Bershidsky on Europe: Turkey in Upheaval
Here's today's look at some of the top stories on markets and politics in Europe:
Erdogan replaces 10 ministers after corruption probe
Turkish Prime Minister Recep Tayyip Erdogan fired half his cabinet after the resignation of three ministers, all his long-time supporters, in the wake of a major corruption scandal. The sons of Economy Minister Zafer Caglayan, Interior Minister Muammer Guler and Environment Minister Erdogan Bayraktar were accused of bribery, and Erdogan apparently leaned on the cabinet members to step down and relieve public pressure on him. As he tendered his resignation, Bayraktar, Erdogan's close friend and ally since the 1990's, said he felt the prime minister needed to resign, too. Erdogan, however, plans to do nothing of the kind. Instead, after saying repeatedly that the bribery scandal is part of a foreign plot against Turkey, he has responded to it by firing 10 ministers. This is hardly consistent behavior, and it is unnerving investors who are selling Turkish stocks and dumping the lira. These developments are bad for Erdogan, whose popularity is based on his government's economic success. The prime minister's grasp on power appears to be weakening.
Russian court may make Khodorkovsky's return possible
The Russian Supreme Court reopened proceedings in two old cases against former oil magnate Mikhail Khodorkovsky, raising the possibility that a civil verdict ordering him to pay $520 million in back taxes will be overturned. Khodorkovsky, who was Russia's most prominent political prisoner until President Vladimir Putin pardoned him last week, cited the ruling as his reason for staying out of Russia. The European Court of Human Rights has ruled the $520 million verdict illegal, saying the Russian state had already recovered the money from Khodorkovsky's now-defunct oil company, Yukos. The Russian court is likely to confirm this decision in keeping with established practice. While that does not mean it would be entirely safe for Khodorkovsky to return to Russia - new proceedings may be opened against him at any moment - Putin appears to want an end to the Yukos affair 10 years after it started. Whether or not the wily dictator is sincere is debatable, but his actions so far speak louder than words.
Think tank expects U.K. to overtake Germany by 2030
London-based Center for Economic and Business Research published its 2013 "World Economics League Table", predicting that the U.K. will be the developed world's second best-performing economy after the U.S. over the next two decades, overtaking France in gross national product size by 2018 and catching Germany by 2030. The think tank believes the eurozone will be holding Germany back: If the monetary union fell apart, Germany would outperform the U.K. CEBR predicts, however, that under any circumstances, emerging economies will dominate the world standings in the coming years, China surging ahead of the United States and India passing Japan by 2028, while Brazil will have a bigger economy than the U.K. by 2023. Few people are likely to remember the forecast by the 2020s, but right now the British economy does look more flexible and dynamic than those of the eurozone countries. It would take a leap of faith in European economic unity to predict that this will change in the near future.
Snowden broadcasts alternative Christmas message to U.K.
NSA leaker Edward Snowden was tapped to record an "Alternative Christmas Message" on the U.K.'s Channel 4, a traditional format that mimics the Queen's Christmas speech. In a two-minute video from Moscow, where Snowden now lives, he spoke about the end of privacy in an Orwellian modern world. "We have sensors in our pockets that track us everywhere we go. Think about what this means for the privacy of the average person," he said. "A child born today will grow up with no conception of privacy at all. They'll never know what it means to have a private moment to themselves, an unrecorded, unanalyzed thought". While many in the U. S. view Snowden as a traitor, to Europeans his revelations of American electronic surveillance have made him one of the folk heroes of 2013. The fallout will be felt next year, too, especially by U.S. companies dealing with foreign governments and by Internet and technology giants such as Google Inc., Facebook Inc. and Apple Inc. The U.S. still has to convince the world that it will take steps to curb the spying activity.
Toshiba to take majority stake in U.K. nuclear power company
After the Fukushima disaster, Japan has no interest in expanding its nuclear power industry. Toshiba, one of the country's biggest electronics corporations, does. It has focused on perhaps the biggest remaining market where nuclear energy will be a growth sector in the coming decades -- the U.K. The Japanese company plans to buy part of GDF Suez's 50 percent stake in the NuGeneration consortium, which builds and operates power plants in Great Britain, in addition to buying out Spain's Iberdrola, which owns the other 50 percent of NuGeneration. Another Japanese company, Hitachi, and Chinese nuclear power companies have already bought U.K. assets. The modernization of the country's energy industry is becoming the business of Asian players squeezed in their home markets and in the U.S., where the shale revolution is making nuclear power less attractive.
(Leonid Bershidsky is a Bloomberg View contributor. He can be reached at
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