EMEA

Rivals unlikely to crash HP’s punchy Autonomy deal

19 Aug 2011

Autonomy would be a nice-to-have for Oracle or IBM. But Hewlett-Packard’s $11.7 bln offer for the UK software group is already rich, and rivals don’t need Autonomy quite so badly. Add in falling markets and the ugly reaction of HP shares, and a bidding war doesn’t compute.

Finnish favouritism could unravel Greek rescue

19 Aug 2011

Greece’s bailout allows Finland to secure its loans with cash. Now other member states want the same deal, which would undermine the whole exercise. With either the rescue package or euro zone unity at stake, the EU’s biggest players may have to knock some heads together.

UK should avoid handwringing over Autonomy sale

19 Aug 2011

It could have been Britain’s Google, say those who mourn the Cambridge software firm’s sale to HP. Maybe. But Autonomy’s founder has a right to an exit, while public companies have a duty to accept rich takeover bids. Its success is still an inspiration to would-be entrepreneurs.

HP says goodbye Compaq, hello IBM

19 Aug 2011

The U.S. tech giant may spin off its PC unit and stop making some mobile devices. It has also offered to buy UK data search software group Autonomy for $10 bln. Leaving the cutthroat hardware market for higher margin software can work, as IBM shows. But it won’t be quick or easy.

How to break Europe’s bank-sovereign "doom loop"

19 Aug 2011

The crisis of 2008 is repeating itself in reverse. Instead of saving the banks, European governments are now dragging them down. That threatens another credit crunch. Severing the link between states and lenders is essential to restoring calm. Here’s how it can be done.

EU bank shares braced for recession – and worse

18 Aug 2011

The huge sell-off in European bank stocks is partly due to sovereign-related funding fears. But it mainly reflects the hit to earnings that lenders would suffer in another economic downturn. Investors also seem to be pricing in another round of capital injections.

High volatility the price for still unfixed system

18 Aug 2011

The tail-risk fear of a Lehman sequel in the euro zone has whipsawed stocks, bonds and just about every other market. Gloomy data on the U.S. economy didn’t help on Thursday. While policymakers and fundamentals alike offer no conviction, global volatility is set to stay high.

Spain must seize the moment for more austerity

18 Aug 2011

The markets’ focus has been on Italy and France. Emergency ECB buying of Spanish bonds has helped bring down yields. Spain may not have crippling debt, but it’s plagued by low growth and a high deficit. Fresh austerity measures due this week need to be comprehensive and credible.

EU banks’ summer funding lull may bring autumn woe

18 Aug 2011

Post-crisis reforms and central bank backstops mean Europe’s lenders are less vulnerable to a short-term funding freeze. But if markets do not reopen in the autumn, or if wholesale borrowing costs remain high, the economic fallout for the euro zone could be nasty

ECB’s dollar-swap safety net should cap bank pain

17 Aug 2011

The central bank has activated a facility that allows EU banks to access dollar funding. An unnamed lender has highlighted the stress in bank funding markets by paying up for seven-day liquidity. But the ECB’s ready supply of dollars should help prevent a Lehman-style crunch.

Merkel and Sarkozy live down to low expectations

17 Aug 2011

The Franco-German summit produced proposals for further euro zone integration. But the demand for balanced budgets was unmatched by any promise of more aid for peripheral states, while the mooted tax on financial transactions misses the point. Investors are rightly sceptical.

Barclays’ star trader exit won’t be the last

17 Aug 2011

The UK bank is parting company with big-shot commodities trader Todd Edgar. Curbs on proprietary trading are one factor, and his contract terms may make it logical to go now. But with revenues in trading under pressure, the underlying trend is shrinkage in any case.

Europe shouldn’t dally on Syrian oil boycott

17 Aug 2011

Proceeds from the country’s oil exports are helping to prop up an increasingly brutal regime. Global markets can withstand the loss of Syria’s supplies. Even if there is a chance that Syria can circumvent sanctions, they remain the best tool available to weaken the regime.

Balanced budget laws are flawed but not useless

16 Aug 2011

Sarkozy and Merkel like them, and they feature in America, too. But politicians often fudge the numbers, or just change the rules. Nonetheless, in reasonably honest systems such laws slow the build-up of deficits. Perhaps as importantly, they also stigmatize bad behavior.

German slowdown adds to pressure on euro zone

16 Aug 2011

Weak Q2 GDP confirms fears that the EU’s largest economy has entered a soft patch. That makes it harder for Europe to grow its way out of crisis. The euro zone can’t afford to relax near-term fiscal austerity just yet. But further rate hikes by the ECB must now be on hold.

Solar firm’s demise signals gray industry forecast

16 Aug 2011

Onetime investor darling Evergreen Solar, among the first U.S. green energy companies to go public, just went bankrupt, victimized by a global supply glut. Growing Chinese competition and waning European subsidies mean the solar sector will probably get darker before the dawn.

Italy’s imperfect budget faces bumpy ride

15 Aug 2011

There’s mounting public anger at Rome’s accelerated austerity programme, in particular its tax on high earners. Debt market jitters are likely as the measures are debated in coming weeks. Still, it’s hard to see the package being rejected - though it may well be modified.

Euro bailout fund could survive French downgrade

15 Aug 2011

France’s triple-A rating is the weak link in the soon-to-be-expanded European Financial Stability Facility. A downgrade would almost certainly dent the rescue fund’s top rating, pushing up borrowing costs for bailed-out countries. But this need not be a disaster.

Russia needs to kick-start pension reform

15 Aug 2011

A rapidly rising state pension bill will become a crippling burden without serious reforms. The latter is the key not only to addressing deteriorating public finances, but also to developing flimsy capital markets. A pity Russia’s leaders are so shy about the sensitive issue.

Korea’s leveraged bets put it at risk of contagion

12 Aug 2011

Seoul’s stock market fell further than the U.S. this month - 16 pct. South Korea relies heavily on European credit and a U.S. recession would threaten its exports. But the popularity of loans and derivatives to bet on stocks makes Seoul susceptible to even more dramatic declines.