Here's today's look at some of the top stories on markets and politics in Europe.
EU won't stop Egypt aid.
European Union foreign ministers decided on sanctions to punish the "disproportionate violence" that Egypt's military rulers are using to crack down on the rebellious Muslim Brotherhood. The sanctions, however, will be minimal: Sales of weapons and security equipment will be suspended. The EU stopped short of withdrawing more than $7 billion worth of aid programs meant to support the Egyptian democracy. Although the aid is being disbursed at a snail's pace - Egypt has only seen $21 million of it this year - even the promise of the cash means a lot to a country experiencing a severe hard currency shortage. What Egypt needs most now is economic stability, and the EU leaders' approach to sanctions shows they understand that.
U.K. banks face $2 billion in fines for mis-selling insurance.
The U.K. Financial Conduct Authority may force banks and credit card issuers to pay out about $2 billion to clients who were sold useless identity theft insurance. The banks in question, including Barclays, MBNA, HSBC and Santander referred customers to CPP, a "life assistance" company that regulators have already fined $16 million. Since banks bear the client identity theft risks themselves, CPP's product was useless to customers. Barclays is likely to be in for the biggest payout, up to $470 million. After the mis-selling scandal, banks are likely to abandon questionable cross-selling deals in the U.K., but not in emerging markets where these products are the bread and butter of retail bankers. Eastern European, Latin American and Asian regulators should take a lead from their British colleagues.
Saab attempts comeback as electric car specialist.
Two years after the bankruptcy of cult Swedish car maker Saab, production lines in Trollhattan are about to come to life again. National Electric Vehicle Sweden, which owns the defunct brand that once belonged to General Motors, has already hired 330 people to man the facility as it gears-up to produce the 9-3 model. Starting this fall, the plant will produce cars powered by a turbocharged gasoline engine, followed by an electric version next year. National Electric is Chinese-owned and will use Chinese-made batteries for the cars. The success or failure of the electric-powered vehicle will decide the success or failure of Saab's re-incarnation: The 9-3 was developed in 2002 and is only getting a minor facelift, so demand isn't likely to be high for the diesel version.
KPNresists Carlos Slim bid.
The Dutch telecom operator KPN recommended that its shareholders approve the sale of the company's German business, E-Plus, to Spanish operator Telefonica. The latter has offered KPN $6.7 billion in cash and 17.6 percent interest in Telefonica Deutschland. The deal, if it goes through, will frustrate Mexican billionaire Carlos Slim's bid to buy KPN as a whole. Slim's America Movil owns a blocking stake in the Dutch operator, but acquired it too late to vote in the extraordinary shareholders' meeting in October. Slim, the world's richest man, is actively seeking to broaden his company's European presence and unlikely to give up if KPN shareholders side with the management: He will probably try to increase his stake and call another general meeting to reverse the decision. There is still time for Slim to pull that off, since the German antitrust authorities have not yet approved the E-Plus deal.
Vestas fires CEO to refocus from expansion to efficiency.
The global leader in wind turbines, Copenhagen-based Vestas, replaced its CEO Ditlev Engel with former Ericsson executive Anders Runevad. Engel was widely blamed for the 96 percent drop in Vestas' stock price since 2008. Just as the U.S. and Europe went into recession, he expanded production, increasing the workforce by about 50 percent between 2008 and 2010. Now, the company wants to dump its growth strategy and focus on efficiency. The move is long overdue, given the nature of the sustainable energy market. For now, demand depends heavily on government subsidies, which tend to get cut at the first signs of weakness in the economy. Given Vestas' troubles and the near-collapse of the solar panel industry, investors are finding it hard to believe in renewable energy again. These companies need to start relying on solid financials, rather than a trendy product image.
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