Bloomberg Businessweek-Europe Edition 11/6/2017

Canada Canadians haven’t given up on a new North American Free Trade Agreement with the U.S., but they’re also pursuing a trade deal with China. Mexico Leftist nationalist Andrés Manuel López Obrador is leading in the polls and could be elected to a six-year term as president in July. U.S . The Trump administration is likely to keep the world guessing on issues including trade, fiscal stimulus, and military alliances. Italy Divisions on the right are increasing the chance that a populist, euroskeptic government could take power after general elections, which are set for May or earlier. U.K . Britain’s exit from the European Union must happen by March 2019. The battle over terms of disengagement will get even more fractious in 2018. Germany Germany continues to export way more than it imports, annoying its neighbors. In 2018 its current account surplus seems…

Everyone in the world—plus the two SpaceX customers who technically won’t be in the world when they do figure eights around the Earth and the moon for two weeks this coming year—can look forward to another year of healthy growth in 2018. We’ve gotten so used to complaining about sluggishness that it’s a shock to realize the global economy has quietly accelerated to a respectable and sustainable cruising speed. Market volatility is historically low. Even the skeptical Germans sound happy. “The data we get and the indicators we see are very positive,” says Clemens Fuest, president of the IFO Institute at the University of Munich. “There is no obvious obstacle.” The big story for 2018 is likely to be how to manage the continued expansion. A turning point may come at…

After a decade of flooding economies with money, key central banks next year will finally start turning off the tap. Since the financial crisis, they’ve kept interest rates near zero and some have bought trillions of dollars in government and corporate bonds. The idea was that low rates would encourage spending by businesses and consumers. Although experts disagree about how effective the stimulus was in stoking broad-based economic growth, two conclusions are in little dispute: The deluge of cash staved off a global financial collapse, and it helped propel stocks and bonds to record levels. Now policymakers believe their economies are strong enough to thrive with less stimulus. The U.S. Federal Reserve made the first move in October when it started allowing a portion of bonds on its $4.5 trillion balance sheet…

Latin America’s two largest economies will hold presidential elections in 2018. That’s a nerve-racking prospect for investors who’ve become used to decades of policy continuity and could see Mexico and Brazil take radical turns. After 36 years of free-market technocrats, Mexicans could anoint a leftist firebrand who’s threatened to take on Donald Trump. In Brazil, where the populist Workers’ Party held sway for 13 years until 2016, a scandal-fatigued electorate is flirting with a former army captain nostalgic for military rule. “You will have a lot of investor angst” during the elections, says Daniel Kerner, an analyst at risk consulting firm Eurasia Group Ltd. “You will have in both cases capital flight, pressures on the currency from investors getting scared—in Mexico’s case that there will be a reversal of reforms,…

Crown Prince Mohammed bin Salman hasn’t wasted any time implementing his vision for Saudi Arabia’s future. Since leapfrogging other senior royals on the line of succession to the throne, the prince has granted women the right to drive and curbed the power of the religious police. Music plays in restaurants, and many women are swapping their black abayas for colorful ones, sharp contrasts in a country that’s been guided by an austere brand of Islam for decades. The prince’s proposals for the economy are even more ambitious and are detailed in a plan called Vision 2030. The blueprint aims to reduce the country’s overwhelming dependence on oil revenue by promoting the development of new industries such as tourism and entertainment. To fund that effort, he wants to sell shares in the…

The South Pacific nation’s yo u n g e st p r i m e m i n i s - ter since 1856, Ardern, 37, heads a cabinet heavy on neophytes with little governing experience. Delivering on her promise of economic reform will be a challenge, not least because her Labour Party must rule in partnership with two other parties. Items on Ardern’s to-do list include repealing planned tax cuts and replacing them with a broad spending package to help low-income families, as well as making the first year of tertiary education free as of January. Labour also wants New Zealand’s central bank, whose sole mandate is price stability, to add full employment to its objectives, similar to the U.S. Federal Reserve. “The new coalition government is likely to be…