Growth, recessions, fiscal policy, monetary policy, currencies and global business deals. GIS experts provide forecasts and potential scenarios for all of the economic trends that shape geopolitics.
Orderly failure: The EU’s Bank Recovery and Resolution Directive
After the 2008-2009 financial crisis, governments are wary about bailing out distressed banks with taxpayer money. But the bail-in procedures implemented in 2016 by the European Union, while helping minimize some risks, have their own drawbacks. If new proposals are adopted to give resolution authorities more preemptive powers, they will give technocrats unprecedented control over the banking industry.
Opinion: The ‘military option’ in Venezuela is an illusion
The Chinese government is reportedly considering helping Venezuela’s government meet its most pressing domestic needs and start rebuilding the nation’s hydrocarbons industry. The United States, meanwhile, is hinting that it could use force to remove the increasingly brutal regime. Collective pressure on Caracas from the Latin American community, however, remains the only realistic way of resolving the crisis.
Regional integration at the Three Seas summit
With the third summit of the Three Seas Initiative, the countries of Central and Eastern Europe are trying to come together on issues like energy and infrastructure. The effort comes after several failed attempts at regional integration in the 20th century, and this one remains mostly on paper. If the European Union and outside investors will buy into the idea, several proposed projects could help lift all boats.
Opinion: Cryptocurrencies – fears and opportunities
After a few years of hype, experts are now tamping down expectations for cryptocurrencies. Indeed, several concerns about security and regulation need to be addressed. But cryptocurrencies – and the blockchain technology they are based on – also offer tremendous room for innovation and efficiency. By competing with traditional fiat currency, they could help profligate governments and central banks become more disciplined
Ukraine’s revolution nears a test
This may have been independent Ukraine’s last calm summer for a while. There will soon be a reckoning with what succeeded and what did not after the revolution of 2013-2014, during which the eyes of the world were on Kiev. Ukrainians will elect a president early next year, with parliamentary elections to follow in the fall. There are plentiful indications that their verdict on the post-Maidan political elites will be harsh.
GIS Dossier: Europe as a global player – the Middle East and North Africa
Europe’s influence as a great power is nowhere more apparent than in the attraction it exerts on the poorer countries to its south – in the Middle East and Northern Africa. This is the region where European Union member states, often without U.S. support, have deployed their full foreign-policy arsenal, from diplomacy and military intervention to financial aid and investment, with mixed success. Yet as migration and terror show, problems the EU fails to address “out there” tend to wind up on its doorstep.
Modi looks inward on trade
The Indian government has taken a protectionist posture on trade, taking measures to boost domestic manufacturing, hike tariffs and stall trade negotiations. Yet exports have failed to increase, in part because of red tape and poor logistics. The administration’s present attitude could see India struggle with the current account deficit and increasingly get shut out from overseas markets, unless a growing corporate sector can lobby for change.
Opinion: Dilemmas of development aid
Like other areas of public policy, development aid has had its recurrent fads. The pendulum has swung from socialist-style big-push schemes to pro-market reforms and their latest iteration, results-based aid. This micro-oriented approach has recently come under attack for neglecting the wider “macro” environment of states and institutions. Decades after the flaws of the traditional aid model were exposed, economists are still casting about for a better alternative.
The euro and the promise to end monetary profligacy
As the European Central Bank winds down its quantitative easing program, none of its future policy options look especially promising for the euro. While investors would welcome a more neutral monetary stance, that could spur political tensions in the euro area that could roil financial markets. Meanwhile, regulation is on the rise and growth could suffer, with unpleasant consequences for the single currency.
A new leader in Colombia
Ivan Duque, Colombia’s newly elected president, takes office with a clear mandate from his supporters. President Duque will likely try to slow the controversial peace accord reached with FARC guerrillas and address widespread public concerns over crime and corruption. But a factional political balance, and major challenges both at home and abroad, is already giving Colombia’s new leader a full plate of problems.