PARIS (Reuters Breakingviews) - Sometimes the rule of law produces unlikely heroes. Take, for instance, the way pornographer Larry Flynt became a cause célèbre for freedom of speech in the United States. Or how a British court helped make Max Mosley, the son of a 1930s British fascist leader who was filmed in a sadomasochistic orgy, a poster child for privacy rights.
PARIS (Reuters Breakingviews) - Last weekend at the elegant Villa d’Este hotel with its commanding view of Lake Como, an elite squad of Italian business leaders, investors and policymakers, including three former prime ministers, were asked for their view on the state of the country’s affairs. Though not ebullient, they were more optimistic than at the same time a year ago. Given what’s transpired in the world’s eighth-largest economy in the past 12 months, that’s perhaps not surprising.
CERNOBBIO, Italy (Reuters Breakingviews) - Italy’s new coalition government, cobbled together from the centre-left and quixotic 5-Star Movement, has been greeted gleefully by markets and EU allies. But one former prime minister warns about complacency, calling for a reset with Brussels, tax cuts and renewed investment.
NEW YORK (Reuters Breakingviews) - RIP the odd couple of European politics. The year-old pairing of Italy’s right-wing League with the anti-establishment 5-Star Movement, which ended on Tuesday with the resignation of Prime Minister Giuseppe Conte, was always destined for trouble. Investors in Italian assets, though, will be hoping for a revival of the theme.
ATHENS (Reuters Breakingviews) - Greece’s new Prime Minister Kyriakos Mitsotakis is off to a great start. It would be a shame for the former Chase banker to retard that progress in his efforts to revive Greek finance. At issue is the leadership of the Hellenic Financial Stability Fund, which was established to oversee the government’s stakes in four of its largest institutions, including 40% of National Bank of Greece and 26% of Piraeus Bank. Two years ago HFSF named an Austrian, Martin Czurda, as its chief executive. That choice rankled Greek bankers and politicians. But it was demanded by euro zone institutions involved in the country’s bailout, including the European Central Bank and the European Stability Mechanism. The fund needed someone to put pressure on the banks who was free of any conflicts of interest that might inhibit a former or future member of the local financial industry. The fruits of that decision were on display again at NBG’s annual meeting on Wednesday. Shareholders approved expanding the board of the 2.4 billion euro bank to include two new independent non-executive directors. One, former Finance Minister Gikas Hardouvelis, will serve in a senior capacity. The revamp was the result of a campaign by Czurda’s team as well as Velos Advisory, an external governance consultant. Though it met with resistance from NBG’s chairman and others, it received a positive reception from international investors. The bank’s stock has more than doubled this year. The new government hasn’t yet publicly sought a changing of the guard at HFSF. However, the idea of putting a Greek in charge cropped up during the recent election campaign and is popular in the banking community. Another suggestion would see the fund tucked into the Hellenic Corporation of Assets and Participations, a holding company for state-owned assets, diluting HFSF’s independence. Either move could provoke a potentially distracting fight with constituents like the ECB. It would also detract from the work the fund is doing, alongside the Bank of Greece, to reduce dud loans which still account for 45% of all bank credits. And it would remind investors of Greece’s previous Syriza government, which in 2016 pressured the CEO of Piraeus Bank to resign against the wishes of shareholders. Czurda’s mandate expires in June 2020, a little more than two years before the fund itself can be wound down. To avoid scoring an own goal, Mitsotakis should bide his time.
ATHENS (Reuters Breakingviews) - The word most frequently used by Greeks to describe their new government is “weird”. That is not meant pejoratively. Instead, it describes the unusual speed and specificity with which Kyriakos Mitsotakis has taken to the job of prime minister. What people mean is: “This is really weird for Greece.”
AIX-EN-PROVENCE, France (Reuters Breakingviews) - French politicians see three unstoppable forces that threaten the well-being of Europe: China, U.S. President Donald Trump, and “les GAFA”, or Google, Apple, Facebook and Amazon. Yet the leaders of Gallic multinationals say they are investing more in the United States, desperate to get the right Chinese commercial strategy, and partnering with Big Tech.
PARIS (Reuters Breakingviews) - At the ticket office to the sprawling villa built by Emperor Hadrian outside Rome in the second century, an attendant asked a recent visitor if he spoke English or French. “American,” came the reply. “Good,” said the ticket seller, “because we Italians like Americans better than the French these days.”
PARIS (Reuters Breakingviews) - One way to understand the economics of rock and roll would be to comb through the Breakingviews archive, reading stories on the buyouts of record companies, the rise and fall of file-sharing service Napster, industrial experiments by artists like Radiohead and Taylor Swift, the boom in festivals and the emergence of streaming services. Or you could just read “Rockonomics: A Backstage Tour of What the Music Industry Can Teach Us about Economics and Life” by the late economist, Alan Krueger.
PARIS (Reuters Breakingviews) - Bruno Le Maire is either the greatest investment banker roaming the earth, or a living transfiguration of Charles de Gaulle’s industrial policy. The French finance minister on Wednesday night single-handedly blew up the $35 billion merger of Fiat Chrysler Automobiles and Renault, a deal that ticked nearly every box imaginable for shareholders and would have created the world’s third-largest carmaker.