Bershidsky's View From Europe
Here's today's look at some of the top stories on markets and politics in Europe.
German finance minister admits Greece will need more aid.
Someone in the German government had to say it: Finance Minister Wolfgang Schaeuble finally acknowledged that Greece will need a third bailout package. According to the newspaper Sueddeutsche Zeitung, Germany wants the next bailout to be smaller than the two previous ones, with part of the money coming from the European Union as a direct budget transfer. But Schaeuble held the line against any debt write-offs by Greece's sovereign creditors, and new loans would only add to Greece's already unmanageable burden. Now that Chancellor Angela Merkel's government is no longer avoiding the issue of Greek aid, her Social Democratic party rivals in the upcoming general election are demanding specifics about the relief package. They hope Merkel will shoot herself in the foot, either by naming a large amount or attempting to fudge the issue. Regardless of who wins on Sept. 22, Germany will have to help Greece if it wants to keep the euro area intact. As far as political tactics go, the socialists are better positioned to pick up votes from the controversy.
BoA Intern dies from overwork as banks step up hiring.
Moritz Erhardt, 21, an intern at the Bank of America Merrill Lynch in London, died in his apartment, apparently after working until 6 am three days in a row. The ambitious young man's 7-week internship was due to end in a week. It's tempting to blame bankers for abusing cheap labor as they cut headcount, only hiring in the financial sector is picking up. Bank of America, along with Nomura and Citigroup, is among the banks that are hiring more sales staff and traders. Youngsters looking to make careers in finance shouldn't have to work themselves to death: The employment market is coming back to life and recruiters are the busiest since 2010.
Czech parliament dissolves itself for the first time in history.
Left-wing parties have forced the dissolution of the Snemovna, the lower house of the Czech Republic's parliament, rather than wait for elections in 2014. The center-right government of Petr Necas collapsed in June, after it transpired that Necas' chief of staff and mistress Jana Nagyova had used military intelligence agents to spy on the prime minister's wife, Radka. The latter has since divorced Necas, and his Civic Democratic Party has tumbled in opinion polls. Apart from the scandal, Czechs are unhappy about the country's 18-month recession. Though the economy finally showed some growth in the second quarter, it is the center-left Social Democrats who will reap the political benefits of the improvement: They will probably lead a new ruling coalition government after early elections planned for October.
Sponsor of U.K. anti-terrorism law calls Miranda detention illegal.
The U.K. political elite is in turmoil over the recent detention of David Miranda, the partner of journalist Glenn Greenwald who has reported on National Security Agency leaker Edward Snowden's revelations of U.S. electronic spying. Miranda was held under a clause of the Terrorism Act 2000 that allows police to detain people at airports, even if they give no cause for suspicion. Lord Falconer of Thoroton, who sponsored the legislation in the House of Lords, said it didn't apply to Miranda because he plainly wasn't a terrorist. Lord Falconer thus joined a chorus of critics from across the political spectrum, who said using terrorism laws arbitrarily discredited both the legislation and the government. The U.K. authorities' harsh treatment of journalists reporting on the Snowden affair is clearly an overreaction: Paradoxically, the London daily the Guardian will continue its work from the U.S., a country that can claim to have suffered greater damage from Snowden's leaks.
Heineken, Carlsberg profits below expectations.
Two major European brewers, Amsterdam-based Heineken and Copenhagen-based Carlsberg, reported disappointing financial results. Heineken's net income in the first six months of the year fell by 1.3 percent compared with the same period in 2012, to $911 million, as its Western European beer sales declined 8 percent. Carlsberg reported a 1 percent year-on-year decline in profits in the second quarter, complaining of tough market conditions in both Western Europe and Russia, its biggest market. Heineken said it would have to cut more costs than expected. That, however, will not fix the major problem of a looming trend reversal for brewers in the developed world: Consumers are increasingly switching from beer to wine and spirits. Long-term, brewing companies will need to use their marketing expertise and extensive distribution networks to launch and promote new products.
(Leonid Bershidsky, an editor and novelist, is a Bloomberg View contributor. He can be reached at email@example.com).