Europe/Middle East

  • Iran's Rouhani now has to implement his reforms.

    You Can Win an Election, and Still Lose

    Iranian President Hassan Rouhani and his policies are set to get a boost this week after voters elected a parliament that favors reform.  While Rouhani’s reformists didn’t win a majority of seats, it appears likely that the “moderate” independents also elected will side with his faction, giving the reformists an effective majority in the parliament for the first time since 2004.

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  • Greece is on track to receive additional funds, but they won't last long.

    Greece Works to Avoid Last Year's Mess

    For investors, the most important thing about the successful review of Greece's implementation of last year's agreement is that it effectively removes it from the list of potential disruptive factors in the coming quarters.  There will be no repeat of last year's drama.

    Assuming Greece resolves a few outstanding issues in the next few days, it will be given roughly 7.5 bln euros next month and another three bln euros over the summer.  The funds will be in Greece's hands for the shortest of periods.

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  • The UK Treasury report on the Brexit is very pessimistic.

    The Brexit and Vector Autoregressive Analysis...What?

    Over 90 pages, the British Treasury’s latest referendum attempts to identify the short-term economic effects of a vote to leave on June 23 – aka Brexit. When the Treasury tweeted the publication late on the morning of May 23 it was billed a “detailed and rigorous analysis on the immediate impact of leaving the EU”. So how does it stack up?

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  • The Eurozone's economy faces many challenges, but the solutions are there.

    Eurozone Economy: Outlook (Near-Term), Problems and Solutions

    This is an abridged version of this article.  For the full article please see here.

    I was in Belgium in 2011-2012, when I witnessed the escalating ferocity with which the sovereign debt crisis undermined confidence and economic activity across the Eurozone. Four years later, in 2016, economic recovery from the crisis continues to remain fragile - with highly lackluster or tepid growth having become endemic in the Eurozone.

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  • Crossing Turkey's Erdogan did go well and so the mud thickens.

    The Turkish Political Mess Likely Won't End Well

    It has been long recognized by the investment community that power in Turkey was concentrated in Erdogan's hands.  He enjoys incredible power in the ceremonial presidential post and brooks no rivals. 

    Common among authoritarian leaders is that they habitually turn on handpicked successors, as they grow fearful of competitors.  This is precisely what has played out in Turkey in recent days and now has come to a head. 

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  • Turkish travel issues in the EU and the 500-euro note may meet its demise.

    Turkish Travel Travails and the Potential 500-euro Note Sacking

    It might not be on investors' calendars, but European officials will take steps toward addressing two issues tomorrow.  First, the EC will make a preliminary recommendation of visa-free travel in the Schengen area for Turkish passport holders.  Second, the ECB governing council will hold a non-monetary policy meeting.  It is expected to discuss the future of the 500-euro note. 

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  • Iran's economy likely won't realize its potential under the thumb of the U.S.

    Iranian Nuclear Deal, Dents Courtesy of Washington

    The Iran nuclear deal is effective. Yet, Iran’s efforts to attract foreign investment and accelerate growth and prosperity face new hurdles, which seem to reflect Washington’s efforts to dent the agreement.

    Last January, the nuclear agreement between, Iran and the five permanent members of the UN Security Council (US, China, France, Russia, UK), plus Germany and the EU became effective. However, will this agreement allow Iran to attract substantial foreign investment and reanimate its dormant oil fields?

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