Bershidsky on Europe: Trouble From the Far Right
Here's today's look at some of the top stories on markets and politics in Europe:
Greece cracks down on neo-Nazi party
The Greek government cracked down on the extreme nationalist party Golden Dawn, which got into parliament in 2012 with 7 percent of the vote. The party's leader Nikos Michaloliakos and four other parliament members were arrested on charges on founding and participating in a criminal organization. The government plans to cut off state support for Golden Dawn, which stood to receive $1.2 million in government funding this year. The crackdown follows street riots caused by the killing of a left-wing rapper, Pavlos Fyssas, by a self-professed Golden Dawn supporter. The party deserves everything the government can throw at it, having openly declared itself racist. It's exclusion from parliament could trigger by-elections and unrest, but such are the dangers that some Greeks accepted when they elected neo-Nazis to parliament: Instead of liberating Istanbul as Michaloliakos promised, he is messing things up for his own impoverished country.
Far right, euro skeptics surge in Austrian election
The two centrist parties making up Austria's ruling coalition, the Social Democrats and the Conservatives, won a slim combined majority in Austria's parliamentary election, garnering 50.9 percent of the vote. They will probably form the next government, but the result is a historic low for the parties that have ruled Austria since the end of World War II. The far right, anti-Europe, anti-Islamic Freedom party was the big winner, taking 20.7 percent of the vote, 3.2 points more than at the previous election. They might have taken more, were it not for Team Stronach, a new party formed by Frank Stronach, the founder of the car parts company Magna. Like the Freedom Party, Stronach opposes Austria's participation in the European bailouts, but it does not share the other euro skeptics' xenophobia. The Austrian nationalism and isolationism are not of the Greek or Hungarian variety: they are not born of economic desperation. Austria has the lowest unemployment rate in the EU and a healthy export-oriented economy. Many Austrians have simply given up on keeping the euro whole, believing their country can be an island of calm like Switzerland. They are also disappointed with the colorless centrist politicians: The traditional parties do not have an Angela Merkel to lead them.
Italian coalition government falling apart after Berlusconi pullout
Italian Prime Minister Enrico Letta called for a parliamentary confidence vote in his government, hoping to keep the cabinet afloat after former Prime Minister Silvio Berlusconi's party pulled out of the ruling coalition. The vote will take place on Oct. 2, and Letta may win it if some Berlusconi supporters back him - a possibility because the former premier's People of Liberty party is showing signs of a split. If he loses, however, President Giorgio Napolitano will either have to engineer another coalition government, which may take weeks to do, or call an election. The latter is Berlusconi's preferred outcome: Polls show that if an election were held today, a group of right-wing parties including People of Liberty might win. The political mess is driving down Italian stocks and the country's borrowing costs are likely to rise in the near term, creating the possibility of a new debt crisis. Italy's debt already stands at 130 percent of gross domestic product, and a protracted political crisis is something it does not need.
French stores defy court ruling by opening on Sunday
On Sept. 29, the DIY stores Leroy Merlin and Castorama in the Paris suburbs stayed open, despite a court ruling that forbade them to trade on Sundays in keeping with French law. The French government is tired of scandals caused by the Kafkaesque laws that govern the country's 35-hour work week and is willing to negotiate. "There are workers who want to work and consumers who cannot buy at any time other than the weekends," said Budget Minister Bwernard Cazeneuve. "Is there not room for dialogue?" According to Nathalie Kosciusko-Morizet, a candidate in the Paris municipal elections, allowing stores to open on Sundays in Paris alone would create 10,000 jobs. At a time when France is battling 11 percent unemployment, there's only one sensible answer.
Siemens to cut 15,000 jobs
Siemens, the German industrial conglomerate, said it would cut 15,000 jobs worldwide in its business years 2013 and 2014. That means about 7500 more cuts by Oct. 1, 2014. This is the first major cost cut announced by recently-appointed chief executive Joe Kaeser, who aims to bring Siemens' profit margin up from 9.5 percent of sales in 2012, to 12 percent. Besides the layoffs, Kaeser is planning to spin off Siemens' less profitable divisions such as airport luggage systems, water technologies and mail automation. Although the number of eliminated jobs seems huge, it is only 4 percent of the German company's global workforce. What makes Kaeser's plan sensitive is that 5000 of the jobs will be lost in Germany, where no deal has yet been reached with the powerful labor unions. Kaeser will be a tough negotiator, however: His predecessor Peter Loescher was fired for missing profit targets.
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Leonid Bershidsky at email@example.com