Ms May’s pledges to maintain a solid alliance with her European partners hardly match her open challenge to the EU. Conscious of the fact that any soft Brexit would entail concessions on open frontiers for people plus a humiliating acceptance of the Community acquis, she has crossed the Rubicon, severing links with the internal market and other EU disciplines.
In the aftermath of Mr Trump’s victory, stock markets surged, building on promises of strong stimuli and sizeable tax breaks. As time goes on, they are reappraising the short-term outlook, since fundamental changes may take more than one year to materialise. No wonder investors are turning cautious, cashing in on early gains.
Janet Yellen intends to hold firm against market pressure as her press conference showed yesterday. The 0.25% rise in federal funds was downgraded to a modest move, wholly anticipated by investors, while hinting at a moderate path in rate hikes over the next couple of years.
Most observers bet the Draghi would further extend its current asset purchase programme, shoring up confidence in the face of troubled times ahead. Some believed it might reduce the monthly volume, showing its intent to scale down little by little its massive balance sheet.
Referenda stand as a dangerous gamble nowadays. Only the Swiss can manage them with relative ease. Populism can boast of triggering another staggering crisis in Europe as voters rejected by a wide majority the Constitutional reform tabled by the Italian PM. Opposition to his initiative also came from fellow members of the Democratic Party, such as D’Alema, and respected politicians like Monti. Conceding defeat, Mr Renzi has resigned from office throwing the country into utter disarray.
Many take comfort from the prospect of higher inflation and rising interest rates driven by the fiscal stimulus the President-elect Trump promises to deliver. This will push the dollar up, endowing European exports with increased competitiveness. Yet the currency tailwind expectations might prove short lived as current debt levels curb any significant public deficit-led expansion.
It is too early to guess what kind of economic policy the Trump administration may deliver. The markets are crossing their fingers and praying the President-elect will ultimately hand over matters to an experienced team.
A real estate tycoon and reality showman will head the world’s most powerful nation, winning an astonishing victory grounded on outright lies and a shallow promise to make America great. His roguish conduct, threats and abuse towards Hillary Clinton, migrants, women, disabled persons and servicemen killed in action, did not deter voters from supporting him.
A Belgian region totalling no more than 3.5 million inhabitants has derailed European Union efforts to conclude a broad trade agreement with Canada. Wallonia’s unexpected rebellion will undoubtedly weigh on any future negotiation involving issues beyond the usual trade in goods, setting a nasty yardstick for the forthcoming Brexit talks.
The Italian banks are struggling for survival. And the prospects for some of the biggest German banks are also gloomy. But the authorities in both countries are reluctant to act quickly on the assumption that time may solve the problems.