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Why Clinton will win

by John Kornblum in Berlin | Thu 28 Jul 2016

John Kornblum, a long-time US state department official, former US ambassador to Germany, and a member of the OMFIF advisory board, gave an interview to Die Welt, the daily German newspaper (Andrea Seibel), published on 26 July. In the interview he discusses the election prospects of Donald Trump and Hillary Clinton, and states his belief that Clinton will become the first female American president.

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Erdogan's 'gift from God'

by David Tonge in Istanbul | Wed 27 Jul 2016

The impact of Turkey's failed military coup may be greater at home than abroad. Of the external factors setting limits on Turkey’s policies, its ties with the US and EU may be weakened, relations with the IMF are unlikely substantially to be changed, while those with Russia seem set to improve. President Recep Tayyip Erdogan has long been pressing to amend the constitution to reinforce his powers. The coup attempt, which he has called ‘a gift from God’, has given him the chance of carrying out that aim.

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A chance for Chancellor Hammond

by Brian Reading | Wed 27 Jul 2016

Rising demand and falling supply explain Britain’s housing crisis – a blight on social mobility, labour market flexibility and growth, not just for now but for generations. If the UK wishes to profit from the new-found opportunities following last month’s vote to leave the European Union, then tackling Britain’s deeply detrimental housing imbalances should be high on the list of the new UK government’s priorities.

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Threat to debt sustainability

by John (Iannis) Mourmouras | Tue 26 Jul 2016

Political risks have increased across the euro area, posing a challenge to the implementation of fiscal and structural reforms. Rising political uncertainty and increasing support for populist political parties with eurosceptic credentials contribute to risks for debt sustainability. Across the whole of Europe the biggest political risk is the UK decision to quit the European Union: a shock to the institutions and norms that underpin markets. This time we face the threat of political rather than financial contagion.

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Angela May and Theresa Merkel

by David Marsh | Mon 25 Jul 2016

We know the name of Europe’s crisis control tandem: Angela May and Theresa Merkel. The similarities between the German chancellor and British prime minister are evident: born in the mid-1950s; no-nonsense, get-things-done conservatives; clergymen’s daughters; childless, with behind-the-scenes husbands; excel at ejecting troublesome male rivals. They established a good rapport in Berlin last week. Angela (Merkel) told Theresa (May) that the UK could take time over opening European Union divorce proceedings.

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Shaking faith in democracy

by Ben Shenglin in Beijing | Thu 21 Jul 2016

The UK departure from the EU has been guided by the conventional wisdom that democracy, ultimately expressed through a referendum, is a good and effective system for governance. Britain is held out as the pioneer and standard-bearer of western democracy; the EU vote was supposed to show how a democratic system functions. However, ‘Brexit’ is likely to wreak irreversible damage to Britain and the world. So, as an important by-product, the outcome will shake popular faith in the ‘sacred’ system of democracy.

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Britain’s timetable for regaining control

by John Redwood | Wed 20 Jul 2016

European Union leaders are urging Prime Minister Theresa May to speed up the UK’s plans for exit. I agree. It is in the EU and UK's interest to sort this out quickly. It need not be a difficult negotiation. Many people seem to think that the UK is a weak petitioner, and that we have to be very careful in case we are expelled from the so-called single market. Many observers talk of bartering free movement and payments against some kind of maintained membership of the EU market. This is misinformation. The facts are very different.

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New global Atlantic in the making

by John Kornblum in Berlin | Tue 19 Jul 2016

British exit from the European Union provides Europe with what it needs most: a good shaking-up. The same goes for America. The EU will continue to exist. There’s even a chance that 'Brexit' could turn out to everyone’s advantage – Europe, Britain and America. We should seek guidance from Tweedledee in Lewis Carroll’s Through the Looking Glass. ‘Contrariwise, if it was so, it might be; and if it were so, it would be; but as it isn't, it ain't. That's logic.' Whatever happens will be a logical outcome of facts, not of illusions.

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Regime change from ‘new narrative’

by David Marsh | Mon 18 Jul 2016

The monetary about-face by James Bullard, the hawk-turned-dove St. Louis Federal Reserve Bank president, has wide implications for central bankers. His ‘new narrative’, elaborated at an OMFIF meeting in St. Louis, could shake up how the Fed views the world, reflecting deep-seated changes in the functioning of money and economics. His shift reflects intensive discussions within the St. Louis Fed about what appears to be a semi-permanent transition to very low real interest rates on government bonds around the world.

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Seizing opportunity from EU crisis

by Ernst Welteke in Frankfurt | Mon 18 Jul 2016

With his ill-considered referendum on EU membership, David Cameron played Russian roulette – and lost. But the list of losers extends much wider. Underlined by Thursday’s renewed terrorist atrocity in France and the attempted Turkish military coup, Europe faces a rising tide of challenges on many fronts. The remaining 27 EU members must treat the referendum result as a wake-up call for Europe-wide renewal, with the aim of improving the EU’s content, institutions and transparency in all its fields of action.

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