Bershidsky on Europe: Stop Sign for EU Finance Regulator
Here's today's look at some of the top stories on markets and politics in Europe.
Court may take away EU's right to ban short-selling.
The European Court of Justice's advocate general, Niilo Jaaskinen, suggested that the court take away the emergency power of the European Securities and Markets Authority to ban short-selling in European Union member states. The concept attempts to replace "national decision-making with EU-level decision-making," rather than harmonize rules across Europe, Jaaskinen wrote in an opinion. This is not a binding document, but judges usually concur with the advocate general's views. If they do so in this case, the Paris-based market regulator will have little chance of getting important supranational powers, such as the right to regulate the Libor interest rate. Jaaskinen's opinion is a victory for the U.K., which is worried London might lose its status as one of the world's financial capitals if the EU takes on too much regulatory power over financial markets.
France to cap millionaire tax to protect soccer clubs.
According to the French business daily Les Echos, the government is planning to soften the 75 percent tax to be imposed on salaries of more than $1.33 million a year. The tax payments, to be made by employers, will be capped at 5 percent of a company's turnover. The idea of the cap is to help French soccer clubs: Out of the 1,000 people in all of France whose employers will have to pay the tax, 112 will be soccer players, including 24 from the Paris Saint-Germain club, which is owned by the royal family of Quatar. The French soccer league calculated the tax would increase the clubs' costs by 30 percent, or about $110 million. That would force them to get rid of expensive players, rendering them uncompetitive in Europe, something the French government cannot allow. It ought to drop the tax altogether. The measure has drawn much ridicule and forced French companies to move highly-paid employees to other jurisdictions, notably Switzerland. It is only expected to bring in about $345 million next year – and that's before the "soccer cap."
Vodafone clears hurdle to German deal.
More than three quarters of the shareholders in Kabel Deutschland, Germany's largest cable group serving 8.5 million households, approved Vodafone's offer to acquire it for $10.2 billion. Most of the money will come from the payout the U.K. telecom group will receive from the $130 billion divestment of its stake in Verizon Wireless in the U.S. Vodafone is already established in the cable business in Italy, Spain and the Netherlands. Adding cable to wireless telecommunications is part of its strategy, which also includes a major overhaul of its mobile networks to improve service quality. Given the size of Vodafone's war chest, few European cable operators will be able to resist its offers.
Hollande unveils grand plan to revive French industry.
Amid much fanfare, French President Francois Hollande presented a 10-year re-industrialization policy, which includes support for technologically advanced projects in 34 sectors ranging from electric aircraft to intelligent textiles. Hollande said the plan's goal was to bring back 450,000 of the 750,000 industrial jobs France lost in the past decade and cut the country's trade deficit by creating added value of $60 billion, about 40 percent of France's current annual export volume. The government plans to spend $5 billion in lending and investment to implement its industrial policy. That relatively small amount makes Hollande's program look like more of a declaration of goodwill toward the French high-tech sector than a realistic plan.
Merkel rival giving the finger on magazine cover.
A photograph of Peer Steinbrueck, the Socialist party candidate for chancellor in Germany's upcoming election, with his middle finger extended will appear on the cover of the daily Sueddeutsche Zeitung's magazine supplement. The picture was taken during a "silent interview" in which the subject is required to answer questions with gestures, not words. Asked what he thought about his many unflattering nicknames, including Peerlusconi after the flamboyant former prime minister of Italy, Steinbruek responded with the rude gesture -- which on a German road would earn him a fine of $800 to $5,300 fine. Merkel's coalition partner, Economics Minister Philip Roesler, said such behavior was "just not on" for a presidential candidate. Steinbrueck, however, probably understands that, given Merkel's popularity, he is not going to take over from her. Many German voters are likely to conclude the gesture was directed at them.
(Leonid Bershidsky, an editor and novelist, is a Bloomberg View contributor. He can be reached at email@example.com).