Bershidsky's View From Europe

Here's today's look at some of the top stories on markets and politics in Europe.

Here's today's look at some of the top stories on markets and politics in Europe:

France and Germanyreport surprisingly high growth.

German gross domestic product grew by 0.7 percent in the second quarter, and French GDP was up 0.5 percent, well above analysts' expectations. Government statisticians in both countries said the increases came from higher domestic demand, although quirks in the weather also contributed. In Germany, an unusually long and cold winter forced delays in the completion of construction projects until spring. In France, energy consumption by households was higher than usual because of low spring temperatures. Even so, the French economy continues to shed jobs at an alarming pace and Germany is expected to slow down in the second half of the year due to low demand for its exports. With other European economies still in recession -- Spain lost 0.1 percent of GDP is the second quarter and Italy was down 0.2 percent -- the strong French and German numbers aren't enough to break out the champagne and celebrate a European recovery.

Big European banks exit crisis.

The European Union's 10 biggest banking groups all posted strong results for the first half of 2013. All are profitable and six reported net income increases of 10 percent or more. Most still need to cut their balance sheets to fall in line with international regulations, but the major cuts and write-downs caused by the financial crisis are behind them. The banks have emerged leaner and the global nature of their business allows them to grow overseas when domestic markets slump. The Spanish giant Banco Santander SA, for example, saw its profits rise by 28.9 percent, due to growth in Latin America,and HSBC increased net income by 21.8 percent thanks to its powerful Asian operation. Now the rest of the European banking industry needs to follow suit: Smaller banks haven't faced the same pressure as the larger ones, so many of them been slower to accept credit losses and make cuts. They need to get started.

RWE closes power plants.

German energy company RWE AG announced plans to close down power plants with a total capacity of 3,100 megawatts in Germany and the Netherlands. Its generation business is suffering from low wholesale energy prices. Yet, unlike its major competitor, E.ON SE, RWE hasn't posted a profit drop in the first half of 2013. In fact, its earnings before interest, taxes and debt amortization increased 9.1 percent to $7.3 billion, thanks to a legal victory over a major supplier - the Russian natural gas monopoly, OAO Gazprom. Gazprom links its natural gas prices to the price of oil and an arbitration tribunal ruled against the practice in July -- RWE already booked repayments from Gazprom in its second quarter results. This will do little to improve RWE's future performance and the company realizes that as it prepares for production cuts. Still, get ready for the legal precedent to make waves throughout Europe: Gazprom uses oil-linked prices across the continent.

EU antitrust commissioner wants single telecom regulator.

The office of the Euroepan Union's antitrust commissoner, Joaquin Almunia, issued a report calling for the leveling of national barriers to a single European telecommunications market. "Advancing further towards a true single market would require gradually moving away from the present status quo of 28 different national regulators," the report says, while attacking earlier single market proposals from the telecommunications commissioner, Neelie Kroes, weren't radical enough. Now that both regulators have spoken it is clear the EU will move to unify the mobile phone market, which would entail cross-border consolidation in the sector and a convergence of tariffs. Pushing for a single regulatory body, however, may be overly ambitious: Governments will be reluctant to cede control over such strategically important infrastructure.

Deutsche Bank employee goes on trial forgambling with client funds.

A 39-year-old former Deutsche Bank AG employee, identified only as Jens L., goes on trial next week for allegedly embezzling $10.7 million from his clients' accounts, and losing more than half of it at Hamburg's Casino Esplanade. At the gaming establishment, the banker was known as a high roller: He never arrived with less than $65,000 in his pocket, according to a report in the Hamburger Morgenpost. Jens L. says he did it for his clients. "I was selling bets on interest rates to my customers and I felt guilty because of the big losses they incurred," the newspaper quoted him as saying. "So I thought, why not try the casino so that the clients could get some money back." The banker is accused of 156 counts of fraud, but maybe he has a point: In 2008, investors lost enormous amounts of money on financial instruments that turned out to be no better than casino bets.

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