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El Periódico de Catalunya - Spain | 23/07/2014

Spain's painful bank bailout

The Spanish state on Monday sold the Catalunya Banc, which was nationalised in the wake of the banking crisis, to the BBVA bank for just under 1.2 billion euros. The overhaul of the Catalan financial institute is seen as one of the final steps in Spain's bank bailout operation. The left-liberal daily El Periódico de Catalunya is less than enthusiastic about the results: "We must conclude that many mistakes were made during the economic boom, but that things weren't done any better once the extent of the tragedy had become clear. Instead of intervening quickly as was done in other countries, we strived to convey the impression that we had the most solid banking system in the world (as [then prime minister] Zapatero said in September 2008). Then came the promise that the money spent on bailing out the banks wouldn't cost the taxpayers a single cent (as Guindos [minister for economic affairs] said in June 2012). And this is all the more painful given that virtually none of those to blame for the disaster has been called to account." (23/07/2014)

Jornal de Negócios - Portugal | 22/07/2014

Greedy hedge funds squeezing Argentina

Argentina will try again today to reach a court settlement with its creditors and thus avoid insolvency. The creditors, spearheaded by the US hedge fund NMS Capital, refuse to accept a debt cut negotiated in 2001 and are suing the country for the repayment of 15 billion dollars. Something has gone fundamentally wrong here, US economist Nouriel Roubini contends in the liberal daily Jornal de Negócios: "Like individuals, corporations, and other private firms that rely on bankruptcy procedures to reduce an excessive debt burden, countries sometimes need orderly debt restructuring or reduction. But the ongoing legal saga of Argentina's fight with holdout creditors shows that the international system for orderly sovereign-debt restructuring may be broken. ... Holdouts must not be permitted to block orderly restructurings that benefit debtors and creditors." (22/07/2014)

Eleftherotypia - Greece | 21/07/2014

Greek citizens need debt relief

The debts owed by Greek citizens to the state grew by 880 million euros in June, to a total of 67 billion euros. Debt relief is the only option in this situation, the left-liberal daily Eleftherotypia comments: "The government and the new finance minister must finally understand. It's not that the citizens don't want to pay. They are trying to keep their heads above water and cover their basic needs in the face of growing unemployment and 1.5 million private sector employees who only receive their reduced salaries nine months late. The government must understand that the problem of tax arrears and overdue pension contributions can only be resolved through debt relief for the financially weak (the long-term unemployed, the sick and the elderly) and citizens with an income below the subsistence level." (21/07/2014)

Hürriyet Daily News - Turkey | 22/07/2014

Ankara must not abandon firms in Iraq

In the past year Iraq imported goods worth roughly 12 million dollars from Turkey, making it Turkey's second largest export market after Germany. Since the advance of the terrorist organisation Isis, however, many Turkish companies have registered a huge drop in sales. The government must stand behind companies even in times of crisis, the liberal daily Hürriyet Daily News insists: "It's all very well to praise the success of Turkish businesspeople in Iraq in times of peace, but you cannot leave them out in the cold and just say 'good luck, you are on your own' in bad times. ... Turkish companies have come up with a number of measures that will facilitate their survival, but the government has been slow in deciding on those proposals. Some companies risk total bankruptcy. So instead of uttering rhetoric about the 'greatness of Turkey,' it's high time the government started at least acting responsibly." (22/07/2014)

Diário Económico - Portugal | 18/07/2014

Don't underestimate Portugal's bank turbulence

Portugal will issue more government bonds despite the concerns over the stability of its financial sector after the turbulence at its largest private bank Banco Espírito Santo (BES). The liberal business daily Diário Económico warns against a reckless move: "The trust the country has regained in the last three years is dissipating day by day. This can be observed in the repeated stock market crashes in Portugal. ... The turbulence at the BES and the GES holding company are a heavy blow that makes the constitutional court's rulings, so detrimental for the national budget, seem laughable by comparison. ... For the sake of the BES, the financial sector and the country, the orderly bankruptcy of GES should be carried through as quickly as possible. This is the only way to remove an abscess that could infect everything else." (18/07/2014)

Helsingin Sanomat - Finland | 18/07/2014

Dirty work for Microsoft in moblie phone sector

US software giant Microsoft announced plans to axe 18,000 jobs worldwide on Thursday. Around 12,000 will be in the mobile phone division Microsoft acquired from Nokia in the spring. For the liberal daily Helsingin Sanomat further proof that the golden age of mobile phones is over not just in Finland but all over the world: "The layoffs reinforce the impression that the new 'Nokia', which is now focussing on the networking sector, sold its mobile phone division at exactly the right moment. Now the US owners must do the dirty work, namely fix the less profitable division. ... Microsoft has therefore declared itself a mobile phone manufacturer for the time being. The Finns, for their part, must get used to the idea that the entire sector is subject to rapid change. Thanks to its know-how Finland still plays a role in mobile phone development. But the business decisions are in the hands of others." (18/07/2014)

Večer - Slovenia | 17/07/2014

Slovenia hurt by ECHR ruling

As successor states of Yugoslavia, Slovenia and Serbia must pay back savings to depositors to the tune of 270 million euros, the European Court of Human Rights ruled on Wednesday in a case brought by three Bosnians. Not good news for Slovenia, the conservative daily Večer writes: "In the 20-year dispute over frozen foreign currency savings deposits, Slovenia tried to convince several international institutions that the states that emerged from the break-up of Yugoslavia should assume the responsibility for the savings deposits. But these efforts have failed. The ruling will spur on all those who see Slovenia as responsible for the fate of thousands of large and small savers. Now the country has a year to think about how to also end the torturous negotiations [on Yugoslavia's bankruptcy assets]." (17/07/2014)

El País - Spain | 17/07/2014

Brics states right establish their own bank

At their summit meeting in the Brazilian city of Fortaleza the Brics states Brazil, Russia, India, China and South Africa agreed to create their own development bank. This initiative is justified given that international economic and monetary policy pays too little attention to the emerging industrial nations, the left-liberal daily El País comments: "With the bank, the Brics states want to assert their new role in the global economy vis-à-vis multilateral institutions that ignore them and are dominated by the US and Europe. The International Monetary Fund (IMF) initiated a reform of its contribution system years ago, but the long overdue changes are being blocked by the US Congress. ... Seventy years after the Bretton Woods conference [in July 1944] which saw the founding of these organisations [the World Bank and the IMF] it's time to adjust these institutions, their objectives and the distribution of power and resources to the new emerging reality." (17/07/2014)

24 Chasa - Bulgaria | 15/07/2014

Bulgaria's banks need European watchdog

Bulgaria wants to join the European Single Supervisory Mechanism for banks, President Rosen Plevneliev announced after a crisis meeting with the chairman of the parliamentary parties on Tuesday. The country is taking the necessary measures in the face of the near bankruptcy of the country's fourth-largest bank, the Corporate Commercial Bank. The move can only benefit the financial system, the daily 24 Chasa believes: "Even if this means losing part of our sovereignty, accession to the European Single Supervisory Mechanism would have a positive impact on Bulgaria. Just think of the EU monitoring system with which Brussels puts Bulgaria under pressure to repair deficits [in the judiciary, the fight against corruption and organised crime]. ... At the moment criticism of Bulgaria's central bank is hailing down. People say it failed to adequately monitor the Corporate Commercial Bank, that it was asleep or closed its eyes to the misdeeds. Would we be in this situation now if we were members of the European Banking Supervision Mechanism?" (15/07/2014)

Neue Zürcher Zeitung - Switzerland | 15/07/2014

Lindt's boosted US presence too expensive

The Swiss chocolate manufacturer Lindt und Sprüngli has acquired the American confectionery manufacturer Russell Stover for more than a billion dollars. According to Lindt CEO Ernst Tanner, the move will make the company North America's third-largest chocolate manufacturer. But its boosted presence in the US comes at a price, the liberal-conservative Neue Zürcher Zeitung warns: "Russell Stover is far less profitable than Lindt. According to a not too recent Wall Street Journal assessment it generates an EBITDA margin of 10 percent. Lindt's margin is 17.5 percent, but according to the calculations of [Swiss] broker Helvea it would sink to 16.5 percent once the takeover is completed. The move will also put a damper on Lindt's growth rate, which Helvea puts at an average of 9 percent per year between 2008 and 2013, compared to just 4 percent at Russell Stover for the same period. From this perspective the investors know what to expect from the takeover: namely that Lindt's US activities will lose a little of their current lustre." (15/07/2014)

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