Bershidsky on Europe: Spotify Gets $4bn Pricetag

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:

Spotify valued at $4 billion

Swedish music streaming service Spotify attracted $250 million in a new round of financing from Silicon Valley investor Technology Crossover Ventures, valuing the company at more than $4 billion - about two-thirds of the market cap of Pandora, its U.S. competitor. Spotify is potentially the stronger company: Last year, it generated $585 million in revenue compared to Pandora's $427 million. Both firms lose money, but mainly because they are financing quick expansion. Spotify plans to use the new investment to launch in Japan and grow in other markets. It added 15 countries in the past year for a total of 32. The global success of Spotify and its French competitor Deezer show that European tech companies are able to carve our lucrative niches where giants like Google and Apple fail to offer a comparable user experience.

Draghi defendsinterest rate cut in Germany

Speaking at a business conference in Berlin, European Central Bank President Mario Draghi brushed aside criticism of the ECB's recent decision to cut its key interest rate to 0.25 percent. "We are not German, neither French nor Spaniards nor Italian, we are Europeans and we are acting for the euro area as a whole," he said, responding to what he called "nationalistic" criticism of the monetary authority's policies. German bankers are complaining that the low interest rates are a disincentive for people to save. Draghi, for his part, argues that the drop in German savings was caused by low bond yields, natural in a country whose debt is used by investors as a safe haven. Germans are a nation of conservative savers, and Draghi's policy is naturally rubbing them the wrong way, but the ECB has a strong supporter in Chancellor Angela Merkel. Speaking at the same conference, she said there was "a high level of agreement" in Europe on monetary policy. In the end, the cheap credit issued to weaker euro area economies is good for German exports. Germany will reap the benefits of its relative strength one way or another.

UBS avoids EU fines in Libor case

EU antitrust regulators will grant UBS immunity from further fines in the Libor manipulation affair. Like Barclays before it, the Swiss bank has agreed to aid the investigation by providing information about other banks. UBS and Barclays previously settled charges against them in the U.K., for a total of $2 billion, and admitted wrongdoing as part of the settlement. The EU is expected to levy at least another $2 billion in fines, but the Swiss bank will not have to pay, transferring the burden to others who agreed to accept the fines without a fight, such as Deutsche Bank, Societe Generale and RBS. The unfairness of such application of the EU's whistleblower rules should only strengthen the resolve of Credit Agricole, HSBC and JP Morgan to fight the charges in the courts.

Ukrainians protesthalt in EU association talks

Thousands of people took to the streets in Kiev and other Ukrainian cities to protest the Ukrainian government's decision to suspend talks with the EU on an association agreement. The government stopped the negotiations under pressure from Russian President Vladimir Putin: The Kremlin had threatened Ukraine with trade sanctions. Now, Kiev is calling for a tripartite commission including EU and Russian representatives to settle differences. Ukrainian liberals, however, saw this as the end of their hopes for a European future. Slogans at the night rallies included "We are Europeans" and "Out with Putin". Ukraine's authorities reacted nervously to the protests, closing off Kiev's main streets and shutting off streetlights and web cameras on Independence Square. It remains to be seen whether the discontent will grow into something more significant as it did 10 years ago, when mass rallies in the capital forced a vote recount in a closely-fought presidential election. The issue is certainly serious enough for a repeat of those events, but Ukrainians are now more cynical and less economically hopeful.

EDF customers furious as computer bug turns them into debtors

The call centers of French power utility EDF were inundated with calls from angry customers, who had received a mass mailing telling them they had unpaid electricity bills. The 41,300 households had opted for paying EDF by automatic bank transfer, so the arrears could only be the company's own fault. In trying to migrate to Europe's new payment processing rules, in effect from February, 2014, the company's tech service messed up the transfer orders sent to banks. When banks failed to execute them, this triggered non-payment alerts and the mailing went out to blameless customers. Now, EDF needs to send out another mass mailing apologizing for the mess. Earlier this year, the French government celebrated a drop in unemployment only to find out it had been cause by a bug in the national employment service's computer system. We let computers handle so much in our life that we are helpless when they miscommunicate.

(Leonid Bershidsky can be reached at

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