Finance: Research, Policy and Anecdotes

Hot summer, desperate autumn

As Europe suffers from a heat wave that has been predicted for 2050 rather than 2022, the politics across Europe has taken again a shift for the worse.

 

In Italy, the populist parties have put an end to Draghi’s technocratic government. Early elections and a stop to pass the necessary reform legislation might hold back further funding from NGEU and the economic recovery. The perspective of a right-wing government, led by a formerly fascist party does not exactly raise confidence either. At the same time, the ECB faces further pressure to fight inflation and sovereign fragility at the same time; as before, Italy will provide the proof to which extent this can work.  The new programme (Transmission Protection Instrument, also known as To Protect Italy) has the potential to reopen the political tensions between North and South. At the same time, a new conflict has been opened, between countries that have created energy dependence on Russia over the past decade (most prominently Germany) and others (such as Spain). In the other main European countries, things do not look much better. President Macron lost his parliamentary majority (on the upside, this increase in checks and balances might make reforms more sustainable). In Germany, Olaf Scholz is still struggling with the Putin-friendly wing of his own social democratic party.  At the same time, Hungary’s regime is going a step further and trying to cosy up to Putin as much as possible.

 

In the UK, Liz Truss is seen as favourite to become the next Prime Minister – as a late convert to Brexit (she strongly supported Remain) she is even more extreme than others in the Tory party (also known as English Nationalist Party), a similar trajectory as Lord Frost.  The two candidates Rishi Sunak and her are currently engaged in an arms race of who can be nastier to refugees, who can give more money away to billionaires while cutting public services even further and who will take a stronger stand against the EU.  As pointed out by numerous observers, most elegantly Chris Grey, this will only end in more tears as either of them will try to convert these promises into actual policy, which will again prove impossible.  And all of this on the background of more Brexit disruptions, as British tourists trying to cross into France in Dover discover yet again how Brexit has not made their life better, with hour-long waiting queues.  Obviously, the British have to blame the French for this (French immigration is done in Dover and on one specific morning, French officials were delayed by a total of 1.5 hours); ignoring the fact that the British government refused to expand immigration facilities in Dover ahead of Brexit – so, the usual patterns: Brits refusing to take responsibility for the consequences of Brexit and their refusal to properly prepare and blaming others – no wonder no one takes the UK serious anymore.

 

A good moment to take a few weeks off and getting ready for a rather hectic autumn.  On the upside, I have just discovered a great restaurant in Bogota – Leo – which – if the Michelin guide were to cover Colombia – certainly would qualify for a Michelin star.