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EMEA: one problem after another

Jackson, Olly.  ; London (May 29, 2018).

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Italy finally has a government. After two months of instability and decision, eurosceptic parties Five Star Movement and League have agreed a coalition deal built on wide-ranging tax cuts and spending rises. The economic plan has attracted criticism from many, including former Italian Premier and European commissioner Mario Monti. The two parties have published joint manifestos including wide-ranging tax breaks and a guaranteed basic income.

The stance of the two parties on the EU has softened since the beginning of the election campaign but the coalition wants to re-discuss EU treaties, financial contributions to the EU, and also wants a review on EU rules that impose fiscal restrictions on member governments. After a relatively tranquil period after Brexit, EU membership could be put back to the forefront of attention, at a time Brussels can ill afford. This, coupled with the huge debt mountain that is comparable to Greece and is set to increase in the short term, is undoubtedly the biggest challenge the EU faces once Britain departs.

Crypto fever

The EU updated its latest Anti-Money Laundering Directive to include crypto exchanges and custodian wallet providers. This is their first major move in crypto regulation and plans to regulate initial coin offerings are also expected.

US regulators have also been busy in this area. A decision from the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) that ethereum – the second most valuable cryptocurrency – is a security, not a commodity could potentially have wide ranging effects on exchanges and investors. This has incited concerns that regulation could hinder the growth of blockchain – which decision makers are almost unanimously in favour of, in contrast to cryptocurrency. But it seems that greater regulatory oversight is leading to more financial institutions entering the space.

Goldman Sachs appointed its...