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Geopolitics

Spotlight: It Takes Two To Tango In Europe

We first had "Merkozy," a marriage of convenience between German Chancellor Angela Merkel and former French president Nicolas Sarkozy made to counter the European debt crisis. Then the pair was forced to part ways when Sarkozy lost to current French President Francois Hollande. Merkel and Hollande's relationship was always awkward, with one newspaper saying "there was no spark" between them.

If Merkel had a secret hope of reconnecting with her previous ally, it brutally ended yesterday when Sarkozy lost to François Fillon, a former prime minister, in the first round of the center-right primaries in France. The winner of the second round next Sunday will likely face, and defeat, far-right contender Marine Le Pen in next spring's presidential election. Since Merkel declared her candidacy yesterday to run again for the top job in Germany, and Fillon showed strong gains in France, perhaps we'll be seeing an era of "Merkillon" going forward?

If that's the leadership combination that emerges next year, it's likely to be a contentious one. Fillon's economic program inspired by the "Iron Lady," former British prime minister Margaret Thatcher, would be encouraged by Germany, which is concerned about France's astronomical debt.

But the foreign policy stance of Fillon, who has long been calling for a rapprochement with Russia especially regarding the war in Syria, could hardly be more different from Merkel's. His recent comments about a French alliance with U.S. President-elect Donald Trump and Russian President Vladimir Putin — "not only do I not fear it, I want it" — would isolate Germany on the global stage.

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Economy

Why More Countries Are Banning Foreigners From Buying Real Estate

Canada has become the most recent country to impose restrictions on non-residents buying real estate, arguing that wealthy investors from other countries are pricing out would-be local homeowners. But is singling out foreigners the best way to face a troubled housing market?

Photo of someone walking by houses in Toronto

A person walks by a row of houses in Toronto

Shaun Lavelle, Riley Sparks, Ginevra Falciani

PARIS — It’s easy to forget that soon after the outbreak of COVID-19, many real estate experts were forecasting that housing prices could face a once-in-generation drop. The logic was that a shrinking pandemic economy would combine with people moving out of cities to push costs down in a lasting way.

Ultimately, in most places, the opposite has happened. Home prices in the U.S., Canada, Britain, Germany, Australia and New Zealand rose between 25% and 50% since the outbreak of COVID-19.

This explosion was driven by a number of factors, including low interest rates, supply chain issues in construction and shortages in available properties caused in part by investors buying up large swathes of housing stock.

Yet some see another culprit deserving of particular attention: foreign buyers.

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