Here's today's look at some of the top stories on markets and politics in Europe:
German Greens drop out of coalition talks
Germany's Green Party said its coalition talks with Chancellor Angela Merkel's Christian Democrats failed, apparently because the two parties failed to find common ground on taxes, which the Greens want to raise. There may be another reason: Recent revelations of Merkel's strong ties to the auto industry show she is not green enough for the Greens. On Oct. 9, three members of the Quandt family, which owns 46.7 percent of BMW,donated$311,200 each to Merkel's party. Less than a week later Germany blocked a key EU vote on tightening emissions standards for cars. The Green leadership would find it hard to explain a deal with Merkel to the party's supporters. Now, Germany is definitely headed for a "grand coalition" between the Christian Democrats and the Social Democrats, the country's second strongest party.
Ireland to close Apple tax loophole
Irish Finance Minister Michael Noonan said he would act to ban Irish-registered companies from remaining "stateless" for tax purposes, a state of affairs that allows Apple to cut taxes on $44 billion of offshore income. The government will force "stateless" companies to establish tax residency somewhere or pay the Irish corporate tax of 12.5 percent from 2015. Apple, however, will still be able to use a scheme known as the "Double Irish," favored by Google and Adobe. An Irish-registered company resident somewhere in the Caribbean holds licenses to intellectual property, while an Irish company registered in Ireland receives the proceeds of Google's overseas operations. The second company pays most of the money to the first one as license fees. Apple and other "stateless" giants will probably switch to this scheme after their current loophole is closed. Ireland, meanwhile, will be seen to be doing something to quell U.S. and EU political outrage about the laxity of its tax regime.
SoftBank values Finnish game developer at $3 billion
Japan's SoftBank agreed to pay $1.5 billion for 51 percent of Supercell, the Finnish company that has developed two popular iOS games, Clash of Clans and Hay Day. Supercell, launched in 2010, employs fewer than 100 people and uses the "fremium" business model, which allows users to download games for free but requires them to pay for extras such as weapons. The two games have only been on the market since last year, but the company is already profitable, having made $40 million on sales of $105 million last year. In 2013, Supercell's revenue reached $178 in the first quarter alone. It is now the highest-valued app company in the world, proving that Finnish high-tech is about much more than just shaky Nokia. The challenge for Supercell will be to produce more hits after gamers tire of its two current offerings. Success can be short-lived in this fickle industry.
Switzerland signs away its banking secrecy
Switzerland has signed the mutual tax assistance convention of the Organization for Economic Cooperation and Development, essentially ending its long-time tradition of banking secrecy. The convention obliges signatories, all of the G20 countries and 40 others, to exchange information to prevent tax evasion. While the exchange will not be automatic, it will become easier for overseas tax investigators to get information from Switzerland about their suspects. The convention still has to be ratified by the Swiss federal parliament, where it will meet with strong opposition from the right. That hurdle will be cleared sooner or later, because Switzerland now faces too much international pressure to make its banking system more transparent.
Russian police seize murder suspect after race violence
After race riots shook Moscow last weekend, Russian authorities have arrested a suspect in the murder that caused the disturbances. On Oct. 10, a 25-year-old taxi driver was knifed in south Moscow by a man who looked like a native of the Caucasus in Southern Russia. Locals took to the streets to protest police inaction. The protests escalated into street violence and attacks on dark-skinned people. On Oct. 15, the police announced that it had the murder suspect, Azerbaijan native Orhan Zeinalov, and that he had confessed to investigators. Zeinalov's Russian landlord, who recognized him in security camera shots, will receive a $30,000 reward. Russian television showed footage of Zeinalov being dragged into the luxurious office of Russian Interior Minister Vladimir Kolokoltsev - an unusual spectacle clearly meant to calm the rioters and show them that the authorities were on their side against migrant criminals. Meanwhile, those who instigated last weekend's violence are allowed to walk free. This is clearly a mistaken policy: Nationalists will not be appeased so easily.
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Leonid Bershidsky at email@example.com