Bershidsky on Europe: Boeing Wins Gulf War
Here's today's look at some of the top stories on markets and politics in Europe:
Greek companies turn to bond market
Greek corporates raised a record $5.4 billion on the bond market this year. The 15 issuers include the telecommunications company OTE, Hellenic Petroleum and the Greek bottler of Coca Cola. This is part of a trend evident throughout the periphery of the European Union: Companies from the weaker and newer EU member countries raised about $83 billion through bond issues in 2013, the most since 2009. This is partly a sign of investor confidence in strong companies from these countries - Portugal's Galp Energia borrowed at a lower rate last week than the yield on Portuguese sovereign debt with the same duration - but mostly evidence that Europe's banks are too weak to handle these companies' financial needs, and their lending rates are too high.
Airbus losesto Boeing in Gulf
At the Dubai Airshow, the European aircraft builder Airbus raked up $49.9 billion in orders, while its main competitor, Boeing, obtained twice as much. The orders all come from Dubai's Emirates and Abu-Dhabi's Etihad, and Qatar Airways. Emirates and Etihad ordered planes from both manufacturers, but Boeing's new 777 was the clear winner: Emirates asked for 150 of them. Airbus, for its part, only managed to save its A380, the biggest passenger plane in the world, from production cuts. The Gulf airlines' appetite for new planes sends a strong message to the aviation world: The Middle Eastern players aim to become the new market leaders in the Eastern Hemisphere as European carriers retreat. Main traffic hubs are shifting to the east, and Airbus and Boeing are increasingly dependent on clients in the Gulf.
Germany closer to economic unity
In 2012, for the first time since German reunification, about as many people left East Germany for the West as vice versa. According to the government's latest reunification report, to be presented in the Bundestag on Nov. 20, unemployment in the East is still much higher at 9.5 percent, compared to 5.8 percent in the West, and the former Communist state's per capita gross domestic product is still 71 percent of the West's level. The East, however, has certain compensatory advantages, such as a strong school and kindergarten system. With internal migration evening out, Germany is finally achieving true economic unity more than 20 years after the country came together politically. That is a lesson for Europe as a whole: European unification, a project on a much grander scale than the German one, will take much more than a generation to achieve similar results.
Former U.K. bank chairman caught buying drugs
Paul Flowers, a 63-year-old Methodist minister who for three years served as chairman of Co-operative Bank, was caught on camera counting out banknotes to buy cocaine and crystal meth from a dealer in Leeds. Flowers resigned from Co-op Bank in June after the bank nearly collapsed because of bad real estate loans. Co-op, which was known as an "ethical" lender investing in the communities it served, is now undergoing a rescue by U.S. hedge funds. Meanwhile, the Mail on Sunday newspaper revealed text messages by Flowers in which he bragged about using a variety of drugs including ketamine and crack cocaine. He allegedly snorted "some good stuff" before he was due to be called by parliament to testify about the bank's affairs. Following the revelations, Flowers apologized and said he was "seeking professional help." U.K. banking has seen its share of scandals in recent years, so why not a drug bust?
Munich collector wants his art back
The news magazine Der Spiegel obtained an exclusive interview with Cornelius Gurlitt, the octogenarian in whose apartment German investigators unearthed a cache of 1400 art works that his father accumulated during Nazi rule. Gurlitt said in the interview that he would not give up any of the paintings voluntarily despite the fact that the government believed more than 500 of them had been stolen by the Nazis. Gurlitt said he loved the collection more than anything or anyone in his life and that its confiscation had been a nightmare experience. He said he had committed no crime and did not even have a lawyer. He may indeed have a strong legal position, because the statute of limitations on any art theft that occurred during World War II has expired, so Gurlitt is considered the collection's owner until proven otherwise. The German authorities would do better to make a deal with him to exhibit the collection, rather than have them gather dust in storage while they investigate. Gurlitt, after all, has said they could "do anything they want with the paintings" after he dies.
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To contact the author on this story:
Leonid Bershidsky at firstname.lastname@example.org