Donnerstag, 1. Dezember 2011

Monti should destroy the round tables

"Concertazione" was for many decades at the very hardt of Italy's political process. It worked in the way that the government never took any decision regarding taxation, welfare etc. without having installed "round tables" with the organized interest groups, like the trade unions or the industrialist federation Confindustria. That was the  place, were the outcome of the measurements was negotiated.
Be sure: this method had many negative effects and only few positives. At the price of a (quite doubtful) social peace real reforms were not done. The few ones, that were done, were terribly diluted. And it has always slowed down the process of political decision making. It was very expensive, having led Italy to a total public debt of currently 120% of GDP, before Geeece the worst in Europe. Last but not least it has helped to swell up the lobbies, overall in terms of power.
This bad habit will be the main issue for the new Italian government under Prime Minister Mario Monti. Today the trade unions have started to criticise Monti's envisaged pension reform. He should at least listen to us, they argue, but they mean, he should dilute the plans and he should take more time. In this phase, in which the new government has to build up his credibility in front of the international communities, the markets but also the Italians, this "recommendations" are lethal. Monti should notlisten to it. He has to do the deep structural reforms, that Berlusconi was never able to do, with determination and speed. Now. 
The only place to go in order to do this is the parliament, not the "round tables". Mario, destroy the concertazione!

Freitag, 25. November 2011

How Monti works on a changed ECB-role

Yesterday's summit in Strasbourg has proved, that the future architecture of European leadership will be different from the German-French "Directorate", that was in place since the Greek crises has begun. Under the highly respected Mario Monti Italy is returning on the stage. Both, German Chancellor Merkel as well as the French President Sarkozy have made that clear yesterday, with words but also with gestures. The dark days of Italy's international isolation caused by Berlusconi are definitively over. But what will Monti do with the renewed influence?

Be sure, that he has apart from his domestic an articulated European agenda. The Professor spent during his two mandates as EU-Commissioner so much time on Brussels that he is a truly European and remains an indiscussed expert on all communitarian matters.
During the trilateral meeting yesterday the leaders have talked also about the two hottest topics at the moment: Eurobonds and a changed role of the ECB as lender of last resort. Listening to them afterwards it became clear that the first topic remains unpalatable to Germany. The fact, that Sarkozy as a strong advocate for Eurobonds showed a super-cautious attitude during the press conference is a signal, that not only Merkel but also Monti has influenced him, to be more realistic.

Even more interesting than that is, what the three said and what they didn't say about the ECB: they underscore the total independence of the Central Bank from politics. After the criticsm, that Merkel didn't even try to hide in the last months, this is a new tonality. Also here: hard to believe that Monti has been ininfluential to this. Nobody talked about about a possible new role of the ECB, which in combination with the highlightig of the independence makes a lot of sense. Why? Because it means that the institution led by Mario Draghi could have in the future more options to interpret it's role with more freedom and without the current risk, that the governments, overall the German,  interfere too heavily. I can imagine that Bundesbank Governor Jens Weidmann, a former Merkel advisor, who is categorically against any enlargement of the role of the ECB, was not amused yesterday. Without the political rear cover he will feel on the future more and more alone in his fight, because most members of the governing council, including President Draghi, are more open to discuss about a new interpretation of the role for the ECB. By the way: it would be strange if Monti and Draghi, who know each other very well, have not talked recently exactly about that.

So I proved right yesterday in saying that Italy under Monti will start to influence in a critical manner the current discussions, but I proved wrong in saying, that this would be bad news for Angela Merkel. On the contrary, my impression is now, that she will one day use the new set-up of the European leadership to explain at home, because Germany has to accept, that the ECB becomes more Fed-like as lender of last resort. She knows perfectly that it's always better to digest controversial decisons with a convincing narrative.

Donnerstag, 24. November 2011

Will France and Italy build now an alliance against Germany?

When the German Chancellor Angela Merkel and the French President Nicolas Sarkozy meet today Mario Monti, the recently appointed Italian Prime Minister, the Frenchman will be more pleased than his German counterpart. The reason is obvious: the EU Co-founder Italy is returning after Berlusconi dynamically on the international stage and will under the former EU-competition Commissioner with his no-joke style play a much heavier role than it used to play under his completely discredited predeccesor.
While Sarkozy and Merkel formed a kind of European directorate since the Greek crises broke out, France could have in the future more options. With a more influential Italy, Sarkozy will have a potential ally that up to now was not at his disposal. Don't forget: France and Italy are after Germany  by far the biggest countries of the Eurozone. If they would pool their interestests, Germany would inevitabily drive in a weaker position than before.
Because one thing has to be clear: Germany with it's unreasonable only-austerity-ideology today  is isolated in Europe. Maybe the Finns have similar ideas, but not even the stability oriented Dutch agree on the orthodox attitude of the German government and - worse - the Bundesbank.
So new scenarios emerge if France opens up to Italy and stops treating exclusively with Germany about solutions for the crises and the future governance of the Eurozone. That could mean a new push for a changed role of the ECB as lender of last resort or in the mid term the creation of Eurobonds.

Montag, 21. November 2011

Monti: What a different, what a sobre style!

The political life in Italy used with few exeptions always to be a "teatrino", a little theater. Showbiz. Entertainment, not too serious. Sure, the differences are huge between say a Giulio Andreotti and a Silvio Berlusconi, but there are not so many western democracies, where even porno stars have been elected as member of the Parliament.

Having said so, it is noteworthy, that in the long Berlusconi-years this already low level of political culture has even deteriorated. The "Cavaliere" has impressingly shown during the 17 years, that he spent in the political arena a scarce sense for the the democratic institutions and the rule of law. Avoiding taxes? An acceptable piccadillo, he once said. And his advice to the workers of Fiat in a sicilian plant, that risked the closure, he adviced: "Look for some clandestine work and than you can make it!" If a prime minister, who acts by definition as a role model for a country and it's people spreads such messages, no wonder that not only the polotical but also the civilian culture suffers.

When I saw last week the new government sitting in the aula of the Senate I thought spontaneously: Wow, what a difference! A totally new are sitting serious people, interested only in the tasks and the challenges that they have to tackle. Mario Monti, the new PM, stayed seated for the whole long session. With diligence he took notes of the questions of the Senators and responded one on one precisely and without any trace of arrogance. It was a demonstration of his seriousness and his respect for the parliament

Differently Berlusconi never stayed seated for more than half an hour. And even then he didn't listen to the speeches, but usually chatted with some of his ministers. He hardly could hide his disinterest in the debates. He never responded questions diligently. He was always full of arrogance in order to show that he is the boss of the government and the parliamentarians are nothing else than Yes-men servicing the executive power.

Also visually the differences between the last cabinet of Berlusconi and the one of Monti, that was sworn in Wednesday could not be bigger: from al 24 ministers of the last administration maybe five or six were really ministrable, Finance Minister Tremonti for example. The rest: unacceptable for an important country. Take Umberto Bossi, the Lega Nord leader and last Minister for Reforms, admittedly a ill man after a stroke three hears ago. He fell during the sessions regularly to sleep, wor dirty shirts and had not an appropriate level of personal hygiene. Too many, too nice, too model-like were the female ministers. And effectively, when you didn't look only at them but you listened to them, you uderstood suddenly that they were not chosen for their competencies but for different reasons by the Cavaliere.

The new cabinet under the PM Mario Monti may be is a little bit grey on it's public perception. All these professors, civil servants and people from the institutions are used to be very careful in their expressions. But this new, this sober style will help not only the government, but Italy, to regain the seriousness on front of the Italians as well as internationally, it has lost under the show-regime of the TV-entrepreneur Silvio Berlusconi. 

Donnerstag, 17. November 2011

Meine Kommentare zu den Kommentaren über Montis Regierung auf Zeit-Online

Der Grad von Aggressivität und Frust übe die derzeitige Situation in Europa, die aus den Kommentaren atmet, hat mich betroffen gemacht. Ich denke, dass es Elemente gibt, die durchaus kritikwürdig sind, von der Verantwortung der Wall Street Banken bis hin zur Gefahr der Demokratie-Reduzierung, die diese Krise implizit in sich trägt. daraus aber eine grundsätzliche Kapitalismus- und Systemkrise abzuleiten halte ich für grundfalsch.
Kurz zu den wesentlichen Kritikpunkten an der Regierung Monti, die aus den Kommentaren hervorgeht:

1. Sein Kabinett enthalte nur Experten, keine gewählten Volksvertreter.Das sei der Beweis für eine Unterhöhlung der Demokratie:

Das ist eine Kritik, die einer Prüfung nicht standhält. Denn erstens war es der erklärte Wunsch aller Parteien und ihrer entsprechenden vom Volk gewählten Exponenten, dass Monti eine reine "technische Regierung" bilden solle. Zweitens kann die Regierung ja nichts tun ohne die Zustimmung des Parlaments, in dem ausschließlich gewählte Volksvertreter sitzen. Insofern ist es Unsinn aus einem Experten-Kabinett ein Demokratiedefizit abzuleiten.

2. Monti ist als ehemaliger Goldman Sachs Berater ein U-Boot der Wall Street

So ein Blödsinn, sorry. Monti hatte mit GS einen Beratervertrag, er war nie Mitarbeiter der Investmentbank. Im Rahmen dieser Beratung hat er in erster Linie Kontakte ermöglicht und Türen geöffnet. Professor Monti war nie ein Banker im eigentlichen Sinne.
Nebenbei: wer glaubt dass Monti mit Hilfe von Goldman Berlusconi, den reichsten Italiener, der als mehrfacher Milliardär wirklich die Macht des Geldes kennt,
aus dem Sattel heben konnte, leidet unter Halluzinazionen.
Monti hat, vor allem als EU-Wettbewerbskommissar ( Kampf gegen Microsoft) eindrucksvoll seine geistige Unabhängigkeit unter Beweis gestellt.
I publish here my piece about the new Italian government, that runs currently on Zeit-Online in German language:

Professor Monti sucht die Italien-Formel
Italiens neue Regierung unter Mario Monti steht. Sie muss einen schwierigen Spagat meistern: Das Wachstum stimulieren und gleichzeitig kräftig sparen.

VON Marcello Berni
DATUM 16.11.2011 - 17:38 Uhr

An den Finanzmärkten hat die Nervosität auch am Mittwoch nicht nachgelassen. Die Renditen auf zehnjährige italienische Anleihen stiegen erneut auf über sieben Prozent. Offenbar hat sich bei den italienischen Gläubigern noch nicht die Überzeugung durchgesetzt, dass sich Italien unter einer Regierung Monti deutlich unterscheiden wird von jenem Italien des "Cavaliere" Berlusconi, an das wir uns seit fast zwei Jahrzehnten gewöhnt hatten.

Dabei hat es der ehemalige EU-Wettbewerbskommissar Mario Monti geschafft, binnen zwei Tagen und nach intensiven Beratungen mit Vertretern aller Parteien eine valide Regierung auf die Beine zu stellen. Um 11:00 Uhr stellte der künftige Premier im Quirinalspalast dem Staatspräsidenten Giorgio Napolitano seine Kabinettsliste vor. Sie enthält eine starke Mannschaft von Technikern, also Experten ihres jeweiligen Faches: Universitätsprofessoren, Richtern, Hohen Militärs und auch dem prominentesten Bankier des Landes, Corrado Passera, Vorstandschef der Großbank Intesa San Paolo. Er wird das Ressort "Wirtschaftliche Entwicklung" übernehmen.

Der neue italienische Ministerpräsident Mario Monti hat als erster des neuen Kabinetts seinen Amtseid vor Staatspräsident Giorgio Napolitano abgelegt. [Video kommentieren]
Die nächsten Etappen sind bereits klar definiert: Bis zum Freitag wird die Regierung in beiden Kammern des Parlaments die Vertrauensfrage stellen und mit an Sicherheit grenzender Wahrscheinlichkeit auch eine solide Mehrheit erhalten. Dann kann es losgehen. Auf Monti und seine Mitstreiter wartet nach jahrelangem Missmanagement, ja Nichtstun, ein Berg von Arbeit. 

Die grundsätzliche Stoßrichtung seines Wirtschaftsprogramms hatte Monti bereits vorgestern verkündet: Opfer ja, aber keine Tränen und Blut. Sparen ja, noch wichtiger sind aber Strukturreformen, die das Wachstum stimulieren. Monti ist ein liberaler Reformer. Sein Programm wird geprägt sein von mehr Markt, weniger Staat. Gleichzeitig wird es einen Akzent setzen auf soziale Gerechtigkeit. Denn der von Jesuiten erzogene ehemalige EU-Kommissar ist ein Anhänger der christlichen Soziallehre. Das macht ihn ideologisch nicht zu einem Sozialdemokraten, wohl aber zu einem Politiker, der auf eine faire Verteilung der Lasten achten wird.

Die wohl größte Herausforderung am Anfang seiner Regierungszeit wird sein, sich den dramatisch verschlechterten Rahmenbedingungen für die öffentlichen Finanzen entgegen zu stemmen. Die Wachstumsaussichten für dieses und das kommende Jahr haben erheblich eingetrübt: Ging die alte Regierung noch von einem Wachstum von 0,7 Prozent in diesem und 0,6 Prozent im kommenden Jahr aus, so glaubt die EU-Kommission nun, dass mehr als 0,5 Prozent in 2011 und 0,1 Prozent in 2012 nicht drin sein werden. Das schwache Wachstum wird zu Steuermindereinnahmen in Höhe von 20 Milliarden Euro führen. 

Hinzu kommen höhere Zinskosten durch die seit diesem Sommer stark steigenden Risikozuschläge für die italienischen Staatsanleihen. Kostenpunkt: bislang vier bis fünf Milliarden Euro, schätzt das Schatzamt in Rom. Im Klartext bedeutet dies, dass Monti einen Nachtragshaushalt im Volumen von mindestens 25 Milliarden Euro verabschieden muss, um Berlusconis Versprechen eines ausgeglichenen Haushaltes im Jahr 2013 zu halten. Dies wird nicht einfach, zumal dies nicht vorwiegend durch Mehreinnahmen finanziert werden sollte, sondern durch echte Sparanstrengungen.

Schon heute sind Staatsquote und Steuerbelastung erdrückend hoch und strangulieren das Wachstum. In keinem Land der OECD, außer in Schweden und Dänemark, ist der Staatsanteil am Bruttoinlandsprodukt (BIP) so hoch wie in Italien. Das Ergebnis: Zwischen 2003 und heute ist die Wirtschaft in Italien (real und pro Kopf) nach Angaben des Internationalen Währungsfonds (IWF) im Jahresdurchschnitt um 0,5 Prozent geschrumpft. Zum Vergleich: In Deutschland ist es um 1,3 Prozent gestiegen, in der EU um durchschnittlich 0,7 Prozent. Montis zentrale Mission lautet also, das langfristige Wachstumspotenzial der Wirtschaft zu steigern.

In den ersten 100 Tagen stehen indes andere Themen an. Kurzfristig könnte die Regierung einen Teil der Staatsbeteiligungen in Höhe von 120 Milliarden Euro verkaufen. Das sind immerhin 7,5 Prozent des BIP. Allein die Beteiligungen an dem Mineralölkonzern ENI und dem Stromversorger ENEL – beide sind börsennotiert – sind aktuell über 30 Milliarden Euro wert. Kurzfristig könnte Monti auch die Immobiliensteuer ICI wiedereinführen, was vier Milliarden Euro in die Kassen der Kommunen spülen würde. Eine Vermögenssteuer erscheint hingegen nach dem Veto der Berlusconi-Partei PDL eher unwahrscheinlich.

Die wichtigsten Strukturreformen, die Monti im Laufe seines Mandats anpacken dürfte, sind hingegen: eine Rentenreform, die sowohl auf die Verlängerung der Lebensarbeitszeit auf 67 Jahre bereits ab 2020 statt 2026 setzt, als auch auf Abschaffung der sogenannten Altersrente, die heute all jenen volle Bezüge bereits mit 60 garantiert, sofern sie 36 Jahre lang Beiträge geleistet haben. Ein zweites Großprojekt wird die Liberalisierung der freien Berufe betreffen, die heute in ein extrem enges Korsett eingeschnürt sind und keinerlei Logiken des Marktes folgen. Es ist ein gewaltiges Programm, das auf Professor Monti und seine Mannschaft wartet.

Dienstag, 15. November 2011

UBS: Ermotti erobert den Chefposten und Weber kommt schon 2012

Schneller als gedacht hat die krisengeschüttelte UBS sich auf ein definitives Personaltableau verständigt:  nach dem Skandal um einen Londoner "rogue trader", der mit ungenehmigten Deals über 2 Milliarden Euro versenkt hatte und damit CEO Ossi Grübel im September zum Rücktritt gezwungen hatte, schien alles recht vage und undefiniert. Zwar wurde noch am selben Tag Sergio Ermotti an die Spitze berufen. Allerdings mit Schönheitsfehler: nur als CEO "ad Interim". Man wolle mit Hilfe von Personalberatern(Egon Zehnder) den Markt sondieren, um wirklich den besten Kadidaten zum neuen CEO zu berufen. Das Board sprach damals von einer Zeitspanne von 6 Monaten, die ich damals bereits als unsinnig lange angesehen habe. Denn was die UBS nach der langen Krise am wenigsten gebrauchen kann, ist Unsicherheit. Zudem eine halbjährige Hängepartie für Ermotti die Garantie dafür gewesen wäre, als "lame duck" jegliche Autorität zu verlieren.
Ähnlich umständlich hatte die Bank den Wechsel an den Spitze des Verwaltungsrates geplant: zwar konnte sie mit dem ehemaligen Bundesbankpräsidenten Axel Weber einen dicken Fisch an Land ziehen. Weber sollte aber ursprünglich erst 2013 das Ruder vom ehemaligen Politiker Caspar Villiger übernehmen. Auch hier: Schweizer Langsamkeit statt der für ein globales Haus notwendigen Dynamik. Nun, die Herren im Board  scheinen in sich gegangen zu sein, denn heute morgen überraschten sie mit der Pressemitteilung, dass Weber nun doch bereits 2012 die Präsidentschaft antreten werde. Villiger werde sich bei der kommensen Hauptversmmlung im Frühling nicht mehr zur Wiederwahl stellen. Noch wichtiger aber: Sergio Ermotti werde mit sofortiger Wirkung zum definitiven Group CEO benannt.
Damit hat die UBS in meinen Augen einen respektablen Bedreiungsschlag geschafft, der Stabilität und Perspektive gibt. Nun verfügt die Großbank über ein exzellentes Team, das die Strategie neu justieren und in den kommenden Jahren exekutieren wird. Denn eines steht fest: die UBS wird sich ändern. In wenigen Tagen wird Ermotti den neuen Strategieplan vorlegen. Die Stoßrichtung ist klar: weniger Risiko, weniger Zockerei, Fokus aufs traditionnelle "Swiss Banking". Im Klartext: die Investmentbank wird sicherlich schrumpfen, vor allen jene Business Lines, die nicht den Kundenbeziehungen der Bank dienen, wie Teile des Handel mit Festverzinslichen Wertpapieren, Rohstoffen und Devisen (FICC); das Private Banking wird sicherlich wachsen, vor allen in den dynamischen Geographien Asiens. Sicherlich wird die UBS ihre beneidenswerte internationale Präsenz in 50 Ländern nutzen, um künftig noch bessere Geschäfte dank der Globalisierung zu machen. Ermotti dürfte zudem versuchen, das "glocal"-Attribut der "Global Swiss Bank" zu prägen. Denn trotz der tiefen Krise, in die vor allen die UBS als größtes Institut des Alpenlandes gerutscht war, hat das Schweizer Banking wenig von seiner Strahlkraft verloren. Dies natürlich auch deshalb, weil die vornehmen Privatinstitute wie Julius Bär oder Pictet sich weiterhin in der ganzen Welt einer herausraenden Reputation erfreuen.
Der neue CEO hat also eine gewaltige Aufgabe vor sich. Sergio Ermotti ist aber bestens dafür gerüstet. Schon als Deputy CEO der UniCredit hat er große Herausforderungen gemeistert und gewaltige Veränderungen in dessen Investmentbank in die Wege geleitet: weg vom unpersönlichen Geschäft, hin zum kundenorientierten Flow-Geschäft, beispielsweise.
Er hat umstrukturiert, reorganisiert, das Corporate Banking synergisch an die Seite des Investmentbankings gestellt und nebenbei zwischen 2009 und 2011 den größten Gewinn aller Divisionen der italienisch-europäischen Großbank geliefert. Das Private Banking/wealth Management ist unter seiner Führung internationalisiert worden und hat sich glänzend entwickelt.
Wäre es nach dem Willen des im letzten Jahr gefeuerten langjährigen UniCredit-CEO's Alessandro Profumo gegangen, wäre Ermotti wohl zu seinem Nachfolger gekürt worden. Vermutlich war genau das der Grund, warum es anders kam: Osteuropachef Federico Ghizzoni wurde an die Spitze berufen.
Nun hat Ermotti seine Revanche.

Montag, 14. November 2011

No pick nick for Monti

Every start is difficult. Also "Super-Mario" had today to make this experience. It was quite clear, that after the euphoria in the last days more sober moments would come.
Today the incoming Prime Minister held talks with different political forces in order to assure the broadest possible majority in the two Houses of the Italian Parliament. And it emerged chrystal clear, that the formation of the new government will not be a pick nick. The political parties are reluctant to provide Monti "carte blanche". And Berlusconi has already started to threaten, that he could in any moment put an end to the new government. Unfortunately this is in theory possible, because the center-right coalition has in one of the two Houses, the Senate, still a very robust majority. Add a more cautious feeling in the markets, where the spreads between Italian T-bills and German Bunds today returned to 500 basispoints and ready is a soup, that tastes not so good than the one of the last days.
Monti has in the next couple of days to solve overall one key question: will the cabinet be a purely "technical" staffed with ministers without any political link or will the government include also some politicians from the parties, which promised to support Monti? That latter solition would create more stability. But Berlusconi as well as the leader of the major opposition party PD, Pierluigi Bersani don't like that. They prefer to have nobody of "their" people in the government to maintain more freedom on their decisions.
Monti should press them hard, because of the superiority of the solution. On the other hand he has to be flexible enough to understand realistically, what in this Italian circus is feasable and what is not feasable. He cannot lose much time. The new governement has absolutely to be formed in two, maximum three days. It would send a desastrous signal to the European partners as well as the markets if it would take longer.

Sonntag, 13. November 2011

Expect a Lean and Efficient Management by Monti

A long and ardous day is waiting for Italy's President, Giorgio Napolitano: he will meet with all political forces, which are represented in the parliament - from the Südtiroler Volkspartei to Berlusconi's People of Freedom party. The objective is clear: the President has to organize a broad majority for the new government and strap commitments from the political parties. No doubt, that he will succeed. At the end Monti will have the broadest majority, that in the Italian history any government has had. Certainly this refers only to this crucial moment of deep national crises. The picture could and will will change in the future. Personally I do expect that latest in te next Spring, that the support will diminish notably. So speed matters now.
How will the new government look like? It seems - from the perspective of this morning- that it will be a purely "technical" cabinet with highly qualified ministers, who are not linked to any political force. Even if I don't like this idea hundred percent, it can have an important advantage: independence and dynamism. Monti has to get things done. Fast. With such a cabinet the efficiency would be higher than in the case of a mixed technical-political government. But wait and see, the decisions in these regards are not yet taken.
On thing however is sure: The cabinet will be lean and mean. Monti plans only with 12 ministers or so, no deputies, no secretaries of state. What a difference to the government Berlusconi, where some 40 or 50 people had a function (and often nothing to do).
Expect from Monti a highly efficient management style. Good for Italy, good for Europe.

Samstag, 12. November 2011

It's done - Berlusconi is out, but...

My, and not only my fears yesterday evening luckily proved exagerated. Silvio Berlusconi has behaved as promised. No poker game. Simply resignation. Halleluja!
A new spin has emerged however today: many politicians are talking now about a "technical government", which would mean a cabinet without the presence of leading political figures from the Parties.
This would clearly weaken the position of Mario Monti, the incoming Prime Minister. It would be much easier for the political forces in the parliament to act swiftly in a destructive way, don't running the risk to damage their rappresentatives in the Monti-team. I really hope that this will not happen. Because a governement full of experts and professors has for sure a high intellectual level, but it wants a bit more than smartness to govern really this huge and complex country. Attenzione Mario: the first traps will emerge from tomorrow on. This is Rome, not Brussels. Take care!

Freitag, 11. November 2011

Shaky Italy: Berlusconi creates difficulties for the formation of a Monti-government

This was not forseeable this morning, when I wrote my last blogpost. But as far as the support of the Berlusconi-movement (PDL) for a Monti-led government is concerned, have emerged today major difficulties. The outgoing prime minister seems to be oriented to influence directly the names of the new cabinet. If not, he would withdraw his support, sources of the PDL, said this evening. Berlusconi could also propone to President Napolitano a different name than Monti.
The "cavaliere" once again shows with this unacceptable Poker game no sense for the country. He is a power drunken irresponsible. What happens im the markets on Monday, if the new government under the leadership of the highly reaoected Monti will not be formed? For sure a desastrous bloodbath! But this does not interest the crazy man, who behaves like Emperor Nero, who burned Rome and dropped afterwards a tear.
Italy will only be on the safe side, when Berlusconi will be definitely out of politics. The man is pure poison for Italy.     

Don't worry: Monti will save Italy!

As I explained this morning, in Italy the road seems 95% cleared for the formation of a new government under the leadership of Mario Monti, a highly respected academic and economist, who held in two different administrations in Brussels the post of a European commsissioner, first for the Internal Market than for Competition. I see three main reasons, why Monti will save Italy in the next couple of months.
1. Monti is the right man at the right time.
2. He will create a very broad majority in the parliament - a kind of "Great Coalition" - which will provide to the Prime Minister an incredible amount of power, maybe more than any of his ca. 60  predecessors. 
3. He will form a cabinet, that will include the best people. They will come from the two main political sides but there will be also tecnocrats, academics and leaders from respected institutions like the Bank of Italy on board.

Ad 1. Monti is the right man, because he is very smart. He has highest tecnical and ethical standards. He has an incredibly strong and courageous personality - remember his storical fight against Microsoft, that ended with the record fine of 497 Mill Euro and a real victory for the EU. He is visionary and bold. But he is also a affable person, listens very well and is a very good team player. Last but not least he is in the international elite one of the most respected men. He is the best face that Italy has at it's disposal to improve very quickly the terribly damaged image of the country, that has reached in the last weeks scary levels. Nobody here would have ever imagined that Italy would be one day compared to Greece and therefore with the weakest member of the European Union. A shame and a slap in the face for this proud country - founding member of the European Community - that is not only incredibly rich in terms of culture and natural beauties, but also in terms of entrepreneurial spirit, creativity, inventiveness and sense for quality - think about the excellent food and the unicque wines, think of the luxury companies like Armani, Zegna, Versace, Loro Piana...
So Monti will be very quickly very visible on the international stage and I'm sure that he will faster, than many think today, let forget the disastrous past for the country, that Berlusconi with his unacceptable behaviors has been responsible for. In a certain sense is Mario Monti the perfect contrary to Silvio Berlusconi. The world will understand that Berlusconi was not the norm. He didn't represent the Italian-way to be and to do, but he was the exception. And the world will understand that Italy luckily has at it's disposal a broad group of classy people, internationally educated and open minded.

Ad 2. Monday Monti will start working. He will explore the situation on both sides of the political spectrum, in the People of Freedom (PDL) - the Berlusconi movement and the Democratic Party (PD), the left-of the-center party led by the reasonable Pier Luigi Bersani, a former communist, who has turned to a Social Democrat.
The mainstream of the parliamentarians in the Berlusconi party will happily support Monti, because of the alternative scenario, that would prove desastrous: early elections before Christmas. Be sure, that in the aftermath of the utterly flawed crises-management the PDL would suffer a storical defeat. So, the longer Monti stays, the better he can make forget the past, which is in the interest of the PDL leaders. At least today. Elections should be however hold when Monti will have done the bulk of work, expect in March, maybe April.
On the other side of the political arena dominates the word "responsibility for the country". Even if early elections could lead with a high probability to a relative majority of the PD, which could then form a coalition government together with some smaller parties - some on the left side of the spectrum as well as the catholic UDC of the handsome and smart Pier Ferdinando Casini. To be clear: PD-boss Bersani would have a good chance to become Prime Minister in only a few weeks, a dream for every homo politicus. But he shows an admirable attitude, that Berlusconi never had, to put the countries interests before his one. Chapeau! That means: the mainstream of the PD under Bersani will support Monti.
The only party with a significant size, which will not follow the new government will be the regionalist, sometimes secessionist Lega Nord of Umberto Bossi. The long-time ally of Silvio Berlusconi will go happily in the opposition to sharp the profile of his party for the elections 2012 after the desastrous months passed on the benches of the government.

Ad 3. The first rumors of the names for the new governments are very encouraging: 
(a) Gianni Letta, who was crucial during the long tenure of Berlusconi, that the Prime Minister behaved in a constitutional way avoiding even more desasters, should stay as Deputy Prime Minister, covering de facto the role of Chief-of-Staff for Monti. He is a first class civil servant with enormous experience (he is 76)  and he is also a feel-good-factor for Berlusconi, who apparently linked the future of Letta with his dispomibility to resign in reasonable terms. 
(b) The current minister of justice, Nitto Palma, more a legal technician than a real politician should stay as well or should be at least be substituted by a "neutral tecnician". This is also crucial for Berlusconi, because he is obsessed to be persecuted by the justice system. Berlusconi wants to sleep well. And - frankly speaking - I can understand that. 
(c) As successor of Giulio Tremonti at the finance-ministery could arrive Fabrizio Saccomanni, currently General Director of Banca d'Italia, who seemed for some weeks as most likely successor of Mario Draghi as Central Bank Governor. This government department will however change quite strongly his character, because much of the power for economic and financial will be executed in the future by Prime Minister Monti himself. It seemed sometimes in the cabinet of Berlusconi, that Tremonti had more power than his boss.
(d) At the foreign ministery should arrive with Giuliano Amato another member of the meritocratic elite Italy's. He is as former prime minister and multiple minister in different functions; very strong connected internationally. He knows everybody, who counts, and he has the characteristic, that I would call "gravitas" - i.e. seriousness, a natural authority and competence. I was lucky to interview him at the very beginning of my mandate for Handelsblatt, when I arrived 11 years ago as correspondent for Italy.. He was in these times caretaker Prime Minister and he impressed me due to his affable personality and his sharp intelligence.
(e) From the PD side could play a leading roles the expert for social affairs Pietro Ichino as Minister for Welfare and 
(f) Enrico Letta, who was once with 33 the youngest ever Minister in Italy. At the beginning of his 40ies he is still young and could become Deputy Prime Minister in the more political role.
(g) From the catholic UDC will be also included someone, most likely Rocco Buttoglione.

Bottom line: Monti will form a lean and diversified cabinet, which has the perfect mix of politicians of the different parties, that support the government in the Parliament - younger and more experienced -  and technocrats. This government will be highly operative and active. It will move Italy on. If the world doesn't give credit to such a project I do not understand anymore anything! 
Two words to the financial impact: I'm sure that the spread between German Bunds and Italian T-bills should quickly go down from than 500 basis points to 350 maybe. Later this year they could even come down further, if the reforms are well designed. It will be for sure a much more sustainable level than today. The country will be able to refinance itself over the markets in 2012 and will not anymore be forced to be helped out by the bond purchases of the ECB. Italy will prove, that it is not Greece.
Although I'm half Italian, although I live for a long time here, one thing is totally unclear to me: why needs this crazy country always (as in 1992) terrifying crises to move on finally? Crazy country, really!

The miracle of Rome

In the last three days something miracolous has happen in Rome: Italian politics has followed a path of reasonableness and appropriatness. The behaviour of the main political actors has become increasingly rational and smart. Sure: Berlusconi went into parliament Tuesday with fully wrong expectations, that his majority would still be there. But his next steps, to go to the President of the Republic, Giorgio Napolitano, and to offer him his resignation was exactly that, what he had to do in democratic and constitutional terms.
Frankly speaking: I didn't expected such an orderly procedure, because of my doubts, that Berlusconi suffered increasingly the "Emperor Nero Syndrom", that means: a lost sense for reality. Well, I was wrong, and I'm more than happy about this misjudgement.
I think however, that such a reasonable handling of the crises was only possible for two reasons:
1. The impeccable political management of the real hero in today's Italy, President Napolitano. With the perfect mix of pressure, moral suasion and concessions he convinced Berlusconi to do the right thing and to free Italy from his legacy
2. The psycological shock for Berlusconi, when he sat on the government-bench in parliament seeing that even his eldest allies were leaving him alone. It can be compared only to the surprise of Julius Caesar, when he asked to his murder Brutus at 15 March of 44 BC, "tu quoque fili?". Berlusconi had been one of most optimistic men on earth. He was used to win, in politics as well as in business and in his private life. Don't forget, that he created with creativity, also ability, a bit of luck and a lots of corruption out of nothing  one of the most precious media-conglomerate in Europe. For many years Berlusconi was not only the most powerful but also the wealthiest man of the country. He had never expected such an end.
So what's next: After the latest developments I do expect, that this weekend the two chambers of the parliament will have passed the Stability Law, which is more or less the transcript into law of Berlusconis letter to Brussels with a series of commitments, like the increase of the pension age and the liberalization of certain professions. The law is not bad, but it has substantially only the function, to be the very last action of this government. The approval is not in doubt and suddenly after Berkusconi will go to the President to resign officially from the post of Prime Minister. After that, Napolitano will meet with Mario Monti and mandate him to form a new government of National Unity.
 I will explain in my next Blog post, that I will post in the next couple of hours, why Mario Monti will succeed in  forming a very good governement, how he will assure a very solid majority on the parliament and what will be the next steps. With other words: how Monti will save Italy. Stay tuned!

Donnerstag, 27. Oktober 2011

European deal risks on many unclear details

Whoever analyses the outcome the European summit, that terminated at 4:30 this night, struggles with a clear valuation.
Sure, all three chapters that had to be adressed, were adressed: orderly default of Greece, fresh capital for banks and the strengthening of the firepower of the EFRS. The problem is not even, that the expectations on the single dossiers were disappointed, no that's not the point, because a 50% headcut on Greece's debt, 108 Bill. of cap hike for the leading 70 European banks and the strengthening of the EFSF to 1 Trillion Euro are impressive figures. I hadn't anymore expected that, overall from the German side.
The issue is about lack of details and the unclear implementation. In management terms you call that execution risks.
While Greece is the most concrete dossier with remaining uncertainties about the concrete adherence of the bank, the capital strengthening plan seems more nebulous. While the target sum of 9% "highest quality capital" is clear, it remains open, which assets banks can count as capital in that definition. This question had to be answered upfront, in my view.
The most fuzzy thing is however the quadrupling of the EFSF. European leaders didn't even name the final sum because of the many uncertainties. Pundits calculate, that it should be roundabout 1 Trillion Euro, but nobody said that officially. And the mechanisms are vague (insurance solution with the participation of private investor, but how, who, what conditions?)
The impression remains, that the leaders had committed themselves in a political move to the bottomline. How this bottomline will work, has to defined later. This process is very top-down and it is well known, how many risks such a design runs.

Mittwoch, 19. Oktober 2011

Let's talk seriously about bank capital

Making banks more stable and resilient is one of the key questions in the current European crises. It seems, that regulators and policy makers have reached a consensus, that banks generally should prop up their capital base to have bigger buffers against losses at their disposal. While this is generally a comprehensive objective, I do not aggree, that it is one of the most pressing problems in this phase. So I would like to pose two more or less provocative questions:
1. Is the capital base of European banks really too low?
Just remember: before the crises the minimum regulatory capital stood at 4% Core Tier 1 (CT1). Most banks had an equity base of around 6%. Although  this was low, the most prominent failures were caused by a shortage of liquidity, not capital. This was the case at Northern Rock in the UK, IKB in Germany and Lehman Brothers in the US. Same picture two weeks ago at franco-belgian Dexia. Nevertheless capital remained a key focus of the various banking reforms and that was of course also correct. The effect is, that today the average bank has a CT1 of 9%, many arrive even in the double digit area. But nobody seems to take notice of that. 
So Ladies and gentlemen: How much capital would be appropriate? This not a scientific question, but it depends on two factors: the political and the market sentiment. Many politicians would like to make banks so robust, that they cannot fail anymore. In such a scenario banking cannot be anymore a profitable business and should therefore - as a consequence - be socialized. And the markets? If they really see a benefit of higher CT1 ratios can be doubted. If that would be the case the Swiss banks UBS and CS (with CT1 over 15%) would structurally over perform the likes of Deutsche or Barclays, which is not the case. 
2. So - if its not capital - what are the real problems surrounding banks?
The flawed stress tests have shown, what's the key question: it is the reliability of sovereign debt. All banks have more or less large amounts of sovereign debt on their balance sheets. Italian banks have Italian treasuries, French banks bonds of the French government. Most of them have also some sort of troubled peripheral debt, Greek or Portuguese in their books. How much are these holdings worth? It makes a huge huge difference, if these bonds are considered risk free or have to be discounted by - say 50%. No capital base, even the highest, could not withstand in that case. But: on what depends the value of sovereign debt. This is exclusively a political question. If Europe guarantees seriously with all it's firepower for example Italian and Spanish debt, it suddenly becomes risk-free. If not, it should be marked to market, Billions of losses would depress the banks threatening the recovery. I have the feeling, that the governments - overall the German - prefer to talk about banks capital ratios while they should absolutely focus on the question of sovereign debt.

Dienstag, 18. Oktober 2011

Muddle through the middle

Frankly speaking: I don't understand The Germans anymore. We are heading more and more towards a catastrophic crises, but the in Berlin continues to play it's masochistic game of doing too little too late.
This morning the CDS spreads of France and Belgium reached with 200 respectively 300 basispoints peaks never seen during the Euro era. That means that the cost to insure against a default of these countries has neve been so high. On top France risks now a lowering of it's credit rating outlook from Moody's, which could be the first step to withdraw the country it's AAA rating in the next 12 months or so. What does that all mean?
Whoever thought that the Euro crises would be a isolated regional event of some profligate southern countries like Greece and Portugal, maybe also Italy and Spain, has been proved wrong. The Euro crises is a crises of the whole Euro-zone. Useless to point the finger on certain countries, that behaved wrong in the past. We are in one boat and we have to make sure that this boat will not sink.
When France and Germany announced to postpone their decisions in terms of crises solution mechanisms to this weekend, the hope was nurtured, that they would really start to think big. Yesterday's statements from Ms Merkel and Mr Schäuble said the contrary: don't believe that the crises on Monday will be over. As if this would be a bad news!
Don't take me for naïf. It is clear that the Franco-German tandem cannot fix all the problems, that occured in the last two decades with one announcement.  But they could show the world (and the distrustful markets), that they have really started to understand the dimension of the problem. Apparently they prefer to continue to muddle through the middle.

Mittwoch, 12. Oktober 2011

Bold words are useless without credibility

The tricky thing about communications is, that words should always be consistent with actions. Take the Euro crises. The British Prime Minister David Cameron asks the European leaders to go for a "big bang approach" now. They simply would need a "bazooka" to solve the current crises. Sounds strong, isn't it? 
The problem is, what the hell does this concretely mean. Would an increase of the European Financial Stability Facility (EFSF) from the current 440 Bill. Euro to - say 800 or 1 Trillion - already be a "bazooka"? Or should the increase be even bigger? Not clear. When the EFSF was created the spin doctors of the European leaders called it a "shock-and-awe"-plan. The issue was however that the shock took just a few days to evaporate and awe of the financial markets has never existed. The words were bigger than their meaning. 
This can happen. But it should not happen too often. Because every time the senders of such messages loose a piece of their credibility in the eyes of their recipients. The biggest asset in communications, credibility, disappears quite easily. 
Exactly this is today the problem of Ms Merkel and Mr Sarkozy. Even if they would shoot with the "Bazooka", would anybody believe that this time, after so many others times, this is true? Rebuilding credibility is so much harder than losing it. 
What kind of asset, also in financial terms, real credibility can be, has been brilliantly shown by an institution, that has always been consistent: the SNB, the Swiss National Bank. When it announced some weeks ago to intervene in an "unlimited" way to lower the value of the Swiss Franc, the speculation towards new highs immediately stopped. The markets took the words for granted. It is funny, that despite the bold word "unlimited" the SNB had to spend only little money at the end, because a fight between the Central bank and the markets didn't even start. Consistency is a smart communications strategy. 

Mittwoch, 5. Oktober 2011

Financial Crises 2.0 ante portas

We are definitely back in the dark days of the autumn 2008. That was my strong feeling, when the news about the life-threatening funding and liquidity crises of Dexia broke. The Franco-Belgian bank will be split up now, toxic assets will be put into a "bad bank", the governments have provided a state-guarantee for the lender. But who cares about that? The shares have more or less halved their value. And nobody believes, that Dexia can survive in it's current form.
The real problem is not Dexia. The real problem is, that Dexia represents just the first European bank in this new phase, the Financial Crises 2.0. We are staring in the abyss. Who's next? All banks with a similar model - fund short term, lend medium-long term - are now eyed with extreme mistrust. That was already one of the main reasons for the first round of collapses in 2008/2009,  like Northern Rock and Hypo Real Estate. The fact, that sovereign debt from the periphery plays nowadays more or less the same destabilizing role as CDO's and similar structured credit in the first phase, makes all banks with a portfolio of Greek, Spanish or Italian bonds, like Dexia,  extremely vulnerable. The parallels between October 2008 and October 2011 look embarrassing. 
I'm sure that the Financial Crises 2.0 cannot be resolved simply by propping up the capital of the European banks. That would be only the right method, if capital strength would be the key weakness of the system. But: the equity base today is already far far stronger than it was in 2008. Markets don't take notice of that. No! The real problem once again is funding and liquidity and the underlying issue is the lack of trust in banks and peripheral European sovereign debt. 
Instead of wasting time discussing about the capital of the banks, the Finance Ministers should discuss seriously about leaving the trust crises once for good behind us.       

Donnerstag, 29. September 2011

Draghi won't give Italy a run on his money

In a couple of weeks the Italian Mario Draghi will take over as the third Governor of the European Central Bank ( ECB) replacing the Frenchman Jean-Claude Trichet. As the responsible person for the monetary policy of the Euro-zone he will be one of the most powerful people in the world. Among his key-duties are actions on interest rates and money supply as well as providing liquidity to the banking sector.
 I think we can agree, that today the role of the ECB-President is even more influential than it was before the economic crises. The central bank makes de facto often the job, that the governments of the Euro zone should, but cannot or do not want to do. One example is the multi-billion acquisition programm of sovereign bonds in order to sustain such securities, like Spanish or Italian government bonds. With such steps the ECB mixes in fiscal policy and leaves it's usual territory of monetary policy - controversial but to appreciate in my view,  because pragmatic and without alternatives. 
Not at least for that reason many people in financially sound countries like Germany or the Netherlands were initially against the appointment of an Italian at the helm of the ECB. However after a communications campaign during spring it was clear to everybody, that this ominous Mr Draghi is not the "typical Italian",  if such a figure exists at all...stability driven, hawkish and careful in his approach he looks more like a German than a member of the Club Med. 
What does that mean for his future action? When you read the joint letter, that Draghi and Trichet wrote to Berlusconi seven weeks ago and that was leaked only today to Corriere Della Sera, you'll understand it. In that letter the future ECB-boss holds the pistol on the Italian Prime minister's head telling him in detail, what he has to do now: anticipate the balanced budget to 2013, frontload the bulk of the measures to this year, liberalize the public services etc. This is a formidable paper, because it means that Draghi is leaving the territory of moral suasion and moves towards a pure power play. What is not mentioned in the letter, but clearly laid out by the spirit of the words: or you do this, or you will loose our support. And Berlusconi knows perfectly, that this support consists in massive acquisitions of Italian bonds by the ECB in order to drive down their spread vis-a-vis German bunds. Without this action Italy's public finances would soon run into trouble - and with them also the government itself. 
I expect more of that in the future. Italy will not have an easy game, because an Italian sits at the top of the ECB. On the contrary, because he is an Italian he will think twice before helping out his country with money from the ECB. Berlusconi cannot pin his hopes on Draghi. Good for Europe. Good also for Italy.  

Montag, 26. September 2011

Europe needs more courage

The European Union has two substantial problems, one is fragmentation, the other a lack of courage. Fragmentation makes the political process messy and complex. Different countries in different situations have different interests. It is hard to talk with one voice and to act with one hand in a Union of 27 and a single currency zone of 17 countries.  
A lack of courage makes it on the other hand impossible to address rapidly and effectively a crises. The Greek dossier is now on the table for two years without being resolved. Now the possible default risks to become a  major problem for the survival of the whole Euro zone. European leaders, overall the German chancellor and the French president, have failed to treat the problem properly. The handling was far too timid. Otherwise the crises could not spill over to some of the biggest core countries of the Euro zone, notably Spain and Italy. 
Greece has a public debt of not even 400 Bill. Euro, Spain roughly double and Italy more than four times that amount. Nice difference, isn't it? The figures show, how disastrous a full blown contagion would be. Europe would not be prepared for that.
Up to now the leaders agreed to set up a European financial stability facility of 440 Bill. Euro, that should step in to stabilize weak countries, if it occurs. For Greece the current dimension of this rescue fund seems to be sufficient. Not for Italy and Spain. Their debt piles are far too massive to be handled by the EFSF. So the first thing to do is therefore to beef up these funds by four to five times of todays dimension. It seems to be bold, but there is no choice. Furthermore the fund could be leveraged, if needed, which would prevent money-flows from the member countries. Market participants would soon recognize, that European leaders will not accept a failure of the Euro zone. This would lift most of the pressure and provide air to breath. In that scenario I'm quite sure that the fund would not even be used.  
As a second step European banks should be recapitalized in oder to end the speculations of bank defaults. The balance sheets of the banks are full of sovereign debt, Italian banks have mostly Italian bonds, Spanish banks spanish bonds and Greek banks greek bonds. As long as markets valued this sovereign debt as risk free it didn't represent a problem, now that the markets calculate with a probability of sovereign default it has become a major issue overall for the bank of the crises countries. There is no way out, the capital of these institutions have to be strengthened, if possible through the markets, if necessary with public money. A bank default would cost far more than the amount of money, that should be now injected into the system, overall because it is not thrown in a dust bin. The government would simply buy a stake of the system, that could be sold in the next couple of years, maybe even with profit. 
Beefing up the EFSF means to stop the market rout, strengthening the banks capital base means providing the financial system with stability and calm the nerves. The debt crises could be ended in that way. 
Europe needs to act quickly. The alternative is not acceptable. The Euro zone would be destroyed and a prolonged, severe economic crises would follow. In such a gloom-and-doom-scenario the social and political effects for the continent are totally unclear.  
Do the European leaders have enough courage to do the right thing?    

Donnerstag, 22. September 2011

Why Berlusconi is a dead man walking

All politicians do have enemies. Heads of governments fight against the opposition (Barack Obama can sing a sad song about that in these days). Conservatives are usually attacked by the trade unions, left-wingers by the employees. That's life.
The picture changes dramatically, if a political leader looses his most important allies. Exactly this happens today to Silvio Berlusconi. I'm not talking about his partners in the government coalition, even if the strange relationship between him and the Lega Nord  leader Umberto Bossi would merit a separate blog-post. No, I refer to his supporters in the population, the civil society.
Exactly 10 years ago happened something, that I would call Berlusconi's "coronation-mass". I recall lively the general assembly of the powerful industrial and employee association Confindustria in Parma. The euphoria of the delegates was even for Mediterranean standards overwhelming - more than 10 minutes of standing ovations after his speech, where he promised a "liberal revolution" and a "new economic miracle". His credibility was extraordinary, not only because he was in these times still a brilliant communicator, but also due to his credentials as one of the most successful entrepreneurs and richest man of the country. 
He was still the leader of the opposition. To me, in that moment it became crystal clear, that he would not only win the next elections, but that he would stay for quite a long time in power.   
Today everybody knows, from the Agnellis in Turin to the hairdresser at the next corner, that Berlusconi has not kept his promises. In the last decade Italy has lagged behind it's European peers, overall Germany, in terms of economic growth and wealth-creation. The reforms of the labor market, the service-sector, the fiscal policies and the fight against red tape have not come true. The prime minister was more interested in fixing his own judicial issues and conflicts of interest via laws ad personam. Italy has not moved on.  
Now the business elite wants to get rid of the man: "Deliver the reforms in 10 days, not 10 years, or go home" was the strong message of Confindustria-President Emma Marcegaglia yesterday. The export-oriented industrialists are sick of the Berlusconi-jokes they have to listen abroad: "He makes a mockery of us," says Marcegaglia. No doubt, he has lost the support from his key-allies. Without them Berlusconi cannot survive politically.                          

Mittwoch, 21. September 2011

Berlusconi needs an Exit-Strategy

The history of the ancient Roman tells thousand tales about lonely and confused emperors. Many of them - from Cesar to Nero - realized only far too late, that the game was over. Also Sun King Silvio feels increasingly desolate, but we can doubt, that he fully understands, that these could be his very last days as Italy's leader.
It's not anymore just the opposition, that asks him to step down as soon as possible. No, also more and more fellow party leaders, for example the co-founder of Berlusconi's "People of the Freedom" and former Minister of the Interior, Giuseppe Pisanu, press Berlusconi to set up an "orderly transition". And even if Standard&Poor's downgrade of Italy's sovereign debt from A+ to A yesterday didn't come surprisingly - it triggered a surprisingly harsh reaction from the public opinion.
The Milan based daily Corriere della Sera, considered the most relevant voice of Italy's conservative-liberal citizens, placed today a significant editorial on it's first page, where a long-time defender of Berlusconi, Sergio Romano, a former ambassador in Russia, asks the Prime-Minister openly to announce anticipated elections for the next spring. The biting cartoon next to the editorial shows Berlusconi sitting as a beggar on the street: "Less Standards but always Poorer," is the title.
What is the perspective now? Nobody knows, but there are certain scenarios in place, which have different probabilities to come true. I try to list them in the order of likelihood:
1. Similar to Zapatero in Spain, Berlusconi could announce, that he will not run anymore for office and that elections are anticipated to the first quarter of the next year. This is exactly the solution proposed today by Corriere and it seems that the moderate wing of the major political forces could support such a move. Berlusconi feels the heat. And he will consider very well this exit strategy, because it represents an acceptable transition. It would give him enough time to place a potential successor, most likely the party secretary Angelino Alfano, a former Minister of Justice and loyal author of some "tailor-made" laws for his master. And it would at least conserve the appearance, that Berlusconi is still in the driver seat. Not very elegant, but it could work. Probability 50%.
2. Berlusconi could try to stay in power until the end of the legislation in 2013, not running anymore for office. The man is 75 but still very combative. Be sure, that this is his preferred solution, because it would conserve - at least in his eyes - in the best way his image. The man is a Marketing Man, as I tried in the past to explain to the Handelsblatt-readers; he is not a statesman. Don't underestimate him, he has shown in the last decade an extraordinary ability to survive. Probability 30%.
3. Berlusconi could have to step down due to a coalition crises triggered by Bossi's Lega Nord. The President of the Republic Giorgio Napolitano could in that case help to install a "technical" government. Italy has made good experiences with such institutional solution in the 90ies, when some of the most important reforms have been put in place by the independent Prime Ministers Amato, Ciampi and Dini. Such an administration would today be most likely lead by the former EU-Commissioner Mario Monti, who has an excellent standing. The task is clear: inject trust from the markets and clean up the mess. For Italy this would be for sure the best solution, but nobody in the political arena - not even the smaller parties - like it. The reason, why it could come true against all odds, is that the majority of the Italians would support such a solution being a symbol for a real new start. Also President Napolitano seems to like it. Probability 20%.  

Dienstag, 20. September 2011

Fehlendes Wachstum, nicht die hohe Verschuldung ist Italiens Kernproblem

Heute nacht hat die Ratingagentur S&P die Kreditwürdigkeit Italiens um eine Stufe auf A nach unten korrigiert. Es ist interessant, dass die Experten diese Entscheidung nicht in erster Line mit dem enormen Schuldenstand von etwa 120% des Bruttoinlandsproduktes begründen, sondern mit den düsteren Wachstumsaussichten des Landes. Die Prognosen für dieses Jahr liegen nun nicht mehr bei 1,3% sondern nur noch bei schlappen 0,7%. Bei dieser schwachen Dynamik wird es schwer, die angestrebten Steuermehreinnahmen auch tatsächlich zu realisieren.
Der Kern der News ist folgender, wie ich schon vorgestern in meinem Blog argumentiert habe: es ist nicht sinnvoll, die aktuelle Krise in Europa ausschließlich auf die Schulden zu schieben. Mangelndes Wachstum spielt eine mindestens genauso wichtige, vielleicht sogar noch wichtigere Rolle. Im Falle Italiens ist dieses Thema nach fast 20 schlappen Jahren besonders drängend. Wer meint, dass das Land nur sparen muss, um wieder auf die Beine zu kommen, befindet sich auf dem Holzweg. Viel wichtiger wären Reformen, um die verkrusteten Strukturen aufzubrechen. Nota bene: dafür würde man gar kein Geld benötigen, nur politischen Willen. Aber der fehlt in der derzeitigen Regierung von Silvio Berlusconi, wie auch S&P heute richtigerweise anmerkt. Je früher der alte Mann Platz macht für einen Neuanfang, desto besser für sein Land.

Montag, 19. September 2011

Zweiter Nachklapp: Was ist mit der UBS los?

Die UBS hat in diesen Tagen nicht nur unter Beweise gestellt, dass ihr Risikomanagement löchrig ist wie ein Schweizer Käse, sondern auch, dass ihre Kommunikation bestenfalls die Qualität einer Provinzsparkasse besitzt. Und damit tue ich vermutlich den meisten Provinzsparkassen Unrecht.
Direkt nach dem Bekanntwerden des 2,3$ Milliardenlochs, das ein 31 jähriger Trader durch ungenehmigte Deals in die Bilanz gerissen hat, fühlte sich die UBS außer Stande zu sagen, in welchem Bereich ihrer Investmentbank der Betrug statt gefunden hat. Schnelligkeit und Präzision sehen anders aus.
Am Wochenende kam dann die im Banksektor übliche Verteidigungsstrategie des technischen Relativierens zur Anwendung. O-Ton in Englisch: "The positions taken were within the normal business flow of a large global equity trading house as part of a properly hedged portfolio." Wer solche Sätze von sich gibt, will nicht wirklich informieren, sondern nur Nebelraketen zünden. Transparenz sieht anders aus.
Die unklügste Äußerung lieferte indes CEO Ossi Grübel. Zwar gab er in einem Interview mit einer Schweizer Sonntagszeitung zu, dass er für alles was in der Bank geschehe die Verantwortung trage. "Wenn Sie mich fragen, ob ich mich schuldig fühle, dann sage ich aber Nein." Kein Wort über mangelnde interne Kontrollen; schwerlich hätte ein Mitarbeiter über drei Jahre sein Unwesen treiben können, wenn diese Tip-Top gewesen wären. Selbsterkenntnis sieht anders aus.
Ich habe bereits kurz nach dem Bekanntwerden des Skandals argumentiert, dass sich weder Grübel noch Investmentchef Kengeter halten werden können. Heute bin ich komplett überzeugt, dass ein Führungswechsel in der UBS nur noch eine Frage der Zeit ist.

Sonntag, 18. September 2011

Schulden sind nicht der Hauptgrund für die Schuldenkrise

Als ehemaliger Rundfunkjournalist, der auch schon mal Sendungen mit Hörerbeteiligung mitgestaltet hat, ist mir klar, dass viele komplexe Themen eher emotional und polemisch diskutiert werden als rational und mit kühlem Kopf. Das trifft auch immer mehr auf die Debatte in Deutschland über die Euro-Schuldenkrise zu. Kein deutsches Geld für faule Griechen! Warum sollten wir Berlusconis Sex-Orgien mit unseren Steuern finanzieren? Und überhaupt: die Portugiesen, wir wussten es doch schon immer, dass die zu nichts taugen! Über die Iren liest man weniger, aber sie passen ja auch schlecht auf das Stereotyp des lebenslustigen aber sorglosen Südländers, der mit Mandoline und Rotwein am Strand sitzt, anstatt ehrlich und hart zu arbeiten.
Eine solche Verengung der Perspektive ist nicht nur dumm sondern auch gefährlich, weil die Debatte hierdurch unsachlich wird und zu falschen Schlüssen führen könnte. Zwei Fragen, die zu wenig diskutiert werden, deren Antworten aber unklarer sind als viele denken, sind die folgenden: was würde passieren, wenn im Falle eines Ausscheidens des "Club Med" eine "Triple A" Währungsunion entstehen würde mit Deutschland und den Niederlanden, Finnland und Luxemburg, vielleicht noch Frankreich? Und: sind wir uns tatsächlich so sicher, dass die Schulden und die unsolide Haushaltsführung bestimmter Länder das Kernproblem darstellen?
Ohne dass ich einen Anspruch darauf erhebe, es genau zu wissen, zitiere ich in Bezug auf die erste Frage einen der klügsten Beobachter der Weltwirtschaft, Martin Wolf, Chefökonom der Financial Times, der nebenbei noch nicht aufgefallen ist als großer Freund der Währungsunion:"Die Deutschen sollten sich bewusst darüber sein, dass in diesem Falle der Wechselkurs stark steigen würde, die deutschen Exporte folglich weit weniger gewinnträchtig wären, das Rückrat der deutschen Wirtschaft also unter Druck käme und damit auch das Wachstum. Daneben wäre dies auch gleichbedeutend mit dem politischen Scheitern zweier Generationen, ein starkes europäisches System zu bauen, das Deutschland umgibt." Sehen all jene, die heute cool ein Ausscheiden Griechenlands aus der Währungsunion fordern diese Risiken?
Zur zweiten Frage, also jener ob Schulden und Schlendrian die Hauptverantwortlichen der Krise sind, werfe ich einfach ein paar Daten in die Runde, die vielleicht den einen oder anderen überraschen dürften: zwischen 2001 und 2011 ist die Gesamtverschuldung der öffentlichen Haushalte in Italien nur um rund 10% gestiegen, in Deutschland indes um etwa 20% und in den USA gar um mehr als 40%. Und: Italien hatte während der Finanzkrise (2007-2009) mit die niedrigsten Haushaltsdefizite in Europa, ganz zu schweigen von den USA, die teilweise mehr als 10% Defizit pro Jahr anhäuften. Die Bilanz der italienischen Finanzpolitik ist also in den letzten Jahren - entgegen der gängigen Meinung nördlich der Alpen - alles andere als schlecht gewesen. Es stimmt zwar, dass Italien seit langem eine hohe Staatsverschuldung vor sich her schiebt. Das aber ist keine Neuigkeit, sondern war schon vor 30 Jahren so. Warum merken es die Märkte erst heute? Nebenbei: Japan ist seit langem viel höher verschuldet als Italien; 2011 werden es voraussichtlich 228% des Bruttolinlandsproduktes sein, in Italien sind es knapp 120%! Niemand aber würde die Zahlungsfähigkeit Japans ernsthaft in Zweifel ziehen. Sind also die Schulden wirklich der Hauptgrund für die derzeitige Krise? Ich bezweifle dies.
In den nächsten Tagen werde ich auf die vermutlich wichtigeren Gründe für die aktuelle Krise eingehen.

Freitag, 16. September 2011

Unbelehrbare Banken

Alles sollte besser werden, nach der großen Krise: Kapitalausstattung, Risikomanagement und interne Kontrollen, Corporate Governance.
Was die Kapitalausstattung betrifft, so haben Regierungen und Regulierer die Schrauben angezogen. Und in der Tat, die Ergebnisse können sich sehen lassen: die durchschnittliche Kernkapitalquote von Banken hat sich von durchschnittlich 6% im Jahr 2007 auf rund 10% heute deutlich erhöht. Um es mit den Worten von Peter Sands, CEO von Standard Chartered, zu sagen:"Die Welt der Banken ist deutlich sicherer geworden." Aber stimmt das wirklich?
Betrachten wir das Thema Risikomanagement und interne Kontrollen, so spricht der Fall UBS eine deutliche Sprache. Immer noch gibt es Aktivitäten, vor allen in den großen Investmentbanken, die offensichtlich nahezu unbeaufsichtigt laufen können. Sonst wäre es ja nicht möglich, dass ein einziger Trader unbemerkt Verluste von zwei Milliarden Dollar anhäuft.Gillian Tett hat heute in der FT eine beeindruckende Analyse über die Schattenwelt der Exchange Traded Funds (ETF) geschrieben. Brandgefährliche Instrumente, die man durchaus mit den toxischen CDO's in der Subprime-Krise vergleichen kann. Diese ETF's sind in den letzten Monaten gewuchert wie Pilze in einem feuchten Herbst. Warum? Weil die irren Gewinnziele bestimmter Banken nur auf hochriskante Weise erreicht werden können. Ossi Grübel hatte seinen Investoren aggressiv 15 Milliarden Franken Vorsteuer-Gewinn für das Jahr 2014 versprochen. Das geht nicht zusammen mit einem risikoadäquaten Geschäftsmodell.
Womit wir bei der Corporate Governance wären: das Symbol überzogener Profit-Targets, Joe Ackermann ("25% Eigenkapitalrendite!") darf in Zukunft als Vorsitzender des Aufsichtsrates weiterhin die Strippen in der Deutschen Bank ziehen. Was das mit den Richtlinien einer guten Unternehmensführung zu tun hat, versteht kein Mensch. Dazu hat beispielsweise Ulric Papendick im jüngsten Manager Magazin einen guten Artikel geschrieben.
Und heute bin ich über die bemerkenswerte Nachricht gestolpert, dass der derzeitige CEO von Morgan Stanley, James Gorman, kommendes Jahr ebenfalls zum Chairman des Verwaltungsrates gewählt wird. Gratulation! Die Aktie von Morgan Stanley hat in diesem Jahr bereits 40% verloren, der Marktwert ist seit 2009 (und nicht 2007!) von 70 Milliarden Dollar auf 30 geschrumpft. Zum Lohn für diese brilliante Performance bekommt der derzeitige Chairman John Mack - auch er war in bester Tradition vorher schon mal CEO der Bank - warme Worte zum Abschied und einen Vertrag als Senior-Consultant. Der Weg zur Erkenntnis ist noch lang und steinig...

Nachklapp: Was ist mit der UBS los?

Die Analysten von Goldman Sachs schreiben ebenfalls, dass der Betrugsfall Grund sein sollte für eine "dramatische Verkleinerung" der UBS-Investmentbank. Martin Wolf argumentiert heute in der FT, dass die UBS nun den Beweis für die Argumentation der Vickers Kommission in UK geliefert hat, dass das traditionelle Bankgeschäft vom Investmentbanking getrennt werden sollte. Nur durch ein solches Ring-Fencing sei es möglich, die Steuerzahler vor zockenden Bankern zu schützen. Last but not least kann man heute in der NZZ lesen, dass Schweizer Politiker die selbe Forderung stellen wie ich in meinem gestrigen Post: dass die UBS sich künftig aufs Asset Management und das Private Banking konzentrieren sollte.

Donnerstag, 15. September 2011

Was ist mit der UBS los?

Déjà vu: ähnlich wie die Soc Gen 2008 ist nun die Schweizer UBS von einem jungen Angestellten um Milliarden geprellt worden . Wieder dreht es sich um einen "Rogue Trader", der mit ungenehmigten Deals eine Megabank um erhebliche Summen schädigt.
Warum halte ich den aktuellen Fall in der UBS für schwerwiegender als jenen, der seinerzeit die Soc Gen erschüttert hat? Erstens sind drei Jahre seit dem Skandal in der französischen Bank vergangen und man hätte annehmen können, dass alle erstklassigen Institute in der Zwischenzeit ihr Risikomanagement auf Vordermann gebracht haben. Das ist allem Anschein nach bei der UBS nicht geschehen. Verheerend für ein Haus, das in Europa das Subprime-Primat mit Abschreibungen auf toxische Assets in Höhe von 50 Milliarden Franken hält. Zweitens hat die UBS unter Führung des Veteranen Ossi Grübel alles daran gesetzt, im Investment Banking wieder zur Weltspitze aufzuschließen. Um dieses Ziel zu erreichen hat der zuständige Vorstand Carsten Kengeter, ein früherer Goldman Executive, viel Geld in die Hand genommen und kräftig Top-Leute eingestellt. Damit dürfte nun Schluss sein.
Wir wissen, wie die Soc Gen mit der Krise umgegangen ist. Alle wesentlichen Akteure mussten die Bank verlassen. Ich erwarte nun das selbe in der UBS: sowohl Grübel als als auch Kengeter werden, vielleicht nicht sofort so doch in den nächsten Monaten, die Konsequenzen ziehen müssen. Der frühere Bundesbank-Präsident Axel Weber wird dann als neuer Verwaltungsratspräsident die Bank mithilfe eines neuen CEO's (vielleicht mein ehemaliger Kollege in der UniCredit, Sergio Ermotti, heute verantwortlich für EMEA in der UBS) strategisch neu ausrichten müssen.
Eine UBS, voll fokussiert auf das Private Banking und das Asset Management, wäre nicht die schlechteste Lehre, die man aus dem heutigen Skandal ziehen könnte.