Bershidsky's View From Europe
(Here is today's look at some of the top stories on markets and politics in Europe.)
EU may suspend aid to Egypt.
The twin presidents of the European Union's institutions, Herman van Rompuy and Jose Manuel Barroso, issued a joint statement saying the EU will discuss a common response to the escalation of violence in Egypt. This is likely to include suspending $6.7 billion in aid, which the EU promised last November to smooth Egypt's transition to democracy. A military coup does not fit the European, or any, definition of democratic transition and hence the cancellation. Yet withdrawing the aid may bring Egypt that much closer to chaos. The economic woes that contributed to former President Mohamed Morsi's removal on July 3 are being exacerbated by the loss of Egypt's main source of hard currency: foreign tourism. In 2012, 11.2 million tourists visited the North African country, but now European and Russian travel agents have stopped offering tours to Egypt because of the violence. Democracy may be a dead letter in Egypt for now, but the country needs international aid to stabilize, which is probably more important.
German economics minister wants to revive local NASDAQ.
In 2002, the Deutsche Boerse closed its market for technology stocks, the Neuer Markt, after the exchange's combined market cap dropped 96 percent from its 2000 peak. Now, Economics Minister Philipp Roesler is making plans with Deutsche Boerse CEO Rero Francioni to revive the tech exchange, perhaps in mid-2014. Their goal is to revive the German market for initial public offerings: In 2000, there were 140 IPOs in Germany, compared to eight in 2012. Local tech start-ups are deterred by the current listing requirements on mainstream exchanges, but a Neuer Markt comeback could give them access to institutional investors such as insurance companies. Creating more opportunities for innovative businesses is smart and may be just what's needed to help the German economy to achieve faster growth.
Al-Qaeda said to be planning attacks on European high-speed trains.
The German daily newspaper Bild reports that the U.S. National Security Agency has intercepted a telephone conversation between high-ranking Al-Qaeda members, about plans to attack high-speed trains in Europe. The German authorities are taking the American tip seriously and are stepping up security at stations and on trains. Yet, according to the report, cited by many of Europe's major news outlets, the Al-Qaeda conversation took place several weeks ago, and no actual threats have been detected since. The Bild report, based on a leak from the German secret services, looks suspiciously like an attempt to justify the extensive electronic spying on Germany by U.S. intelligence that was revealed by NSA whistle-blower Edward Snowden. Europeans are, in effect, being offered a trade-off: Keep protesting against U.S. screening of your electronic communications, or get timely tips that could save lives in case of a real terrorist threat.
Greek privatization chief fired on suspicion of corruption.
The sale of 33 percent of Greece's gambling monopoly Opap has ended the career of Stalios Stavridis, who until Sunday headed the country's state privatization fund. He was asked to resign after local media reported that one of Opap's buyers provided the private jet that Stavridis used to fly to the signing ceremony. The official used the plane again after the signing to go vacation in the Greek islands. This appears to have been the final straw for Finance Minister Yannis Stournaras, who promptly fired Stavridis. The disgraced official will now no doubt get the blame for Greece's abortive privatization efforts in recent months. The nation desperately needs cash to pay back international creditors, yet this year it failed to sell-off the national gas company Depa, and other proposed privatization deals are in danger of falling through for lack of bidders. The bureaucratic ineptitude and corruption that caused the Greek debt collapse in the first place remain, even as the country seeks a way out of its effective bankruptcy.
Major Spanish mobile operators lose 2.1 million customers in 2013.
The two leaders of the Spanish telecommunications market saw their combined market share drop below 60 percent in the first half of 2013. Telefonica (whose mobile network brand name is Movistar) lost 1.2 million customers and Vodafone shed 900,000. The majors are losing the market to virtual mobile network operators, which purchase bandwidth from them and then resell it to consumers on more attractive terms than Telefonica and Vodafone themselves are offering. The Spanish market situation should serve as a warning to traditional mobile operators everywhere: They have been too greedy and complacent. As soon as economic difficulties force consumers to start saving, smaller companies take advantage of the shift in priorities, using the same infrastructure but providing greater flexibility and a better understanding of customer needs.
(Leonid Bershidsky, an editor and novelist, is a Bloomberg View contributor. He can be reached at firstname.lastname@example.org).