Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: A bail-out for Greece is just the beginning
Desperate times; desperate measures. After months of costly delay, the eurozone has come up with an enormous package of support for Greece. By bringing in the IMF, at Germany’s behest, it has obtained some additional resources and a better programme. But is it going to work? Alas, I have huge doubts, the FT columnist writes.
Adam Tooze: The message from Berlin that Europe failed to grasp
Behind the difficulties of the past few months of the eurozone’s crisis lurk deeper changes in German government, writes Tooze, professor of history at Yale university. Though they have gone largely unnoticed by the outside world, these changes are rooted in recent German history and threaten to have profound implications for Europe.
John Plender: Uncovering public pension liabilities
In a financial world obsessed by sovereign debt problems, there is bound to be a closer focus on public sector pension liabilities and the hocus-pocus assumptions behind their valuation, the FT columnist writes. In the world of the New Normal, investing pension fund pots in risk assets is a risky punt in the US — while European liabilities are going unfunded.
Editorial Comment: Triple A decision
The European Central Bank is eating humble pie. After repeatedly denying that it would bend its rules to help Greece, the monetary authority has announced that it will waive credit rating requirements for Greek debt used as collateral in ECB liquidity operations. Humiliating for the central bank, but a wise volte-face.
Analysis: Italy — much to play for
In an attempt to put Europe’s most acute sovereign debt crisis into perspective, Italy’s finance minister Giulio Tremonti likes to argue that Greece’s economy is only as big as the northern Italian province of Verona. But as Greek contagion spreads, analysts fear the fate of the euro could be tested in Italy, the world’s seventh-largest economy.
Lex on UBS
Thank you fixed income, currencies and commodities, thank you. Given the long dark period of losses from which UBS is emerging, its better-than-trailed profit of SFr2.2bn for the first quarter is a step in the right direction. However, the bank must take care to avoid tripping up on its own internal imbalances.
The Short View: European M&A
For those companies considering big investments or acquisitions in the eurozone, there is a greater incentive than ever to delay, the FT’s Aline van Duyn argues. First is the potential for further currency declines after the euro’s fall against the dollar. Second is the financing risk weighing on corporate bonds after the sovereign crisis.
John Gapper’s blog: The New York Times gets down and dirty
There is nothing quite so entertaining – or so illogical these days – than an old-fashioned newspaper war such as the one that Rupert Murdoch’s Wall Street Journal is picking with the New York Times on the paper’s home turf, the FT columnist says.
Martin Wolf’s Exchange: Must large capital inflows always end in crisis?
Is it possible for countries to accept large net inflows of capital from abroad, without ending up in crisis? If not, how do we manage a world of capital mobility? This may seem a rather abstract problem, the FT columnist says. But I find it among the most important of all challenges confronting the world economy.