Bershidsky on Europe: Cue NSA Spying Backlash
Here's today's look at some of the top stories on markets and politics in Europe:
Germany and France seek change to intelligence sharing with U.S.
German Chancellor Angela Merkel said she and French President Francois Hollande would launch a "joint initiative" to change cooperation protocols between the intelligence services of their countries and the U.S. Both leaders are angry at the recent revelations that U.S. National Security Agency spied on numerous European citizens and possibly even listened in to calls Merkel made on her Nokia. "Words are not sufficient," said Merkel, who discussed the allegations with U.S. President Barack Obama but did not get satisfactory answers. "True change is necessary." European powers will probably want a cooler, more formal intelligence partnership with the U.S., and an agreement not to spy on each other. The Guardian newspaper, which has reported most of the U.S. spying revelations by NSA leaker Edward Snowden, says the U.S. agencytapped the phones of 35 world leaders. The world has never seen a spying scandal like this and Snowden, living a secluded life in Russia, shows no sign of stopping. Even if he has provided no materials to Russian intelligence, as President Vladimir Putin maintains, the damage he is doing to brand U.S. prestige justifies all the trouble he has been causing his Russian handlers.
Ford says European car market has bottomed out
Ford said it will lose less money in Europe this year than in 2012, because the continent's car market is finally on its way to recovery after a six-year slump. All that time, major car makers have had to subsidize their European operations with profits from other parts of the world: the U.S. for Ford and emerging markets for GM, Toyota and Volkswagen. Ford lost $1.8 billion in Europe last year. It is the first automaker to state that Europe's nascent economic growth will improve its 2013 financial result. The decrease in losses, however, also comes at the cost of job cuts and factory closures: Ford shut down a plant in the U.K. this year. The company's profit guidance is as much the result of caution as optimism.
Spanish banks increase profits
Spain's Banco Santander, the biggest in the euro area by market cap, reported an eightfold year-on-year rise in net income to $1.46 billion in the third quarter and predicted its profit would keep rising because next year all 10 countries where the bank operates are expected to show economic growth. Two other Spanish banks, CaixaBank and BBVA, have roughly doubled their profits for the first nine months of the year. A lot of the profit growth comes from the Spanish central bank's reduced provisioning requirements, and Spain's sluggish economy is still a headache: Santander has cut lending in its home market by 7 percent over the past year. Yet the earnings show that hedge fund managers investing in Europe's post-bailout banking systems are onto something.
Google plans$150 million investment in Finnish data center
Google, which already spent $200 million on a data center in Hamina, Finland, is planning another $150 million investment. This follows a Microsoft announcement that it will build a new data center in Finland for $250 million. The Nordic country and its neighbors are turning into a data center mecca for large U.S. Internet companies: A cold climate and abundant cool water are pretty much the only natural resource they use, and they need more and more of it.
Boxing champion bids for Ukrainian presidency
Heavyweight boxing champion Vitaly Klichko said he would run for president of Ukraine in 2015, setting the stage for a fierce battle with incumbent President Viktor Yanukovych. The president's Party of the Regions tried to preempt the move by pushing through a bill that would ban Klichko from running because he has a German residence permit, but the boxer declared he "would not be intimidated or stopped." Opinion polls say Klichko would beat the unpopular Yanukovych in a run-off vote if the election were held now, provided the jailed opposition leader Yulia Tymoshenko did not run. Yanukovych is under pressure from Brussels to release Tymoshenko if he wants to sign a sweeping trade agreement with the EU, but even if he does, he will make sure she is excluded from the ballot. That, however, will not ensure his victory, because of the threat from Klichko. The European path Ukraine has chosen makes it difficult for Yanukovych to become a dictator like many of his post-Soviet counterparts and may ultimately spell the end of his bungled, corrupt rule in Ukraine.
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To contact the author on this story:
Leonid Bershidsky at email@example.com