Financial Times Watch (23 January 2023)

Recession Watch.

Today’s watch starts with recession watch. For bosses at Davos last week there is more good news as p. 1 reports that the EU is not going into recession, the report being confirmed by the International Monetary Fund too.

Yet despite the good news there is plenty of bad news to report too. In the UK, labour strikes (p.2), and Peru, violence between protestors and security forces over last month's coup (p.8), the instability of the last few months continues. Seemingly, both would appear to not be ending anytime soon.

Indeed, both nations have come in from criticism from capital. The main business chamber in the UK, the CBI, doesn’t think much of the UK’s government management of the economy (p.3). And the FT agrees. Quite a wrist slap for a Tory party that prides itself on its business credentials. While in Peru the protests have partially shut down Peru’s tourist industry and, according to a Peruvian ex-fiance minister, pushed the country into recession this quarter


US War Watch (to de-couple or not to de-couple department).

This takes us to the US War Watch and the latest on the global de-coupling between the US and Europe. Once again we have the CBI complaining on the front page. Their problem this time is that UK business is feeling left out from all those green subsidies that are being thrown about on both sides of the Atlantic, but not in the UK.

The FT editorial, p.22, chimes in on the topic too. While Neoliberal de-coupling is pretty much a fact now, in FT HQ the times are not a changing, as Bob Dylan didn’t say. They don’t want the protectionism that the green subsidies are producing. Going on, the FT notes that US subsidies are doing what the EU asked. But they are also in contravention of WTO rules. And even though the two blocs are talking, the real task of re-forming the WTO rules will be a hard job. Made harder by the WTO's membership structure and US actions to block appointments to the institution.

Well you can’t fault the FT for staying true to global neoliberalism. But not even they can stem the glut of de-coupling that they report on everyday. For instance on p. 6, Brazil and Argentina are discussing a currency union that they will eventually open up to other Latin American nations.

And in today’s final note, US financial capital, despite the green subsidiary war, continues to reject China, see FT watch 19 & 20 January, for opportunities in the EU (p.11). This is, in my opinion, a consequence of the war in Ukraine. Because as the EU’s manufacturing base, read Germany’s, is decimated by expensive energy costs; US, and global, financial capital will move in to exploit the remaining areas of the EU that avoided neoliberalism.

This is the kind of news that suggests that while total global de-coupling is some way of yet, like the news from the Southern Cone, regionalisation is taking place. Yet, with the EU’s manufacturing and green future linked to China, it will be interesting to see how EU/US relations develop over the next few years.


That's all for now folks.

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