- Finland – a reshuffled government and modest economic expectations;
- Haiti – a major Cabinet reorganization;
- Slovenia – question marks over the government’s survival chances.
CHINA: Investors in yuan are now on notice that there is a two-way risk and this makes US warnings on the currency rather meaningless. With economic softness persisting, the authorities are taking steps to stabilize growth. They are probably not finished, yet, allowing defaults in order to reduce moral hazard and curb speculation.
COSTA RICA: The Leftist Guillermo Solis easily won the presidential run-off election. He will step up social spending, but without any near-term plans for tax hikes. The budget is not in condition to sustain such a policy in the longer term, but for now Costa Rica can still borrow and the economy is set to gather momentum.
FRANCE: The composition of the new Cabinet sent out mixed messages about the economic policy intentions of the man in the Elysee. Just-appointed Premier Valls’ presentation of his policy program to parliament has cleared up some of the questions, but not all of them. There is a swing back to a more pro-business course. How pronounced is, for now, still a matter of debate.
GERMANY: There are indications that domestic consumption may contribute more to economic growth this year than last, but exports will continue to be the main drivers. The possibility of big losses on this front is dissuading Berlin from taking a firm stand against Russia’s expansionism. Germany is too reliant on Russian energy & trade.
HUNGARY: The landslide re-election victory of PM Orban will not just bring a continuation of the unorthodox policies he pursued, but an intensification of them. Facing a feeble opposition, the government will tighten its grip further. But Hungary is in a difficult position vis-a-vis Russia, having recently signed a mega-deal with the Kremlin.
ITALY: Business confidence has risen and the new PM is listening to what the entrepreneurial community has to say. He faces major obstacles in getting his plans through parliament and getting them accepted by the EU. Meanwhile, the country is struggling with record-high unemployment.
THAILAND: The focus of anti-government protests has shifted from the streets to the courts, but the threat of further violence remains real, especially after a leadership change in the red-shirt camp. The damage to the economy is growing and it is doubtful that the lower interest rates engineered by the CB will make much difference.
UKRAINE: Russia has pretty much completed the absorption of the annexed Crimea and the question now is not so much whether, but when Pres. Putin will bite off the next chunk of Ukrainian territory. Aside from stirring up trouble in the Eastern part of the country, Moscow has severely increased its economic pressure on Kiev.