Bershidsky on Europe: Drone Delivery Tested
Here's today's look at some of the top stories on markets and politics in Europe:
Ukrainian police remove barricades from government quarter
Riot police cleared downtown Kiev of barricades that pro-EU, anti-government protesters threw up on Dec. 8. There was surprisingly little violence: at worst, police pushed outnumbered protesters with their shields. All night, thousands of demonstrators on Independence Square expected their encampment to be stormed, but were spared. The security forces' goal was only to clear access to government building as President Viktor Yanukovych, back from a series of foreign trips, awaits the arrival of senior officials from the U.S. and the EU to discuss the resolution of the Kiev stalemate. At the same time, armed people, presumably detachments of SBU secret police, raided the offices of a major opposition party and several media outlets. Yanukovych appears to be in control, but with hundreds of thousands of people ready to take to the streets at the slightest provocation and the world watching, he has to be extra careful. The problem in Kiev is that nobody has any idea what kind of compromise could suit both sides, implacably aligned against each other.
EADS details job cut plan
The aerospace and defense group EADS, recently renamed Airbus, detailed its cost-cutting plan for the defense unit. Chief executive Tom Enders wants to bring the unit's profit margin up to 10 percent from the current 2.5 percent, and that means cutting the workforce by 5,800 people and closing some sites. Roughly half the jobs will be lost in Germany. France will lose 1,700 positions, as well as the group's corporate headquarters in Paris. To avoid conflict with labor unions in both countries, EADS will phase out the workers over three years and the reductions will be voluntary. EADS will re-employ some of the workers in its helicopter and civil aerospace divisions. To further sweeten the pill for local politicians, the company will open an amusement park in Munich, including an artificially generated wave for surfers and a giant parachute jump. In Europe, one has to tread carefully when cutting jobs to increase profits. Enders is doing just that and, so far, the market has rewarded his rationalization efforts: The EADS stock price is up 70 percent this year.
Deutsche Post tests drone delivery
A week after Amazon.com made waves by announcing it would use drones to speed up deliveries, Deutsche Post-DHL started testing such a service. It launched a week-long joint project with a Bonn pharmacy, Mohren Apotheke, to see if drones would be efficient in delivering medicine urgently or to hard-to-reach areas. German regulations prevent the delivery company from launching drones from a residential area, so the drugs have to be taken to the bank of the Rhine, where they are put on a small four-rotor drone called a Quadrocopter. It is operated manually by remote control. During the test project, the orders for medicine come from Deutsche Post employees. Technologically, drone delivery is possible right now, not in some distant future. The biggest problem is regulation: Bureaucrats will be reluctant to allow courier services to populate the air with flying machines. Deutsche Post had to get a special permit for its test.
Europe allows the use of mobiles on planes
Following the U.S. authorities' lead, the European Commission moved to allow the use of electronic devices on planes during all flight phases. Next year, passengers will also be allowed to use mobile services, but only "quiet" ones such as text messaging and email. "We must respect silence," EU Transport Commissioner Siim Kallas said. "There is no question of private conversations." An outright ban on voice calls is the right approach which should be adopted by the U.S. and other regulators, too. Internet chat is good enough for any urgent communication, and there is no need to invade seatmates' personal space by using the phone in the traditional way.
Irish social services offer unemployed people jobs abroad
Ireland's welfare authorities have sent 6,000 unemployed people letters suggesting they consider jobs outside the country. One man, for example, received the details of a bus driver job in Malta paying only $343 a week, but in a "Mediterranean climate." Ireland is getting praise for successfully exiting an EU-financed bailout, but the success has been partly achieved by pushing "extra" people out of the country: 75,800 people aged 15-44 left Ireland last year. There are few governments in the world that actively encourage emigration, and Ireland's austerity experience may not be applicable to most other nations because of this peculiarity. Besides, the emigration may have unpredictable long-terms effects for the nation: In many cases, it is not the unemployed who are leaving but successful professionals fleeing tax increases.
(Leonid Bershidsky can be reached at email@example.com).