Europe’s Record Jobless Rate Seen Resisting Recovery
Europe poised for tense week with Berlusconi vote, ECB ahead
Such as the “data tax” on Amazon, Apple, Facebook and Google, about to be proposed by France for adoption by the European Union. Apparently, France would like to impose a data transmission tax on those companies — and only those companies — because they are the dominant platforms for Internet usage in Europe just as they are in the US, but they are “non-European,” that is, American. Their dominance therefore prevents European competitors from emerging from obscurity. (How taxing the most popular sites will make other sites more popular with consumers is not clear.) A French member of the European Parliament tells the Wall Street Journal that a data tax should be imposed because the European nations have become “just the puppets of financiers and multinationals.” Or, as Forbes puts it in a now-classic headline: “Gibbering Nonsense From France About Apple, Google, Facebook and Amazon.” The tax plan is just one piece of a proposal that would establish a new Internet regulatory agency within the European Union. In part, the agency would be empowered to impose other rules aimed at leveling the playing field for European competitors, such as forcing the American companies to enable portability among devices for digital purchases. French Technology Minister Fleur Pellerin told the Wall Street Journal that the absence of such regulations is effectively “blocking innovation from all of the other actors,” and making it difficult for European companies to emerge. The call for regulation gets real impetus from another issue that has entangled US technology companies in Europe: data privacy. The issue gained a great deal of heat after revelations of the US government’s continuing collection of private data on a massive scale, and with the cooperation of some of its biggest technology companies. The proposals are expected to be presented in late October at a summit of European leaders. At this point, the data transmission tax is the part of the proposal that seems least likely to succeed. For one thing, it’s not clear how such a usage-based tax could be imposed, though Pellerin told the Financial Times that her agency is looking at data transfer, traffic, and interconnection to work out how the big Internet companies make their money and, therefore, what part of their (free) services could be taxed. In addition, it appears that Great Britain will oppose the idea, according to the British newspaper The Telegraph, not least because the European Union does not currently have the power to levy taxes.
Look at Tuesday, for instance: German unemployment data, the final readings on euro-zone PMIs, U.K. manufacturing PMI and the broader euro-zone unemployment rate. What a day. Unemployment rate in the bloc has been stuck at a euro-era high of 12.1% for five months straight, and analysts forecast that the August reading will be no different. Why isnt the employment situation improving? Survey data on firms hiring decisions has not kept pace with the improvement seen in the wider macro data, analysts at RBC Capital markets say. While the ECB is busy planning monetary policy in Paris, and investors try to keep up with the data flow, a domestic political drama is playing out in Rome. Over the weekend, former Prime Minister Silvio Berlusconis party said all five of its ministers would resign from the cabinet, sending the yield on 10-year Italian government bonds /quotes/zigman/4869096/delayed IT:10YR_ITA to a three-month high. In response and to avoid snap elections Prime Minister Enrico Letta has scheduled a vote of confidence for the government in parliament on Wednesday. Berlusconi said he engineered the walkout because he opposes a planned increase in the sales tax, but Prime Minister Enrico Letta called this a huge lie. Last week, Berlusconis allies threatened to bring down the government ifa special Senate committee meeting on Friday, Oct. 4 votes to expel the former prime minister from the upper house because of his tax-fraud conviction . Meanwhile, political disagreements in the U.S. also look set to keep investors on edge.Congress has to agree on a budget bill before the new fiscal year starts on Tuesday, Oct. 1 to avoid the first government shutdown in 17 years , but one of the key points of partisan contention is funding for the Affordable Care Act, also know as Obamacare.The Republican-led House voted early Sunday to delay the health-care law by one year, as part of legislation to keep the government running. Rounding off the week on Friday is the nonfarm payrolls report from the U.S.
While unemployment in Spain fell for the first time in two years in the second quarter, net job creation requires at least 1 percent year-on-year economic growth, Economy Minister Luis de Guindos said this month. That level wont be reached before the final quarter of 2014, according to economists surveyed by Bloomberg. Social Tragedy Unemployment in Europe is a social tragedy and we need to address it, OECD Secretary-General Angel Gurria said in July when presenting the organizations annual employment outlook . Siemens AG (SIE) , Europes largest engineering company, will eliminate 15,000 jobs, the Munich-based corporation said on Sept. 29. It initially planned some 8,000 cuts globally, a person familiar with the program told Bloomberg News in October. Earlier this month, Air France-KLM (AF) Group, Europes biggest airline, scrapped a plan to break even at its main French unit this year, putting 2,800 jobs in the country at risk. While most Southern European economies are struggling to provide work for the unemployed, the jobless rate in Germany , the regions largest economy, remained at 6.8 percent in September, according to 31 estimates in a separate Bloomberg survey . Thats close to a two-decade low of 6.7 percent. The Federal Labor Agency is due to publish these data tomorrow at 9:55 a.m. in Nuremberg. Resurgent Economy A robust job market and Germanys economic strength in the midst of the euro areas debt crisis helped Chancellor Angela Merkel s Christian Democrats take the largest share of the vote in Sept. 22 elections. German retail sales rose 0.5 percent in August from July, the Federal Statistics Office in Wiesbaden said today. That missed the median estimate of a 0.8 percent increase in a Bloomberg News survey of 26 economists.
Windows Phone takes more of Europe’s smartphone market amid signs of a Nokia comeback
But, further down the table, Windows Phone is turning into a serious contender. According to figures out today from researchers Kantar WorldPanel ComTech, Android featured on just over 70 percent of smartphones sold in the three months to August across Europe’s five biggest markets: Great Britain, France, Germany, Spain and Italy. Equally unsurprisingly, iOS is in second position with 16 percent of the smartphone market in Europe a year on year rise of around two percentage points for both OSes. Windows Phone meanwhile continues to grow its share in the five countries, hitting 9.2 percent around double its 5.1 percent share for the same period last year. The jump has been fuelled by significant gains in the three major European markets: France, Germany and Great Britain. In the latter, its share has risen from 4.5 percent a year ago to 12 percent today, while in Germany it’s grown from 3.8 percent to 8.8 percent the first time it’s hit double digit share in either country. In Germany, that puts Windows Phone only one percentage point behind iOS in market share. “Windows Phone’s latest wave of growth is being driven by Nokia’s expansion into the low and mid range market with the Lumia 520 and 620 handsets. These models are hitting the sweet spot with 16 to 24 year-olds and 35 to 49 year-olds, two key groups that look for a balance of price and functionality in their smartphone,” Dominic Sunnebo, strategic insight director at Kantar Worldpanel ComTech, said in a statement. And, despite recent turbulence and a proposed 5.4bn takeover by Microsoft , Windows Phone’s main hardware champion Nokia is growing its own market share across some of Europe’s biggest markets. (Nokia accounted for four in five of all Windows Phone device sales across the five markets.) For the three months to the end of August, Nokia bagged 7.8 percent of all smartphone sales, up from 6.9 percent a year ago, inching up on third-placed Sony, whose share stands at 8.2 percent, a slight rise on a year ago. LG is also seeing something of a comeback, increasing its European share to 6.1 percent from 2.1 percent a year ago. Following its recent troubles, BlackBerry’s share has seen the biggest dip in Europe, falling from 5.8 percent of all smartphones sold in the five markets to 2.4 percent today.