Bershidsky on Europe: Swiss Reject Pay Cap
Here's today's look at some of the top stories on markets and politics in Europe:
Swiss reject executive pay cap
In a referendum on Nov. 24, 65.3 percent of Swiss voters rejected a proposal to ban companies from paying any employee more than 12 times the wage of their lowest earner. After a similar vote earlier this year approved binding say-on-pay and a ban on sign-on bonuses and golden parachutes, Swiss officials feared a "yes" vote on the egalitarian proposal, too. Swiss executives are among the highest-paid in Europe, and French companies have been moving some of their best-paid staff across the Swiss border to save on payroll taxes. If approved, the pay cap would have caused a similar outflow of executives, and corporate headquarters, from Switzerland. The good thing about Swiss direct democracy, however, is that common sense tends to prevail. High salaries for top employees are as reasonable as golden parachutes are not.
German union calls for strikes at Amazon.com
Services union Ver.di called for strikes at two of Amazon.com's German locations, at Bad Hersfeld and Leipzig, expecting at least 1,000 workers to participate. The Union demands that Amazon join an industry-wide wage agreement rather than use its own pay scale for German employees. Amazon classifies staff at the two sites as warehouse workers, whereas the union insists they should be recognized as retail workers and paid more. Germany is Amazon's second biggest market, and strikes could ruin the holiday season for the online retailer. Concessions from the company are the likely outcome: apart from trying to avoid disruptions due to labor disputes, Amazon has to show it accepts the dominant culture in its key markets. In Germany that means maintaining a good relationship with the powerful unions.
Pro-EU protesters in Ukraine clash with police
Up to 100,000 people gathered in the center of Ukrainian capital Kiev to protest the government's decision to postpone signing an association agreement with the EU. Radicals tried to storm the government buildings but were repelled by riot police who used tear gas. Several thousand protesters remained in the central square overnight. Thousands of people attended similar rallies in other Ukrainian cities. The scale of the protests is somewhat narrower than in 2004, when a nationwide strike and non-stop rally in Kiev forced a vote recount in a presidential election. Yet the Euromaidan, as the protest campaign is known, is serious enough to give President Viktor Yanukovych a serious scare. The EU Eastern Parternship summit at which the association treaty was to be signed is scheduled for Nov. 28-29, and theoretically protesters could force the government to rethink its stand. Yanukovych, however, will probably stick to his delaying tactics because giving in to the protesters' demands would create a major problem in relations with Russia, which opposes to the EU deal.
Former Renault COO to join competitor PSA
Earlier this year, carmaker Renault's Carlos Ghosn fired his chief operating officer Carlos Tavares for saying he was tired of being number two and would like to run an automobile producer. Now, Tavares is joining Renault's French competitor, PSA Peugeot Citroen, also as number two. The company's chief executive Philippe Varin wants Tavares to run the operational side of the business while he concentrates on negotiations with Chinese partner Dongfeng, which could result in the transfer of control over PSA from the founding family to the Chinese. Top jobs in the auto industry do not come open often enough to accommodate all the able and ambitious managers, as Tavares has found out. He may, however, have a better chance to get to the top at PSA than at Renault, where Ghosn's position is secure. 61-year-old Varin's contract runs for another three years, and since it was he who approached Tavares, he may see him as a credible successor.
42 percent of French would consider voting for National Front
A recent poll showed that 18 percent of the French would "definitely" vote for candidates backed by the ultra-right National Front in municipal elections, while another 24 percent "did not rule out" voting for the ultranationalists. It isn't as if the French don't know what the National Front is about: 88 percent of those polled believe that some National Front politicians hold racist and anti-Semitic views. Though that drags the party down somewhat - 69 percent of those polled said they would change their vote if a specific candidate turned out to be a racist - there is a solid core of 30 percent who do not care. With the popularity of the ruling Socialists at historic lows, France is set for a right-wing backlash, and it is not the centrists who can expect the biggest gains but the National Front radicals.
(Leonid Bershidsky can be reached at email@example.com).
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