Bershidsky on Europe: UN Slams Vatican
Here's today's look at some of the top stories on markets and politics in Europe.
Google reaches EU antitrust settlement.
The EU will not hold a formal antitrust investigation into Google's prioritization of its own services in search results. After several unsuccessful attempts, the Internet giant managed to persuade the European Commission that it would fix the problem. Google's latest proposal to the EU is the biggest concession the company has ever made: It will now show links to rival services next to its own preferred results, provided the competitors bid against each other for the privilege. This means Google will still be able to give priority to whatever search results it deems more profitable, and no further concessions will be extracted, not just in the EU, but elsewhere – for example, in Canada, where the company faces similar antitrust action. It's only fair as long as users do not object. Losers in the search game, such as Microsoft, which was most active in pushing the EU complaint, should be content with the bone Google has thrown their way.
Alcatel reduces loss, prepares to sell of phone division.
Alcatel Lucent chief executive Michel Combes' plan for reviving the Franco-American telecom equipment maker appears to be working. The company announced a $1.76 loss for 2013, compared to $2.7 billion the previous year. The losses are driven mainly by asset writedowns: Alcatel showed an operating profit of $392 million after a loss in 2012. Combes, however, needs to do more to focus the company on its most profitable businesses. Last year, he promised more than $1.3 billion in selloffs. A large one is coming up: China Huaxin, the minority partner in Alcatel's Chinese operation, offered $362 million for 85 percent of the Alcatel division that makes corporate telephone systems. Chinese industrial companies are confident payers in areas where little innovation is required, and it is a win-win deal for the partners. Combes, meanwhile, is headed for CEO stardom if he can turn Alcatel around.
Berlusconi may run for European Parliament.
Silvio Berlusconi, the unsinkable Italian ex-prime minister, may be looking to build a new political career at 77, this time on a European scale. After being expelled from the senate and banned from running for public office in Italy because of a fraud conviction, he wants to run in the May election to the European Parliament. Berlusconi intends to campaign on an anti-German platform, arguing that German policies are aimed at enriching the north of the continent at the expense of the south. Berlusconi may well win: Despite all his legal problems, his party, Forza Italia, is still strong enough that it may call the shots in the next government. Berlusconi hasn't yet anointed a successor to leader the center-right force, but whomever he picks will be a strong contender for top jobs. Berlusconi's thirst for power and political skill are forces of nature.
UN report criticizes Vatican's handling of sex abuse.
The UN Committee on the Rights of the Child issued a forceful report criticizing the Holy See for covering up child abuse in the Catholic Church. According to the report, practices such as moving offending priests from parish to parish and not reporting abuses to local authorities allowed criminals to escape punishment. The committee called on the Vatican to admit the scale of the problem: Tens of thousands of children, it said, have been abused by clergymen. The Vatican's delegate to the UN, Monsignor Silvano Maria, called the report unfair, saying the Holy See was already dealing with the problem on an unprecedented scale. The report calls for a more substantive response for Pope Francis: How far he dares to go in investigating and rooting out abuse cases will mean a lot for his already established reputation as a reformer.
IKEA tells UN agency to think more like a business.
IKEA, the biggest private donor to the UN High Commissioner for Refugees, is unhappy with the way the refugee agency operates, and willing to talk about it. The Swedish company's chief executive Per Heggenes said the UNHCR "is not used to the way we think," not innovative enough and "very hierarchical." Coming from the head of a company that has contributed $70 million to the organization in the last three years, that is painful. IKEA wants the UNHCR to do away with its time-tested concept of a refugee camp as "a Roman military-style arrangement" with rows upon rows of tents and create more village-like conditions for the people it is trying to save. The company also wants the agency to work on financial planning rather than start afresh every year, not knowing what kind of budget it is going to have. Aid agencies and non-profit organizations often view private business as no more than a cash cow, but Heggenes is right – they could also benefit from the skills and the creativity than companies like IKEA can bring to the tasks at hand.
(Leonid Bershidsky writes on Russia, Europe and technology for Bloomberg View. Follow him on Twitter.)
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