France’s silly stake obsession could kill BAE-EADS 8 Oct 2012 Germany, France and the UK could agree on the BAE-EADS merger if Paris didn’t insist on keeping a large stake in the joint company, confirming the fears of the deal’s opponents. The French government doesn’t seem to get that there are other ways to remain influential.
UK should foster not fear BAE-EADS tie-up 5 Oct 2012 Former Chancellor Alistair Darling says UK interests may suffer if France and Germany held sway over the defence merger. Britain certainly needs safeguards to protect national security. But these can be found. And the alternative - no deal - wouldn’t be in the national interest.
France can’t always count on sleepy markets 5 Oct 2012 President Francois Hollande’s domestic support is falling, but his market support remains high. Peripheral distress is keeping French yields artificially low, and distracting investors from France’s competitiveness woes. Austerity without reforms won’t do.
Advice to French refuseniks on 75 pct tax: move on 27 Sep 2012 The socialist government’s plan to take three quarters of annual income above 1 million euros may well be economic and intellectual nonsense. But in this age of austerity, clumsy protests from privileged taxpayers can only increase social resentment.
Franco-German politics first hurdle for BAE/EADS 25 Sep 2012 The two European defence and aerospace companies can’t merge unless Paris and Berlin settle their differences over governance and shareholdings. The tension is typical of EADS’ own complex political and economic history. The BAE deal offers a golden opportunity to clear the air.
Boeing could play BAE-EADS spoiler on many fronts 19 Sep 2012 Europe’s $45 bln defense deal needs U.S. security clearance and perhaps a nod from Congress. Boeing wields enormous clout in Washington and has a history of using it against rivals. Valuations and looming military cuts also mean a bid for all or part of BAE can’t be ruled out.
Is Lazard too well connected for its own good? 4 Sep 2012 The French branch of the bank is in hot water for getting a government contract from the finance ministry after its chief loudly supported the socialist government and hired an economics minister’s partner at one of his newspapers. Lazard may have got the mandate anyway.
Markets too forgiving of French do-nothing summer 15 Aug 2012 France’s funding costs are at an all-time low as investors seek safety from the euro crisis. But markets seem blind to the country’s lack of competitiveness. Low bond yields should give Paris a golden opportunity to pursue reform. But it also lessens the pressure to do so.
French banks only solve first existential crisis 2 Aug 2012 Euro zone turmoil gave BNP Paribas and Societe Generale a mighty scare a year ago. First-half results show how they have turned their capital and liquidity positions around. But the euro is far from fixed, and they are still lumbered with subscale investment banking arms.
Vivendi will struggle to get clean Activision exit 18 Jul 2012 Shareholders in the French conglomerate will be glad it’s mulling options for its $8 bln controlling stake in the U.S. software developer. The snag is the sheer size of the desired deal. Vivendi may have to sell the holding in pieces - or simply wait for a stronger M&A market.
Alcatel kept on hold despite mobile data explosion 17 Jul 2012 Telecoms kit makers like Alcatel-Lucent and ZTE should benefit from a smartphone-driven explosion in mobile data. Yet crimped telcos are delaying network spending, and price competition remains fierce. Lousy finances, and ugly profit warnings, set an annoying ringtone.
Peugeot cuts will test Hollande’s centrist pledges 12 Jul 2012 The French government says it “cannot accept” the carmaker’s plans to slash 8,000 jobs. It can create road blocks for the group, making a turnaround more costly. This could be the first serious clash between François Hollande’s stated economic realism and the anti-market left.
France arrives early to austerity rendezvous 3 Jul 2012 Francois Hollande seems to have opted for a pre-emptive strike to make sure France meets its deficit targets this year and next. In spite of likely union uproar, this will be the easier part. Restoring competitiveness will be harder.
Vivendi CEO ouster doesn’t count as a strategy 28 Jun 2012 Jean-Bernard Lévy is being shown the door, having failed to close the French telecom and media group’s longstanding conglomerate discount. His exit paves the way for a breakup. Even so, that still leaves big strategic questions unresolved.
Would the ECB downgrade France? 28 Jun 2012 The European Central Bank is toying with using its own credit assessments when taking sovereign collateral. That would mark a big and welcome step in curbing the power of the ratings agencies. But it’s questionable whether it could exercise judgment free from meddling.
Reform denial puts Hollande in minority of one 22 Jun 2012 France, Italy and Spain will try to convince Germany to accept some form of debt mutualisation at a four-way summit today. But the most serious divide is between France, which doesn’t see the need for economic reform, and its three partners, who have embraced it.
France can’t tax its way out of debt 19 Jun 2012 Paris is to levy a special tax on company dividends, part of efforts to reduce the country’s deficit by increasing revenue instead of cutting spending. But together with other planned moves, this new tax could discourage the foreign investors France may soon badly need.
Credit Agricole drafts strong man for Greek trial 13 Jun 2012 Xavier Musca, a former French treasury chief and until last month Nicolas Sarkozy’s chief of staff, is joining the mutual lender as its second-in-command. Hiring one of the key euro crisis negotiators is no accident: the bank is facing a potential disaster in Greece.
Parliamentary success will rob Hollande of excuses 11 Jun 2012 The Socialist domination of parliamentary elections in France should give the new president a free hand to act. He can continue to ignore the causes of the economy’s woes, or tackle structural reforms head on. But market and German pressure may not leave him much choice.
France’s state sector pay cap is necessary folly 31 May 2012 The French government is about to force a 1-to-20 remuneration scale in state-owned companies. This means that most of their CEOs will have to take a serious pay cut. The measure doesn’t seem to make much sense. But it is needed to make austerity more palatable.