Bershidsky on Europe: Putin Takes Crimea
Here's today's look at some of the top stories on markets and politics in Europe.
Putin asks Russian parliament to admit Crimea as new region.
Late on Monday night Russian President Vladimir Putin signed a decree recognizing the secessionist Crimea as an independent state. Some Ukrainians gloated at the news, thinking Putin had backtracked and decided against admitting the pro-Russian peninsula into Russia, as its voters apparently asked in a travesty of a referendum on Sunday. Putin quickly dispelled those hopes by announcing on his site that he had asked the Russian parliament to consider Crimea's accession. The decision must have been especially easy for Putin after the U.S. and the EU announced their sanctions against Russia on Monday, imposing travel restrictions and asset freezes on two dozen Russian and Crimean officials and legislators, none of whom belongs to Putin's inner circle or has any known assets in the EU or U.S. These mini-sanctions reinforce Putin's conviction that the West won't dare face him down over the annexation of the Crimea. Russia's financial markets share this belief: The MICEX index was up on Tuesday morning after days of pessimism bordering on panic. It appears that Putin will get away with his land grab if he does not attack continental Ukraine. That might finally trigger real sanctions.
Russia's richest man sells Facebook, buys Alibaba .
Russia's richest man, Alisher Usmanov, sold his small stake in Apple and sizable holding in Facebook to buy Chinese technology stocks such as Alibaba. Usmanov's partner and investment manager Ivan Streshinsky said Chinese assets now make up 60 to 70 percent of Usmanov's internet investment protfolio. The billionaire got rid of his U.S. investments - about $100 million in Apple shares and up to 10 percent of Facebook - last year, well before the threat of Western sanctions against Russia arose. Usmanov was not hedging his bets in case Russia became a pariah state: It was nothing but business. Usmanov and Streshinsky believe Chinese internet companies have a bigger upside potential than Western ones. Given that the billionaire has hardly made a single losing bet in the past, that is a point of view that merits consideration.
Vivendi picks Numericable for exclusive SFR negotiations.
Billionaire Patrick Drahi is entering exclusive negotiations to purchase the mobile operator SFR from Vivendi, having outbid another wealthy Frenchman, Martin Bouygues. Drahi's investment vehicle, Altice, will merge SFR with cable operator Numericable. "The real future is the convergence of mobile and fixed-line communications," Drahi told a press conference on Monday. "We are not inventing something here. It is happening everywhere around us." Indeed, the U.K. mobile operator Vodafone has just acquired Spanish cable group Ono, as if to confirm Drahi's words. Convergence is the motto of the European telecom consolidation. Drahi himself says he will be doing similar deals in other European countries in the near future.
EU car demand jumps in February.
New car registrations in the EU rose 8 percent year-on-year in February to 861,058 vehicles. This is the sixth straight month of growth after six years of decline, and industry forecasts of a market recovery this year are beginning to ring true. France was the only big market in February where sales fell, as the rest of Europe showed healthy growth and Spain recorded a 17.8 percent surge in registrations. The average car on the European roads is almost 10 years old, and it is time for many owners to get a replacement. That means budget carmakers such as Skoda are the first to benefit. In February, Skoda showed 24 percent sales growth. Other relatively inexpensive cars, such as Toyota, Opel and Seat, also posted double-digit growth. Some luxury car marques, however, are also recovering fast, the champion being Lexus with a 29 percent jump in new registrations. Competition is heating up again in a market where losses became the norm in recent years.
France lifts car ban as pollution clears.
On Monday, cars with license plates ending in even numbers were forbidden to drive in Paris and surrounding areas to reduce record pollution levels not seen in this part of France since 2007. The weather was warm and windless, and smog became visible in many areas, so the government decided to act, making public transportation and the capital's bicycle and electric car rental schemes temporarily free. Private cars with even numbers were only allowed on the streets if they had three or more passengers. The measures not only reduced congestion by 60 percent, but also succeeded in reducing pollution levels, so the French government canceled restrictions for cars with odd numbers planned for Tuesday. One has to wonder whether this was the right thing to do. If Monday's scheme became permanent in big European cities, they could say goodbye to pollution and traffic jams. People who have to use cars could organize into pools, and for others using public transport, a bike or a rental electric car once every two days would hardly be life-threatening.
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