EU Taking Hit from Russian Food Ban

The Russian food ban for US, Canadian and EU consumers is certainly going to have an impact – but it will create an even bigger impact for Russia itself. As David Cohen, the Treasury Department undersecretary in charge of economic sanctions explained, “What the Russians have done here is limit the Russian people’s access to food. We don’t do that. Our law doesn’t allow us to do that.”

The EU exported about 11.8 billion euros ($15.8 billion) to Russia last year, which is about 10% of its total agriculture exports. They will feel much of the loss, with Poland, France, the Netherlands and Germany taking the largest hit. As The Daily World article explains,

“The Netherlands send 1.5 billion euros ($2 billion) worth of agricultural products to Russia annually, Germany 1.6 billion euros ($2.1 billion), France 1.2 billion euros ($1.6 billion) and Poland 1.6 billion euros ($2.1 billion). Poland is Europe’s largest producer of apples; more than half of its production goes to Russia.

President Xavier Beulin of a French farm union said the Russian import ban could affect the country’s fruit and vegetable industry.”

Learn more with the complete article here.



UK Threatens Action Against the Financial Transaction Tax

The UK is turning its anger towards the EU as the EU is implementing a financial transaction tax. Chancellor George Osborne has threatened new legal action after his pre-emptive challenge was rejected last week.

As Osborne said at a meeting of EU finance ministers on Tuesday, “It’s not a tax on bankers, it’s a tax on jobs, on investment, on people’s pensions. That’s why the United Kingdom does not want to be a part of it.”

“If they seek to damage jobs and investment across the rest of Europe, then we are entitled to challenge that.”

Osborne is seething over the tax, as he explained, “We have a situation where 11 member states are working up their proposals, largely in secret and we get a piece of paper handed to us all saying ‘Oh this, by the way is what we’ve agreed.’”

The EU taxation commissioner, Algirdas Semeta, rejected Mr. Osborne’s threat of legal action. As he said,

“We should be clear that the ECJ rejected UK’s challenge on the FTT. This should pave the way for its adoption. We have already clearly presented our opinion that the proposal does not violate territoriality rules.”

Other countries, however, are stewing over the proposal and thinking about joining the UK. Sweden announced that it is closer to supporting the UK on their legal case and Luxembourg joined in the attack.

Charles Brandes Lowers Stake in Nippon Telephone and Telegraph Corp

Charles Brandes

Investor Charles Brandes

In a recent move, Charles Brandes and David Dreman have sold off some of their stake in Nippon, a Japanese company which is a major player in the telecommunications sector there. Nippon has a 66.7 percent stake in Japan’s largest wireless service provider; NTT DoCoMo Inc. DCM has more than $62 million users and is also the owner of the two main fixed-line operators, NTT East and NTT West. Together these companies account for about half of the market share.

Nippon’s cash flow is healthy, with a value of about JPY 500 billion per year. This cash flow is used to good effect to keep an edge over its competitors. In 2010 Nippon was the first company to start LTE services, giving them a two year head start over their competitors.

Due to the building of the FTTH network Nippon’s returns on capital were reduced, which could help explain why Charles Brandes and David Dreman lowered their holdings in the company. Despite the fact that the situation is improving as the end of the roll-out approaches, returns in the fixed-line division are still not where they should be, and are still behind many of the incumbent telecom operators.

Eastern European News

200th Anniversary Commemorative Coin in Malta

The Central Bank of Malta will issue €2 commemorative coin marking the 200th anniversary of the creation of the Malta Police Force on Wednesday July 16th. The Governor of the Central Bank of Malta, Professor Josef Bonnici, presented the coin to the Acting Commissioner of Police, Raymond Zammit.

At the Central Bank of Malta there is an exhibition of memorabilia from the Malta Police Museum which will be open until the end of July. The Malta Police Force is actually one of the oldest in Europe and was established at the beginning of the British colonial period in 1814 by Sir Thomas Maitland, who was the first Governor of Malta.

As explained by the Malta Independent, “On its reverse side the commemorative coin features the common €2 symbol while on the obverse side it depicts the emblem of the Malta Police Force. The obverse side of the coin was designed and engraved by Noel Galea Bason and was minted at the Royal Dutch Mint. The coin will be issued in circulation quality in rolls of 25 coins each.

The Bank will be contacting all those who have placed their orders to inform them of their allocation, the means of payment and the dates on which they can collect their coins. The coins will be available for collection from the Malta Coins Distribution Centre at the main building of the Central Bank of Malta.”

Launch of New EU Financial Instrument and Advisory Service

A new EU financial instrument and advisory service has just been launched to help firms to access finance more easily. The agreement was just signed by European research, innovation and science commissioner Máire Geoghegan-Quinn on behalf of the EU in Greece.

The goal, over the next seven years, is for InnovFin – EU Finance for Innovators products to make available more than €24bn of financing for research and innovation (R&I).

As Enterprise Ireland CEO Julie Sinnamon said, “Enterprise Ireland welcomes the introduction of the InnovFin financial instruments and associated advisory services. These instruments will complement existing research and innovation funding sources and will provide much needed additional access to finance for innovative Irish SMEs. We now want the Irish banking sector to embrace these new instruments as they will de-risk lending propositions for Irish companies that want to fund R&D in order to gain a competitive edge. This activity is central to boosting employment and growth in Ireland’s economy.”

Geoghegan-Quinn added: “Financial instruments provide an innovative way of investing in growth enhancing companies and activities. The EU lags behind its global competitors in terms of business investment in innovation, so we must encourage banks to lend to these projects and help research-intensive companies get access to this finance. This will help us reach our EU target to invest 3pc of GDP in R&D by 2020.”