Bershidsky on Europe: Goldman Deal Shakes Denmark

Here's today's look at some of the top stories on markets and politics in Europe.

Here's today's look at some of the top stories on markets and politics in Europe.

Danish government crumbles over Goldman Sachs deal.

The Socialist People's Party, one of the three making up Denmark's ruling coalition, quit the government in protest against a decision to sell 18 percent of the state-owned utility, Dong Energy, to Goldman Sachs for about $1.5 billion. Prime Minister Helle Thorning-Schmidt, she of Mandela funeral selfie fame, is scrambling to find replacements for the six ministers who resigned and keep the diminished coalition together. According to opinion polls, though, Danes would rather see her step down, to be replaced by opposition leader Lars Loekke Rasmussen. Just what is the problem with Goldman buying a minority stake as part of a capital call by Dong? Well, because it's Goldman, the evil U.S. bank firmly associated with the 2008 crash in the minds of many Europeans. Danish attitudes on this are irrational: There is no way the deal can hurt them. The Socialist People's Party, however, chose not to argue about it with its voters, leaving the mess to the already unpopular Thorning-Schmidt. Politics is not about about being rational, anyway.

Eastern European currencies succumb to emerging markets trend.

The Hungarian forint, Czech koruna and Polish zloty, until recently immune to the massive emerging markets currency sell-off, are now affected by it, too. The forint and the zloty are trading at about 2 percent less than on Wednesday, and the koruna is about 1 percent down. None of the three countries have the same problems as Turkey, Ukraine or Argentina, whose currencies have been tumbling recently. Their governments are not in crisis, they have plentiful foreign reserves and no large current account deficits (Hungary even has a surplus). Yet the three countries are classified as emerging markets and therefore lumped together with riskier investments. When a run on the entire category starts, they suffer, too. People making decisions about large capital flows ought to be more conscious of the not-so-subtle differences between Poland, India and South Africa.

LVMH growth slowed in 2013.

The world leader in luxury goods, LVMH Louis Vuitton Moet Hennessy, increased sales by 4 percent in 2013 to $39.6 billion compared to 12 percent growth in 2012, but maintained net income at the same level, $4.6 billion. Bernard Arnault has built an empire that can resist any crisis and remain highly profitable. LVMH grew despite the anti-gift campaign in China, which hurt many competitors, the rise of the euro against the dollar, the disappointing results of most luxury groups in Europe and heavier-than-usual investments in brand development. A juggernaut that includes brands like Kenzo, Givenchy, Marc Jacobs, Berluti, Dior and others wins no matter how fashion trends change. At the very worst, there's always the crisis-resistant cosmetics business. Vanity is perhaps the best profitability driver a company could hope for.

Nationalized bank's Miro art sale sparks anger in Portugal.

On Feb. 4 and 5 Christie's in London will auction 85 works of the Catalan artist Joan Miro, which now belong to Banco Portugues de Negocios (BPN), nationalized in 2008. The auctioneer valued the collection at about $50 million, a paltry amount if one considers that in its entirety, this is one of the biggest Miro collections in the world. The bank bought it for about as much from a Japanese collector in 2006, and many Portuguese see it as a national treasure. Thousands of people signed a petition calling on the government to keep the paintings and find another way to fix BPN's balance sheet. Museum directors and private collectors protested against the planned sale. The government, however, is going ahead with it, a culture official stating that "the acquisition of the collection of Joan Miro is not considered a priority in the current context of the organization of the state collection." In fact, Portugal never even got around to exhibiting the paintings. Austerity is generally a good thing when a country is trying to exit an international bailout, as Portugal is. Selling the Miro collection, however, is hardly going to solve its problems. One can only hope that a wealthy collector will step up and try to keep the works together.

Ukrainian president goes on sick leave with crisis unresolved.

The office if Ukrainian President Viktor Yanukovych issued a statement saying he would be taking time off work because of a bad cold. The move follows a botched attempt to compromise with protesters who demand, among other things, an early election. Yanukovych fired the government, but since opposition politicians refused to from a new one, the cabinet is now run, on a temporary basis, by Serhiy Arbuzov, a close associate of the president's elder son. The president's Regions party also agreed to repeal a number of recently-passed repressive laws and, together with the parliamentary opposition, voted for an amnesty for 140 arrested protesters. In exchange, the demonstrators were to free all seized government buildings in Kiev and throughout the nation. Many of the protesters, however, rejected the deal and held on to the buildings. Meanwhile, one of the informal protest leaders, Dmitri Bulatov, who had been missing for a week, showed up near Kiev with marks in his body showing he had been tortured. Bulatov said his tormentors spoke "with a Russian accent." The anger and violence that have recently accompanied Ukrainian protest are still there, and no immediate solution is in sight since the protest is essentially leaderless. If the situation continues for much longer, Ukraine's economy will collapse because of the government's inability to collect taxes or attract external financing. Russia has stopped disbursing aid to Ukraine, at least until a permanent government is appointed.

(Leonid Bershidsky writes on Russia, Europe and technology for Bloomberg View. Follow him on Twitter.)

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

    To contact the author on this story:
    Leonid Bershidsky at

    To contact the editor on this story:
    Marc Champion at

    Before it's here, it's on the Bloomberg Terminal.