In the last months of the current European Commission, Google is in deep trouble. Its effort to reach an antitrust deal with Joaquín Almunia, the competition commissioner who is to be succeeded by Margrethe Vestager, is failing amid an outcry from politicians and rivals that it is being let off the hook.
As politicians, members of the European Parliament are justifiably proud of the bonus cap they have agreed to impose on bankers. They seem to have found a politically expedient, legally watertight, electorally popular way to use their limited powers to whack high finance where it hurts. That doesn’t mean that the measure, if confirmed, won’t have potentially grave consequences.
It will increase banks’ fixed costs, weaken the link between pay and performance, accelerate the inevitable drift of financial know-how and power from Europe to Asia, and instantly conjure up a thousand more complex, lawyer-driven alternative compensation structures to get round the rules.
If I were a mastermind seeking to undermine the City of London, I would shift Germany’s financial centre from Frankfurt to Berlin, just as the country moved its political capital from Bonn in the 1990s. Then it would be part of a cosmopolitan city where foreign bankers and lawyers might actually want to live.
Greetings from Davos, the annual shindig of world leaders and chief executives in a valley by a Swiss mountain. Or perhaps the site of a global conspiracy of the power elite. Or perhaps the place where a Swiss professor imposes his quaint euro-views on “stakeholder capitalism” on US corporations. Or perhaps one giant cocktail party.
Gerard Depardieu gives a thumbs up to Belgium. Getty Images
Every time they heard about a disaster in another part of the world, the parents of Belgian friends used to intone: “Qu’on est bien en Belgique” – roughly, “How lucky we are to live in Belgium.”
French (or, perhaps more precisely, French-born) actor Gérard Depardieu may be thinking along similar lines, given his threat this weekend to give up his passport and take up residence in the village of Néchin in Belgium. “I’m leaving,” he wrote, in an open letter to Jean-Marc Ayrault, the French prime minister, “because you consider that success, creativity and talent… must be sanctioned” – a clear protest about rising tax rates in the country of his birth. Earlier this year, France’s richest man Bernard Arnault applied for Belgian citizenship, though he said he was seeking dual Belgian-French nationality and would continue to be tax-resident in France.
I’ve lived in Belgium and it has plenty going for it, including the usual cliché attractions of beer, chocolate, mussels and Tintin, but low personal tax rates never seemed to be one of the benefits of residency.
For BAE Systems and EADS, the European aerospace and defence companies whose courtship was revealed last week, it’s simple. Business logic will help level the political hurdles and bridge the legal pitfalls that lie in the path of their proposed union.
Lord knows how Spain will get Bankia, its troubled savings bank conglomerate, out of its €19bn mess. But, for once in the crisis that has been unfolding since 2007, anyone can grasp how it happened.
Shortly before Mario Draghi started his press conference at the European Central Bank’s meeting in Barcelona on Thursday, his predecessor Jean-Claude Trichet was addressing a more sympathetic audience at the St Gallen Symposium in Switzerland. If anything, Mr Trichet was probably the cagier of the two.
In spite of some robust questioning from the BBC’s Stephen Sackur, the former ECB president came across as unrepentant about the ECB’s role during the eurozone crisis. He argued, for example, that 14 years ago, 99 per cent of observers would have dismissed as impossible that the euro would keep its value amid low inflation – a performance that he said bettered that achieved by the national central banks in the 15 years before the single currency’s birth. “Had I added that this [performance] would be observed after five years of the worst crisis ever, [the sceptics] would have been 100 per cent,” Mr Trichet said. The nearest he came to admitting to flaws in the eurozone project was when he said the financial crisis had been “like an X-ray or scanner that reveals the problem you might have”.
It’s not that they’re wicked or naturally bad
It’s knowing they’re foreign that makes them so mad!
– ‘A Song of Patriotic Prejudice’
Flanders and Swann, the English songwriters whose 1960s ditty gently ribbed nationalists and national stereotypes, would have had a field day last week. Canadian Mark Carney was added to the list of candidates to become the next governor of the Bank of England, prompting this priceless, po-faced observation from one of the central banker’s supporters: “As a Canadian national he is a subject of the Queen. That is important.”
Italians like to wear their qualifications where everyone can see them. Accountants style themselves Ragioniere, architects are always Architetto, and so on. Corporate chieftains whose business successes have long since overshadowed their academic achievements hang on to the handle: so Fiat’s Gianni Agnelli was always l’Avvocato, Carlo De Benedetti is still l’Ingegnere. I used to be rather proud to receive letters addressed to “Egregio Dott. Hill”, when I worked in Milan, until I realised protocol dictated that every university graduate was a Dottore or Dottoressa.