Here's today's look at some of the top stories on markets and politics in Europe.
Ukraine vows to fight for Crimea and withdraws troops.
Ukraine struggled to come to terms with the Russian annexation of the Crimea as the world looked on. Acting president Oleksandr Turchinov proposed that parliament approve a declaration saying that "the Ukrainian people will never, under any circumstances, cease its struggle to liberate the Crimea from occupants, however hard and prolonged it may be." At the same time, Ukraine is preparing to pull out its troops from the Crimea, effectively conceding the territory without a fight. Andriy Parubiy, head of the country's National Security and Defense Council, said the body was working on an evacuation plan for 15,000 servicemen and their families. Ukraine, which earlier asked the United States for military aid and received none, does not have the resources to fight Russia on its own, and despite their rhetoric, its leaders know that. It is time for them to move on and rebuild what is left of their country, with the West more eager than ever to provide economic aid to atone for the sin of not helping much diplomatically or militarily.
Court cancels Jerome Kerviel's $6.8 billion repayment to SocGen.
Jerome Kerviel, the rogue trader who lost billions for French bank Societe Generale before the financial crisis, has reached the end of the French judicial chain in his stubborn fight to get rid of a $6.8 billion fine slapped on him by a court in 2010. While Kerviel admitted he had made numerous unauthorized trades and hid them using flaws in the bank's computer system, he maintained, somewhat reasonably, that he had not personally benefited from the trades: He was just trying to excel by unorthodox means and the bank made it possible. France's highest Court of Cassation overturned the 2010 judgment on Wednesday, saying the lower court had not adequately considered the bank's own guilt. There will now be a civil trial in which blame should be more exactly apportioned, and Kerviel may still be forced to pay back a large amount, but not $6.8 billion. About three-quarters of French people, according to polls, consider Kerviel a victim of a tyrannical financial system. The Court of Cassation's ruling may make them happy, but the system is still there, and so is the fact of Kerviel's crime. The ex-trader may still go to prison for it, an event delayed by his spirited defense.
Credit Agricole's strategic plan: back to basics.
The French banking group Credit Agricole has presented a strategic plan until 2016. It says nothing about acquisitions or diversification. Organic growth and cost cuts are the order of the day. "Our goal is to do well what we know how to do well, and not to innovate in areas where we don't know much," Credit Argricole chief executive Jean-Paul Chifflet said. That means concentrating on retail banking and insurance in its home market, France, and in Italy where the bank has an established presence. This, according to the strategy document, should allow the bank to increase net profit to $5.5 billion in 2016 compared to $3.5 billion in 2013 and boost return on equity from 9.3 percent to 12 percent. Credit Agricole is yet another large bank abandoning international ambitions – last year it sold its Greek bank to a local institution for 1 euro – and remembering its placid local roots: Royal Bank of Scotland, UniCredit, Raiffeisenbank -- the list goes on. The good thing about this new fad is that is is not as dangerous as previous, more imaginative ones.
Deutsche Bank boosts management board bonuses.
Despite modest results – its newly revised profit dropped to $947 million in 2013, compared to $3.5 billion the year before – Deutsche Bank increased its top management's compensation to a total of $53.5 million, of which co-chief executives Anshu Jain and Jurgen Fitschen will receive $10.4 million each, up from $6.7 million for 2012. It is way too early to reward Jain and Fitschen for their achievements. They have only been running the bank since 2012, and despite attempting to clear up some of the Deutsche's enormous litigation backlog -- for example, they finally settled with the estate of media mogul Leo Kirch after more than a decade of fighting his rather obvious claims -- it still has enormous litigation provisions and has now become embroiled in the forex rate manipulation scandal. Paying more to managers as performance worsens is so pre-2008.
U.K. announces biggest pension reform since 1921.
U.K. finance minister George Osborne proposed the boldest pension reform his country has seen in almost a century, giving retirees more freedom in deciding what to do with their pension savings. Until now, people in the U.K. had no choice but to buy an annuity at retirement. Now, if Osborne's proposals pass, they will be able to take out the savings built up in a defined contribution fund as a lump sum. Even if they make bad investments and lose the money, Osborne says the guaranteed government pension will still keep them above poverty level. The proposal should give the Conservative Party a boost at the polls, since the annuities yield ridiculously low interest rates and people are eager to use their money differently. The insurance industry, however, stands to lose, and the stock market has already hammered U.K. insurance firms which sell the annuities. It takes a lot of trust in ordinary people's judgement to make decisions like the one Osborne has presented. Whether people deserve it or not, they will be grateful for the gesture of respect.
(Leonid Bershidsky writes on Russia, Europe and technology for Bloomberg View. Follow him on Twitter at @Bershidsky.)
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