A political storm has erupted in Italy over reform of the euro zone’s bailout fund, known as the European Stability Mechanism (ESM). The main government and opposition parties, as well as the Bank of Italy, say the reform could hurt market confidence in Rome’s debt and potentially make a debt restructuring or even default more likely. Here are some questions and answers on the reform: WHAT IS THE AIM OF THE REFORM? The role of the ESM is being expanded to include backing up the European Single Resolution Fund (SRF) ...

Each year brings a reliable drumbeat of broadsides against the economics profession in the popular press. This year’s standout is an op-ed by anthropologist David Graeber in the New York Review of Books. Like its many predecessors, Graeber’s article gets a few things right and a lot of things wrong about the failings of economics and its role in the modern world. Like many of his fellow critics, Graeber focuses almost entirely on one particular branch of economics — business cycle theory, which occupies a small niche in the broad ...

China is widely referred to as a global leader in artificial intelligence (AI) but just 14% of companies in the country are actively using AI software, according to Alain Bénichou, CEO of IBM’s Greater China business. Citing research from IBM’s Institute for Business Value, Bénichou said the rate of adoption in China is higher than the global average, but still not as high as expected. “There is a long way to go,” Bénichou said Tuesday at CNBC’s East Tech West conference in the Nansha district of Guangzhou, China. “When you ...

Faith in the world-conquering, relentless, sure-thing America First trade is fraying on bets world markets will turn the corner in 2020. Risky assets outside the U.S. are seeing fresh flows as optimism over a trade deal buoys expectations for global growth. Stocks in Europe just took in money for a fourth straight week and emerging markets notched the strongest buying in 41 weeks, according to a Bank of America Corp. report citing EPFR Global data. Meanwhile, U.S. equities saw outflows over the same period, with a similar phenomenon surfacing in ...

A “phase one” trade deal between the United States and China was supposed to be a limited agreement that would allow leaders from both countries to claim an easy victory while soothing financial markets. But it may morph into something bigger if U.S. President Donald Trump agrees to Beijing’s demands to roll back existing tariffs on Chinese goods, people familiar with the talks say. China’s commerce ministry said this month that removing tariffs imposed during the trade war is an important condition to any deal. The demand has U.S. officials ...

Completion of a “phase one” U.S.-China trade deal could slide into next year, trade experts and people close to the White House said, as Beijing presses for more extensive tariff rollbacks, and the Trump administration counters with heightened demands of its own. Just over five weeks later, a deal is still elusive, and negotiations may be getting more complicated, trade experts and people briefed on the talks told Reuters this week. Asked Wednesday about the status of the China deal, Trump told reporters in Texas “I don’t think they’re stepping ...

Federal Reserve officials said little about what would prompt them to resume interest-rate cuts when they signaled a pause following last month’s rate reduction. In cutting rates for the third time since July, Fed policy makers at the October meeting worried that weakness in manufacturing, trade and business investment could threaten the economic expansion by triggering cutbacks in hiring and consumer spending, according to minutes of the policy meeting, released Wednesday. “Risks to the outlook associated with global economic growth and international trade were still seen as significant despite some ...

China will revise its 2018 gross domestic product (GDP) estimate in the next few days to reflect an increase in the number of businesses and assets recorded in the last census, officials said. China’s fourth National Economic Census, released on Wednesday, included “richer” data points that showed more business entities and a bigger total asset base in 2018 than assumed under earlier GDP estimates, Li Xiaochao, deputy head of the statistics bureau, told Reuters. While the revisions typically have no immediate bearing on policy, some analysts see other implications for ...

Growth has slowed in the Asia-Pacific due to trade tensions and uncertainty, but countries in the region should take this opportunity to adopt structural reforms to strengthen their prospects for growth in the long term. This is a key recommendation in a report by the Asia-Pacific Economic Cooperation (Apec) Policy Support Unit (PSU), the research arm of the regional bloc. Released this week, the report noted that the region grew at a slower pace of 3.6 per cent from January to June this year, compared to gross domestic product growth ...

Earnings expectations for European listed companies for the third quarter remained stable, leaving the region stuck in a corporate recession, data published late on Tuesday showed. Companies on the pan-European STOXX 600 index are expected to report a 4.7% decline in earnings for the July-September quarter, unchanged compared to the drop expected a week ago, according to the latest data from I/B/E/S Refinitiv. At the end of October, expectations were for a fall of 8.6%. Overall, the current earnings season is set for its third straight decline and worst quarterly ...

The European Central Bank warned of potential side effects from its loose monetary policy, highlighting how years of unprecedented stimulus designed to bolster the economy is contributing to an erosion of financial stability. Low interest rates have encouraged excessive risk-taking by investment funds and insurers as well as in some real estate markets, the ECB said in its semi-annual Financial Stability Review released Wednesday. Signs of asset mispricing suggest potential for future corrections. “While the low interest-rate environment supports the overall economy, we also note an increase in risk-taking which ...

China is sticking with a rate-cutting strategy that hasn’t done much to reduce borrowing costs. Wednesday the central bank cut its loan prime rates, which it positioned in August as reference points for the rates commercial banks charge. The one-year rate was reduced to 4.15% from 4.2%, and the rate for longer-term loans, such as mortgages, to 4.80% from 4.85%–the first cut in the long-term rate since the system was introduced. The cuts indicate authorities want broadly lower borrowing costs, to spur the slowing economy. But given inflationary pressure from ...

Greece’s current account balance showed a larger surplus in September compared to the same month last year, thanks to higher tourism revenues, the Bank of Greece said on Wednesday. Central bank data showed the surplus at 0.887 billion euros ($3.15 billion)compared to a surplus of 0.548 billion euros in September last year. Tourism revenues rose 16 percent to 2.847 billion euros from 2.454 billion euros in the same month last year. Last year Greece’s current account showed a deficit of 5.3 billion euros, up by 2.1 billion year-on-year as the ...

Reform of the European Stability Mechanism (ESM) bailout fund may be unacceptable for Italy, Foreign Minister Luigi Di Maio told daily Corriere della Sera on Wednesday. The proposals have created a political storm in Italy, where parties and institutions are battling over whether Rome should try to block the changes at the European Union level. A draft of the reform was agreed by euro zone finance ministers in June and is due to be finalised by leaders next month, but senior Italian officials including its central bank chief have warned ...

U.S. President Donald Trump said on Wednesday the United States is continuing to talk to China but gave no other details, as both sides tried to hammer out a phase one trade deal ahead of looming U.S. tariffs due next month. “We continue to talk to China. China wants to make a deal. The question is: Do I want to make a deal? Because I like what’s happening now,” Trump told reporters at the White House. Trump last month announced an agreement for an initial trade deal with Beijing but ...