Bershidsky on Europe: France Takes on Amazon
Here's today's look at some of the top stories on markets and politics in Europe:
A boat carrying hundreds of Africans from Libya to Italy capsized near the island of Lampedusa, and at least 114 people drowned. The exact number of casualties is unknown: some of the 155 survivors say the overloaded 66-foot boat was carrying as many as 500 people. The incident is likely to cause debates in the EU about a common approach to illegal immigration, an issue that has led to the electoral success of nationalist movements across Europe. Italian Deputy Prime Minister Angelino Alfano, who said Italy has rescued 16,000 migrants at sea this year, called for a common European migration policy: "We want to talk about European frontiers, not Italian borders." European countries set their own immigration and asylum rules, but they struggle to find a balance between politically unpopular laxity and cruelty to refugees from war-torn countries. Incidents like the one at off Lampedusa are a direct consequence: European countries' arcane policies have given rise to an illegal, unsafe market in migrant transportation.
Francepasses "anti-Amazon" bill
The lower house of the French parliament passed a bill to forbid internet booksellers from offering free delivery. The proposal came from Culture Minister Aurelie Filippetti, who accused Amazon of "dumping" to destroy French bookstores. Amazon, she said, would raise its delivery prices once local competition was ruined. The move against the U.S. company, which controls up to 70 percent of book sales on the Internet, is part of a broader campaign against American Internet majors, such as Google, Apple and Facebook, which do a lot of business in France but pay almost all of their taxes elsewhere. Some moves in this war make sense: the French government, for example, has essentially forced Google to give French news outlets part of the revenue it gets from distributing their content. Others, like Filippetti's bill, merely protect outdated business models that will not survive, anyway. Amazon, which operates in France from Luxembourg, will still be more efficient and easier to use than independent bookstores.
French economy stagnant in Q3
The French official statistical body, Insee, published its latest economic growth forecast: Zero growth in the third quarter of 2013 and 0.4 percent in the fourth. For the whole year, according to the Insee, France's gross domestic product is set to increase by 0.2 percent. This almost invisible growth is not enough to cut unemployment significantly, the Socialist government's main goal. By the end of 2013, the jobless rate is expected to stabilize at 10.6 percent. Someday, President Francois Hollande's government will have to come to the obvious conclusion that more regulation and more taxes do not encourage growth and job creation.
German parties start exploratory coalition talks
The winners in the recent German parliamentary elections, Angela Merkel's center-right Christian Democratic Union and its Bavarian sister party, are beginning exploratory talks with two other parties, the second-place Social Democrats and the fourth-place Greens, to form a coalition government. Social Democrat leader Sigmar Gabriel warned before the talks started that they could take a long time because compromise will need to be reached on issues rather than personalities. Merkel's party has publicly drawn the line at raising taxes, while both the Social Democrats and the Greens are for tax increases. There are, however, certain points on which the parties could agree, such as a statutory minimum wage and energy policy. Merkel will try to play the others against each other to force concessions. Her victory was convincing enough to put her in a strong position in the talks.
Italian prosecutorsaccuse JPMorgan
Prosecutors in Siena want to try JPMorgan for obstructing regulators in the case of Monte dei Paschi di Siena, Italy's third largest bank by assets, which now subsists on government bailout funds. In 2008, Monte dei Paschi acquired the regional bank Antonveneta for $12 billion, one of the disastrous deals that led to its ruin. Now former managers at the Italian bank face criminal charges for obstructing regulators, market manipulation and fraud. JPMorgan's alleged role in the scandal was a failure to tellregulators about a $1.3 billion facility it arranged for Monte dei Paschi before the Antonveneta acquisition. JPMorgan, already under fire from regulators on both sides of the Atlantic and forced to pay billions of dollars for violations committed in the U.S. and U.K., has never suffered as much reputational damage. It is hard to say whether new legal claims against it keep springing up because something is especially wrong at the U.S. bank, or because it is seen as fair game.
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Leonid Bershidsky at firstname.lastname@example.org