Help European IPOs Says the IPO Task Force

Financial trade groups have started to lobby the European Commission to implement changes that helped to bring about the US biotech IPO boom. What the European IPO Task Force specifically wants is for politicians to slash the regulatory and administrative cost that is involved in going public by as much as 50%. This would help more small companies to stay afloat.

They have identified cost as one of the main reasons that companies haven’t been going public. Together, EuropeanIssuers, the European Private Equity and Venture Capital Association and the Federation of European Securities Exchanges (FESE) have figured out that up to 10% of an IPO that raises less than $55 million is taken up by fees. And that this keeps the little guys from going public.

They argue that current legislation is designed around the top 10% of companies. They want a 50% reduction in fees and they want small companies spared from certain requirements. As Philippe de Backer, a Belgian Member of the European Parliament, said “Although Europe continues to build and grow businesses with the potential to be world class the failure of the IPO market to facilitate their access to capital hampers their growth and ultimately their potential to create jobs.”

E-Book Tax Raises Price and Hackles

The EU has recently ruled that e-books sold in Europe constitute an electronically supplied service and are subject to higher taxes (VAT) than physical books. This could raise the price of e-books in some countries.

This change will primarily impact France and Luxembourg. Ironically, these are the two countries that created the need for the ruling when they petitioned the EU’s Court of Justice to be allowed to sell e-books at the VAT rate of regular books. With the new ruling, the VAT rate in France will increase from 5.5% to 20%. In Luxembourg, the rate will go from 3.5% to 17%. Counties such as the UK and Germany, which already sell e-books at the higher tax rate, won’t have any affect.

France and Luxembourg both say that they will fight against the new tax. As French Culture Minister Fleur Pellerin said, “We will continue to push for what is called technological neutrality, meaning the same taxation for books, irrespective if they are on paper or electronic.”

EU Accusing Luxembourg & Amazon

The EU has accused both Luxembourg and Amazon of finding a band-aid fix to avoid tax. Competition Commissioner Joaquin Alumina sent a 23 page letter to the Luxembourg foreign ministry. It is they said, “The commission’s preliminary view is that the tax ruling of 5 November 2003 by Luxembourg in favour of Amazon constitutes state aid”.

The EU said: “The commission is  of the opinion that through the contested tax ruling the Luxembourgish authorities confer an advantage on Amazon.” Amazon denied receiving any special tax treatment from Luxembourg.

They are also probing deals that took place between Apple and Ireland and Starbucks and the Netherlands.

Eastern European News

EU Offering Aid to Bulgaria

The European Commission has proposed a grant to give Bulgaria EUR 10 million in aid for flood damage. The EU’s Economic and Financial Affairs Council is expected to approve of this proposal. The vote on the EUR 10 million aid package for Varna and Dobrich districts will take place on Friday, according to the Bulgarian EU Commissioner Kristalina Georgieva.

Banning High Powered Hair Dryers & Other Appliances in the EU

If you live in the EU, you might want to grab that high powered hair dryer and hide it now. That’s because the hair dryer is on the list of 30 appliances that the EU is considering banning in order to curb energy consumption. A study that was commissioned by the EU has identified these 30 appliances which would be restricted.

The ban on powerful vacuum cleaners already began this week. From September 1, companies in the EU will be banned from making or importing vacuum cleaners that are above 1600 watts.

Sales have certainly risen ahead of the deadline with sales jumping for Tesco 44% in the last few nights.

As Guenther Oettinger told Germany’s Bild newspaper “We haven’t got round to these devices yet, we want to curb power consumption.” The EU Commission spokeswoman said, “It’s a study we have asked consultants to do. In the final report they will reduce 30 products to 20. In January 2015 we will look at these recommendations then select from this list what to regulate and how.”

Of course, the National Hairdressers’ Federation (NHF) has urged the EU to reconsider, saying its plans are “ill thought-out”. NHF president Mark Corary pointed at the potential irony of the ban, saying that banning these items won’t reduce energy consumption since blow-drying a client’s hair will now just take longer.