout-vote?utm_source=rss_feed https://www.scmp.com/news/world/article/1842996/greek-pm-alexis-tsipras-keeps-lid-party-rebellion-pass-bailout-vote?utm_source=rss_feed Thu, 23 Jul 2015 03:00:15 +0000 Despite a bloated public sector and high government spending, Greece adopted the euro as its currency in 2001. In 2004, the Greek government admitted it had lied about its annual budget deficit to circumvent the criteria needed to join the euro zone. Greek debt continued to rise until the 2009 crisis erupted when the Greek budget deficit hit 12.9 per cent of its GDP — over four times the EU’s 3 per cent limit. Fast forward to today and Greek banks are on the brink of bankruptcy. These losses in... https://www.scmp.com/infographics/article/1841400/infographic-origin-greek-crisis?utm_source=rss_feed https://www.scmp.com/infographics/article/1841400/infographic-origin-greek-crisis?utm_source=rss_feed Mon, 20 Jul 2015 00:45:30 +0000 With each day, the likelihood is growing that Greece's financial catastrophe will force it out of the euro currency alliance and compel it to restore its old currency, the drachma. It won't be simple. Issuing a new national currency is a complex logistical task involving digital commands and manual labour. Greece would have to reprogram banks' computers to make the switch out of euros, the currency it's used since 2002. Then it would need to design, print and distribute new bills. That process... https://www.scmp.com/news/world/article/1835521/can-athens-make-drachma-way-out-euro-crisis?utm_source=rss_feed https://www.scmp.com/news/world/article/1835521/can-athens-make-drachma-way-out-euro-crisis?utm_source=rss_feed Thu, 09 Jul 2015 16:45:45 +0000 Greece yesterday promised it would start pension and tax reforms next week, as demanded by creditors, in return for a three-year euro-zone loan to drag its financial system back from the brink of collapse. "We propose to immediately implement a set of measures as early as the beginning of next week including tax reform-related measures [and] pension-related measures" if the loan from the European Stability Mechanism (ESM) was forthcoming, the finance ministry said in a letter to the euro-zone... https://www.scmp.com/news/world/article/1834942/greece-vows-pension-and-tax-reforms-next-week-return-three-year-emergency?utm_source=rss_feed https://www.scmp.com/news/world/article/1834942/greece-vows-pension-and-tax-reforms-next-week-return-three-year-emergency?utm_source=rss_feed Wed, 08 Jul 2015 16:30:45 +0000 Until not so long ago, governments and markets were in thrall to the International Monetary Fund. The IMF is one of the world's most powerful institutions and its word on global stabilisation efforts has generally been seen as sacrosanct and final. When economies hit hard times and sought the IMF's help, it was universally accepted for countries to take its tough monetary medicine without question. For Greece, it has been much too bitter a pill to swallow. As the Greek crisis has come to a head,... https://www.scmp.com/business/global-economy/article/1832723/imf-might-have-lost-its-policy-clout-over-greece?utm_source=rss_feed https://www.scmp.com/business/global-economy/article/1832723/imf-might-have-lost-its-policy-clout-over-greece?utm_source=rss_feed Sun, 05 Jul 2015 09:21:46 +0000 The International Monetary Fund delivered a stark warning of the huge financial hole facing Greece as angry and uncertain voters prepare for a referendum that could decide their country’s future in Europe. Days after Greece defaulted on part of its IMF debt, the Fund, part of the lenders’ “troika” behind successive international bailouts, said Greece needed an extra €50 billion over the next three years, including €36 billion from its European partners, to stay afloat. It also needed significant... https://www.scmp.com/news/world/article/1831895/imf-says-greece-needs-extra-50-billion-euros-funds-stay-afloat?utm_source=rss_feed https://www.scmp.com/news/world/article/1831895/imf-says-greece-needs-extra-50-billion-euros-funds-stay-afloat?utm_source=rss_feed Fri, 03 Jul 2015 01:00:30 +0000 European Commission President Jean-Claude Juncker made a last-minute offer to Athens in a bid to reach a bailout agreement before the deadline expires today, European Union and Greek government sources said. Under the offer, Prime Minister Alexis Tsipras would have to send written acceptance by today, in time for an emergency meeting of the Eurogroup of euro zone finance ministers to be held and agree to campaign in favour of the bailout in the planned July 5 referendum. However, there was... https://www.scmp.com/news/world/article/1829389/eus-juncker-makes-last-ditch-offer-greece-reach-bailout-agreement-sources?utm_source=rss_feed https://www.scmp.com/news/world/article/1829389/eus-juncker-makes-last-ditch-offer-greece-reach-bailout-agreement-sources?utm_source=rss_feed Tue, 30 Jun 2015 04:15:00 +0000 US stocks added to a global selloff on Monday as Greece veered toward a default on its debt, while the euro recovered from an early sharp loss to turn higher against the dollar. Greece will not pay a 1.6 billon euro loan instalment due the International Monetary Fund on Tuesday, a Greek government official told Reuters, while thousands rallied behind a ’No’ vote in a referendum called for next Sunday on the terms of an aid deal offered by Greece’s international creditors. Talks between Athens... https://www.scmp.com/business/markets/article/1829365/wall-street-joins-global-sell-greek-crisis?utm_source=rss_feed https://www.scmp.com/business/markets/article/1829365/wall-street-joins-global-sell-greek-crisis?utm_source=rss_feed Tue, 30 Jun 2015 00:15:45 +0000 With the Greek crisis playing out its last act of denouement, it raises key questions about the outlook for the euro-zone economy, the survival of the euro and the future viability of a united Europe. Grinding austerity policies, stagnant growth and the blight of high unemployment have deepened economic divisions, posing major dangers for European political cohesion ahead. Right now, the euro zone is like a zombie economy pumped full of monetary steroids. It is only thanks to zero interest rates... https://www.scmp.com/business/global-economy/article/1828219/policymakers-should-foster-closer-integration-euro-zone?utm_source=rss_feed https://www.scmp.com/business/global-economy/article/1828219/policymakers-should-foster-closer-integration-euro-zone?utm_source=rss_feed Sun, 28 Jun 2015 09:45:00 +0000 Long gone are the days when global financial markets used to quiver at the prospect of a major policy initiative by the Group of Seven. The group of nations consisting of the United States, Japan, Germany, France, Britain, Italy and Canada used to hold the markets in thrall in the 1980s and 1990s. It is a different matter today as supranational organisations seem to have lost their mettle. The Group of 20 and the European Union both had major get-togethers last week but there was no progress on... https://www.scmp.com/business/economy/article/1714021/why-g20-and-eu-lose-mettle-global-recovery?utm_source=rss_feed https://www.scmp.com/business/economy/article/1714021/why-g20-and-eu-lose-mettle-global-recovery?utm_source=rss_feed Sun, 15 Feb 2015 11:00:00 +0000 We need more money and soon, says Greece. We have no more to give, counters Germany. In a nutshell, that was pretty much the result of a tense meeting between the finance ministers of the two countries late last week. The two nations are far apart over Greece's debt financing after the electoral victory of Alexis Tsipras, the new prime minister, and Syriza, his left-wing, anti-austerity party. Perhaps the meeting, which did not even discuss Greece's massive national debt, could be called a... https://www.scmp.com/comment/insight-opinion/article/1707748/creditor-nations-must-give-greece-some-breathing-room?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/article/1707748/creditor-nations-must-give-greece-some-breathing-room?utm_source=rss_feed Sun, 08 Feb 2015 23:30:30 +0000 In Paris and Rome, it was sugar coated; in Berlin and Frankfurt unequivocal. But the message from European capitals to Greece's new leaders was the same at every stop on last week's tour - stick to your commitments. Prime Minister Alexis Tsipras will head to his first European summit on Thursday duly warned that it will be near impossible, as Athens wants, to rip up pledges made during the country's four-year international bailout. Tsipras and his aides were also advised to learn the ways of... https://www.scmp.com/news/world/article/1707609/greece-prime-minister-alexis-tsipras-unlikely-persuade-european-leaders?utm_source=rss_feed https://www.scmp.com/news/world/article/1707609/greece-prime-minister-alexis-tsipras-unlikely-persuade-european-leaders?utm_source=rss_feed Sun, 08 Feb 2015 22:30:00 +0000 Quantitative easing is the last chance for euro-zone policymakers to defeat deflation and put the economy back on the road to recovery. Macroscope, David Brown Business, January 26 I used to have the business back page to myself as a columnist when I contributed the daily Monitor column that ran there for many years. Now we have many more people contributing to it and quite a range of opinion. Among them David Brown has been notable recently for telling the European Central Bank that it should... https://www.scmp.com/comment/insight-opinion/article/1694238/drinking-kool-aid-stimulus-poison?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/article/1694238/drinking-kool-aid-stimulus-poison?utm_source=rss_feed Wed, 28 Jan 2015 09:45:00 +0000 After dragging its feet for the past five years, the European Central Bank has finally placed its ultimate policy bet with a government bond-buying programme designed to pump €1 trillion (HK$8.7 trillion) of new money into the deflated euro-zone economy. Quantitative easing has finally arrived in euro land. But it is far from certain that the ECB's cascade of cash can get the economy back on its feet. It is hard to shake off nagging doubts that it is all too little, too late to save the economy... https://www.scmp.com/business/economy/article/1691291/ecb-has-one-last-chance-save-euro-bond-purchases?utm_source=rss_feed https://www.scmp.com/business/economy/article/1691291/ecb-has-one-last-chance-save-euro-bond-purchases?utm_source=rss_feed Sun, 25 Jan 2015 10:00:00 +0000 Ever since the euro-zone crisis escalated dramatically in the autumn of 2011, financial markets have been clamouring for a programme of large-scale government bond purchases by the European Central Bank aimed at restoring confidence in Europe's ailing economy. After successive disappointments, the issue for investors is not whether the central bank has the gumption to act, but whether the deep disagreements among the 25 members of the ECB's governing council have caused irreparable damage to the... https://www.scmp.com/business/economy/article/1689391/euro-zone-political-divisions-undermine-ecb-policy-plans?utm_source=rss_feed https://www.scmp.com/business/economy/article/1689391/euro-zone-political-divisions-undermine-ecb-policy-plans?utm_source=rss_feed Thu, 22 Jan 2015 14:15:45 +0000 Investors continue to underestimate the determination of Mario Draghi, the president of the European Central Bank (ECB), to help shore up the euro zone's depressed economy. In July 2012, when financial markets feared that Europe's single-currency area might break apart, Draghi promised to do "whatever it takes to preserve the euro", which immediately resulted in a sharp fall in the bond yields of Spain and Italy as investors believed the ECB was willing to stand behind the debts of the euro... https://www.scmp.com/business/economy/article/1590030/eu-easing-under-draghinomics-pipedream?utm_source=rss_feed https://www.scmp.com/business/economy/article/1590030/eu-easing-under-draghinomics-pipedream?utm_source=rss_feed Thu, 11 Sep 2014 03:30:45 +0000 There are many casualties of the four-year-old crisis in the euro zone. Among the most conspicuous and troubling is the political will to implement much-needed fiscal and structural reforms aimed at raising the bloc's long-term growth rate and increasing competitiveness. Last weekend, trenchant criticism of Germany's austerity-focused policies by Arnaud Montebourg, France's outspoken former economy minister, triggered the resignation of the country's Socialist government, led by centrist premier... https://www.scmp.com/business/economy/article/1581392/europes-rapidly-unravelling-economic-reform-agenda?utm_source=rss_feed https://www.scmp.com/business/economy/article/1581392/europes-rapidly-unravelling-economic-reform-agenda?utm_source=rss_feed Thu, 28 Aug 2014 03:30:00 +0000