Bershidsky on Europe: U.S. Spying 'Shocks' France

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website
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Here's today's look at some of the top stories on markets and politics in Europe:

France protests U.S. electronic spying

Foreign Minister Laurent Fabius and other members of the French government loudly protested massive U.S. spying efforts in France, revealed by National Security Agency leaker Edward Snowden. "We cooperate on terrorism in a meaningful way, but that doesn't justify everything," Fabius said. Interior Minister Manuel Valls called the revelations "shocking." U.S. President Barack Obama phoned his French counterpart Francois Hollande to discuss the spying, saying the report in the daily le Monde distorted some of the U.S. activities, but admitting that some of the facts were legitimate grounds for concern. While the scandal will inevitably die down - France will not cease to be a U.S. ally over this - there could be a backlash against U.S. high-tech companies. U.S. intelligence heavily monitored Alcatel Lucent, a struggling French network equipment maker, possibly for business-related reasons. That provides justification for French bureaucratsto make life difficult for U.S. technology leaders such as Google, Facebook and Amazon. The EU is already drafting new regulations to force these companies to protect their European customers data more adequately.

Bundesbank warns of real estate bubble

According to a Bundesbank study, apartments in Frankfurt, Munich and Frankfurt are overpriced by about 20 percent. Germans traditionally prefer to rent housing, which has led to a lethargic real estate market. In the last three years, however, low interest rates and a flight to value as debt markets disappointed investors have triggered a boom. German authorities are not overly worried about a nationwide housing bubble because the price spikes have only occurred in a few large cities. Germany is, however, concerned that the European Central Bank is keeping rates too low in an attempt to boost growth, and Angela Merkel's government will use the bubble data to argue for a monetary tightening.

Eni head says U.S. shale a threat to Europe

Paolo Scaroni, head of Italian energy giant Eni, said the U.S. shale boom was threatening European heavy industry. "Why would anyone invest in anything energy intensive [in Europe] rather than go to Texas, where the cost of electricity is half and gas a third?" he questioned. Scaroni and others in the European energy sector believe the difference between oil and gas prices in Europe versus the United States is here to stay, because shale projects will take off more slowly in Europe. This could result in rapid U.S. re-industrialization as the old continent seeks growth opportunities in less energy-intensive businesses.

Hediard files for bankruptcy as Russian owner fails

The celebrated, 160-year-old luxury grocery chain Hediard, which has its flagship store in Paris' Place de la Madeleine opposite arch-rival Fauchon, has filed for bankruptcy. Hediard seemed unsinkable after Russian billionaire Sergei Pugachev, then seen as close to President Vladimir Putin, bought it in 2007. Pugachev's business empire has since gone bust, however. His Russian bank, Mexhprombank, failed in 2010, and his industrial assets were sold or seized for debts. Pugachev once promised Hediard international expansion, but he has proved unable to finance either that or the restructuring of the loss-making company. Russian tycoons got rich quickly, but their money can disappear just as fast - a cautionary tale for the owners of prestigious but money-losing European assets, who dream of Russian capital injections.

Bill Gates takes stake in Spanish construction firm

Bill Gates paid $155 million for 6 percent of Spanish construction company FCC, becoming its second biggest shareholder after the founding family, which owns a controlling interest. FCC has been struggling since the 2008 financial crisis, but is now close to a deal with creditors on restructuring its $6.8 billion debt. It also recently won a lucrative contract in Saudi Arabia to build the Riyadh subway. Gates adds the FCC stake to a spate of other non-high-tech investments, including tractor maker John Deere and Mexican Coke bottler Femsa. These distinctly unglamoros workhorses help Gates make money faster than he is giving it away to charity: His fortune has increased by almost $10 billion this year. Now the Microsoft co-founder is officially in on the European rebound story.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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Leonid Bershidsky at