Italy can be bolder with its budget laxity 28 Sep 2016 Rome will delay its deficit goal next year, citing emergency factors like refugees. Brussels may quibble, but Italy needs growth, and a fiscal crunch could hurt Prime Minister Matteo Renzi's chances in a critical referendum. The leeway is too modest and fleeting to ensure either.
Tech giants don’t grow on European soil 16 Sep 2016 The region hasn't produced its own answers to tech disruptors like Facebook and Alibaba. That leaves the EU open to accusations of sour grapes when foreign companies like Apple are targeted for unpaid taxes. Regulation and fragmented markets explain Europe's failure to launch.
How Hinkley delivers a bad deal for everyone 15 Sep 2016 The approval of Britain’s new nuclear power plant puts politics ahead of sense. Consumers could end up paying 15 bln pounds in today’s money. New ownership tests erode the country’s reputation for openness. Brexit has undermined Britain’s bargaining power.
Better to fly Europe’s airlines than buy them 12 Sep 2016 Fuel prices have fallen, but that has incentivised European carriers to keep too many planes airborne. Demand is too weak to meet the supply, which means ticket prices are set to fall, and with them airlines’ profitability.
Orange takes calculated risk in Iran 1 Sep 2016 The French telco is set to invest in the Islamic Republic. Post-sanctions Iran remains too risky for banks, given the danger of financing the still-proscribed Revolutionary Guards. Orange seems to be betting its experience in other hotspots will help it manage any conflicts.
Exiting French economy minister is odd insurgent 30 Aug 2016 Leaving the government frees Emmanuel Macron to speak out before the 2017 presidential elections. The former banker’s most radical quality is mixing policies and ideas from both left and right. That makes him less dangerous, and more likely to be absorbed by established parties.
Warsaw charm offensive shows London’s strengths 30 Aug 2016 Poland hopes to woo investment banks from the UK to its capital city. Credit Suisse, Goldman and BNP Paribas each have 300 or more staff in-country. But most are IT support, not revenue creators. The point is that financial hubs are built on far more than low costs.
Burkinis oust economics in French identity tussle 26 Aug 2016 A ferocious debate over bans on full-body swimwear sounds like pre-election posturing, but is more than that. France is less and less able to hang its identity on a unique economic and social model. As a result, the battleground is shifting to its deep-seated secular tradition.
EU banks give notice that they’re not all hapless 3 Aug 2016 Dutch lender ING and French peers Societe Generale and Credit Agricole all increased second-quarter earnings. Stake sales in Visa Europe helped, and low interest rates hurt in French retail banking. But it’s a reminder that recent EU bank stress tests had a positive message too.
Weaker banks are in EU’s core, not its periphery 1 Aug 2016 A dozen lenders had sub-10 percent post-stress capital ratios and a 400-plus bps loss in the EBA's stress test. Only a third are from troubled "periphery" states like Italy. Perhaps core states should become less sniffy about a Europe-wide deposit protection scheme.
Theresa May may have saved EDF from itself 29 Jul 2016 The state-owned French utility’s 12 bln pound investment in nuclear reactors at Hinkley Point could unravel after the UK’s new prime minister initiated a surprise review of the high-risk, high-cost project. Pulling the plug would do UK taxpayers and EDF shareholders a big favour.
Carrefour’s edge on Tesco is no French paradox 28 Jul 2016 The Gallic retailer’s first-half revenue grew 2.9 percent, and it has better sales and profit margins than Tesco. That’s not surprising: the UK has strong price deflation and Carrefour had a head start in battling the discounters. Yet Tesco’s online nous may narrow the gap.
Europe gets pragmatic with budget delinquents 27 Jul 2016 The European Commission doesn’t want to fine Spain and Portugal for flouting EU budget rules. That may look toothless, but piling on fines when both are struggling to cut their deficits doesn’t make much sense and risks political backlash.
Barnier’s Brexit gig better than it looks for UK 27 Jul 2016 Brussels' ex-financial services tsar is to lead EU talks over Britain's exit. Michel Barnier has at times raised British hackles, but he largely treated the City of London fairly. Arbitration won't be smooth, but the identity of the negotiator could have been worse.
Peugeot well positioned for yesterday’s car market 27 Jul 2016 Bumper half-year operating profit shows the French carmaker is cutting costs neatly. Yet a radical shakeup in the car industry means getting up to speed with fuzzier stuff like self-driving cars, electric vehicles and new mobility services. That's a big ask for smallish Peugeot.
LVMH results showcase benefits of mixed luxury bag 26 Jul 2016 A pop in demand for champagne and cognac boosted sales of the fancy French conglomerate in the first half and offset declines at its core fashion division. As travel fears and lower demand for designer goods bite, LVMH's diversity allows it to hold its own better than rivals.
Vivendi has upper hand in Italian cable tangle 26 Jul 2016 Mediaset says the French group run by Vincent Bollore wants out of a deal to buy its pay-TV unit. Vivendi says the two disagree over numbers. Vivendi's hard-nosed approach may reflect its stronger negotiating leverage. Still, it's bold for a serial acquirer to renege on a deal.
LVMH hints at timely wardrobe edit 25 Jul 2016 Selling Donna Karan to U.S. fashion company G-III for $650 million is a rare fashion cast-off for the French luxury group. More underperforming brands may be sold as global sales of designer goods slow. That presents opportunities for smaller but ambitious luxury players.
Attack in Nice keeps border issue front and centre 15 Jul 2016 Over 80 tragic deaths on Bastille Day at the hands of a truck driver will play into fears about frontier security. The killer's French-Tunisian dual nationality won't deflect that much. With Brexit negotiations and national elections to come, free movement is under threat.
Time to end Swatch margin destruction 15 Jul 2016 The watchmaker has warned profit will fall 50-60 percent in the first half. Sales will underperform the wider Swiss watch industry and there's limited scope to raise prices. Yet there are no real cost-cutting plans. Swatch is in denial about the scale of the problems it faces.