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The EconomistThe Economist

The Economist June 1, 2019

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Country:
United States
Language:
English
Publisher:
The Economist Newspaper Limited
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51 Issues

IN THIS ISSUE

access_time8 min.
the world this week

Politics At elections for the European Parliament, a predicted surge by populists and nationalists failed to materialise, though such parties gained seats in Italy and Britain. The new parliament will be much more fragmented than the old one, thanks to a strong showing by green and liberal parties. The traditional main groupings, the centre-right European People’s Party and the centre-left Socialists and Democrats, both lost ground, falling well below a combined majority of the chamber for the first time. Greece’s prime minister, Alexis Tsipras, said he would call a snap election after his left-wing Syriza party flopped in the Euro polls. In Austria, Sebastian Kurz lost a vote of confidence thanks to the break-up of his coalition with the hard-right FPö, so a fresh election will be held there, too. In a…

access_time5 min.
the next to blow

BRITONS PRIDE themselves on their “unwritten” constitution. America, France and Germany need rules to be set down in black and white. In the Mother of Parliaments democracy has blossomed for over 300 years without coups, revolution or civil war, Irish independence aside. Its politics are governed by an evolving set of traditions, conventions and laws under a sovereign Parliament. Thanks to its stability, Britain convinced the world that its style of government was built on solid foundations laid down over centuries of commonsense adaptation. That view is out of date. The remorseless logic of Brexit has shoved a stick of constitutional dynamite beneath the United Kingdom—and, given the difficulty of constitutional reform in a country at loggerheads, there is little that can be done to defuse it. The chances are high…

access_time3 min.
buggins belongs at the back

SEEN FROM afar, Europe is shrinking and ineffective. In Germany Angela Merkel’s chancellorship is winding down. Domestic woes bedevil the French president, Emmanuel Macron. Britain is leaving the EU, which is divided between east and west, north and south, liberals and authoritarians. The big centre-right and centre-left blocks are struggling, as politics fragments across the continent. If America or China wants to speak to Europe, it is less clear than ever whom they should call. The European Parliament elections have brought yet more fragmentation, with the two main groups losing seats and their joint majority in the EU’s legislature (see Europe section). Liberals, Greens and right-wing populists gained. The union today resembles a patchwork of ideological and regional tendencies (see Graphic detail). That makes the task of parcelling out its big…

access_time3 min.
think bigger

IT HAS BEEN a decade since America’s latest recession, and it has taken that long for the Federal Reserve to ask itself whether it is ready for the next one. On June 4th officials and scholars will gather in Chicago to debate how monetary policy should work in a world of low interest rates. The benchmark rate is 2.25-2.5%, which gives the Fed little room to cut before hitting zero—and less than half as much as it has needed in past downturns. As if to remind policymakers that rock-bottom rates are here to stay, the ten-year Treasury yield fell below 2.3% this week. Other central banks, many of which preside over still lower rates and weaker economies, are looking to the Fed for inspiration. The belated battle-planning, although welcome, is awkwardly…

access_time4 min.
one thousand and one sleepless nights

IF YOU WANT to understand how cooling relations between America and China are changing global business, a good place to look is Alibaba, an internet giant. It is China’s most admired and valuable firm, worth a cool $400bn. For the past five years it has also been a hybrid that straddles the superpowers, because its shares are listed only in America. Now it is considering a $20bn flotation in Hong Kong, according to Bloomberg. The backdrop is a rising risk of American moves against Chinese interests and the growing clout of Hong Kong’s capital markets. A listing there would be a sign that Chinese firms are taking out insurance to lower their dependence on Western finance. The world looked very different back in 2014, when Alibaba first went public. Although based…

access_time4 min.
fighting thugs with thugs

JAIR BOLSONARO, Brazil’s president, was elected last year on a promise to rid his country of a trio of plagues: economic stagnation, corruption and sickening violence. For residents of Rio de Janeiro, the last of these is most urgent. The number of murders in Rio state reached 40 per 100,000 in 2017, 14 times the rate in New York state. The government felt compelled to send in the army, temporarily, to quell the mayhem. Much of the city and its favelas are controlled by organised criminals, who are difficult to prosecute because residents are terrified to testify against them. Mr Bolsonaro is well aware of this. He was a seven-term federal congressman for the state of Rio de Janeiro and has deep personal ties to the city. Yet his prescription…

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