Bershidsky on Europe: Russia Censors Web
Here's today's look at some of the top stories on markets and politics in Europe.
Russia intensifies web censorship .
On Thursday, the Russian telecommunications regulator orders internet providers to block access to a number of news and opinion resources critical of President Vladimir Putin, such as ej.ru, grani.ru and kasparov.ru, the latter maintained by former world chess champion Garry Kasparov. It also blocked opposition leader Alexei Navalny's personal blog, arguing he was not allowed to update it while under house arrest. The popular radio station Echo Moskvy was ordered to remove a mirror of Navalny's blog from its website, and until it did so, access to the site was blocked, too. Echo Moskvy promptly removed the blog. All this followed the firing of Galina Timchenko, editor in chief of the Russian internet's most popular uncensored news resource, Lenta.ru, with about 500,000 daily visitors. Lenta's Kremlin-friendly shareholder Alexander Mamut fired her after the regulator warned that a reference to a Ukrainian ultra-nationalist's anti-Russian remarks violated Russian anti-extremist laws. Because of Putin's aggression in Crimea, Russian internet users seeking uncensored information, as opposed to official propaganda, face a quickly narrowing choice. Most likely the curious will start fighting this emerging Great Russian Firewall with anonymous proxies and other means of bypassing site blockages.
Ukraine asked U.S. for military aid.
Ukraine's interim government appealed for U.S. military aid when acting Prime Minister Arseniy Yatsenyuk visited Washington. It asked for arms, ammunition and intelligence support to fend off a Russian invasion of the continental part of its territory as Russia started military drills on Ukraine's borders. Pro-Russian activists killed a Ukrainian nationalist during bloody clashes in Donetsk on Thursday, and the Ukrainian authorities believe that the destabilization could be a prelude to full-scale intervention by Russian troops. The U.S., however, denied the Ukrainian request for fear of provoking an unpredictable Russia. Ukraine is helpless militarily, and NATO will not step in to defend it. Putin knows he could conquer the neighboring country if he wanted, and is probably weighing the economic cost. Former finance minister Alexei Kudrin, said Thursday that broad Western sanctions could cost Russia $50 billion per quarter, a heavy price to pay for crushing a defenseless neighbor.
Draghi makes verbal intervention to counter euro rise.
European Central Bank president Mario Draghi made it clear the ECB was worried about the recent rise of the euro to two-year highs against the dollar. He said the central bank's forward guidance, projecting lower interest rates, should drive the currency down. "The real interest rate spread between the euro area and the rest of the world will probably fall, thus putting downward pressure on the exchange rate," Draghi said. It is time to admit the ECB probably made a mistake a week ago when it left interest rates unchanged: the euro has since gained about 1 percent against the dollar, reviving deflation fears. Draghi's words are not enough: The ECB has to act to show it is serious about sustaining Europe's fragile economic recovery.
Bidding war for Vivendi's SFR heats up .
Both potential buyers of Vivendi's French mobile operator SFR sweetened their offers and sought to reassure the government that the deal would not have adverse social consequences. Cable operator Numericable's owner Altice increased the cash portion of its offer from $15.17 billion to $16.35 billion. Diversified holding Bouygues boosted its cash offer from $14.6 billion to $15.71. Bouygues is also offering Vivendi a 43 percent stake in the combined company, while Altice's proposal is 32 percent. Boygues's offer is better on the surface, but will face regulatory hurdles because it will reduce the number of mobile operators in France to three. Besides, it might result in more job cuts, because the combined Boygues-SFR operator would not need as many support staff as the two companies working separately. Bouygues has promised to the government it would keep all the staff, but officials are not sure whether this is a long-term commitment. Vivendi, which needs the money to cut its debt burden, might lean towards Altice because that way it will get paid faster and there is no chance the deal will fall through. If that happens, the cable-mobile merger may become the standard for upcoming European telecom consolidations.
EU decrees single charger for mobiles in three years.
The European Parliament finally approved a European Commission directive decreeing that all the producers of mobile phones, tablets and GPS navigators should use the same charger plugs. The directive, which has been in the works since 2009, comes into effect in three years. This is a rare example of the EU bureaucracy doing good where the market failed. Producers could have agreed on a unified charger, making life easier for consumers without hurting their competitive positions: Nobody buys a mobile phone because it has a particular charger plug. They couldn't do that, however, and the regulator stepped in. It's time for the U.S. and other countries to follow suit, since the gadget producers will now be working to unify chargers for the European market, anyway.
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Leonid Bershidsky writes on Russia, Europe and technology for Bloomberg View. Follow him on Twitter at @Bershidsky.
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