Comment, analysis and other offerings from Monday’s FT,
Wolfgang Münchau: The eurozone’s tragic small-country mindset
The European Union is a tyranny of small countries, and this has served it well. But the small-country syndrome is counterproductive when it comes to macroeconomics, writes the FT columnist.
David Rothkopf: The all-too-real phantom balance sheet
Unlike the official balance sheet and the off-balance sheet-balance sheet, which would count up legally contracted liabilities, the phantom balance sheet carries implied obligations. For example, few investors when weighing the financial obligations of, say, Germany, prior to the Greece crisis would have listed “bailing out Greece” as a national liability for which Berlin was on the hook. But markets concluded otherwise, notes Rothkopf, visiting scholar at the Carnegie Endowment for International Peace.
Martin Wolf’s Exchange: Does Japan really have a public debt problem?
The conventional wisdom in both Japan itself and the west is that the country has an unmanageable public debt problem. I find this quite unpersuasive, argues the FT’s Wolf. All the country needs to do is generate, say, expectations of 3 per cent inflation and the public debt problem should melt away like snow. But the longer it waits the bigger the ultimate adjustment will need to be.
Clive Crook: Britain should back down over BP
Given the extraordinary importance of BP for the UK stock market, the stakes are huge, and the row might easily open a rift between Mr Obama, no instinctive admirer of the British to begin with, and the new government in London. But if a serious falling out is to be avoided, it is the Brits more than the Americans who need to be careful, says the FT columnist.
Lex on BP – beyond politics
Banks must thank the lord that they deal in ones and zeros zooming down wires unseen by the public eye, Lex writes. Equally fortunate, Detroit went bust because it was complacent, not because its cars blew up spraying oil all over cute little animals. How else to explain why Uncle Sam was more than happy to bail out Wall Street and America’s carmakers, yet promises not to spend a cent of taxpayers’ money cleaning up another national disaster in the Gulf of Mexico.
Energy Source: Charted – How much oil was captured?
The new official estimate range for oil flowing from the Gulf of Mexico Macondo well is 25,000 – 30,000 barrels per day, but the some say the range could be as high as 40,000 or as low as 20,000, writes the FT’s Kate Mackenzie. So, taking those two extremes, how do the first six days of oil captured compare to both the high and low estimates?
Andrew Large: How to implement a systemic risk policy
The post-crisis debate has generated many initiatives to reduce systemic risk: higher capital and liquidity ratios; restraints on bankers’ pay; and splitting banks. But these will not in themselves prevent another crisis. What is needed is a robust and continually active framework to ensure stability of the financial system, says Large, former deputy governor of the Bank of England. This article is based on a paper to be published by the Centre for the Study of Financial Innovation this week.
Gideon Rachman’s blog: Early World Cup thoughts
With the World Cup underway, I’m finding it hard to concentrate on my usual diet of failed states, UN resolutions and brave struggles for democracy, says the FT columnist. The 42-inch-plasma TV is now installed and looking vulgar and out of place in my otherwise tasteful, sitting room. It arrived just in time for me to watch Argentina-Nigeria — the “bad governance derby”.
The careerist: Delegating efficiently
Climbing the corporate ladder requires you to hand over day-to-day tasks to others. But many people find this very difficult to do – or do it in a way that leaves everyone feeling unhappy and demotivated. Here, FT Management provides some delegating tips.