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Saturday, October 5

5th Oct - Weekly Links #4172

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EUROPE
‘The EU is an empire’
Spiked
Wolfgang Streeck on why the EU is a deplorable institution that we must leave.

EU allies urge US to avoid tit-for-tat trade spat over WTOFT
France and Germany say they want a deal but are ready to hit back if none can be reached

Why It’s So Hard for Startups to Create Wealth in EuropeBB
Lawmakers across the Continent haven’t given startups the compensation tools they need to share profits with employees. That’s changing.

Europe Needs a Migration ResetProject Syndicate
The new European Commission under President Ursula von der Leyen must regain control over migration while respecting the dignity of those seeking a better life. To do this, it needs to reset the EU’s approach in four areas, mobilizing member states in the European interest.

Editorial: Austria Must Keep the Populists Out of GovernmentBB
Sebastian Kurz should resist the temptation to ally with right-wingers after the snap election.

Why Vladimir Putin Suddenly Believes in Global WarmingBB
Russia was happy that global warming opened up Arctic oil, but the melting of permafrost poses a huge threat to its hydrocarbon heartlands.

Europe Has a Magic Charm Against Tariffs: CachetBB
“Made in Germany” and “Made in Italy” are brands capable of compensating for higher prices.

Nordic Outlook - October 2019Danske Bank
Denmark: Growth remains strong, but cannot resist the slowdown in Europe forever * Sweden: danger signs accumulating, labour market is now showing significant signs of weakness * Norway: economy approaching peak, oil investments keep growth strong, but to a lesser extend next year * Finland: The boom years are over, and growth is normalizing

Euro Area Macro Monitor Danske Bank
Has the service sector caught the manufacturing malaise?

  GERMANY
German economists urge Berlin to ditch balanced budget ruleFT

Germany’s services sector suffers as recession fears mountFT
Composite PMI contracts for first time in six years, IHS Markit survey indicates

An Industrial Crisis Is Brewing in Germany BB
The country’s position as the “engine of Europe” is under genuine threat.

El-Erian: Germany must take care when throwing around stimulus FT
Two speed economy means that any spending must be carefully tailored

It’s Time for German Fiscal ExpansionProject Syndicate
The United States has made some bad fiscal choices, in particular by cutting taxes for the rich at the peak of the business cycle. German policymakers should not make the symmetric mistake of preserving the country’s budget surplus as the economy risks sliding into recession.

Austria’s Elections Show Germany’s FutureBB
The center right will have to come to terms with the Greens.

  EUROPEAN CENTRAL BANK
Former central bankers attack ECB’s monetary policyFT
Sharp criticism of Draghi’s measures underlines challenge for his successor Lagarde

Interview: Draghi declares victory in battle over the euroFT
Departing ECB president justifies more stimulus and says hawks have lost the political argument

Draghi Says ECB Has Room to Do More, But Needs Fiscal BackupBB
Says policy will be less effective without government spending * ECB president spoke in an interview with Financial Times

Europe’s biggest insurer lambasts ECB over ratesFT
Allianz chief executive joins German criticism of central bank policy

No signs yet of failing bank transmissionABN AMRO
Fall in bank lending rates may encourage ECB to cut policy rates further

How to solve a problem like European bankingFT
Barclays points to the “structural drag” from negative rates, due to the zero bound of household deposits. In France and Germany in particular, it says, tiering only provides “partial relief”.

ECB officials evoke experience of Japan as confidence slidesABN AMRO

The Crisis of Central-Bank GovernanceProject Syndicate
The ECB may enjoy stronger protection against political pressure than other central banks do, but it also faces unique constraints. The more the ECB is forced to expand its policy remit to meet new economic challenges, the more likely it is to trigger destabilizing political conflicts within the eurozone.

Troubles at the ECB Aren’t Draghi’s FaultBB
Europe’s central bank has been shouldering the euro zone’s policy burdens alone for too long.

Stabilisation policies in a monetary unionECB
Speech by Mario Draghi, President of the ECB

Improving macroeconomic stabilisation in the euro areaECB
Speech by Luis de Guindos, Vice-President of the ECB

Euro-area flash inflation: Muted price pressuresNordea

Downward trend in inflation has a way to goABN AMRO

UNITED STATES
Weak manufacturing to drive broader US slowdownABN AMRO

Tariff-Front-Running Hits US Manufacturing, after Causing Biggest Surge since 2004Wolf Street

ISM comment: Big disappointmentNordea
ISM manufacturing fell further back in September, pointing to a contraction in the manufacturing sector. Four out of five subcomponents are currently below 50. We expect the weak trend to continue over the coming months.

US labour market report: Mixed bagNordea
Nonfarm payrolls increased by 136k in September, underperforming consensus expectations. However, August numbers were revised up. Overall, a mixed bag. An October cut looks likely.
 

OTHER
A Tour of the Global Economy - in one chart pack Danske Bank
The weakness is driven by soft investments and business confidence globally, which are both at levels normally seen in G7 recessions, while corporate earnings growth is also waning or even negative in the euro area and emerging markets. The stalwart of the global economy so far, the confidence of private consumers, has started to show weakness despite still-robust real income growth. This is evident in China and, to some extent, the US, while euro area consumer confidence remains resilient.

Trade wars are pushing the global economy to the brinkFT
A slowdown in manufacturing is now spilling over into domestic services

After 1989: how five eastern Europeans saw their lives change FT
They helped bring down communism 30 years ago. What do they make of politics today?

Full transcript of Mark Zuckerberg’s leaked internal Facebook meetingsVerge
Highlights from two hours of leaked audio from recent Q&A sessions with Facebook’s CEO

  CHINA
China’s Hong Kong ProblemProject Syndicate
The Chinese government is playing for time in Hong Kong in the hope that the demonstrators will lose heart and perhaps the will to resist. But if China’s leaders were as sophisticated as they claim, they would behave very differently.

The Next Phase of China’s Reform and Opening UpProject Syndicate
Over the last four decades, China has made major progress on integrating into global networks. But it has a lot more work to do – and must do it while confronting an increasingly hostile external environment.

China and Hong Kong: the ultimate test of authoritarian ruleFT
Is the country a confident superpower or a brittle paranoid regime?

US-China Trade - 60% probability of an interim dealDanske Bank
US and China meet for high-level trade negotiations next week, sources say 10-11 October. We put a 60% probability of an interim trade deal, which should help to de-escalate the trade war. However, the road to a big deal is still paved with many obstacles in our view.


FINNISH
Miten välttää hitaan kasvun ja hitaan inflaation huono tasapaino? Suomen Pankki

Näköpiirissä vain hyvin vaimeaa kasvua Suomen Pankki

Laskusuhdanne voisi hidastaa euroalueen tuottavuuden kasvua entisestäänSuomen Pankki

Kauppasota heikentänyt merkittävästi maailmantalouttaSuomen Pankki

Vuoden 2015 pakolaiset tilastoitu Ruotsissa: 163 000 tuli – 4 500 käy töissä Suomen Uutiset

Politiikasta tuli uskontoJouko Marttila
Ilmastonmuutos ja väestöennusteet ovat kirvoittaneet kipakkaa keskustelua, jossa tiede ja tilastot on sivuutettu.

Suomenkieliset pikkulapsiperheet muuttavat pois Helsingin heikko-osaisilta alueiltaHS

Pikkulapsi­perheiden pako heikko-osaisilta alueilta huolestuttaa Helsingin johtavia poliitikkojaHS