Reuters blog archive
After a local election drubbing, French President Francois Hollande duly sacked his prime minister last night and tempered his economic reform drive, vowing to focus more on growth and “social justice”. A fuller cabinet reshuffle is expected today.
Interior minister Manuel Valls, anything but a left-wing firebrand whose appointment could stir unrest on the left of the ruling Socialist party, takes the premiership with a mandate to pursue cuts in labour charges for business but also tax cuts to boost consumer spending and employment.
Hollande said France would still cut public spending to pay for a 30 billion euro reduction in labour charges on business, part of a "responsibility pact" with employers he launched in January. But he said Sunday's elections also showed the need for a "solidarity pact" offering workers tax cuts and assurances on welfare, youth training and education.
Brussels would have to cut it some slack with its budget deficit, he said. Paris has already been given until the end of 2015 to bring the deficit below the EU limit of 3 percent of GDP. Data released on Monday showed the deficit stood at 4.3 percent in 2013, higher than the government's 4.1 percent target.
Investors have spent months looking askance at Turkey’s corruption scandal and Prime Minister Tayyip Erdogan’s response to it – purging the police and judiciary of people he believes are acolytes of his enemy, U.S.-based cleric Fethullah Gulen. But it appears to have made little difference to his electorate.
Erdogan declared victory after Sunday’s local elections and told his enemies they would now pay the price. His AK Party was well ahead overall but the opposition Republican People's Party (CHP) appeared close to seizing the capital Ankara.
from The Great Debate:
In France, taking a person hostage or sequestering them against their will is a crime punishable by up to 20 years in jail. It also happens to be a very effective weapon in French labor disputes. Since 2009, there have been 15 incidents of “boss-napping” and only one resulted in sanctions: 11 postal workers who were fined $2,000 apiece for locking up their managers during a dispute over a change in how the mail is delivered.
Most of the time, it’s the unions who win. That’s certainly the case in the most recent incident, involving a bitter struggle over job losses at a Goodyear tire plant in Amiens. Earlier this month, union officials occupied the factory and sequestered the production manager and head of human resources for 30 hours. After the government intervened, the battle finally ended last week when the company agreed to triple the severance it had offered. Union leader Mickaël Wamen didn’t hide his triumph. “It was a grand and beautiful struggle,” he wrote in a blog post on Jan. 24, announcing details of the settlement.
This week will go a long way to determining whether a violent emerging market shake-out turns into a prolonged panic or is limited to a flight of hot money that quickly fizzles out.
On our patch, Turkey is under searing pressure, largely of its own making and that is the theme here. Yes, the Federal Reserve’s slowing of money printing is the common factor, prompting funds to quit emerging markets, but it is those countries with acute problems of their own that are really under the cosh.
Lots of action in Switzerland today with the annual get-together of the great and good at Davos getting underway and Syrian peace talks commencing in Montreux.
On the latter, few are predicting anything other than failure, a gloom that Monday’s chaotic choreography did nothing to dispel.
U.N. chief Ban Ki-moon Ban first offered Iran a seat at the table, prompting a threat to pull out by Syrian opposition groups which led to Washington demanding the invitation to Tehran be withdrawn. In the end, Ban did just that.
A landmark deal curbing Iran’s nuclear programme in return for a loosening of sanctions appears to be underway, an agreement intended to buy time for a permanent settlement of a decade-old standoff.
Under the deal, Iran must suspend enrichment of uranium to a fissile concentration of 20 percent. An Iranian official has just said Tehran will start its suspension of uranium enrichment up to 20 percent in a few hours.
Friday is European ratings day since EU rules took force requiring ratings agencies to say precisely when they will make sovereign pronouncements and to do so outside market hours.
S&P has already shifted its outlook on Portugal’s rating from creditwatch negative to negative. The rating remains at BB, one notch below investment grade. That sounds obscure but it’s actually something of a vote of confidence though probably short of what the market had been hoping for.
Francois Hollande managed to bat off questions about his private life (how successful he is in holding that line depends on the attitude of the French media which yesterday was nothing but respectful) and focus instead on a blizzard of economic reforms.
Skating past the French president's call for an Airbus-style Franco-German energy company which left everyone including the Germans bemused, there was some real meat.
This afternoon, French President Francois Hollande will expand upon his New Year announcement that French companies who agree to hire more workers could pay lower labour taxes in return and find themselves less tied up in red tape. Unemployment is running near to 12 percent and Hollande’s vow to get it falling by the end of 2013 fell short.
Unfortunately, the announcement has been eclipsed by his threat of legal action after a French magazine reported he was having an affair with an actress. France tends to overlook its politicians’ peccadilloes but with the economy in a hole, Hollande risks facing the charge that he should be focusing squarely on that.
from John Lloyd:
Like all great nations, the French have acquired a series of stereotypes that have a greater or lesser amount of observable truth going for them. One of these has been around since the nineteenth century, which is that its politicians all have semi-official mistresses. They are chosen from the ranks of the “grandes horizontals,” which reveals a Paris, for all its present economic woes, that still appears to be rich.
Much of that is due to the literature of the age. The best-known French novelists of the nineteenth century, Alexandre Dumas and Emile Zola, both put courtesans at the center of their fiction; women whose beauty and wit were their living. Zola’s Nana (1880), based on the beautiful Blanche d’Antigny (among others), saw its heroine die of smallpox; her face ravaged by pustules. Dumas also killed off his heroine painfully in La Dame aux Camelias (1848; and the source for Verdi’s La Traviata). But Guy de Maupassant’s Bel Ami (1885) has the handsome hero, Georges Duroy, rise through society to a position of power and wealth aided by affairs with the wives of powerful men -- a kind of male “grand horizontal.” Though Zola and Dumas both gave a conventionally grisly ending to their sinful heroines, they clearly sympathized with them. Maupassant was famously “immoral” for using a prostitute in his Boule de Suif (1880) to show that she is superior in character to the disapproving bourgeois men and women who surround her.