01 21/3/98 3:13 pm Page 1

No 409 Ffr15 DM3.80 UK 75p USA $3 TROJAN HORSE Is it safe to let the Greeks into EMU?

▼ Fat profit from anti-obesity pills PAGE 20 VW drives a hard bargain PAGE 23

▼▼ Are you worth $164,000 a day? PAGE 55

INTERNATIONAL Bahrain...... Din1.650 Canary Isles ....Ptas400 Denmark ...... Kr18.00 Germany ...... DM3.80 Hungary ...... HUF340 Italy...... L4,000 Malaysia...... S$7 Norway...... Kr20.00 Singapore...... S$7 Sweden...... Kr20.00 UK ...... 75p PRICES Belgium ...... Bf75 Croatia ...... KN22.00 Finland...... Mk15.00 Gibraltar...... £1.40 Ireland (Rep)...... IR£1.00 Japan ...... Y700 Malta ...... Ml0.80 Poland...... Zl 7.9 Slovenia ...... Sit450 ...... F4.00 USA ...... $3.00 Austria...... S35 Canada ...... C$3.50 Cyprus...... C£1.20 France...... Ffr15.00 Greece...... Dr500 Israel...... NS 12 Luxembourg ...... Lf75 Netherlands ...... Fl 4.00 Portugal(Cont.)Esc 430 Spain...... Ptas375 Turkey...... TL350,000 USAFE ...... $1.95

CyanMagYelloKey CONTENTS

EPA COVER STORY Greece on the tracks 8 Shuttle diplomacy and a timely devaluation have put the drachma on course for the euro, but can even radical reform rescue the Greek economy?

INSIDER EMU’s interest rate fault lines 6 Europe’s economies are not clocks, all ticking to the same interest rates

NEWS Dining with the enemy 14 France’s regional elections leave the right in chaos as it splits over deals with the Front National

CAP that 16 Franz Fischler’s long-awaited reforms mark the start of fractious squabbles over cash

Final frontier? 17 As the Kosovo kettle continues to simmer Albanians in Macedonia grow restless

Brown study 18 Britain produces a budget aimed at keeping Can I buttonhole you? Tony Blair has news of a cautious first budget both the poor and the affluent happy but worries as his foes marshal their forces Pages 18-19 BUSINESS

Fat profits 20 FINANCE The race to capture a large slice of the $50bn anti-obesity market goes pear-shaped Ocean racing 36 Who’s in charge? 52 The race is on in Lisbon to complete preparations The European Central Bank’s chief economist will Southern comfort 22 for this year’s Expo. As Hugh Pearman discovers, be the continent’s second most powerful banker In Manfredonia, the entrepreneurial spirit the builders still have a way to go of northern Italy is heading south Heading for the Markt 53 Books of the week 38 The German love affair with equities is leading No siesta time 23 Is this a manifesto for a red-green coalition them to high-risk markets How Volkswagen divides and rules its government? Keine Angst vor der Globalisierung pan-European workforce builds the framework for a future Social Poisoned Dart 54 Democratic government in Germany American greenmailer is locked in dispute with Bridge too far? 24 Russia’s oil barons. Who will win? Bridge Information Systems is bidding to be Ground control to CEO 39 number one in the financial data market Now you can join the jet set with your own personal Cash rich 55 plane, set to retail for less than an executive car Guy Hands is Europe’s most highly paid banker. Net losses 26 His winning strategy is to stay ahead of the pack Electronic publications are the future. So why New wave sleep 40 is nobody advertising on them? Amplify the amount of sleep you get by tuning European 500 56 into the frequency especially made for insomniacs Is it time for bottom-fishing of oil firms’ shares? PCs on the cheap 27 Falling computer prices take the low-paid online SPORT Price sensitive 60 but hurt manufacturers’ profits Index-linked bonds will be making a comeback Hitler’s Olympic ruin 48 if EMU leads to higher inflation EUROPEAN ESSAY ’s planners stall as the 1936 Olympic stadium fails to meet World Cup standards MBA education special report...... 30-35 Radical recipe 28 Jobs, courses and business opportunities ...... 43-47 Hans-Olaf Henkel, president of the Federation Graf’s comeback challenge 50 Property special ...... 41-43 of German Industries, argues that only After seven years of medical problems, Steffi Graf market-oriented policies can revive the economy hopes to rescale the peaks of Cover photograph: Ronald Grant Archive Regulars ■ Editorial comment 5 ■ Seven Days 29 ■ Markets 56-61 ■ Indicators 62 ■ Letters 63

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23–29 MARCH 1998 ■ THE EUROPEAN 3 CALLS ONFREE SUNDAYS The only REAL 23-29 MARCH 1998 The rout of the right *

UROPE’s centre-right is out of touch, out of power Europe’s right, of course, can take comfort from the fact that the alternative to BT... and out to lunch. The intellectual new-right colos- centre-left now wears many of their clothes (though not in France). Primus has become one of the leading sus that strode the American and British politi- But centre-left governments that are forced to sound more friendly cal stages of the 1980s, winning the Cold War, towards the market will not rescue Europe from its economic scle- telecommunications companies in the world by rolling back the frontiers of state control, fight- rosis; and the failure of the mainstream right to offer a credible alter- offering its customers extremely competitive call ing for free markets and exporting privatisation native has opened the door to more unpleasant forces. across the globe, never had a firm footing on con- It is not the social democrats who have benefited most from the rates backed with the highest level of service. tinental Europe. The failure to embrace it in the last decade has decline of the centre-right. It is the nasty, neo-fascist right which is reduced Europe’s mainstream right to a walk-on part in this one. filling the vacuum. The Front National won more than 15 per cent NOW GLOBE-TALK BRINGS THE QUALITY AND VALUE EELast week’s French regional elections resulted in further setbacks of the vote in France’s regional elections – and up to 30 per cent in OF PRIMUS INTO YOUR HOME BY OFFERING YOU: for the centre-right after last year’s rout in parliamentary elections. the country’s Deep South. The mainstream right is splitting every Defeat has not brought clarity of purpose to a divided, rudderless which way as some seek to do seedy local deals with the Front while • UP TO 80%** saving on your national right that has nothing original or distinctive to say. There is still a the leadership in Paris threatens expulsion for those who sup with and international calls Gaullist president in the Elysée but Jacques Chirac is part of the the devil. The centre-right is in its worst state since the start of the problem, not the solution: a chameleon who will strike any pose to Fifth Republic. It has only itself to blame: division and dither is what further his interests. That makes him unsuitable to rebuild the right. happens when you have no compass to guide you. USA 9p Save 63% against BT The German centre-right is following in the footsteps of its French Even in moderate, socially content Denmark the anti-immigrant counterparts; perhaps not to quite the same oblivion but to defeat right made gains while the mainstream Australia 21p Save 57% against BT nevertheless. The Christian Democrats and their coalition allies face right collapsed. The worry in Germany this a drubbing in September’s federal elections. The certainty of pur- autumn is that similar forces will prosper, Centre-left leaders India 60p Save 50% against BT pose that inspired Helmut Kohl to drive through unification after especially in former , from the collapse of communism and never deviate from his plans for a the inability of the Christian Democrats and forced to sound more Germany 21p Save 25% against BT single European currency has deserted him when it comes to drag- their allies to say anything inspiring. * ging Germany out of its economic malaise. The European right is not just out of friendly towards the • FREE calls on Sundays Like France’s Gaullists, Mr Kohl’s Christian Democrats are only power; it is intellectually bankrupt. For most • NO Monthly charges half-hearted supporters of the market economy. Neither has been of the postwar world it has gone along with market will not save able to shake off an ingrained belief in the beneficent power of the the social market economy model (Mar- • Use your existing telephone and number state, which makes it hard to distinguish them from their opponents. garet Thatcher was the first to jump ship Europe from its ills Mr Kohl’s main rival will be Gerhard Shröder, an SPD moderniser when she realised it was not working in who believes in only modest reform of the social democratic model. Britain). It differed from the centre-left only So does Mr Kohl: in policy terms the incumbent will struggle to dif- in that it placed a little more emphasis on the word “market”, while “ I’ve switched from ferentiate himself from his fresher, more dynamic challenger. the centre-left preferred to underline “social”. It was a cosy con- With the honourable exception of Spain, which has a centre-right sensus which served Europe well as long as it delivered growth, jobs government which knows what it is doing, the mainstream right is and prosperity. Now that no longer delivers the BT to PRIMUS... faced with a vista of unmitigated gloom. The Italian right is out of goods, the European right does not know where it should stand. power and even more divided than the French Gaullists. The British Advocating marginal reform is not the answer, either politically Tories, who won by landslides when they had something distinc- (ask the Danish Conservatives) or in policy terms (Europe needs and I’m not sorry!” tive to say, lost by a landslide under the weak, muddled and uncer- radical reform). The European right needs to take a long, hard look tain leadership of John Major. Almost a year after their humiliation at what ails the continent, learn from what has reinvigorated Amer- they remain an irrelevance. (At least his Labour successor, Tony ica and Britain and draw the obvious pro-market conclusions. There * Free calls relates to National and Local calls excluding premium rated and certain other numbers. This offer is subject to a minimum spend of £25 per month exclusive of VAT and ends 31st May 1998. **Comparison made against BT standard daytime call to Virgin Island USA excluding discounts. Blair, is building on Thatcherite reforms rather than reversing them.) is still a deep-seated tendency for the European right to agree with Even in Denmark, a country with a bloated welfare state, some that a society with labour flexibility, privatisation, deregu- Call free on of the steepest taxes in the world and high unemployment, the lation and a reduced state must inevitably be heartless and uncar- Conservatives lost 10 seats in the general election. Like France’s ing. But when the jobless rate among American blacks is lower than Gaullists and Germany’s Christian Democrats, Denmark’s wishy- among French whites, it is time to wonder what sort of society is T elecommunications washy Conservatives had no convincing analysis for what ails their really the most socially inclusive – and begin to espouse the sort of 0800 036 0000 country, no radical strategy for putting it right. They promised merely policies that will eventually rescue our continent from its mess. www.primustel.com/uk EURO23/3 THE ONLY ALTERNATIVE to tinker here, fiddle there. No wonder voters ignored them. Night of the long spoons: page 14

23–29 MARCH 1998 ■ THE EUROPEAN 5

CyanMagYelloKey *PLEASE NOTE THIS AD IS ONLY FOR UK* INSIDER ERIC FEFERBERG SNAPSHOTS MONETARY UNION GERMANY Protest has Line goes dead as Why a single rate hurts all fatal impact RELAND’s move to revalue the the system in equilibrium. The Gold vary between 141 per cent and 73 per single currency say that, by increas- GERMAN police used party callers forget punt within the European Mon- Standard did not collapse because it cent for the richest and poorest states. ing transparency and intra-EU com- water cannons and dogs to etary System and Greece’s deci- was untenable, as modern economic Even economies which seem closely petition, the euro will accelerate the hold back thousands of sion to have the drachma join it, propaganda maintains. It was linked diverge. The Netherlands is cur- structural reform of Germany’s anti-nuclear demonstra- I have been hailed as evidence of destroyed in August 1914 when rently enjoying an economic boom bloated social security system. This is tors on Friday 20 March as the magnetic force of impending mon- Europe’s states decided to raise money while the rest of Europe, including plain wrong. If unemployment rises, a train loaded with nuc- art of conversation etary union. In reality they underline rapidly to fight the war and expro- Germany into whose economy it is even temporarily, because jobs are lost clear waste neared a tem- one of its most glaring structural priate their citizens by declaring that otherwise heavily integrated, wallows to low-wage EMU competitors, then porary storage site in the faults. the banknotes they had issued against in relative stagnation. Interest rates reform will be made politically much north of the country. LOBAL ONE, the two-year-old joint a revised rescue package under discussion. For years monetary union has been gold would no longer be redeemable in the Netherlands are typically a few more difficult than if it were low. A border guard died venture between France Telecom, Not on. Van Miert says it’s an illegal subsidy. discussed exclusively in terms of in it. points below those in Germany, French supporters of the single cur- after being hit by a pas- Deutsche Telekom and a US long- exchange rates. Its supporters say that When there was a net inflow of despite an absolute and long-stand- rency want it to forestall the need for senger train while secur- distance operator, Sprint, could be Rosneft’s last stand stable exchange rates are necessary goods and a net outflow of capital, the ing link between the guilder and the a leaner social security system and to ing a railway line on the Gheading for trouble. Michel Bon, to perfect the single market, that amount of money in the economy fell deutschmark. enable the labour market to be more train’s route near the France Telecom’s chairman, indicated last RUSSIA’s last state-owned oil company, unstable exchange rates distort trade and so its price – the interest rate – These differences persist even in the highly regulated. This is why the Bavarian city of Würzburg. week that the venture, which cost his com- Rosneft, has been valued at $2.1 billion prior and that Europe’s businesses will save rose. There was an exact symbiosis absence of specific shocks. Differences French government is timing the intro- Despite the efforts of pany $220 million last year, was wobbly. He to a privatisation sale to take place on Wednes- on transaction costs. between the interest rate and the trade persist in the long term, even within duction of the new dirigiste 35-hour 30,000 police to keep the said it was too complicated to estimate losses day by way of auction by tender which will Opponents argue that exchange balance. national economies, such as in south- week to coincide in 2002 with the tracks clear, protesters being racked up by the other two partners. end on 20 May. In a move that surprised poten- rate flexibility is an essential safety Interest rates were also different in ern Italy or eastern Germany, where introduction of euro coins and notes. repeatedly managed to Will Global One survive or break up like BT tial bidders, Dresdner Kleinwort Benson invest- valve for any national economy and different countries under the Gold entrenched economic backwardness It is inconceivable that these delay the train along the and MCI last autumn? Start-up costs in 80 ment bank recommended that the government that, when it is abolished in Europe, Exchange standard created in 1922 is regularly doused with subsidies. opposed expectations can be resolved the length of its 400 kilo- countries for the seamless world service are sell 50 per cent of its shares plus one, rather huge intra-EU transfers will be nec- and again after the Second World War But external shocks happen too and within a single interest rate strait- metre journey from Wal- proving much higher than expected. than 75 per cent plus one as originally antic- essary to offset the consequent inter- at Bretton Woods. They were differ- they affect different economies dif- jacket. Germany cannot liberalise and heim, in southwestern In a market where prices are falling, new ipated. Most investors would have preferred The sound of silence nal shocks on employment. ent within the European ERM, ferently. Take the price of oil, which France simultaneously increase pro- Germany, to Ahaus, chain- partnerships are finding it hard to compete a larger stake, but Kleinwort Benson said the Readers enjoy a final browse in the tranquillity of the National French Library, oblivious to work Even the Maastricht Treaty encour- although it exerted pressure on them, affects an oil-producing country such tectionism within the same economic ing themselves to the rails and attract new customers. 50 per cent plus one formula would ultimately starting to move 10 million books across Paris. The new building, four L-shaped towers said to ages the view that economic and mon- sometimes in unwel- as Britain in the oppo- system. And even if two EMU coun- only to be cut free by be more profitable, raising $1.3bn compared resemble open books, rivals the new British Library in London in ugliness. Like their counterparts etary union (EMU) is about exchange come directions. Even site way it affects an tries were pursuing the same aim of police. Austria’s motoring putsch with $1.7bn for the 75 per cent stake. But the who lost the circular Reading Room, French readers are mourning the rue de Richelieu building. rate stability. It foresees the euro countries with cur- Like uni-sized oil-consuming coun- liberalising the labour market, reform About 450 activists were government announced on 20 March that it emerging out of the supposed rency boards have try such as Germany. would occur at different paces, taken into custody; seven THE future of the once-sleepy Austrian com- was sticking to its original plans, intending to exchange rate stability of the old their own interest sports kit, You would have to according to the different national were injured, according to ponent manufacturer and engineering com- dispose of 75 per cent plus one. Arson in the ? After two years of pussyfooting around the Exchange Rate Mechanism (ERM). rates, such as Hong be self-deceiving not political pressures. The French riot police. pany, Steyer-Daimler-Puch, is being contested Investor groups interested in Rosneft include issue and sticking to the traditional line that The euro, moreover, is the direct suc- Kong, whose dollar is there is never to see that the aims of while the Germans go on strike for a The train, loaded with by three bidders: Canada’s Magna Interna- a consortium of Gazprom, Royal Dutch/Shell FRENCH investigators are expected to report a stimulus would be welcome, but that the cessor to the ecu, the basket currency convertible at a fixed a ‘right rate’ the principal protag- few hours. 60 tonnes of spent nuclear tional, Dana Corpora- and Lukoil, another of British Petroleum and this week that arson was the cause of the scale needed was a matter for Tokyo, frustra- around which the ERM is built. rate against the US onists of EMU are not These differences in implementa- fuel from two power plants tion of Toledo, Ohio, and Sidanko, and a third, Yuksi, the oil giant cre- November 1996 fire which tion came to a head when Japan’s trade sur- All this is dangerously beside the dollar. at which just different; they are tion will result in different macro- in southern Germany, was Borg-Warner, the US ated by a merger between Sibneft and Yukos. disrupted travel for eight months and caused plus jumped last month by 88 per cent point. It lends credence to the mis- It is because, unlike diametrically economic policy needs – which is just two hours late when it gearbox specialist. The government intentions were never millions of dollars’ worth of damage. The following a collapse of imports, because of the taken belief that EMU can work if these other regimes, to join EMU opposed. France what the single interest rate cannot arrived at the outskirts of The reason for the tus- in doubt, according to some industry spe- details, leaked by the French news agency, fragility of Japan’s domestic economy. The exchange rates which are fixed EMU allows no diver- wants EMU to meet. That is why there can never be Ahaus, its final destination. sle is Steyer’s success in cialists.“If you have a limited number of Agence France Press, do not indicate exactly trade surplus rose 32.9 per cent with the US between participating currencies are gence among the eco- weaken the influence a “right” rate for EMU. Like an ugly It was forced to stop again a growing niche market, bidders and they’re all agreeing on what how those investigating the fire believe it was and 75 per cent with the EU. right. When Britain was ignominiously nomic cycles of the different national of Germany over European monetary single-sized sports garment, it will by protesters chained to assembling specialist the terms should be, that’s what the gov- started but bring yet more controversy to the It remains to be seen whether this new- ejected from the ERM in 1992, peo- economies that the Maastricht Treaty policy, hence Paris’s veto of Germany’s always be too tight for some countries the line. The demonstra- vehicles for big corpora- ernment should do,” said Steve Allen of tunnel operator, Eurotunnel. found US proclivity to dish out advice to ple crowed with hindsight that Britain included the convergence criteria. candidate for the presidency of the and too loose for others. tors were forcibly tions. Chrysler’s Jeeps Deutsche Morgan Grenfell. The fire began in a freight wagon before the trading partners will be extended to com- had joined “at the wrong time, for the They are called “convergence” crite- European Central Bank, while the Ger- When the British chancellor of the removed, but not before and its popular people-mover, the Voyager, Russia’s robber barons: page 45 train entered the tunnel from the French side menting on the robustness of central banks’ wrong reasons and at the wrong rate”. ria, instead of “criteria of financial mans want and are constitutionally exchequer says that Britain is currently they had managed to are put together by Steyer, as is Mercedes’ off- but it was not detected until the train was well reporting. The banks’ assessments of the But there can never be a “right rate” soundness”, for the reason that they obliged to accept EMU only if it on a different stage of the cycle from undermine several sec- road vehicle. Hoechst’s credibility inside the tunnel, where it was extinguished. preparedness of hopefuls for EMU mem- at which to join monetary union. are supposed to make one economy extends German monetary practices the continent, he implies that there tions of track. With worldwide overcapacity in volume Five wagons and 15 lorries were damaged. bership are published this week. This is because, unlike any single out of many and because EMU’s archi- to the rest of the . might one day be a Europe in which Police kept more than manufacturing and a growing trend in low- PERHAPS Jürgen Dormann (pictured), head No one was killed but choking lorry drivers previous international monetary tects know that it cannot withstand Or take the single most important all the economies could be set to tick 2,500 protesters at bay for volume specialist vehicles, global manufac- of Germany’s troubled pharmaceuticals and had to evacuate to an adjoining tunnel. Rupert rejected regime, EMU imposes a single inter- different national economic needs if domestic economic challenge for to the same rhythm, like so many an hour before issuing an turers are turning more and more to specialist chemicals conglomerate, Hoechst, should take Eurotunnel, which currently reports est rate across the entire currency area. they emerge. European states: unemployment. Job- synchronised clocks. all-clear to allow the train engineers to avoid incurring capital invest- a leaf out of a competitor’s book in his attempts turnover of £531 million ($880m) and an RUPERT MURDOCH’s bid to take control of In all previous monetary regimes, But differences in national lessness is dangerously high in all This betrays a dangerously mecha- to cover the last five kilo- ment in lucrative but high-risk market sectors. to rebuild his firm’s credibility. Veba, another operating profit of £57m, was unable to Italy’s main private broadcaster, Mediaset, has including all varieties of what is economies are stubbornly persistent. potential EMU member states; the nistic understanding of economics – metres to its destination. The battle for Steyer has seen the original chemicals conglomerate, has impressed fund resume normal services until June 1997 and been rejected by Silvio Berlusconi, the trou- known inaccurately as “the Gold Stan- Not only are there vast variations in “hard core” is constituted of those the economy is far more like a living Energy officials moved $273m offer from Magna rise to $312m. managers by listing on the New York stock so far has received £60m on an insurance claim bled former Italian prime minister, whose dard”, interest rates varied between economic conditions between poten- countries whose jobless rates are organism and not at all like a machine up the annual waste ship- Could interest in the company have been exchange and abandoning a traditional lofty that is still under negotiation. Fininvest investment fund holds 50.6 per cent countries according to the needs of tial EMU members; per capita GDP among the highest. – and it leads to just the kind of eco- ment by a week to foil fanned by Britain’s prime minister, Tony approach to shareholders, a euphemism for Safety procedures were re-examined after of the company. their national economies. varies from 219 per cent of the mean The plans of the two principal pro- nomic engineering of planning which aggressive anti-nuclear Blair (pictured), who abandoned his Ford keeping them in the dark. Now it plans to the fire, which had exposed failures in detec- Berlusconi turned down an offer from the Under the Classical Gold Standard in to 30 per cent of the mean tagonists, France and Germany, for free market economics were supposed activists who had been Galaxy and moved over to a Chrysler Voy- report quarterly. Veba is following a growing tion and in evacuation procedures. chairman of News Corporation, which valued (ie, before 1914), varying interest in the Portuguese Azores, while the tackling it are also diametrically to have dispelled. protesting for weeks and ager for personal transport? Probably not, trend among European blue-chip companies The Health and Safety Executive in Britain, Mediaset at $7 billion. News Corp is thought rates were the mechanism which kept same figures for the United States opposed. German supporters of the JOHN LAUGHLAND had planned mass demon- but the publicity was not unhelpful. and utilities in taking the New York route, but which was also charged with investigating the to have offered L10,000 ($5.55) per share, strations. Officials feared compared with their European counterparts incident, said it would not comment until after valuing the Fininvest stake at L5,900bn, while violence as well as damage Crédit where credit’s due US fund managers are less tolerant of those official publication of the report. Berlusconi pressed for at least L12,000 per to 12 massive containers who promise much and deliver little. share. This is the second time News Corp has holding waste. WHEN Jean Peyrelevade, the Crédit Lyonnais Broken promises are Dormann’s problem. American know-all attempted to take control of Mediaset; it failed Activists say the con- chairman, unveiled sharply improved finan- After initial successful in its previous effort three years ago. tainers are not leakproof, cial results last week, he must have expected sell-offs – SGL Carbon THE tetchy relationship between the US This is not necessarily the end, though it so shipping the waste his nemesis, the EU competition commissioner, floated in 1995 – his treasury and the Japanese finance ministry will not be easy to agree on a price, as Mur- could lead to an environ- , to spoil the party. He was not modernisation stalled has worsened following explicit advice from doch thinks Mediaset shares are overvalued. mental disaster. They also disappointed. when he was unable to Lawrence Summers, the US deputy treasury Since January, when discussions began, Medi- complain that the waste The results are “illegal”, said the commis- fulfil a pledge to float the secretary, to the Japanese about how they aset’s share price has risen from about L8,700, will sit indefinitely at the sioner. At the heart of the controversy over a pharmaceuticals divi- should shape their stimulus package due to following leaks in the Italian press. temporary site, because record net income of Ffr2.05bn ($171m), up sion, Hoechst Marion be announced this week. With unprecedented News Corp insists that L10,000 is its final Germany has, as yet, no from Ffr200m last year, is a Ffr3bn loss on a Roussel, last spring. With exactness, Lawrence advised raised spending offer but the Mediaset stake remains an impor- plans for permanent stor- loan at below market rates made by the bank a drooping share price or lowered taxes amounting to $80bn, a stim- tant one for the company. The acquisition, if age. Most also want Ger- as part of its 1995 rescue package. Crédit Lyon- and profits lagging badly ulus of two per cent of GDP. But Lawrence it does eventually come, would enable News many to shut down its nais removed the figure from its accounts behind those of German rivals BASF and Bayer, seemed at odds with a White House economic Corp to break into television in continental nuclear power plants because it expected the Commission to allow Dormann clearly needs to act quickly to reverse adviser, Gene Sperling, who earlier advised Europe, enabling Murdoch to rival France’s altogether. the French government to refund it as part of the view of sceptical German fund managers. an economic boost of $59bn. Canal Plus in satellite and cable television.

23-29 MARCH 1998 ■ THE EUROPEAN 7 6 THE EUROPEAN ■ 23-29 MARCH 1998 COVER STORY The French right sups with the devil after regional elections PAGE 14 GREECE ■ Shock devaluation produced the deal that might get Athens into EMU, but is the drachma a Trojan Horse that would destroy the euro from within? BEWARETHE GREEKS, EVEN BEARING GIFTS DIMITRI MESSINIS Darius Sanai European Commission and the major ATHENS European Union governments. All the negotiations were conducted amid the FTER Nikos Constanti- strictest secrecy. Stournaras knew that nos finished listening to if the financial markets got wind of a the early morning radio plan to devalue the drachma, it would last Saturday, the first be subjected to a run that could test A thing he did was put up the government’s already depleted the prices at his hotel. “It’s all great foreign exchange reserves of just $13 news,” he said. The 10 rooms in his billion. white stone mansion on the Aegean Germany’s approval was vital: Bonn island of Mykonos are usually booked is worried about the political fallout up for much of the summer; now he of weak currencies joining EMU and is confident of being full all the way creating a “soft euro”. Popular opin- from May to September. ion, already wary of ditching the “Most of my clients are German: mighty deutschmark, has been shaken Greece is going to be cheap for them by the admission of Italy to the euro this summer.” The fact that the drach- zone. Would even suggesting that the ma in his pocket had just been deval- Greeks might do likewise be the final ued was a blessing, with no disguise. straw? In the end the Germans – The feelings of one of his guests, swayed by the overriding commit- Yeorgos Belegris, were more mixed. ment of the Kohl government to mon- “I’m not sure. It means extra costs to etary union – came out with a my business,” says Belegris, whose statement of support, the strongest Athens company imports dental vote of confidence yet in the ability of equipment from Germany. “But if Simitis to reform the economy. Almost that’s the price we have to pay for as important was the nod of approval being a part of Europe, I’ll do it.” which came from the International Greece was caught up in a rare flush Monetary Fund’s president, Michel of national pride last week as the Camdessus. socialist government of Prime Minis- The agreement was effectively ter Costas Simitis, in a dramatic move sealed as EU heads of government, few Europeans had been expecting so including Simitis, gathered in London soon, yanked the drachma into the on Thursday 12 March. But European Union’s Exchange Rate Stournaras and Simitis were desper- Mechanism (ERM). ate to keep the news a secret until the The move, approved by all 15 major European currency markets national governments, involved a 14 closed on Friday evening. Within min- per cent devaluation of the Greek cur- utes of that happening the econom- rency against the ecu and sent the ics ministry in Athens “officially Athens stockmarket into a bullish leaked” to the Greek press, even frenzy. It was seen by many across the though the formal announcement was continent as a signal of the reforming not made until Saturday morning. premier’s intention to keep a firm hand EU foreign ministers sat down to on the struggling Greek economy and talks in Edinburgh with the drachma guide the country into economic and devaluation already a done deal. monetary union (EMU) in 2001 – a Some of Simitis’s own cabinet minis- goal that seemed distinctly unlikely ters did not know about the deal until just a few months ago. the last minute; more than a few of Now Greece, which until very his backbenchers were livid, denounc- recently was considered Europe’s ing it with as much vehemence as the basket-case economy, with a huge conservative opposition. public debt, a fossilised labour mar- Simitis went live on national tele- ket, an enormous bureaucracy and a vision on Saturday to announce the state sector redolent of the old Soviet devaluation. It was a tense weekend; bloc in its inefficiency and corruption, nobody could predict how the money is potentially on course to join hands markets would react. Some analysts with Germany, France and the rest of said the devaluation should have been the EMU countries by throwing the 20 per cent. A negative reaction could drachma into the euro basket. have sent it through the floor. One The man who pulled off what most Goldman Sachs expert had even ven- analysts had considered to be “mis- tured, unhelpfully, that the drachma sion impossible” is Yannis Stournaras, could be the “Thai baht of 1998”. chairman of the government’s coun- On Monday morning a nervous cil of economic advisers. He spent Simitis flew to Prague for a pre- three weeks shuttling between Athens, arranged trip to see President Vaclav Brussels, Paris, Bonn and London as Havel, effectively to catch up on the he masterminded the ERM deal and progress the Czechs have been mak- secured approval to join from the ing on their fast track to joining the EU. One of his greatest unspoken fears Bull’s eye: investors watch values has been that several of the east surge at Athens’s stock exchange continued on page 10

8 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 9 C O VER STORY

EPA continued from page 9 Greece satisfies the Maastricht crite- European aspirants could overtake ria, the consequences could rever- AT A TANGENT Greece in economic terms, perhaps berate through Europe. Although even joining EMU first and leaving Greece’s return to the ERM is only a Athens languishing at the bottom of first tentative step towards potential Punting up the league, in danger of relegation. EMU membership – and far from a When he returned to Athens on Tues- guarantee – the principle of admitting day morning he was overjoyed to find weaker economies is already soften- the Irish the currency market stable and stocks ing the embryonic euro. Even Kohl is still rising on the second day of an worried. unexpected boom. The gamblers had In an election year it could be hard connection backed his bet and taken a chance on work explaining that the deutschmark Avinash Persaud in the booming BMW worker’s pocket BRUSSELS buys less because of the “necessity” THE European Monetary Com- of including a half-baked economy in mittee has had a busier fortnight monetary union. Already, the than usual. Not only was Greece deutschmark has fallen two pfennigs admitted to the Exchange Rate 19981998 in a week since the drachma’s acces- Mechanism (ERM) at a new sion to the ERM was announced. devalued rate but the Irish punt Europe’s leaders may be pulling a Tro- was also revalued. Ireland’s ERM

OLIVIER POLET jan Horse into the euro stable. Once central parity was revalued three in EMU, the irreversible nature of mon- per cent from Ir£2.411 against etary union would mean the door was the deutschmark to 2.483. bolted behind them. The revaluation was designed Stournaras arrives for a session of the Greece is the poorest EU country by to keep the punt’s market rate European Union monetary committee a long way, its GDP per capita half that fairly unchanged. Indeed, if the of Germany. In many ways it is closer punt revaluation has wider impli- Greek equities being a bargain. to former communist countries such cations, it is in the clear desire In his office at the economics as Slovenia and the Czech Republic by European central bankers to QualityQuality AAwarwardd ministry overlooking Athens’ Consti- than it is to most of its EU partners. preserve stability in the run-up tution Square last week, Stournaras But it eats up a large proportion of problems. People talk of Simitis as Greek fire: Costas Most public sector employees are to the EMU start-up date of brandished a copy of the Wall Street European taxpayers’ money: every being Greece’s Blair,” says Manos, Simitis, the reforming political appointees. While most west- 1 January 1999. Journal. “Look,” he said, pointing out year since 1991 the economy has been independent MP for Athens. “But you socialist premier, went ern countries endure a degree of polit- If Europe’s central bankers a report on how the stockmarket had subsidised by Brussels to the tune of can’t have Blair without a Thatcher. on live television to ical appointment at the top of the civil were not so hung up on stability, boomed since the devaluation, “it’s 4.2 per cent of GDP – meaning that Greece has never had a Margaret announce devaluation service, appointments in Greece are we might have seen a revalua- amazing, isn’t it?” He moved over to $5.1bn flowed into various Greek pro- Thatcher.” to the nation after made as a matter of patronage. For tion in the punt in the order of 10 a computer monitor with the latest jects and farmers’ pockets through the Simitis is confident his government shuttle diplomacy example, after each election, man- per cent. Ireland can boast strong market information. will do enough to meet the Maastricht across Europe (left) agers of a hotel chain belonging to a economic growth, above six per Are you the best in Europe? “Even I didn’t expect the reaction ATHENS criteria of low inflation and reduced nationalised bank are shifted out and cent, and a hearty current to be this good,” said the technocrat government debt, a task that has new managers appointed – as are account surplus (above two per with a reputation as Athens’s finan- already been eased by the creative managers in the bank itself. In effect cent of the country’s gross cial whizzkid as he scrolled down the accounting used by the Italians in par- there are two parallel civil services, domestic product). screen, unable to conceal a broad grin. ticular, but also the Spanish, French each one swapping places with the The decision to let Greece join Stournaras, together with his chief and even the Germans. But behind other when their party wins. the ERM at a sharply devalued economic adviser, Professor Tassos YIOR the statistics and the admirable per- “As an MP, the question you get rate indicates that Europe’s Giannitsis, has been the driving force GO formance of certain sectors of the asked most frequently by your con- bankers will do anything to head S KAR behind the government’s decision to economy – the tourist industry, ship- stituents is: ‘Have you found my son off a crisis. There are rumours make joining European economic and AHALIS ping, some financial services – is or daughter a job?’,” a senior Pasok that they are intervening in the monetary union its main priority. another picture, one of a country held MP said. “It’s not a question; it’s some- market to keep the dollar in a Initial market reaction to the move, Simitis after a cabinet meeting on hostage by the crippling Papandreou thing that’s expected.” Bureaucrats tight range. The aim is to keep which was welcomed by the EU coun- structural reform for ERM entry legacy of old-fashioned socialism, expect to be paid bribes for perform- volatility to a minimum as EMU- tries, was ebullient: the Athens stock political patronage and corruption. ing the simplest tasks and the system day approaches. Further realign- exchange ended the week at 1919.91, Common Agricultural Policy (CAP). “The government talks of privati- encourages this secondary economy ments of the Italian lira and Case United Kingdom Limited – 1997 Winners up 15 per cent since devaluation. The reforms have earned Simitis sation, but there is so little and it’s tak- because it means wages can be Finnish markka appear unlikely, Foreign investors saw tough talk by the nickname “Greece’s Tony Blair” ing place at such a slow pace,” says restrained. “It’s very much like the although not impossible. ‘Entering the Perkins European Quality Awards was an the government last week on further and have split both his own Pasok Anthony Kefalas, associate editor of Soviet system: ‘They pretend to pay In the interests of stability excellent opportunity to have a “healthcheck” in our steps privatisations and labour market party and the centre-right New Demo- Ekonomikos Tachdromos, the coun- us, we pretend to work’,” says one Europe’s central bankers will also towards becoming a world class facility.Winning the award reform as encouraging signs that the cracy opposition. Simitis embarked try’s main financial weekly. “For all businessman. be keen to keep interest rates poorest country in the EU really is get- on reform in 1996 when he succeeded the talk, until now we’ve had no struc- While it has not yet moved to stable for as long as possible enabled us to benchmark ourselves against other leading ting its act together. Andreas Papandreou, the veteran tural reform.” reform the bureaucracy or social secu- without jeopardising anti-infla- In association with companies but more importantly it has helped us remain The reforms launched by Simitis are socialist whose nepotism and cor- Kefalas points out that, so far, the rity system, the Simitis government tion credibility. This means that focused on our quality initiatives. ruption had discredited Greek democ- government has tried to reduce the has at least launched a cautious pri- German interest rates are not EDINBURGH racy and prompted jibes that he was deficit by increasing taxes. It has yet vatisation programme. The state rising in the weeks ahead and the The fact that we won reaffirmed that all the effort was a Stalinist in shepherd’s clothing. In to deal in an emphatic way with the banks, which account for 80 per cent deutschmark will continue its worthwhile and we are heading in the right direction.’ stark contrast, Simitis has moved causes of the deficit on the expendi- of the banking sector, are being shaken general, gentle weakening trend National Society XXXXX, Case United Kingdom Limited towards privatising some state-owned ture side, a catalogue of problems up, with three small banks and one in the near term. However, it does for Quality through Teamwork Accept the challenge by returning the coupon today. firms, trimming the huge bureaucracy, including large subsidies and other medium-sized one, Ionian, facing not necessarily mean that Ger- blunting the teeth of the all-powerful transfers, the high number of civil rationalisation and at least partial pri- man rates are staying put until public-sector unions and cutting gov- servants, loans undertaken on behalf vatisation and an expected injection EMU-Day. Once the European

L Please contact me with further details of the Perkins Engines European Quality Award. OUIS ernment spending to reduce the bur- of public enterprises, the huge oper- of management expertise. Central Bank (ECB) is established

A BULLER geoning budget deficit. ational deficit sustained by the social The state-owned banks are them- in July, it will co-ordinate inter- The changes look impressive on security system and the large number selves an example of much that is rot- est rate decisions euro-wide. Name: paper; but the reality is rather differ- of money-eating quangos. The bloated ten within the system: bankers have While German economic con- Post to: Van Mierlo, Dutch foreign minister, and ent. Simitis may have shown a will- The public sector, which employs been known to give preferential-rate ditions may not warrant an inter- Title: Jo Allum Greek counterpart Theodoros Pangalos ingness to reform certain sections of 600,000 people, is at the root of the public sector, loans to local politicians, who in turn est rate rise, there is clear the economy but there is no evidence problem. Manos, who started to ensure the bankers’ friends and fam- evidence that the euro area may Company: Perkins European Quality Award 1998 vital to Greece’s hopes of participa- that he will embark on the wholesale embark on reforms when he was ily get plum jobs in the bank. Such soon require one. Rising interest National Society for Quality through Teamwork tion in a single currency: with more structural reform – akin to a revolu- finance minister in 1992, calls it “enor- employing loans are rarely repaid and the state rates on the fringes of the euro Address: 2 Castle Street than 50 per cent of the economy still tion – that is needed to bring Greece mous, bloated, overstaffed, expensive, has poured hundreds of millions of area in the Czech Republic, Fin- Salisbury in state hands, one of Europe’s most into the 21st century. In the words of inefficient, unproductive and, most of drachmas into the system to com- land and Norway herald higher 600,000 England rigid labour markets and an agricul- Stefanos Manos, the former New all, corrupt”. pensate. In the present reforms, some rates in the core. Stability may tural sector, comprising 27 per cent Democracy finance minister, an Public sector employees cannot be of Ionian’s branches may have to close be a key priority, but to the new Country: SP1 1BB of the population, heavily dependent avowed free-marketeer and one of the sacked unless they break the law; the people, is at but there will be no real job losses; ECB president the euro’s anti- Or phone us on: on EU subsidies, Greece is still a Third most respected voices in Greek poli- government introduced a policy of legally, the government will have to inflation credibility will be even Tel: Telephone:+44 (0)1722 326667 World away from Paris, Hamburg or tics: “The so-called reforms are just lip hiring only one worker for every five the root of offer several thousand employees more important. Fax: +44 (0)1722 410983 London. service; they’re superficial. Greece who retire, but this has not yet filtered early retirement and generous pack- The writer is head of currency Fax: If Simitis fails properly to modernise cannot and should not get into EMU down to most local government offices ages costing as much as their salaries. research at JP Morgan his economy, regardless of whether unless it tackles its endemic structural and state-owned corporations. the problem continued on page 12

10 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 11 SUBSCRIPTION OFFER C O VER STORY B VD CHARLEMAGNE CLAY PERRY unions are tame, workers are allowed to work only 15 hours’ overtime every six months. Similarly, the working week is legally restricted to 45 hours in a maximum of six days. Firms are not allowed to sack more than two per cent of their workforce in any month. The current government, more than any other before it, is willing to recog- nise that drastic changes need to be made, quickly. But if the government goes to the root of the problem and recognises the extent of the changes needed, it will be confronted with the realisation that its core constituency is the one that will suffer most. Manos, the former finance minister, is not exaggerating when he says the Greek A walk on the inside of the EU corridors of power public sector is more communist than in most ex-communist countries: it is larger now than that of Poland and the Czech Republic. Privately, cabinet ministers admit Federal follies ($489 million) – and rising. The con- the Commission: “Mr Van Miert is unions claimed that the committee they have little idea what to do about tract signed in 1994 between Parlia- rejecting this idea completely.” MEPs on the did not follow EU procedures of open one of the country’s most pressing ENTHUSIASTS for the cause of Euro- ment and Sers, the French company Mr de Coene has so far refused to examination and interview, preferring long-term problems. A significant pro- pean federalism gathered last week responsible for monitoring work on disclose the shape of possible pro- instead the practice of cronyism. portion of the $5bn received annually in Brussels to get carried away with the site, originally planned that the ceedings but insiders reckon that he lookout for Dammeyer has swept into office from the EU goes to tobacco, olive and talk of constitutional reform. circular iron-and-glass building would might sue the Commission before the wielding the proverbial broom but continued from page 11 It was this big, honestly: The government is giving them a sop other farmers as CAP handouts. The Union of European Federalists be completed by December last year. European Court of First Instance new trade may have succeeded only in putting In a more impressive move, four state- most Greeks were pleased through its tough stance on Turkey The multiplier effects of these essen- (UEF), together with its cadet branch, Three months after the expiry of the under an emergency procedure. How- out his own eye with the handle. He owned companies have also been tar- by the devaluation; some and commitment to high defence tially untenable businesses – most the Young European Federalists, deadline, there are serious doubts ever, another route for Mr de Coene, has appointed two previously rejected geted as showcases of privatisation, independent financial spending. But what if the workers farmers would go bankrupt without launched a campaign for what it calls about the building being ready for the who still considers Van Miert “an ally”, ties heard applicants, including the one who with Olympic Airways singled out for experts thought it really started to squeal? the aid – mean more than a million “a great democratic initiative”. By the first session in the autumn. Parliament would be to take action against the brought the case, but has sacked two tough treatment. It is notoriously over- should have been much “Greece is a socialist country by Greeks are dependent on EU hand- time of European Parliament elections is now considering fining Sers CFO, since article 85 of the EU Treaty, someone say other officials to make way for them. staffed and inefficient, with wage costs more substantial nature,” said Capsis. “Any privatisa- outs that will inevitably decrease as in June next year, it hopes to have per- Ffr180,000 for each day it goes which regulates competition, is Firing is almost unheard of in Brus- comprising almost 50 per cent of its tion would mean huge job losses, so the Union expands. Patience with suaded one million citizens to sign up beyond the deadline. directly applicable in national courts. sels, so now the two employees who expenditure, compared with a Euro- we would ask at the same time for impoverished Greek farmers, grow- to the cause of a federal constitution Sers said last week that it would not A judgment could be issued by in a robotic were dispatched are expected to sue. pean industry standard of 28 per cent. additional social security measures.” ing unsaleable low-grade tobacco on for the European Union. meet the new deadline of 25 May national courts before the World Cup Dammeyer can, at least, cheer him- The European is The government has vowed to The austerity programme, he said, their one-hectare mountain strip At a conference in Brussels Joe (which does not include fitting the in June but few think that sold tick- voice that self with the thought that he is not essential reading for restructure Olympic, threatening to “would have to be shared all over, by farms, could soon wear thin. The gov- Leinen, UEF’s president, touted insti- electronics, setting up maintenance ets could ever be recovered, even sharing the committee’s rotating pres- business people in Europe. close the airline down and reconsti- the rich as well as the poor”. ernment has no idea how to cope with tutional reform as a cure-all and dis- teams, installing furniture and con- though they have not yet been printed. idency with a French aristocrat. Ear- tute it as a slimmed-down company The inward investment the gov- the unemployment, flight to the cities missed a suggestion that the public ducting a security review) unless it The legal case could end up being he had come lier this year Valéry Giscard D’Estaing, Don’t miss a single the next day, if necessary. Government ernment needs to generate sustain- and pressure on government coffers were not interested. “Even sceptics are can hire extra workers. more captivating than the football. the former French president, decided issue. Subscribe today. ministers say privately they fear the able economic growth may be that the inevitable tapering of the sub- not against Europe,” he said. “They There are already 1,200 people from Mars not to seek the conservative group’s Our basic annual power of the airline unions but Simi- impressed by the supposedly bureau- sidies will bring. are against the way the institutions working on the 200,000 square metre Delors unto himself candidacy for president, fearing that tis has staked his pride on showing he cracy-slashing “one-stop investment The Greeks’ relationship with the now work.” site – including 20 working full-time he would be defeated in regional elec- subscription rates are: can carry off the reform and is deter- shop”, akin to Ireland’s, that was EU has always been one-sided. Greece Mr Leinen should perhaps have on tiling the 626 MEPs’ bathrooms. JACQUES DELORS, the former pres- tions at Auvergne, which he represents mined to do so before the summer. recently set up by the socialists. But if has until recently squandered its EU obtained a copy of a Eurobarometer A spokesman for Parliament had no ident of the European Commission, on the committee. But last week COUNTRY 1-YEAR RATE Even if he breaks the unions, the experiences of Canada’s TVX Gold largesse. There are documented survey of public opinion in Europe, objections to more staff being hired was in Brussels last week to speak D’Estaing was comfortably re-elected. Austria Sch 1300 Greece’s prime minister will have to are anything to go by, there could be instances of local officials who published by the Commission on the so that the deadline could be met. “We about the prospects for enlargement Belgium Bfr 3200 deal with the hardline rump of Pasok, further problems along the way. received regional aid to develop morning of the debate, in which insti- will have a session in the new build- of the Union. Ground control to MEPs Czech Rep Kcˇ 3200 which, having spent 16 of the past 19 Two years ago TVX set up a Greek tourism and used it to buy private tutional reform ranks 10th on a list of ing in the autumn,” he said, but But Brussels has changed a little Denmark Dkr 600 years in power, most of them under subsidiary with the intention of pump- yachts; funds donated to expand cul- 12 policy priorities for the EU. added, charily: “Sers can hire addi- since frère Jacques was in charge. The A GROUP of American and European Eire I£ 52 Papandreou, is not used to seeing its ing $600m into a new gold mining tural facilities were used to set up Fighting unemployment and tional staff if it needs to, but we won’t Delors-engineered Social Chapter to businessmen mustered at Parliament Finland M 570 union comrades attacked. Many and refining facility on the Halkidiki nightclubs. That this was tolerated is poverty rank highest in public con- put more money into this.” the Maastricht Treaty took a heavy were briefly led to believe that they France Fr 570 senior union officials are also party peninsula east of Thessaloniki. It was a legacy of the geopolitical situation cern. Enlargement, the federalists’ jus- blow last week when Unice, the EU’s had been summoned to an inter- Germany DM 160 apparatchiks, including Christos Poly- due to be one of the biggest foreign when Athens started accession talks tification for institutional reform, is Belgian own goal federation of employers’ organisa- galactic encounter with delegates investments in Greece since the Sec- in 1976: the country was emerging Greece Dr 26000 zogopoulos, the general secretary of bottom of the priority list, with 61 per tions, pulled out of negotiations with from outer space. the General Confederation of Labour: ond World War – until, last Novem- from the colonels’ dictatorship, a polit- cent of those surveyed thinking that PHILIPPE DE COENE, a Belgian MEP, the trade unions over the issue of con- The EU Committee of the Ameri- Hungary HUf 18000 he has started to criticise Simitis and ber, villagers angry at unwanted ically fragile, poor, socialist-leaning it should not be a priority. has decided to wage an all-out war sultation in the workplace. Delors’ suc- can Chamber of Commerce was hold- Italy Lira 150000 will see his party loyalties tugged industrial development in their back nation in a strategic position on the More worrying for Mr Leinen, only against the CFO, the French organiser cessor, Jacques Santer, now hopes to ing talks to foster closer links between Luxembourg Lfr 3400 much harder if the government ever yard blew up and set fire to the facil- southern end of the Iron Curtain at 16 per cent think that institutional of this summer’s World Cup, which is knock heads at a summit on “the MEPs and “European companies of Malta M£ 52 turns its actions into words. ity, with the full support of town the gateway to Asia. reform is a prerequisite to enlarge- accused of discrimination against non- future of the social dialogue”. American parentage”. Netherlands Nfl 190 The main threat to Simitis is his mayors. (The mayors received sus- Allowing Greece to join was a way ment, while 54 per cent believe it is French fans in its ticket-selling policy. Even as Mr Delors was addressing The visitors met Parliament’s dele- Norway Kr 650 hardline defence minister, Akis pended jail sentences.) of helping the young democracy to irrelevant. “If we can’t make it to the stadium, we Parliament, unfavourable compar- gation for relations with the United Poland Zl 325 Tsohatzopoulos; but a more active The investment is now suspended stay in the western fold; the subsidies The group’s campaign to make can make it to the court,” says Mr de isons were being made between the States to discuss the Commission pro- Portugal Esc 16100 critic is the education minister, Gerasi- while a government agency compiles were seen as a small price to pay for Parliament more important is natu- Coene who, together with a handful EU’s spending plans for 2000-2006 posal for a new transatlantic market- Spain Pts 13000 mos Arsenis. Both were beaten by a report into the best sites for the mine, retaining the allegiance of an impor- rally popular with MEPs. But the par- of MEPs (lots of Britons, no French), and those in Delors’ day. The EU has place and other EU-US trade issues. Sweden Skr 680 Simitis two years ago for the party and TVX, if it pulls out, faces losses of tant strategic partner. Now, with com- liamentarians should also be is threatening to take legal action set a ceiling for the next spending But the possibility of a transgalactic Switzerland Sfr 115 leadership. A senior Pasok MP recently Officials $180m. “The government must munism dead, this strategic incentive chastened by the survey, for it found against the French organisers. The round of 1.27 per cent of its GNP, com- market place was raised by a member UK £ 52 sent an invitation to all his colleagues understand that when a major cor- has vanished. In Athens, wiser com- that only 43 per cent of European cit- move follows a resolution adopted by pared with the 1.37 per cent Delors of the audience who took the floor Other Europe £ 56 who opposed the government’s poration comes in and wants to invest, mentators are starting to understand izens questioned were aware of the Parliament two weeks ago in which proposed in 1992. and said, in a robotic voice: “I am Canada C$ 155 reforms, inviting them for a chat. given EU it shouldn’t see it as an opportunity to the realpolitik: the Czech Republic and current assembly’s activity. In the light MEPs criticised the Commission for speaking from Mars.” USA US$ 135 “There were so many I couldn’t fit say, ‘Ha, let’s get lots of money in Slovenia could soon be richer than of this finding, the suggestion by a entering late into the fray. Firing up trouble For a few seconds, the mere blink- Rest of World £ 150 them into the living room,” he recalled. money for taxes’,” says Yiannis Drapaniotis, the Greece. French MEP, Jean-Louis Bourlanges, Since 20 February talks have been ing of an interplanetary eye, the audi- He is confident of rounding up a cau- TVX Greece chairman, adding: “If we Meanwhile, Europe is paying bil- that the European Parliament should stalled between Karel Van Miert, the TROUBLED industrial relations are a ence was baffled. Then reality cus of 40 rebels if the government goes stop now, will anyone else want to lions of dollars a year to a country become a constitutional assembly, was competition commissioner, who problem being faced by Manfred dawned: the humanoid was not actu- To subscribe, please write to: The European, PO Box 7000, “too far”. Given that Pasok has 159 cultural start something up here?” which has until very recently shown verging on the fanciful. demands that the paltry 110,000 Dammeyer, the new president of the ally an ambassador from the red Leicester LE94 7ZU, UK MPs, giving it a fairly modest major- The climate for new enterprises is no sign of bothering to adapt itself to tickets which have still not been sold Committee of the Regions. planet, merely the German represen- fax: +44 (0)1858 468 969 ity in a 300-seat parliament, it is a facilities more redolent of Brezhnev than Blair. a modern global economy. In contrast, Building blues be distributed outside France, and the The committee – an advisory panel tative of a large US confectionery tel: +44 (0)1858 439 601 threat to be taken seriously. An entrepreneur wanting to set up his the former Soviet bloc nations, des- CFO, which does not want to exclude of representatives from the EU’s maker. Amid the laughter, one could e-mail: A source close to the prime minis- own business needs no fewer than 16 perate to join, have transformed them- BARELY has Parliament’s new build- the French public. regional and local governments – ran feel a touch of disappointment. [email protected] ter said he was confident that the left- have used permits; bribes usually need to be paid selves from Marxist dictatorships into ing in Brussels opened its doors after The 110,000 tickets are not enough into trouble some time ago over the Please give your full address, wingers would have no reason to at every stage. The whole process quasi-market economies in the time months of controversy over its extrav- for Mr de Coene and his newly appointment of staff to its secretariat. including country. We will start your rebel. Most of them, including the it to open usually takes a year. When they do get it has taken Athens to privatise half of agant cost than the long-suffering appointed lawyer. They are seeking It was accused by the white-collar subscription immediately and defence minister and the veteran left- up and running, new businesses face its telephone company. Europe is still MEPs must turn their attention to the to recover 2.5 million seats, most of trade unions of infringing EU law, a send you an invoice. winger and junior foreign minister, the most rigid labour market in waiting for Simitis to make the right new headquarters being built for them which have already been sold in charge supported by a ruling from the John Capsis, are foreign policy hawks. nightclubs Europe. Although private sector connection. in Strasbourg at a cost of Ffr3 billion France. According to a spokesman for EU’s Court of First Instance. The

12 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 13 Nord- Nord- Pas-de-CalaisPas-de-

Haute- Haute- PicardiePicardie Basse- Basse- Normandie Normandie Ile-de- LorraineLorraine FranceFrance Champagne- Champagne- AlsaceAlsace BretagneBretagne ArdenneArdenne Map 2 Pays-de- Pays-de- la-Loirela-Loire CentreCentre Franche- Franche- Right: backed by FN BourgogneBourgogne ComteComte Split: vote 23 March

Poitou- Poitou- Political control after a week of negotiations CharenteCharente 2 Limousin in undecided areas Left: absolute majority AuvergneAuvergne Rhone-Rhone-AlpesAlpes Left: marginal majority

Right: absolute majority

Right: marginal majority AquitaineAquitaine Midi- Languedoc- Provence-Alpes- Provence-Alpes- Equal distribution PyreneesPyrenees RoussillonRoussillon CoteCote d'Azurd'Azur Graphic: Ben Gilliland Ben Graphic: 1 Political colours of the French regions after municipal elections How it would look if the right accepted the Front National 3 (FN) argument that they had common ground

LEFT MAMAJORITYJORITY RIGHT MAMAJORITYJORITY EEQUALQUAL DISDISTRIBUTIONTRIBUTION Extreme Broad Other Others Other RPR- FN Abst Extreme Broad Other Others Other RPR- FN Abst Extreme Broad Other Others Other RPR- FN Abst left left left right UDF left left left right UDF left left left right UDF RRegionegion with ababsolute solute RegionRegion with absolute absolute RegionsRegions with ababsolute solute majoritmajorityy majoritmajorityy majoritmajorityy Limousin -2222-14335% Pays-de-la-Loire 1 27 4 5 15 34 7 43% Bourgogne - 23 1 2 3 19 9 43% RRegionsegions with ppartial artial RRegionsegions with ppartial artial Franche-Comte 1 15 1 - 1 16 9 38% majoritmajorityy majoritmajorityy Poitou-Charente - 22 2 2 4 20 5 42% Aquitaine - 40 - 8 - 28 9 39% Alsace -9-61151646% Rhone-Alpes - 54 6 2 5 55 35 46% Centre 1 33 - 1 1 28 13 42% Auvergne - 20 1 1 4 17 4 38% Ile-de-France 386-1 15683646% Bretagne 1 34 2 2 3 34 7 41% TTOTALOTAL PPARTYARTY PERFPERFORMANCEORMANCE Languedoc-Roussillon - 31 - 1 3 19 13 38% Champagne-Ardenne 1 17 - 2 3 17 9 44% 2 41 - 2 4 34 8 36% Extreme Broad Other Others Other RPR- FN Abst Midi-Pyrenees Lorraine 12411 11221344% left left left right UDF Nord-Pas-de-Calais 7 50 1 2 10 25 18 40% Basse-Normandie - 17 - 2 4 18 6 42% TotalTotal national Haute-Normandie 2 23 - 1 5 14 10 41% results:results: % Picardie 3 23 - 1 - 19 11 38% Provence-Alpes- - 45 3 1 2 35 37 42% 4% 38% 2% 5% 8% 28% 15% 42% Cote-d'Azur

PHOTOGRAPHS JEAN-PAUL BAJARD / EDITING they are in coalition with the left, it is logical that In Burgundy, the RPR’s incumbent regional coun- description of the Holocaust as “a detail of history” FRANCE ■ we should back the right,” explained the FN’s Guy cil president, Jean-François Bazin, who insists on and into the respectable political mainstream. Front National poll success offers conservatives power at a price Obozil. his “impeccable Gaullist credentials”, said he would The FN is already France’s third-largest party From the start, it was clear that the FN was the have accepted FN votes but then refused to com- behind the Socialists and the RPR. Mégret has his referee. Jaboulet-Vercherre, slight, grey-haired and mit himself to the Front’s minimum plan. Unpop- sights set higher still: to swallow the established gracious, could not conceal his exultation. “The ular among his peers, his fate was already sealed. conservative parties and become the leading right- right has trapped itself between two suicidal choices: Jean-Pierre Soisson of the UDF had struck a sepa- wing force in the country. In his campaign, he is ral- allowing the left-wing parties to win, it kills itself; rate deal with the FN almost from the start; he ended lying a new generation. Night of the long spoons for French right forming an alliance with the FN, it kills itself as well. up expelled from his party and elected regional Pierre Jaboulet-Vercherre, one of the rising lead- But at least we will give them a first-class burial.” president of Burgundy. ership of the Front, looks a world apart from the Others agree. FN backing would be the kiss of The FN managed to make similar deals elsewhere. swaggering Le Pen. Impeccably dressed, quietly Edith Coron split assemblies postponed voting until Monday WIne of discontent: 20 regions they had controlled since the previous death, the climax of a careful strategy by Bruno In Picardie, Charles Baur of the UDF took the bait spoken and with a metropolitan air, he cuts the reas- BEAUNE 23 March. election posters still elections in 1992. But if the leadership had pre- Mégret, Le Pen’s suave, infinitely patient number and was expelled from the party. In Rhône-Alpes, suring figure of a Burgundian wine-maker. He is The parliamentary right in Burgundy, anxious to adorn hoardings in pared for defeat, they were not ready for mutiny two. He hoped that under the pressure of this impos- Charles Millon – a personal friend of Jacques Chirac popular in his region and known as a generous host IERRE JABOULET-VERCHERRE was in hold on to the kudos of power, had no alternative Meursault but the The results gave the UDF- RPR (Rassemblement sible choice, the RPR and UDF would disintegrate. and Raymond Barre – broke ranks; in Languedoc- even to his political enemies. But in Paris, leaders his element. Regional leader of the neo- but to ally itself with the hard men of Jean-Marie parties are coming pour la République) centre-right alliance a clear Mégret, who embodies the new, seemingly prag- Roussillon, the UDF leader, Jacques Blanc, made a on both the left and the right are urgently warning fascist Front National (FN) and heir to Le Pen, the FN’s ebullient leader. In Paris, the word to uncomfortable majority only in the Pays-de-la-Loire. The left won matic generation of FN leaders, is playing the pact with the FN and won the assembly presidency that appearances can be deceptive. an old and internationally respected had gone out from conservative leaders, starting compromises nowhere outright, save for Limousin, although it cuckoo. On Monday 16 March he offered a deal but lost his UDF party card. The UDF’s Bernard Lionel Jospin, the Socialist prime minister, went P wine merchant’s house, he found him- with President Jacques Chirac, not to succumb to did record the largest block vote in six regions. Nine many found irresistible. FN councillors would vote Harang in Centre also struck a deal and was expelled out of his way to make the point, interrupting his self after last week’s French regional elections poised temptation. But such orders were not always easy regions saw the right holding a lead, while in for the RPR-UDF candidates in exchange for pub- Elsewhere, conservative candidates wriggled out schedule on Thursday to denounce the “danger to at the very heart of events in his beloved Burgundy. to obey. another four the left-right split was practically even. lic support of a “minimum plan of action”. of the Front’s embrace. In Franche-Comté, for exam- democracy” posed by any accommodation between Gazing across the multicoloured roof of Beaune’s The newly acquired power of the FN, a party Burgundy was one of the divided regions, and This plan is essentially based on a commitment ple, the UDF leader, Jean-François Humbert, the FN and the centre-right. 15th-century hospice, the architectural jewel of the which, because of the complexities of the French the scenario written by the FN was played out to to reduce taxes, raise the priority given to personal resigned from the presidency as soon as he had been He said nothing, of course, about his own extrem- Duchy of Burgundy, he boasted with a grin: “I have electoral system, has no parliamentary represen- ‘I have the the letter. From the forests of the Morvan to the security and guarantee the defence of regional and elected with FN assistance and went into negotia- ists on the left. While attention has been focused the power to make the duke!” tation, wrought havoc on the French regional scene. vineyards of the Côte d’Or, the 22 councillors of French cultural identities. Such themes are dear to tions with the Socialists over the creation of a “repub- this week on the success of the FN, a small group He did not exaggerate. Without the FN’s support, In spite of Chirac’s insistence that “when one has power to Burgundy’s established right-wing parties faced a the Front but have found clear echoes elsewhere. lican front” government. of Trotskyists has been quietly celebrating its own Auxerre’s outspoken mayor, Jean-Pierre Soisson, republican convictions one must make no com- painful dilemma: to allow the election to the There is no mention of race; there does not have to More often than not, despite Philippe Séguin’s success. Workers’ Struggle (Lutte Ouvrière) won of the centre-right Union pour la Démocratie promise”, local deals have blurred the lines between regional assembly presidency of Eugène Tesseire – be. Everyone in France knows the implications of warnings to RPR councillors not to turn into “a nearly five per cent of the regional vote and for the Française (UDF), would not have been elected pres- the acceptable and the unacceptable. So many com- make the an old friend of François Mitterrand and one of the FN involvement in government. moral and political dead end” and François Léotard’s first time won seats on regional councils. ident of Burgundy’s regional council. promises were made that the former centre-right 24 gauche plurielle (pro-government union of Social- The Front’s outstretched hand was grasped Devil’s advocate: Pierre admonitions to UDF representatives not to let them- The national arithmetic is simple: add the far The Front’s 15 per cent vote meant that here, as prime minister, Alain Juppé, warned that “the repub- duke,’ boasts ists, Communists and Greens) councillors – or to eagerly by many local officials still bruised by last Jaboulet-Vercherre (top) selves be “puppets” in the hands of the FN, Mégret’s left’s five per cent to the FN’s 15 per cent and to the in nearly half of France’s 22 regions, FN power- lican opposition is going through one of its most accept the backing of the FN to guarantee the elec- year’s humiliating defeat of the right in parlia- of the Front National arrows found their mark. 42 per cent of voters who didn’t bother to go to the brokers had a decisive say in the make-up of regional serious crises ever”. tion of one of their number. mentary elections to the National Assembly. They and Jean-François Bazin, Mégret attracted not only the rank-and-file but polls and you have more than 60 per cent of French administration. The FN played kingmaker in five After last week’s elections, the political landscape the Front’s Two councillors elected on the traditional find little to inspire them in their Parisian leaders who was ousted as also heavyweights. Though he did not win outright, men and women who no longer find themselves regional assemblies; the five elected presidents looked awkward for the traditional right-wing par- “hunters and fishermen” ticket sided with the right. and fear they are sinking with the leaky boat that regional president last week saw a giant leap in his effort to move the represented by the traditional establishment par- immediately lost their UDF party cards. Five further ties. They knew they would keep only a few of the local boss “Since for us the enemy are the Greens and since the French right has become. FN beyond the extremism epitomised by Le Pen’s ties. Old values, it seems, no longer add up.

14 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 15 NEWS

EUROPE ■ With enlargement and elections looming, member states face acrimonious debate KOSOVO The budget is done; let battle begin Farmers still Macedonia Albanians SANTIAGO / LYON hooked on Tim King and Bertrand Benoit BRUSSELS subsidies issue call to arms HE package of budget reforms which the Euro- HE reforms to the Com- Robert Fox military forces, because all peaceful pean Commission mon Agricultural Policy TETOVO, MACEDONIA policies have failed. unveiled last week, and (CAP) are intended to “Milosevic [the Serbian nationalist Twhich is now to be put switch support away T night old Tetovo, on leader and president of rump before the Council of Ministers and T from price subsidies, Macedonia’s border with Yugoslavia] now realises he has to ful- the European Parliament, is blighted which distort markets and encourage strife-torn Kosovo, throbs fil the wishes of the international com- by messy compromises. overproduction. Farmers will be com- to discos and the swirling munity. He appears to have little The proposals to overhaul regional pensated for withdrawal of price sup- Astrings and throaty horns choice for his own survival. But this aid and the Common Agricultural Pol- port by an increase in direct payments. of bands at gypsy weddings. But in means he will ruin his internal poli- icy (CAP) from 2000 will be mauled Lower prices ought to see EU farm- the daytime the bars rumble to dis- tics, which have been based on an GEORGI LICOVSKI further before next spring, the dead- ers competing more effectively in cussion about the crisis next door. appeal to Serbian nationalism. So he Border patrol: rector of the unrecognised Albanian of the southern Balkan region for line Jacques Santer, the Commission world markets without such heavy There is a scent of defiance and rebel- faces frustration. Paranoia has set in, Macedonian troops university in Tetovo. “It is mainly another reason. If the violence in president, has set for approval. reliance on export subsidies. Con- lion in the acrid, lignite-polluted air. and so we get the violent and hyster- watch crossing points groups of Albanians defending their Kosovo accelerates and hundreds of Santer’s timetable is complicated sumers should see cheaper food, Tetovo is the capital of the Alban- ical actions in Kosovo. into strife-torn Kosovo families and children. But if Europe thousands flee south, they could by the electoral timetable. Nothing although price reductions are unlikely ian community in Macedonia, once “The Albanians of Kosovo do not does not act, Albanians will be forced, become the largest community in important can be decided until after to be of the same magnitude as the the poorest and southernmost repub- have the time to develop a new vari- really forced, to form such an army.” Macedonia. This would resurrect the the German general elections in Sep- cuts in price support. lic in the old Yugoslavia. “The situa- ation of moves in their game,” he says, International analysts and moni- dream of “Greater Albania”, combin- tember, which may not leave enough Franz Fischler, the EU farm com- tion in Kosovo is now very dangerous,” drawing parallels from his favourite tors emphasise the primitive nature ing the present state with Kosovo and time before the European Parliament missioner, has set new intervention says Arben Xhaferri, the leader of the game, chess. “They should have con- of the UCD resistance as it now is. parts of Macedonia and Montene- elections the following June. MEPs levels at below what he predicts will radical Albanian Party of Prosperity, sidered the armed option much ear- “They have little organisation and no gro,the dream of the League of Prizren will anyway be reluctant, on the eve be the EU’s internal market prices, pre- and now acknowledged as the most lier. With the break-up of the old capacity to handle sophisticated in 1912, the forebears of the UCD. But of their elections, to approve an aid saging, he hopes, the end of butter articulate voice of Albanian national- Yugoslavia, the option of self- weaponry. So far we have no indica- the break-up of Macedonia could lead package that removes support from mountains and wine lakes. ism in the region. determination was achieved only by tion that they have training camps as to a wider war if Bulgaria and Greece many regions. Cereal prices will be cut by 20 per Xhaferri, a hulking bearded figure, those who had enough military power the IRA and PLO established in their execute ancient claims and grudges. Budgetary wrangling will be fur- cent in 2000 but direct payments will has something of Fidel Castro about to achieve their ends.” ‘If Europe early years,” said one monitor. Officially the Albanians are a quar- ther complicated this October when be increased to provide about 50 per him. A former television journalist in Xhaferri and his party are regarded But evidence on the ground in ter of the Macedonian population. But the Commission looks again at the cent compensation. Beef prices will Pristina, the capital of the Serbian by the Macedonian government in Macedonia and Albania suggests that they argue that they are really a third issue of how much each national gov- overdue for reform; but the prospect Oiling the wheels of voking howls of protests from farm- be reduced by 30 per cent in three province of Kosovo, he has now grad- Skopje as the dangerous radical wing does not act, the UCD may be well on the way from of the overall population of 2.2 mil- ernment should contribute to the com- of central and east European power: Spanish olive ers across the Union, have already equal annual steps from 2000. The uated from the politics of street protest of the movement for Albanian minor- a do-it-yourself rural guerrilla band lion; 35 per cent of primary school- mon purse. Germany and the countries joining the EU has put pres- producers are one of been toned down and will be further increase in direct payments should to become the organiser of a militant ity rights. His colleague Rufi Osmani, Albanians to an organised underground resis- children are Albanian and over half of Netherlands are pressing for the kind sure on the Commission to increase many national farming emasculated by national governments compensate for about 80 per cent but nationalist movement. He is in daily, 35, has been stripped of his position tance force. According to international the tiny Macedonian army of about of rebate that Britain currently enjoys, the speed and extent of change. lobbies set to protest at terrified of the farm lobby. national governments must distrib- sometimes hourly, contact with as mayor of neighbouring Gostivar for monitors, weapons from Macedonia 20,000 is Albanian. The true strength and there is bound to be acrimonious Many parts of the present Union the Union’s budget plans Similarly, regional aid reform will ute part of the compensation. Pristina and also has strong links with raising the double-headed eagle will be have already found their way in large of Macedonia’s Albanian minority will discussion over who puts more into which receive regional aid – intended be weakened by the attempts of indi- Dairy prices will be cut by 15 per the Democratic Party of Albania’s for- Albanian national flag and sentenced numbers across the border into become clear in general elections due the EU coffers than they get out. There for the poorest areas – must be vidual member states to retain their cent in four stages – a larger reduc- mer president, Sali Berisha, which to 14 years in prison, now reduced to forced, Kosovo. Two weeks ago it is believed this autumn, which the authorities in is a real danger that the budget weaned off it before enlargement dra- share of EU largesse. The Commission tion than originally envisaged; the now runs the northern Kosovo border seven. In rioting that followed the that a consignment of 200 Kalash- Skopje contemplate with dread. reforms could be held to ransom in matically alters the notion of what is devolving some of the nastier deci- Commission argues that dairy farm- region of Albania as a private fiefdom. announcement of his sentence seven nikovs was transferred by mule over Xhaferri sees only one answer. the Council of Ministers. constitutes poverty. It is equally sions – about which farmers will ers will benefit from cheaper cereal Xhaferri speaks in short, cogent sen- people died and 56 were injured. really forced, the mountains of northeast Albania. “Kosovo is a muddy place, not a sane For the moment, though, the finan- unthinkable to persist with the CAP’s receive what subsidy and which prices for animal feed. Milk quotas tences. The manner and the message Even milder voices in the Albanian The large Albanian community in place. If war spreads in Kosovo, all hell cial framework for 2000-2006 leaves current levels of farm subsidy, which regions will be denied aid – to national will be increased by two per cent: half speak of urgency. The game of words community are now turning to the to form such Macedonia is a vital conduit for funds, will be let loose. The only possibility aside the issue of where the money maintain the price EU farmers get for governments but that may not be to be allocated among farmers under may soon be played out, he suggests, military option. “The UCD [Kosovo war material and manpower to of stopping the hysterical over-reaction will come from, although it is con- their produce well above what would To persist enough to buy off every lobby. 40 and half to farmers in mountain- and it will be time for action. “The Liberation Army] is not really an Kosovo. The Albanians of Macedonia of the Serb forces is Nato. Its presence strained by an overall ceiling on be the market price. Santer acknowledges that agree- ous areas and in Nordic states. Albanians are being pushed to build army,” says Professor Fadil Suleijmanji, an army’ are crucial to the stability and security is needed here now.” resources set by national governments Countries seeking admission to with current ment will be difficult but believes that Fischler is making more money at 1.27 per cent of GNP. Beneath that Europe have set prices below that the budget can be approved by spring. available for rural development, ceiling, spending on the current 15 notional market price. The gap He sounds confident: “If member which will encompass incentives for DIPLOMACY EU member states will diminish as between the two must be narrowed, levels of CAP states have to decide; they decide. early retirement, diversification, train- room has to be found for assistance if they are to co-exist in the Union. They have never shirked their respon- ing, marketing and greener farming, from 2002 for new members. Even without enlargement, the cur- subsidy is sibilities.” But Santer should know but such measures are still dwarfed History repeating as guerrillas take to the mountains The regional aid package and the rent support would be indefensible at that elected politicians feel responsi- by payments to the arable, beef and CAP, which together make up more next year’s round of world trade talks. ble first to national electorates and dairy sectors which will still represent AN American diplomatic cam- president of Yugoslavia together, up is on the hilltops overlooking attack. Conditions are dire and Further north, in the town of Milosevic of the need to stop than 80 per cent of the budget, are But the CAP reforms, which are pro- unthinkable only second to the EU. more than 80 per cent of CAP money. paign for “serious and biting” have said Belgrade has met a group of villages in what would food is short. Several babies have Mitrovica, the Mother Teresa fighting and start talking. They At present, 80 per cent of CAP aid sanctions to force Belgrade to most of the conditions in different circumstances be an been born without medical help medical centre, named after complain that the Europeans, goes to 20 per cent of the farmers. The make concessions in Kosovo is demanded by the international ideal rural setting. Handsome on the freezing hillsides. Albanians’ most famous daugh- while offering mediation, fail to Commission has not dared to cap running into mounting resis- community. Italy is also taking cottages with white walls and To the east, one of the main ter, is staffed by volunteer local back it up. “It seems like Wulf-Mathies’ changes have more bark than bite direct payments, but is proposing to tance in Europe, threatening a a softer line. red roofs are scattered in a fer- roads into the pocket is guarded doctors and has bed and blan- Bosnia,” said one UN official . lower the level of compensation to 80 transatlantic split similar to the Milosevic appears to have tile valley with steep wooded by a Serb checkpoint with piles kets ready for casualties. Hun- “The Europeans are saying this ONIKA WULF-MATHIES, the average, calculated over a three-year period. In which lose the aid will have transitional support per cent after the first Ecu100,000 one which paralysed interna- largely succeeded in splitting slopes on either side. The village of white sand bags and a blue dreds of refugees remain in the is a European problem, we’ll take regional affairs commissioner, 1995, 46 regions in eight member states fell below for four years. The timidity in withdrawing Objec- ($108,000) and 75 per cent after tional action over Bosnia. the Contact Group, with Russia of Llausa is at one end of the val- tank leading to the interior min- town having fled the two Serb care of it. We say, ‘Sure, don’t we wants to concentrate regional aid that mark: all 13 regions of Greece, eight in Spain, tive 2 aid has been compounded by the intro- Ecu200,000. Britain, France and Ger- United States special envoy siding with the mainland Euro- ley, Turiquec lies at the other, istry troops. About 50 metres offensives earlier this month. wish you would.’” in areas of greatest need. The aspi- seven in Germany, six in Portugal, five in Italy, duction of a safety net: no state will have many will want this overturned. Robert Gelbard said the Serbs peans while the British appear with more settlements in in front is an abandoned white The ethnic Albanians’ mod- As for the guerrillas, it is ration is laudable but fraught with two in Britain, one in Austria and all four French Objective 2 support reduced by more than a third. The greatest fury may come from have shown “complete disre- happy sitting on the fence. The between. Serbs say the valley Volkswagen Golf car, riddled with erate leader, Ibrahim Rugova, unclear whether the Serbs did, M gard” for a demand by the Inter- Serb leader has said he will agree harbours terrorists, which the bullets. Soldiers at the check- faces a tough choice between as they claim, destroy their main problems. Regional aid has been spread too thinly overseas départements. But the Netherlands, Ire- The proposal followed intense lobbying, for the Spanish, Portuguese and Italians because it is politically popular to distribute the land and Belgium look set to lose Objective 1 aid. this aid covers a third of Britain’s population and on olive oil. The Commission has only national Contact Group that to some troop withdrawals and Albanian villagers deny. point wearing flak jackets over supporting the hard line of the units. Certainly the guerrillas EU’s annual Ecu40 billion ($43bn) bounty that Those regions no longer considered poor more than 40 per cent of France’s. Eligibility for dared table a partial reform for 1999- security forces which have killed that an envoy will be appointed About 1,000 civilians here are the purple and black tiger stripe guerrillas or continuing to press that this correspondent met in way. Wulf-Mathies was originally aiming to reduce enough in 2000 will still receive transitional aid Objective 2 aid will be decided by set criteria and 2001. Overproduction of olive oil has 80 ethnic Albanians be with- to negotiate with the Albanians. now engaged in a bizarre ritual: uniforms of ministry of interior for passive resistance against the region last month seemed the coverage of regional aid from the current for six years. The EU predicts that Objective 1 aid negotiated by Brussels and member states. reduced the aid to producers. The EU drawn and talks opened between The reality an the ground is dif- by day they cluster mostly in troops say they fired at the car the state in the quest for inde- well-equipped and trained and absurd 51 per cent of the EU population to “35- will cover 20 per cent of the population after Eligibility for Cohesion Funds, the Ecu3bn a is increasing the maximum permitted the two sides. The US is press- ferent: the Serbs are reinforc- the east of the pocket, around a more than a week ago when it pendence. Many Albanians are able to escape attack. And this 40” per cent. Last week she referred to a 40 per 2000, compared with 25 per cent now. Regions year for infrastructure projects in the poorest quantity, but Spain is contesting the ing for trade sanctions against ing troops in a “ring of steel” deserted school at Turiquec. At tried to break out of the pocket frustrated with passive resis- week came evidence: a rocket cent target, saying that greater concentration in structural crisis can qualify for aid for eco- countries, remains unchanged: per capita GDP allocation of quotas. Serb dominated Yugoslavia. around a pocket of six villages dusk the women and children and have left it there as a bar- tance which has brought only and gun attack on a police post was unattainable. nomic and social conversion under Objective 2. must be less than 90 per cent of the average. But A glaring flaw in this reform is that The German foreign minister, holding around 10,000 people in and all but a handful of men rier. They are vague about casu- repression, poverty and 70 per that wounded one Serb police- Two-thirds of the funds will be allocated to the This simplification means that several current Wulf-Mathies has the power to decrease these there is no time limit on compensa- , and the French for- the Drenica region, scene of climb into the forest for the alties, but say they are regularly cent unemployment. men. They are still out there, so-called Objective 1 regions “whose develop- categories of aid – for industrial, urban, rural and payments if they threaten to push a state’s pub- tion. Fischler’s proposals will not wean eign minister, Hubert Védrine, recent offensives. night, leaving a few men on shot at by guerrillas in the sur- The Americans insist that somewhere. ment is lagging behind”. These are defined as fisheries areas – are bundled into one category lic deficit above the maximum permitted under farmers off their CAP dependency. who met Slobodan Milosevic, The focus for this Serb build- watch because they fear a Serb rounding hills. only threats will convince CAMILLA PETRE, PRISTINA those where GDP is below 75 per cent of the EU which covers 18 per cent of the population. Areas the rules of monetary union. TIM KING AND BERTRAND BENOIT

16 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 17

CyanMagYelloKey CyanMagYelloKey NEWS

REUTERS MICHAEL URBAN COMMENTARY GERMANY Failing the driving test Time and politics HO were the to macroeconomic manage- peak of the business cycle, best and ment is worrying. Since the both should be in surplus. A worst post- war, budget speeches have chancellor, pursuing a pol- war British always started with the bud- icy of fine-tuning, would Wchancellors get judgment. Chancellors have tightened considerably wait for no man of the exchequer? Nigel Law- first told MPs how much they more this year, to check con- son and Nigel Lawson. He had decided to take out of or sumer demand, and to Vera Blei NRW party. In the end, the father- was the best reforming chan- put into the economy. Then achieve the longer-term goal figure became a liability. His resigna- cellor: a mechanic who fixed they announced the details. of balance over the cycle. T WAS a humiliating way for a tion statement admitted as much. Rau the economy to motor faster. Brown never mentioned his Unless a surplus is built up giant of German politics to quit. said that by leaving he hoped “to help But he was also one of the fiscal stance in the budget now, there can be no room , father figure of and improve his party’s prospects for worst as a driver: he ran it speech, although details are for manoeuvre when fiscal the Social Democratic Party the general election in September”. off the road into high available in the Financial easing becomes necessary in I(SPD) and premier of North Clement is known for his business- inflation. Statement and Budget Report the downswing. Rhine-Westphalia (NRW), was shaken friendly politics. Franz Müntefering, Chancellors must be red book. He devoted his Brown has left producers from power last week by the tremors the federal party manager who judged on both their micro- opening stanzas to new to suffer while consumers still reverberating from the adoption secured Schröder’s candidature, has economic improvements to Labour’s new ambitions. prosper. This lopsided on 2 March of Gerhard Schröder as been rewarded with the state party the supply-side of the econ- These included a call for pru- approach cannot be in the the SPD’s candidate for chancellor. chairmanship. omy and their macroeco- dence and “long-term sta- economy’s longer-term inter- Land of nod: the prime minister gives his approval to his chancellor’s words On 20 September the 67 year-old The SPD is clearly determined to nomic management of the bility” to break the stop-go ests. His search for stability Rau would have held power in the overcome internal party differences demand side. Like Lawson, cycle and false trade-off is at the expense of flexibil- BRITAIN Land for 20 years. Newspapers spec- and not to miss out on its most promis- Gordon Brown scores highly between inflation and unem- ity. In the global economy, ulated that he might choose this time ing chance of gaining power in Bonn. on the former and badly on ployment. the business cycle cannot be to announce his departure. In the end, With Rau’s departure, “the political welfare state. Schröder even declared Deadline for change: coalition – leaves many voters uneasy. the latter. But Brown is more In 1981, Margaret That- abolished anywhere unless he simply could not hold out that long landscape in Germany underwent that he would roll back some of Kohl’s premier Johannes Rau The change at the top of the NRW gov- likely to crash into recession cher’s first chancellor, Sir it is abolished everywhere, and was unseated by two Schröder another decisive change”, wrote the modest reforms, such as cuts in sick (left) checks the hour ernment tackles that concern, plac- than race into inflation. He Geoffrey Howe, demoted as Asia has shown. Shocks Blair hug for Brown’s henchmen. It marks a symbolic shift conservative Frankfurter Allgemeine pay, a reduction in employees’ pro- under the eye of his heir, ing two Schröder men in control of and the Bank of England Keynesian demand man- are inevitable. Brown has in German politics. Zeitung. tection against dismissal and minor Wolfgang Clement the red-green coalition in the state that monetary policy committee agement by tightening fiscal sacrificed future fiscal flexi- Back in 1993 Rau had named Wolf- Rau’s removal shows the growing pensions reform. includes (for now) the capital, Bonn. err on the side of caution. policy in the teeth of a reces- bility by failing to tighten gang Clement, the Land’s 57-year-old influence of the younger generation Kohl’s government condemned the Clement is used to co-operating It would be churlish to crit- sion. Brown has abolished today. economics minister, as his heir appar- with new ideas. Clement, like programme as “pseudo-modernity” with the Greens, having worked in a icise Brown’s supply-side fiscal fine-tuning altogether. Few arguments against ent but he kept him waiting for the Schröder, disturbs his party’s leftist and said it was bound to lead to more red-green coalition government since measures. He has dared to Excluding indexation, his fiscal fine-tuning cannot balancing act budget coveted job. Clement was dubbed diehards with his cosying-up to big job losses. But days later the Christ- 1995. He has shown himself able to go where others have feared measures reduced the bud- equally be levelled against “Prince Charles”, because he seemed, business. But it has helped draw ian Democrat-led coalition announced compromise and hang tough at the to tread: tackling welfare get deficit by £165 million. monetary policy. Both act Walter Ellis Business saw a slight fall in company tax; uni- like the son of the British monarch, investment to NRW, particularly in the its own populist electioneering mea- same time, most notably in pushing reform bristles with difficul- But as indexation is not with a lag, meaning that pol- LONDON versal child benefit was increased; capital gains perpetually waiting for the crown. media and telecommunications. He sure, detailing a DM1.6 billion ($875 through plans for the extension of the ties. But reform is much eas- neutral, the overall change icy must be set on the basis tax for long-term investors was almost halved; Schröder’s victory became the has also initiated a series of pro- million) make-work programme, controversial Garzweiler opencast ier for a chancellor who was a net giveaway of of forecasts. The monetary VER since he agreed to suppress his families with a total income of less than £220 impetus for a palace coup. Rau, a grammes to encourage young entre- designed to create up to 70,000 jobs. mine in the face of strong Green Party believes that he has money £430m. But given tax hikes lag is longer, but policy ambition to lead the Labour Party per week ($364) were taken out of the tax net member of the left-wing group in the preneurs to start their own businesses. Unemployment, pensions and eco- opposition. It signalled to the public to spend. Then there can be in the pipeline, Brown main- changes are easier and in favour of his friend and ally, Tony altogether. party, followed the political line of The cigar-smoking Schröder last nomic reforms will be the main Gerhard that a red-green government can work winners without losers. This tained his overall tightening quicker. It takes longer to Blair, speculation has grown about True, motorists were hit by higher petrol Schröder’s rival, Oscar Lafontaine, the week sought to boost his business cre- themes of the election campaign. and that the Social Democrats can is partly due to inheriting an stance. change taxes or public Ethe true loyalty and personal polit- tax, while smokers and drinkers will have to party leader. When Schröder’s tri- dentials by unveiling an economic pro- Opinion polls show that the German Schröder’s moderate radical Green demands. economic miracle instead of It is now conventional wis- spending but their effect can ical agenda of Britain’s chancellor of the exche- pay more to indulge their habits. Yet, overall, umph in Lower assured him gramme that he boasted was “the public believes that, despite evidence As the dispossessed Rau considers a mess. But Brown’s tight dom to reject fiscal fine- be more immediate and pre- quer, Gordon Brown. He has appeared out of Brown managed to persuade even hard-bit- the SPD nomination for chancellor, most market-oriented” his party had to the contrary, the SPD is capable of his chances in a possible bid for Ger- control over public spending tuning and rely exclusively cisely targeted. sorts, remote, wounded, even embittered. A ten analysts that he had squared the circle – Rau knew he was in the losing camp. ever produced. But it lacks a com- handling these problems. But the victory was many’s presidency, Chancellor Kohl helped, while in his first bud- on monetary policy to man- The old regulator, allow- recent biography alleged that he regarded Blair encouraging hard work and thrift while guar- In a studied slight, Rau was informed mitment to radical reforms that many same cannot be said of their most may well be contemplating the depar- get last July, he put some age the business cycle. Yet ing indirect taxes to be raised as a usurper who had hijacked Labour for his anteeing the least advantaged in society an only by fax that Schröder would be in industry would like to see. It seeks likely junior coalition partner, the the impetus ture of Wolfgang Rau: a man of exactly £3.36 billion ($5.5bn) of tax the active use of monetary or lowered by 10 per cent own vain purposes. acceptable standard of living. officially announced as the party’s to marry plans for modernisation of Greens. his age, a giant in German politics, increases (excluding wind- policy is inherently more during any year, was a valu- Last week, however, Brown’s budget – his The Tories were stymied. William Hague, chancellor candidate. Demands for the economy with traditional SPD The prospect of a coalition between who simply stayed too long. fall taxes) into the pipeline destabilising than fiscal pol- able weapon. Some similar first full one since Labour returned tri- the Conservative leader, spoke in the Com- Clement to take over grew within the commitments to social justice and the the SPD and Greens – a red-green for a coup Oskar’s list: page 38 for 1998-99. icy. Tightening pushes up the device is needed today. Polit- umphantly to power – suggested that prime mons of Britain’s “golden legacy betrayed”. The acid test of welfare to exchange rate and, if pur- ically, fiscal tightening makes minister and chancellor have rediscovered Few (even those who acknowledged Brown’s work will not be whether sued with vigour, causes a government unpopular by some of the harmony that made them such a debt to the previous government) shared his SPAIN individuals find jobs but equity and property markets identifiably hitting individ- formidable force. scepticism. Such criticism as there has been whether the non-accelerat- to collapse. uals or interest groups. Mon- Blair, who had helped streamline – some centres on the Treasury’s ability to make the ing inflation rate of unem- Easy money produces a etary tightening has a more might say sanitise – the budget during an unre- trick work in practice. It is one thing to bal- ployment, NAIRU, can be weak pound and asset price diffused effect and can be ported weekend meeting with Brown at the ance income and expenditure on paper, quite Every Andorran’s duty is to get through 60 a day lowered. If not, those find- inflation. Demand and activ- blamed on the Bank of prime minister’s country retreat, described another to generate the cash needed for ing jobs will simply replace ity are leveraged up and England. the package as a “defining moment” of his increased spending without – as a previous Giles Tremlett million to 61m packets of brands such as Ben- those arrested were three Irishmen from a taxes. “It would be extremely complacent for others losing them. Inflation down through large swings Despite Brown’s 17-fold administration and seemed genuinely Labour chancellor apocryphally once put it – MADRID son and Hedges and Player’s in the past two gang that allegedly smuggled six million pack- northern countries to consider cigarette fraud is brought down and kept in net exports and invest- claim to prudence, this was delighted by the praise being heaped on his “squeezing the rich until the pips squeak”. years. Every man, woman and child in Andorra ets of British brand cigarettes out of Andorra to be a southern problem,” says Edward Kellet- down by deliberately run- ment. Greater stability in an improvident budget. He finance minister. Brown, for his part, resem- City analysts point to the fact that Brown, HE Pyrenean state of Andorra, (population 63,000) would have to smoke in just six months, netting an estimated $12m. Bowman, British MEP and author of a report ning the economy below its total demand is achieved at has risked seeing a collapse bled a chief executive presenting an upbeat having shown no obvious concern over the perched between Spain and France, three packets a day to consume that many. A lorry belonging to a separate gang was on fraud. potential to increase unem- the expense of increased in exports, investment and company report, both in the Commons and alarming strength of the pound in his budget is an unlikely threat to the Euro- A dozen officials from the Brussels-based stopped near the French border with Spain Investigators are also trying to find out how ployment to its NAIRU rate. instability in the interest and industrial activity drag the afterwards on radio and television. speech, was forced within 36 hours to issue a pean Union. But the small princi- anti-fraud unit, Uclaf, travelled to Andorra last and found to be carrying 200,000 packets of much tobacco allegedly sent to Andorra actu- Brown’s measures stand a exchange-rate sensitive sec- economy into recession. Had The chancellor had been expected to begin plea for monetary calm – scarcely the sign of T pality is blowing a $1 billion hole week to discover where the excess tobacco was British cigarettes, worth half a million dollars. ally reaches its destination. They suspect that good chance of success. They tors of the economy – he tightened fiscal policy sig- what was seen as his inevitable long-term a man wholly in control of events. UK manu- in EU member states’ tax incomes. going. Spanish police, who started an anti- “The contraband is controlled by mafias and cheating is easy with the paper-based Com- increase the supply of work- exports, investment, home- nificantly, this risk could have alienation of the better-off by introducing a facturers and exporters had been screaming Andorra’s non-existent contraband laws, smuggling operation around the Andorran is of industrial proportions,” explained Santi- munity Transit System for goods travelling ers seeking jobs by raising buying and building and been averted by monetary budget directed against middle-class privi- for relief for weeks without any sign that the combined with the EU’s new border-free trade, border last September, can tell them. Much of ago López Valdivieso, the Civil Guard director- through the EU to export markets such as their take-home pay and financial markets. All the easing. As it is, while guard- lege. Thus, mortgage tax relief would go, per- chancellor was listening. Only as his own bud- have made tobacco smuggling so easy and the tobacco is carted straight down the moun- general “Half a million packets have been Andorra. “Some English cigarettes are declared increase the demand for adverse effects of the stop- ing against the upside risk of sonal savings would be targeted, inheritance get began to give sterling yet another boost lucrative that organised crime is giving up tainside into Spain and sent back to where it crossing the border a day. That makes 150 mil- as destined for Andorra when in fact they don’t their services by reducing the go cycle continue and are inflation accelerating, which tax would be raised and a swingeing charge did alarm bells start to ring. drugs and turning back to the the cigarette came from, avoiding 80 per cent taxes along lion packets a year.” And that is just through even leave England,” explains Javier Gozieta, cost to employers. Shrinking exacerbated. would have ensured unem- imposed on the users of company cars. But this government is nothing if not con- carton. The EU, alarmed by total annual rev- the way. Mountain tracks, four-wheel-drive the border with Spain. director-general of Spanish customs. the number of unskilled This is clearly the case at ployment remained low or None of these forecasts came true. Instead, fident. Having stolen the Tories’ clothes on enue losses on tobacco of up to $5bn, last week vehicles and even underground water courses The new smugglers are organised gangs Contraband, organised or otherwise, runs unemployed is unlikely to the moment. Despite net fis- went lower, he has exposed Brown made families and “welfare to work” defence, foreign policy and the enterprise soci- sent in fraud investigators after suspending are used to ship the tobacco out of Andorra. from Ireland and Britain that buy the tobacco in Andorra’s veins. The government has this push up wages. Wage infla- cal tightening, in 1998-99 himself to the risk of rising the theme of his budget. What he wanted, he ety, it is now happy to do the same with bud- talks on a bilateral co-operation agreement. Special units from Spain’s Civil Guard police virtually tax free and then smuggle it across month increased customs fines, raised retail tion results from shortages the unadjusted and cyclically unemployment and ridicule. told MPs, was a culture in which hard work get strategy. Brown, reunited with his prime The extent of the fraud was signalled by a force blocked off numerous routes out of the border from Andorra into Spain or France. taxes on tobacco and pledged to “co-operate of skilled workers. NAIRU adjusted budgets remain in BRIAN READING and enterprise were rewarded and living off minister, has called on the nation to follow his sudden surge in the export of British cigarettes Andorra when Operation Montaña got under In Britain and Ireland it can be resold on the with EU customs policies”, but Andorra refuses could fall. deficit by about half a per The writer is a director of the state was viewed as a last resort. Nearly example and stand firm behind New Labour. to Andorra. Two British tobacco companies, way in September. So far they have arrested black market, avoiding the 70 to 80 per cent to make smuggling a penal offence. Until it The chancellor’s attitude cent of GDP. As this is the Lombard Street Research every interest group, rich and poor, powerful If he should come unstuck in the end, at least Imperial Tobacco and Gallaher, have between 420 smugglers from 17 countries and levies paid by legal distributors. One container does, millions of dollars of tax revenue will go and vulnerable, had reason to be grateful. the end is a long way off. them increased exports to the state from 6.6 impounded more than 600 vehicles. Among load of tobacco can be worth up to $1m in up in smoke every day.

18 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 19

CyanMagYelloKey CyanMagYelloKey CyanMagYelloKey CyanMagYelloKey BUSINESS Ready or not? Lisbon is all at sea over Expo 98 PAGE 36 PHARMACEUTICALS ■ Which firm will make the first successful anti-obesity drug? SEARCH FOR A ‘FAT-BLOCKER’ Company Product How it works Problems How soon

American Home Redux Boosts the levels of the feelgood brain messenger serotonin, making patients feel full Withdrawn worldwide in September Likely never to be Products 1997 because of an association available again with heart valve damage BASF (Knoll) Meridia Prolongs the action of the neurotransmitters serotonin and noradrenaline in the brain, making patients Dry mouth, insomnia, constipation Launched in America; feel full for longer and headaches European launch expected later this year. Roche Xenical A lipase inhibitor which stops intestinal enzymes from chomping up large fat molecules into smaller pieces. Soft stools and a question mark In America in May if the The result is that 30 per cent of fat molecules remain too big to be absorbed by the gut and are excreted hangs over an increased risk of FDA says yes, Europe intact by the body breast cancer possibly later this year. SuperGen RF1051 May interfere with the efficiency of the body to use fat, and may have anti-ageing properties Not yet known 2000? Ergo Sciences Bromocriptine Appears to help the brain regulate bodily functions Not yet known 2001? American Home AHP is developing This class of chemicals, called beta-3-adrenergic agonists, appear to switch on brown adipose tissue, Not yet known 2003 at the earliest Products, Pfizer BTA-243, Pfizer, the increasing energy consumption, and helping to burn stored fat Fatof the land exercise pill Amgen leptin Dubbed “the fat controller”, the hormone appears to signal to the brain how much fat is present in body fat Only expected to work in 20 per 2003 Cath Blackledge risk of developing breast cancer. Roche working hard enough to get rid of it. American Home Products. It faces law- stores. SmithKline Beecham and Ligand, and Roche and Millennium are looking for drugs that could mimic cent of the population was betting that Xenical would be one With so With so many overweight adults, the suits which could cost it $2bn because the action of leptin HE search for one of the of its star performers, enjoying peak market for a prescription anti-obesity patients taking its anti-obesity med- holy grails of medicine – sales of Sfr700 million ($470m) a pill that has to be taken every day to ications, Redux and Pondimin, expe- Neurogen and Pfizer NGD-951 Blocks the action of a brain chemical, neuropeptide Y (NPY), which appears to stimulate food intake. Not yet known 2003 Bristol-Myers Squibb and Synaptic Pharmaceuticals are also developing NPY blockers a pill that helps shift excess year. Without the drug, it has forecast many keep the weight off could be worth as rienced some nasty, in some cases flesh the easy way, with- that its earnings stream will be much as $50 billion – a tempting car- fatal, side-effects. The products were Glaxo Wellcome CCKa agonists Mimics a natural hormone, cholecystokinin (CCK) which is released by the stomach wall and which seems to Not yet known 2004 at the earliest T out patients having to reduced by approximately six per cent overweight rot for a drugs company hoping to withdrawn in September last year stop the urge to eat work up a sweat or eat less – has taken over the next five years. boost its bottom line. after 32 per cent of patients developed Alizyme, Glaxo glucagon-like peptide Appears to tell the brain when a person is full Not yet known 2005 another body blow; this time it is the It is estimated that more than 100 adults, the Since the late 1970s, when drugs heart valve abnormalities. Wellcome, Novo (GLP-1) products turn of Swiss giant Roche to feel the million people worldwide are obese firms realised that there could be a Ten companies, including Interneu- Nordisk, Amylin pinch. – defined as having a body mass index way to transform the developed ron Pharmaceuticals, SmithKline Roche’s share price fell by five per (BMI) of more than 30kg/m2. More world’s expanses of excess flesh into Beecham (SB), Medeva and Teva, Eli Lilly, Neurocrine urocortin mimicker Mimics the effect of urocortin, a stress hormone that suppresses appetite Not yet known 2006 market could Biosciences cent on the news that its fatbuster pill, than 30 per cent of Americans are a steady stream of cash, most com- have been named in the lawsuits Xenical, had not cleared the penulti- obese, while Europeans are slightly panies have ploughed research money because of their involvement in Millennium uncoupling protein A heat-generating protein that raises metabolism and burns white adipose tissue Not yet known 2007 mate hurdle to its launch in the gigan- slimmer, with up to 20 per cent of the be worth into the search for the perfect anti-fat manufacturing, marketing and dis- Pharmaceuticals homologue (UCPH) tic and almost competitor-free adult population deemed to be offi- pill. But 20 years later medical treat- tributing the drugs. Lawyers are pre- American prescription market for anti- cially fat. $50bn ments that actually work in trimming dicting that the lawsuits will run for obesity drugs. Advisers to America’s Although an undefined proportion off the fat are thin on the ground. “years and years”, along similar lines Redux were dispensed every week. In The growth of the sector also under- chemical serotonin, which Redux and will determine the future of Xenical drugs approval agency, the Food and of obesity is believed to be of genetic A year ago the fortunes of three to the breast implant litigation which the 16 months it was on the market, lines an important change in the way Nobody was Meridia affect. in America. It has until 14 May to per- Drug Administration (FDA), said they origin, most is a direct companies – American Home Prod- is still facing Dow Corning, which led sales from Redux totalled $500m. the pharmaceutical industry views The discovery of obesity genes in suade the FDA that the three cases of could not reach a decision on whether result of consuming too ucts (AHP), BASF (through its drugs it to seek refuge in Chapter 11 Despite the concerns surrounding healthcare in the 1990s. The last mice – known as the “ob”, “fat” and unexplained breast cancer seen in the to recommend that the pill is launched much fat and not arm, Knoll), and Roche – looked bankruptcy. anti-obesity pills, companies are con- decade has seen a shift towards med- shouting “tubby” genes – is helping drugs firms Xenical treated group, as compared later this year because of Weighty healthy as they each reached the final The fallout from the fat pill fiasco tinuing to plough research funds into icines which are designed to prevent to understand the genetic causes of with two cases in the group receiving concerns that Xeni- problem: the stages in developing new anti-obesity was not just a financial blow for AHP. finding the perfect anti-fat pill – one disease rather than just responding to about the obesity. Mice with mutations in the no treatment, were not due to the obe- cal increases the discovery of products. But unexpected side-effects It also led to the loss of its future that works, has no side-effects and symptoms. Last year the two fastest- ob gene are obese and diabetic; those sity drug. Roche’s argument is that the obesity genes with AHP and Roche’s drugs have pharmaceuticals life partner, Smith- needs to be taken chronically (ie, every growing therapeutic categories for with defects in the tubby gene get fat Xenical group contained twice as in mice is a damaged their Kline Beecham. Merger negotiations day for a lifetime). With only one drugs were preventive treatments – ethics of after reaching sexual maturity. Com- many women in the breast cancer age landmark in the hopes. The between the two companies at the product to have made it to the mar- obesity pills designed to prevent panies, led by biotechnology firm risk group (aged 45 years and over). quest for an worst start of the year are understood to ket so far, the sector remains attrac- people from developing diabetes or pushing pills Amgen, are looking at how such genes The Swiss company says it is con- anti-fat pill hit so have fallen through when they could tive. “The opportunity is big enough cardiovascular problems – and control the action of a hormone, lep- fident that it can explain its case to far is not agree on the scale of the potential for any drugs company which wants cholesterol-lowering medicines which tin, which is produced by fat cells. the FDA and that the drug will be liability facing AHP and how it to develop a product. You can put any can ward off heart attacks. to otherwise Named after the Greek word leptos, approved. Investors are less bullish affected its merger value to SB. number on this market,” says Alexan- At least 40 pharmaceutical firms are meaning slender, and dubbed “the fat and are talking of downgrades of Shockwaves from the world- dra Hauber, an analyst at Salomon believed to be researching anti-obesity healthy controller”, leptin appears to signal between five to seven per cent on the wide withdrawal Smith Barney. pills, including Glaxo Wellcome, to the brain how much fat is present stock. of Redux and The increase in importance of the SmithKline Beecham, Pfizer and in body fat stores. If the message does “We believe it’s unlikely the FDA Pondimin obesity market is a result of the phar- Bristol-Myers Squibb, while Roche individuals not get through because of low or no will grant unconditional approval. It’s effectively maceutical industry’s search to find and AHP are trying to find more effec- levels of leptin, obesity can result. serious news; it is a major product,” flattened the new markets to maintain double-digit tive substitutes. The companies say Giving fat mice leptin makes them says analyst Karl Heinz Koch at SBC burgeoning anti- profits growth. Obesity is a medical that the woes of AHP, and possibly eat less but the situation may prove Dillon Reed. He believes, unlike many obesity market. Prior to the problems, problem in many cases, because car- Roche, do not affect them because different in humans. While obese mice stock watchers, that Roche will be the market for obesity products – rying around excess weight can lead their products work in different ways. are deficient in leptin, obese humans allowed to market the drug but that which consisted of Redux, Pondimin to diabetes and heart problems; but If Roche’s pill Xenical does not make can have high levels of the hormone. it will have to add warning labels to and an amphetamine-like drug, the bulk of people being prescribed it, the next contender for the obesity Scientists now think that a leptin drug the packaging detailing the potential phentermine – was enjoy- Redux did not face a life-threatening market is a medicine codenamed may work in only 20 per cent of the risk of breast cancer. Such a decision ing annual growth of 44 condition. However, before the prob- RF1051, from the American firm population and is in any case at least would clearly slim down the poten- per cent. It is now show- lems encountered with Redux and SuperGen. It is undergoing efficacy five years away. tial market for Xenical. ing negative growth of five Pondimin, nobody was shouting too tests in patients and, if these are suc- The idea of mimicking naturally- Roche’s and AHP’s problems leave per cent. loudly about the ethics of pushing pills cessful, it could be available in two occurring hormones, which tell the Knoll with the only anti-obesity pill The only hope left for the to individuals who were otherwise years. brain when a person is full, or which currently available (in America only, world’s fatties – at least for the next healthy. It is still unclear exactly how quell the urge to eat, are also under at the moment). This looks like an few years – is Knoll’s anti-obesity To the cynical it may look as though RF1051 works, although studies investigation (see table), as is the enviable position, but because the Ger- pill Meridia (sibrutamine). Meridia the obesity market was created with suggest that it may interfere with the theory that some cases of obesity man group has only a small sales and was launched in America at the the appetites of the pharmaceutical efficiency with which the body uses could be caused by a virus. marketing presence in America it beginning of February. In contrast companies in mind rather than those fat and that it may even have anti- Meanwhile, AHP’s financial would, paradoxically, be beneficial for to the media and medical fanfare of the public. The pharmaceutical ageing properties. All the company future in the face of the wave of it to have a competitor, which would that heralded Redux’s launch industry’s answer is that two forces will say is that it is not ampheta- lawsuits is uncertain, as is its help build the marketplace for obe- there nearly a year earlier, Meridia were driving the growth of the mar- mine-like and that it does not ability to remain independent. sity products. Without this extra help, was rolled out in an atmosphere ket: the desire of the western world work on the feelgood brain For Roche, a decision in May and with the concerns surrounding of extreme caution. BASF is to be slim without having to cut back from the FDA obesity products, slower take-up of stressing that it wants the pill to on fat intake and take more exercise, Knoll’s product, Meridia, is expected. be used only by the medically and medical need – the fact that obe- Producing the perfect anti-obesity obese and under strict guidelines, sity leads to health problems such as pill is proving to be problematic for regulated by doctors and clin- diabetes and heart disease. But if glut- the pharmaceutical firms involved in ics. It is a far cry from 12 months tony wasn’t a way of life for the west- the chase. Perhaps this should have ago when approximately ern world, the market would not be been obvious; in the fat business there 230,000 prescriptions for AHP’s quite so attractive. are no quick fixes. NATURE MAGAZINE 23–29 MARCH 1998 ■ THE EUROPEAN 21 20 THE EUROPEAN ■ 23–29 MARCH 1998

CyanMagYelloKey CyanMagYelloKey BUSINESS

LABOUR RELATIONS No siesta for VW workers in Spain

Giles Tremlett production of the Polo, which was due MADRID to be transferred entirely to Landaben, would go to its plant at Bratislava in OLKSWAGEN, the giant Slovakia. German carmaker, likes Having threatened to withdraw to boast that its head- work from Landaben, VW then set the quarters and factory at trade unions in different countries VWolfsburg, Lower Sax- against one another. Germany’s IG ony, occupy more land than Monaco. Metall, it argued, had already The comparisons with a European embraced the company’s “factories mini-state are not out of place. Wolfs- that breathe” concept and had agreed burg employs nearly twice as many to keep Wolfsburg open for 272 days people as live in Monaco and the $70 a year. Landaben, on the other hand, billion annual revenues it makes far worked only 227 days. Perhaps, it sug- Saturday jobs: workers It worked. The negotiators went home through “overtime”. Wolfsburg, the outweigh those generated by a mere gested, IG Metall, the mother union at VW’s Landaben plant and recommended that the factory’s main VW factory in Europe which principality. which enjoys both a place on the VW will work weekends 4,500-strong workforce embrace the churns out 15,000 cars a day, is VW managers can boast even supervisory board and special treat- after pressure from factories-that-breathe concept and already guaranteed production of the greater power than the country ruled ment for its own members, could the carmaker and its start Saturday working. Overtime pay- Golf and the new compact model, the over by Prince Rainier’s Grimaldi explain to the Sp aniards why greater German trade union ments or days off were guaranteed in Lupo. There is no room there for the dynasty, for VW also has a European flexibility, to respond to fluctuations exchange. Polo. empire: a string of a dozen factories in demand, was important. Although IG Metall’s VW leaders Not only have the Spanish unions that stretches from Poland to Portu- VW announced that IG Metall had failed to meet their counterparts from lost the fight against Saturday work- gal. Like all great European emperors, called the Spanish union negotiators Navarre, their attitude to them was ing, they have lost part of the Polo pro- ANTONELLA NUSCA Benchmark: Manfredonia, with 30 per cent unemployment, will be the laboratory for a new model of development in southern Italy as northern companies move in the company’s chairman, Ferdinand and even the personnel chief at Land- clear. “I don’t just see employment duction originally marked down for Piech, knows how to keep the most aben to Wolfsburg in order to knock problems in Spain, I see them all over Landaben. A fifth of the daily pro- unruly elements of his outer empire some sense into their heads: did they VW knows the world and in Europe, especially duction of 1,500 cars has been passed ITALY in line. He follows the old Roman tenet realise the factory was about to lose in eastern Europe,” said Hans-Jürgen over to Bratislava. “That is one wound of divide and rule. nearly $800 million of internal com- how to keep Uhl, IG Metall’s general secretary of that remains open,” comments the This tactic is being used to tame the pany investment as a result of their the European committee of VW. “If company’s Landaben spokesman, company plant at Landaben, in the inflexibility? Did they know that more people there don’t get work, then they José Zubiyaga. northern Spanish province of Navarre, flexible factory hours, combined with the unruly come to Germany. Eastern Europe has But what about IG Metall? One of where workers went on strike last the new investment that would to be stabilised. We can’t show soli- the most spoilt trade unions in Europe Firms test bridge over north-south rift week in an attempt to prevent the fac- accompany production of the Polo, elements of darity with just one production site.” should watch out. Landaben’s work- tory’s working on some Saturdays. would bring up to 1,200 new jobs to IG Metall, in other words, was back- ers may not be keen to work Satur- A company of Volkswagen’s size can their region? ing the company. This was not sur- days but they work longer hours and Chris Endean to build a new factory out of the ruins of country and we get to keep the ‘Made in Italy’ will take two years to open a factory create its own internal free market in The Landaben personnel chief, Car- its empire in prising. IG Metall does not want to cost less than their 45,000 Wolfsburg MANFREDONIA Enichem; glass-maker San Galli will shift south label,” says the Fashion Box spokesman. manufacturing plastic containers for blood labour. If the Landaben factory and los Sucunza, and two union negotia- rock the boat. Its members have one colleagues. The same can be said of with investment totalling L200bn. “We want Local people, however, remain sceptical – samples. Tecin will take 36 months in setting its 4,500 workers did not want to pro- tors were duly dispatched to line: divide of the cushiest labour deals in Europe, VW workers in Portugal, Poland, ITUATED on the wrong side of to export the secret of ‘Made in Italy’ to the and with good reason. Looking out of his up a plastic coatings factory that will cost the duce extra cars, it reasoned, it would Wolfsburg. However, the meeting with allowing them to work just 28.8 hours Slovakia and Hungary. The next time Italy’s north-south divide, the south,” says a spokesman for the Treviso seafront office on to the desolate promenade EU L9.9bn and offer just 30 new opportuni- find a factory and a set of workers that IG Metall was cancelled and company per week. They can increase their basic VW plays divide and rule, it may turn Adriatic port of Manfredonia has clothes producer, Fashion Box. where Manfredonia’s unemployed youth min- ties to Manfredonia’s jobless. did. Without an agreement, it said, management read the riot act instead. and rule wage packet by up to 50 per cent the tables on mighty IG Metall. always struggled to touch the Over the past two decades the Veneto region gle with pensioners, Biagio Azzarone, secre- But there is some evidence of budding entre- Sentrepreneurial heights of its in northeast Italy has become Europe’s rich- tary-general of the local branch of the Cgil preneurship. A local resident has won L1.2bn northern neighbours. est economy due to its unique network of small trade union, finds little reason for optimism. in EU money to set up an ice-cream factory; Its fishing fleet is the second largest in Italy, and medium-sized businesses; companies such “We had to give our membership some hope,” his only previous experience is running the PAYOUTS its port the deepest natural harbour in the as Benetton are merely the shopwindow for he says. “We had our backs against the wall.” ice-cream shop at Villa Manfredonia. south, but no one ever thought of setting up a cluster of related firms which supply each But the rank-and-file is convinced that the Locals accept that state aid has failed but a fish-processing plant. other with services and provide a pool of new project’s strengths contain the seeds of trade union leaders argue that the Enichem Daimler-Benz offers its shareholders money for nothing For years, Manfredonia Enichem was Italy’s skilled labour. “We believe the same multi- its own demise. When special incentives are petrochemicals plant was not just another most profitable petrochemicals plant; but after plier effect will work in Manfredonia,” says a phased out after three years, there is nothing “cathedral in the desert” – one more of the Eric Culp then shareholders get a say in May. The cash, dictators. So why is Daimler doing this now? for similar shareholder carrots are Volkswagen hundreds of dead dolphins were washed up Benetton spokesman, Paolo Sartor. to stop entrepreneurs from shifting their many high-profile but doomed industrial and FRANKFURT from retained earnings made during the The company will gain little financially from and BMW, but both have indicated that they on the beach, the plant, its image ruined, was For once, rhetoric is born not of political horizons to eastern Europe. Take away the infrastructural projects that litter the south. 1980s, is to be replenished through a rights the move. It could have held the nearly DM3bn are not interested. One of VW’s main share- closed down. necessity but economic logic. As an industrial labour-cost advantages, critics argue, and the When the plant fell victim to Rome’s decision HE Daimler-Benz chairman, Jür- issue, probably in June or July. Deutsche Bank, in tax credits in-house, or never even men- holders, Lower Saxony, probably does not With unemployment in the area running at development zone, however, Manfredonia is north’s sudden enthusiasm for the south will to cut back state investment in capital-inten- gen Schrempp, a man who con- which holds 22 per cent of Daimler shares, tioned the idea of a payout. The former chair- want to forfeit the tax income; BMW may need around 30 per cent, Annibale Nicastro, pres- subject to a special social contract between wither and die. sive industries, Manfredonia was actually stantly sounds the clarion call of and Kuwait, which has 13 per cent, have both man, Edzard Reuter, and the rest of the its retained earnings for the Rolls-Royce pur- ident of the local industrial union, has finally government, trade unions and employers. To There is a precedent. In the mid-1980s gov- L70bn in the black. shareholder value, is putting some indicated that they will support the float. management brushed off a similar plan in chase. Time is running out for any other com- lost patience. In an unprecedented agreement, attract “foreign” firms from the north, the gov- ernment hand-outs underwrote a citric acid Since its closure, however, three petro- Tmore substance behind the air. The Prospective Daimler investors can still buy 1994 because they were unconvinced that pany that wants to take advantage of the Nicastro has persuaded northern entre- ernment is offering fiscal incentives that factory in nearby Campania. The factory chemical related firms, suppliers to Enichem, staid giant of German manufacturing will give in: the DM20 payout is set for between 27 May investors would subscribe to the subsequent present tax levels. The tax rate for retained preneurs from Treviso and Vicenza, including include tax breaks and two-thirds of start-up produced at a profit. But when state aid dried have also closed down. Little wonder, then, its stockholders a shiny present this year: and 15 June, and analysts say shares should rights issue. Shareholders responded with a earnings is currently 50 per cent but it will clothes manufacturing giant Benetton, to open costs (covered by L300bn in European Union up, so did the factory. that trade union leaders are deeply sceptical DM20 ($11) for every share held. be bought a few days in advance of the early firestorm of criticism, catalysed by their dis- drop to 45 per cent at the end of the year. This factories in the southern town. and state development funds). One trade unionist openly suggests some that any Manfredonians will be prepared to Not only do investors get cash in hand but date, when the company will hand out its stan- gust with Reuter’s wide-ranging diversifica- means the savings from a payout, taxed at 30 “Manfredonia is a laboratory to test a new Most significantly, trade unions have agreed local businessmen may take their incentives take the risks of a northern entrepreneur. German taxpayers also receive a tax credit of dard dividend of DM1.60 plus the tax credit. tion scheme. per cent, will shrink by five per cent. model of southern development,” says to break with the national incomes policy; and run long before market forces intervene. As if to confirm local pessimism, most of the DM8.57 per share. Combined with the stan- “This is one of the most investor-friendly It seems clear that current chairman The victim here is the ministry of finance. Nicastro. “Can southerners drop dependence companies setting up in Manfredonia will save Certainly, the list of projects which have won new factories will set up shop on the grounds dard 1997 dividend and the corresponding moves to take place in Germany in the past Schrempp is trying to improve the company’s According to estimates, Bonn could lose up to on regional aid and put their faith in the kind 30 per cent on labour costs through short-term EU funds suggests local businessmen are still of the old Enichem plant, taking advantage credit, shareholders in Germany earn a total 10 years,” said Klaus-Jürgen Melzner, an auto- relationship with investors and further dis- DM700m once all shareholders file their tax of private enterprise that has flourished in the contracts and lower wages. putting the short-term gains of public con- of its excellent communications links and the of DM30.86 a share. For non-Germans, the mobiles analyst at Deutsche Bank research. tance himself from the policies of his auto- returns, especially since between 35 and 40 north?” Over the next three years more than For the companies based in the Veneto, tracts ahead of long-term market rewards. 500 metre-long quay stretching out into the payout is DM21.60. Melzner notes that it follows similar payouts cratic predecessor. Shareholder value is the per cent of Daimler’s capital is held outside 30 entrepreneurs will answer Nicastro’s ques- where industrialists are seeking to move out Unlike Benetton and Fashion Box, few south- Adriatic. Daimler is expected to rubber-stamp the by Allianz and others earlier in the decade and current buzzword in German equities; the country. While Germany is having prob- tion and, therefore, the dilemma that has faced to escape high taxes and a shortage of labour, ern entrepreneurs appear in a great hurry to “No one can understand,” says Azzarone, pay out/take back plan, which totals DM7.4 adds that appeasing shareholders has taken Schrempp knows that investors are closely lems bringing its numbers into line for cur- the south since the Second World War. it is the perfect deal. “Production costs are the start production. “how a bright new world will somehow billion in cash and DM2.9bn in tax credits, at priority in Germany, where investor wishes in monitoring management. rency convergence, some three-quarters of a Benetton has pledged L30 billion ($1.68bn) same in Manfredonia as any east European MGS, which has won L11.9bn in EU funds, emerge from the ashes of our past.” its supervisory board meeting in April, and the past were often neglected by management According to analysts, two prime prospects billion marks are flying out the window.

22 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 23

CyanMagYelloKey CyanMagYelloKey BUSINESS

FINANCIAL DATA Long view brings top spot into reach ANDY BAKER Nicholas Moss the business in 1981 to Exco, a British money broking firm. In 1987 Dow Jones acquired an RIDGE Information Systems initial stake and over time bought the rest of the wants to be number one. Its acqui- shares in Telerate. sition of Dow Jones Markets The problem is that the contract survives the moves Bridge up from fourth acquisition of Dow Jones’ unit by another party. B place to second in the financial If Bridge were to combine its operations from data provision sector. But overtaking the start it would be forced to pay Cantor Fitz- Bloomberg isn’t enough for Bridge; before the gerald a royalty for its 75,000 terminals on top Dow Jones deal is even finalised, Bridge is of Telerate’s 85,000. The remaining eight years already talking about challenging Reuters for of the contract works out at $650 million, an market leadership. expensive price to pay for data that most of Bridge, which began life as the data unit of Bridge’s clients don’t actually want. an American institutional brokerage in Jessop, a 55-year-old executive who took the St Louis, Missouri a quarter of a century ago, top role for Bridge in Europe last July (“I was has agreed to pay Dow Jones $510 million in plucked from the obscurity of semi-retirement cash and stock for its unprofitable financial otherwise known as consultancy”), is confident information unit, Dow Jones Markets. It is of seeing the benefits of the deal. He is also able part of a strategy that is summed up bluntly to take the philosophical view, probably born of by John Jessop, Bridge’s managing director his consultancy work in disaster recovery and in Europe: “Our aim is to be the number one putting in back-up systems for trading rooms. vendor.” He says he has Reuters in his sights. “You don’t pay half a billion dollars for a business But even with Bridge and Telerate’s combined and see the economies of scale and critical mass revenues of $1.1 billion he has a long way to No stopping: John Jessop, Bridge’s European MD, says he has Reuters in his sights created in the first 90 days,” he says. go before catching up with Reuters, which last Eventually, he says, the two services will be week reported 1997 revenues of $4.8bn. on inside, how it functions, who does what. Jessop is unfazed by Telerate’s unspectac- harmonised and offered from one terminal. Bridge’s more immediate task is to absorb We will take a few months to examine the ular recent history and dismisses the sugges- When that happens, Bridge’s strengths in cov- Dow Jones Markets and exploit the synergies situation,” he says . tion that Bridge has bought a useless asset. ering equities will combine neatly with Telerate’s of the two operations. Bridge has expanded Jessop claims that there are advantages to “It’s still a company with $750m a year in rev- competence in fixed income capital markets to through acquisition successfully before: it resurrecting the Telerate brand name (by enues,” he says. “If it’s a dog it’s a very large rival Bloomberg’s popular offering. bought Knight Ridder Financial, the foreign which Dow Jones Markets was known until dog.” “It’s a good fit,” says Jessop. Geographically exchange and news information unit, for last year). However, one of the reasons Dow More convincing as an argument for keep- the marriage also makes sense. Bridge has a good $275m in 1996. Jones dropped the Telerate name was that it ing the two operations separate may be the market share in the US market, especially in equi- However, Dow Jones Markets is a very dif- had become synonymous with poor service. existence of a contract with Cantor Fitzger- ties, while Telerate has been strong in capital ferent proposition. Instead of combining both Telerate was used by Dow Jones as a cash ald, the American fixed income inter-dealer markets in Asia and Europe. operations’ data on a single database and offer- cow during the 1990s. But Dow Jones’s fail- which feeds Telerate its US Treasury bond Jessop’s CV includes a lengthy period work- ing it via a single network, Bridge will initially ure to invest in new technology left the com- prices. The contract involves the payment of ing at Dow Jones as chief operating officer in operate its purchase as a distinct unit with its pany lagging behind its rivals. A planned a royalty fee to Cantor Fitzgerald according the US. He left in 1990, five months after it had own database and delivery system. $650m cash injection for technological invest- to the number of terminals in use. bought all of Telerate; he is seven months into That appears to undermine the raison d’etre ment was too little, too late. Instead Dow Jones The 1990 deal with Cantor Fitzgerald was his £150,000 ($247,000) a year (plus bonuses) of the deal. But Jessop says there is a case for will shed its initial $1.6bn purchase with a based more on past relationships than busi- post at Bridge. “After moving myself and family keeping the operations separate, at least in $923m write-down charge in the fourth ness acumen. Cantor Fitzgerald once owned back from New York to London I find Bridge has the short term. “We don’t know what’s going quarter. the majority of the stock in Telerate. It sold acquired my alma mater,” he says with the boyish smile that breaks frequently across his face. He highlights what will be the eventual advan- tage of the company’s offering. Whereas Bloomberg provides no options with its service – a case of pay your $1,200 a month for every- thing on the system, take it or leave it – Jessop says Bridge will provide whatever information a client wants and charge accordingly. “We will give the client greater choice,” he says. Jessop’s challenge will be to expand the busi- ness. Jessop, who also worked at Reuters for 18 years, says catching Reuters will take much less time than in most industries, partly because of the rapid pace of technological change and the impact of the Internet. Reuters has its own problems at the moment. It is under criminal investigation in America for allegedly stealing data from Bloomberg, a charge WARSAW VOICE FILM TO STRIP the company denies. Earlier this month a Swiss plaintiff added to Reuters’ woes by filing fraud and copyright infringement charges in an Amer- ican court, claims which Reuters says have no basis. Jessop says he wants to include corporate cov- erage in the news feeds to dealers and traders to support Bridge’s equity price information. He will have to move fast. Dow Jones, freed of its exclusivity ties to Telerate, will be aggressively marketing its own news service and expects to triple the business in Europe this year. Telerate has been in turmoil for a year amid rumours that it would be sold. Jessop concedes that there will be staff casualties but says it is in Bridge’s interests to let things settle down. Then Jessop will turn his attention to putting Bridge in the number one spot.

24 THE EUROPEAN ■ 23–29 MARCH 1998

CyanMagYelloKey BUSINESS

WEB MEDIA COMPUTERS Bulk buys Online but off target and tax Simon Reeve cent of the staff on Wired Digital, while Today’s website saw its ad revenue breaks Microsoft has dismissed 40 staff at increase 275 per cent in 1997, to $10.9 HE online media industry Sidewalk, the local information sites million – but costs are rising too. For- – newspapers and maga- it established in competition with local rester Research estimates that the price boost PCs zines which rushed to pub- newspapers – more than a quarter of for a typical website has risen by more Nicholas Moss lish electronic editions on its entire staff. than 300 per cent in the past two years Tthe Internet – is suffering Salon, an online magazine, has to more than $3m. NDERS RONN redundancies, cutbacks and closures decided to start syndicating its online According to Bill Bass, an analyst stands behind as firms realise that they are losing copy to print newspapers and maga- with Forrester Research, only the his wife, Hilda, huge sums of money. zines through United Feature Syndi- larger media companies can afford to as she taps at the Lower than expected advertising cate, largely because of low ad absorb the losses incurred by their Akeyboard of the revenues are causing serious problems revenue. Many believe that Microsoft online media divisions. “There is not new personal computer set up for the industry, with advertisers has decided to start charging sub- enough advertising to support all in their home in Berga, remaining unconvinced of the bene- scribers for its online publication, these sites unless, like the New York Sweden. They watch excitedly fits of the Internet. Revenue from Slate, because Microsoft boss Bill Gates Times, they have other sources of as the e-mail message Hilda advertising in the third quarter of 1997 wants to see if the magazine can stand income,” he said. is sending to her family in was just $170 million, according to on its own feet rather than rely on the Most of the current online cutbacks Greenland disappears from analysts Simba Information. Although support of the parent company. are happening in American-based the screen. this figure is a healthy increase on the The biggest setback for the online firms, but that is largely because the Ronn, a foreman with previous year, Net advertising will industry comes with the closure of the European online media industry is still Scania, the Swedish truck need to rise dramatically if it is to reach New Century Network, an organisa- in its infancy compared with the Amer- manufacturer, was able to buy the $6 billion which enthusiasts in tion established by a consortium ican market; few doubt that low the PC through a bulk pur- 1996 predicted could be earned from including the Washington Post, New advertising revenues will soon have chase scheme organised by Internet ads by 2000. York Times and the Hearst Corpora- an impact in Europe. the country’s largest labour Publishers raced to set up sites on tion to display the best stories from A handful of Internet sites domi- union, Lands Organisationen the Internet for fear of missing out on more than 140 newspapers on a sin- nate the market for advertising, with Net losses: Time Warner’s is a channel where you want to do (LO). He joins 50,000 LO blue- an exciting new medium. Early enthu- gle website. The closure left 60 work- 18 sites, including Yahoo!, Excite and Pathfinder.com (top) is something that you’ve already decided collar members, as well as a siasts for online media gravely pre- ers without jobs and will cost the CNN, taking 55 per cent of the busi- thought to be losing at to do,” he says. “So print is the right multitude of consumers in dicted the imminent death of print partners an estimated $30m. ness. But even these sites are not nec- least $5m a year; Slate way to promote brand image and several European countries, and assured their investors that money Other big media groups are also los- essarily earning huge sums of money; (above) has introduced awareness.” who are benefiting from tax would soon flow in from advertising ing money in cyberspace. According despite many claims to the contrary, subscriptions in an Winston Fletcher, the chairman of breaks which have made it revenue and subscribers keen to to a survey by the Editor & Publisher many Net ads are the result of “con- attempt to pay its way Delaney Fletcher Bozell, a British possible for their employers receive their news through a computer magazine, the New York Times, Tribune tra deals”, where two firms agree to advertising agency, was one of the first to supply them with cheap terminal. and Knight-Ridder all lost approxi- advertise each other’s products, with to sound a note of caution about PCs. Such deals have also The reality has been less exciting mately $60 million on their online no money changing hands. online advertising. Eighteen months raised the prospect that Euro- and the early confidence of the online operations last year. Time Warner’s Pat McGovern, the chairman of ago he warned that the Internet does pean consumers could finally media industry is waning after a spate Pathfinder site, which includes CNN, International Data Group, one of the not provide the inherent qualities catch up with Americans in of closures and redundancies. The Time magazine and Sports Illustrated, world’s largest suppliers of data on needed by advertisers and will never the PC ownership stakes. electronic magazines Charged and is believed to be losing between $5m information technology, has reserva- be a significant advertising medium Just four months after its Word have closed, despite praise being and $10m a year, according to a report tions about Net ads. “We think that for the great majority of consumer launch, the LO deal with heaped on the latter by the computer in the New York Times. advertising designed to create brand goods and services. Unfortunately for American PC manufacturer trade press for being original and inno- The figures are moving in the right awareness or corporate image is not the online media industry, he may well Hewlett Packard had vative. Wired Ventures has cut 20 per direction for some publishers: USA going to work on the web, because it have been right. accounted for more than 30 per cent of all home PCs sold in Sweden last year. surveyed, 68 per cent viewed the approximately three years, by which Because of high sales taxes, Internet’s slow speeds as a “significant time an Internet 2 connection should home PCs in western Europe limitation” hindering the growth of allow business executives in different cost an average $2,500 – online trading and of the network locations to hold a sophisticated video- $1,000 more than in the US. itself. conference and use the Internet to talk The result: 40 per cent of And now, Internet 2 Initially the Internet 2 research will and “pass” documents between the households have PCs in Amer- lead to the establishment of high- group. ica compared with 20 per cent speed links between American uni- Internet 2 will also pave the way for in Europe. versities involved in UCAID, each of video on demand schemes, in which In the Netherlands, Bel- 100 times faster (and slightly more expensive) which is paying at least $2.5 million users will be able to watch movies in gium, Norway and Denmark, to be involved in development and for real time on their computer screens, as well as elsewhere in VEN as Europe struggles to way and looks likely to harness the an Internet 2 connection. According and for Net television, which will Sweden, tax breaks mean embrace the Internet rev- financial benefits while Europe misses to James Duderstadt, president emer- enable someone in, say, Milan to employers can provide their olution and realise the full out. itus and university professor of sci- watch Australian television through workforce with PCs up to 60 benefits of online trading Van Houweling likens the Internet ence and engineering at the University the Internet. per cent cheaper. Dutch bank WORLD NEWS on CNN International. E and commerce, American now to a “single-lane highway with of Michigan, Internet 2 will give rise Ever since American ingenuity gave ING Barings, Danish bank Uni- Every hour, on the hour, scientists are quietly working on a new unlimited access points and no traf- to “entirely new kinds of education birth to the Internet, Europe has been bank and oil giant Statoil in project to speed up cyberspace: fic control”. Internet 2 will use much and research”. struggling to catch up. It will be Amer- Norway are among the com- 30 minutes of up-to-the-minute news from around the world. Internet 2. of the existing Internet system but add Scientists in different countries ica which develops Internet 2 as the panies involved. In Sweden, The technology under development “high-speed toll lanes”, where users could, for instance, discuss an opera- successor to the current network and ABB and Volvo have plans If you want to keep up, keep watching. is designed to increase the speed of will be able to pay a premium to move tion or a computer simulation and talk reaps the rewards. under way. the Internet by a factor of at least 100 data faster. Internet 2 users will be about on-screen changes as they hap- But within 10 years even Internet But if Europe is to match the and is being led by Douglas Van Executives able to give priority to certain mes- pen. The technology has already been 2 will not be fast enough to handle numbers in the US, con- Houweling, chief executive and pres- sages, separating them from, for proved to work: scientists have trans- business’s data transfer needs; some sumers in the big three west ident of the University Corporation example, normal e-mail messages, mitted a three-dimensional brain scientists are already discussing the European markets need to be for Advanced Internet Development in a video which often languish for hours in a image from the University of Pitts- next stage of development. on board. For that to happen, (UCAID), who is one of the original recipient’s e-mail basket. burgh to Washington DC, while a If Europe really wants to take the PC manufacturers will need creators of the current Internet. UCAID conference There is clearly a need for more physician in Chicago has sent a video lead on the development of the infor- to be successful in their lob- is an umbrella organisation for more speed on the Net. The results of a sur- model of the inner ear. Transmitting mation superhighway, perhaps Euro- bying efforts to alter those than 120 American universities and vey by Ovum, a London-based such huge amounts of data in real time pean academics and businesses should countries’ tax environments. could ‘pass’ http://europe.cnn.com 25 firms, including IBM, MCI and research firm, are to be released this is almost impossible on the current come together now to start work on Governments in Britain, Ger- On Cable and Satellite 3Com, all working to build Internet week. Of the 800 European corporate Internet. Internet 3. many and France should pay 2. Once again, America is leading the round papers and residential Internet users Commercial benefits will be seen in SIMON REEVE attention.

26 THE EUROPEAN ■ 23–29 MARCH 1998 23–29 MARCH 1998 ■ THE EUROPEAN 27

CyanMagYelloKey CyanMagYelloKey EUROPEAN ESSAY SEVEN DAYS VIKTOR KOROTAYEV / REUTERS GERMANY FROM THE ATLANTIC TO THE URALS The curse of the Kremlin The radical recipe for Bonn ‘cold’ descends on Boris Hans-Olaf Henkel Inflation fell to the lowest level for decades and on neither on past wage deals nor on desired aims but THE CONTINUING INCAPACITY of Boris Yeltsin Magne Bondevik to proceed with a visit to PRESIDENT OF THE FEDERATION the labour market there are the first signs of relief. on international competition. Wage agreements – the least fit world leader since the latter Moscow. That visit has now been cancelled. OF GERMAN INDUSTRIES (BDI) Britain, unlike most other European countries, should take into account the competitive situation days of François Mitterrand – once more high- Norway said that the five Russians had tried has seen unemployment fall since 1985 from 11 of enterprises themselves and the labour market lights the key role illness has played in Russ- to recruit Norwegian politicians to provide ERMANY’s continuing high unemploy- per cent to five per cent. At the same time, the num- generally. ian/Soviet politics this century. information on “bilateral issues”. Relations ment is a heavy burden for the country ber of people in work has increased to twice the In principle, the system of regionally defined Lenin was dogged by ill-health for the last between the countries had already deterio- as a whole, as well as those primarily rate of the rest of Europe. The following measures wage agreements should be maintained, but we six years of his life and died before he could rated following the arrest, on treason charges, affected. The five million mark hangs have led to stronger economic growth and, together need to regulate industrial relations and take into complete his revolutionary mayhem; Stalin of Captain Alexander Nikitin. A retired Gover the labour market like the sword with moderate pay increases, to a successful employ- account the needs of individual enterprises. The was mentally unbalanced towards the end Russian naval captain, he is alleged to have of Damocles. But with 18 million jobless people ment policy: broad deregulation and privatisation, German system of wage agreements has not been and succumbed, it is thought, to a brain haem- disclosed alarming details about radioactive throughout Europe, unemployment is not just Ger- tax reforms and extensive changes in the labour sufficiently flexible to deal with different economic orrhage. Nikita Khrushchev, a one-time shep- contamination from decaying Russian sub- many’s biggest economic and social problem. The market. The long-lasting restraint in wage demands situations in trades, regions and companies. We herd boy, had the constitution of an ox, but marines in the Murmansk area to a Norwe- recent protests in France and Germany prove that would not have been possible without a change need innovative individual models. his successor, Leonid Brezhnev, inhabited a gian environmental group, Bellona. it is the biggest challenge facing Europe. within the institutions in the labour market. 6 The state. We must also rigorously reduce the kind of demi-monde from 1971 to 1982, sus- On 24 February Nikitin was charged Although ever more businesses are taking a global The power of the unions has been curbed and responsibilities and expenses of the state. This can tained only by his doctors. Yuri Andropov for the sixth time by the Russian Federal perspective, politics and society are sticking to old wage negotiations decentralised. Only one-quarter be achieved by privatising the responsibilities and lasted a mere 15 months in office and Kon- Security Service (FSB), the successor to Dance away the heartache: Boris Yeltsin does a turn on stage in better days patterns of thoughts and action. Yet businesses learn of contracts today involve more than one employer. wealth of the national exchequer, state and local stantin Chernenko, crippled by emphysema, the KGB. Nikitin had already spent 10 from the best practices of their competitors. They Income tax reforms have made the tax system attrac- governments and by liberalising the most impor- joined him on the funeral route not long after. months in prison before being released as PLANS TO INTRODUCE A 35-HOUR working Petrosyan was forced out of office when he use benchmarks. It is a policy German politicians tive and encouraged growth. Union rates and stan- tant infrastructure markets, applying simpler plan- For a time, Mikhail Gorbachev seemed the the result of international pressure. week are causing even more problems in Italy tried to negotiate a deal that would have

should learn from. dard obligations in pay agreements are, in ning and licensing procedures, reforming public epitome of rude good health, but he declined ◆◆◆ than France. Romano Prodi, the Italian prime eased relations with Azerbaijan over the dis- The Netherlands, Sweden and Britain have international terms, quite low. administration and reducing the cost of bureau- rapidly after the attempted coup in 1991 and minister, refused last week to consider objec- puted Armenian enclave of Nagorno- proved that this can have positive effects on the cracy, particularly for middle-class enterprises. lacked the strength to deal with the opposi- PHILIPS CAME CLOSE but in the end it could tions to the scheme – designed to reduce Karabakh. The election, however, produced labour market. We can also learn from overseas AN EIGHT-POINT PLAN PRESS ACTION 7 East Germany. Economic reconstruction tion provided by his long-time rival, Yeltsin. not do it. Instead of moving its headquarters unemployment by spreading jobs thinner – no clear winner. A second-round vote has partners, particularly the United States. Germany, Germany cannot avoid implementing lasting Hans-Olaf Henkel: in eastern Germany must be accelerated and the Since then, the once-robust Yeltsin has gone from Eindhoven to London, it settled for Ams- raised by the employers’ federation, Con- been set for 30 March. too, sets benchmarks for other countries. Many reforms. Only when the conditions for investment ‘Only market-oriented industrial base of the region strengthened. A fun- steadily downhill. He has been unable to work terdam – still Dutch, but plausibly a front- findustria. He promised to introduce the nec- In last week’s opening round, Robert strengths of Standort Deutschland (Germany as a are right can enterprises create profitable jobs. Why businesses can damental change of wage policy is needed as well for at least six of the past 20 months. Last rank city. Now the question is: will Ericsson, essary legislation in parliament before the Kocharyan, the outgoing prime minister, won manufacturing base) are of a qualitative nature. are too few jobs being created? Because businesses create lasting jobs’ as continued support for investment and personal week, having not been seen in public for six the Stockholm-based telecoms group, go the end of the month, possibly this Thursday. 38.2 per cent of votes, compared with 30.62 Political and social stability and a sound legal sys- are burdened with excessively high costs and taxes. capital; and a generally more attractive tax policy. days, it was announced that he would not extra mile and set up shop in Britain? Giorgio Fossa, the head of Confindustria, per cent for his ex-communist main rival, tem make Germany attractive to investors. At the beginning of 1997 the Bundesverband der If the aim in the new east German states is to develop return to his desk until he had shaken off a In Ericsson’s case, tax, not metropolitan was outraged. Earlier, he had walked out of Karen Demirchyan. Independent European Our enterprises lead the world in ensuring that Deutschen Industrie (BDI) suggested an extensive a self-supporting economy, then the existing entre- mysterious respiratory infection. envy, is the crux of the problem. Sweden levies talks with the centre-left government, claim- observers witnessed many “significant vio- environmental protection practices are integrated plan to kick-start the labour market and generate preneurial environment needs to be stabilised and The hard-drinking Russian leader seems one of the highest income tax rates in the ing that a shorter working week could shat- lations” but vowed closer supervision of next into industrial management and we are masters in dynamic new growth in the medium term. In eight developed further. That does not mean businesses determined to continue as a lame duck. world and, according to one senior execu- ter the industrial peace Italy has enjoyed since week’s run-off. Azerbaijan, which tried unsuc- the careful use of scarce resources. Our efficient use areas, we suggested concrete steps to improve the should be artificially sustained nor that perpetual The only issues are who runs the country tive, this has made it hard to recruit top-flight signing a landmark wages policy deal in 1993. cessfully to annex Nagorno-Karabakh in 1992, of energy is demonstrated in the dramatic decrease manufacturing base. These steps are crucial if Ger- subsidies should be provided for unprofitable jobs. in his absence and who will succeed him. managers. The fact is, Prodi had little choice in the and Turkey, whose control of Armenian ter- in CO2 emissions. German enterprises are con- many is to improve its competitiveness and secure It means that a suitable framework should be Alexander Lebed, the charismatic former A study has come up with a beguiling alter- matter. Rifondazione Comunista, a bale- ritory led to bloody wars in the 19th century, tributing significantly to global climate protection. and create jobs. created for business. general sacked by Yeltsin as his security native: London. Not only is the UK’s top rate fully named collection of left-wing parlia- are among the interested parties.

However, the weaknesses of Standort Deutschland 1 Flexibility. Enterprises need to develop the 8 EMU. We need to move on with preparations chief in 1996, is one obvious contender, of income tax a mere 40 per cent; London is mentary extremists, exacted the premier’s ◆◆◆ need to be rigorously examined. Courageous polit- ability to be more innovative. The rapid change of for economic and monetary union. EMU and the but other hopefuls are lining up – assum- the centre of Europe’s capital and equity mar- support for a 35-hour week in return for ical and economic reforms can yield rich rewards. the global market leaves no time to rest. To secure introduction of a common currency are important ing, that is, their health holds out. kets and a global communications hub. It is sustaining him in power last autumn. If ONE OF EUROPE’S BEST KNOWN liberal politi-

and extend international competitiveness remains if we are to catch up in the competitive global mar- ◆◆◆ being stressed in Stockholm that no decision the bill goes, they go; if they go, he goes. cians, Uffe Ellemann-Jensen, took defeat on LEARNING BY EXAMPLE a daily challenge. Not only do quality standards ket for growth and jobs. An end to exchange-rate has been taken. Such is economic dialogue in Italy today. the chin last week when he resigned as leader NO SIGN OF AN EARLY SPRING THAW America sets the benchmark for the creation of need to be at an international level but also new fluctuations and the cost of currency exchanges in rela- Everyone in Ericsson is aware of the dam- ◆◆◆ of Denmark’s Liberal Party following defeat jobs. It is impressive that the biggest economy in opportunities in the dynamic global market need means that significant barriers to growth and tions between Russia and Norway. Russia last age a relocation of this magnitude could do in the country’s general election. the world has hauled itself out of the decline of the to be explored more efficiently. Much needs to be employment are abolished. It is the competence week expelled two Norwegian diplomats in to Sweden’s industrial self-confidence at a ARMENIA, LIKE BOSNIA, sits astride one of A keen football supporter and one-time 1970s and developed an employment policy with- improved in the areas of service and customer rela- and abilities of investors and workers that will be retaliation for Oslo’s declaring five Russian difficult time. Yet the UK is Ericsson’s third- the world’s ethnic and religious fault lines. president of the European Liberal Party, out equal. The high number of skilled jobs in the tions. decisive in future. diplomats personae non gratae for spying. biggest market and the “home” market Its most enduring difficulty, Bosnian-style, is Ellemann-Jensen had expected to be swept service sector proves that a market-oriented eco- 2 Qualifications. We need to improve qualifi- Norway, the only Nato country that borders accounts for just six per cent of sales, so the the integration of the national territory to power but had to watch as Prime Min- nomic policy, an extensively deregulated labour cations at schools and universities. Germany is a SLIMMING THE STATE Russia, had hoped that the Russians would unthinkable is being thought at the highest against violent objections from neighbour- ister Poul Nyrup Rasmussen’s centre-left market and flexible wage expectations can turn the country of high costs, high environmental and social We can move only if everybody accepts not respond, allowing Prime Minister Khell level. ing states. Last month, President Levon Ter- coalition hung on by one seat. job market around. The main factors guaranteeing standards and high income demands. Germany can one basic condition: that only market-oriented busi- success are: decentralised wage negotiations tai- maintain its position among international com- nesses create profitable and lasting jobs. If we are lored to individual enterprises; differentials in the petitors only by exploiting to the full its potential to improve conditions for more investment, then wage structure; mobility between jobs and resi- in research and technology. this needs to be the focus of attention. First and PRESSWATCH ON: THE MIDDLE EAST dence; simpler dismissal practices; and a benefits 3 Tax. It is absolutely essential to lower the tax foremost, taxes affecting businesses need to be cut STEVE BELL system that prevents abuse. burden on German businesses to a level that bears and the economy freed from weighty social costs. Netanyahu and excluded any European The Netherlands has shown how to convert fun- comparison with other countries. Standort Deutsch- Everyone knows the recipe: a leaner state leads La Repubblica role in the peace process, it is neces- Die Welt damental flexibility in work relations into compet- land needs to become more attractive to national to lower costs and lower taxes. Privatisation leads WITH a simple stroll in the rain in east sary to take a step back. The European Union finds itself in an itive advantage and job gains. Core elements of the and foreign investors. Germany needs a tax reform to better performance and lower costs. Liberalisa- Jerusalem, Europe has decided to chal- With the Six Day War in 1967 Israel insoluble dilemma. On the one hand, new Dutch economic policy are wage restraint and agreement that creates jobs and encourages domes- tion encourages competition and less bureaucracy. lenge Israel. Britain’s foreign secre- conquered the eastern part of it pumped large sums of money into significant tax breaks for employees and enterprises, tic and foreign investment. Self-help relieves the burden of high social costs. tary, Robin Cook, whose country holds Jerusalem, but the international com- the occupied territories between 1994 as well as fundamental restructuring of labour rela- Tax reform is also good for the state, because it Together, these measures create wealth and jobs. the EU presidency, yesterday visited munity has never recognised the and 1998; on the other, it is Israel’s tions. Today, the Netherlands is the champion in leads to more growth, more jobs and higher tax Within the Amsterdam Treaty, European Union Har Homa, the Arab district of the holy annexation. Negotiations with the largest trading partner. But besides making working time more flexible. About one- income. Tax burdens play an important role in the Britain, members commit themselves to fighting unem- city where one year ago the Jewish Palestinians started in 1993, but they this ideal basis for political influence, third of employees work on part-time contracts; competition for global mobile investment capital. ployment together. German industry never was a state started to build 6,000 homes postponed the question of Jerusalem Europe has not managed to mark a almost 10 per cent are temping. This clearly relieves Examples are countries such as Britain, Austria and Austria and friend of the social chapter; the problem of unem- destined for Israelis. to the final settlement: united and indi- clear position for itself in the conflict. the strain on the labour market. With an unem- Sweden which have bravely cut tax burdens for ployment needs to be seen within a broader The mere idea that a European visible as capital of Israel, or divided Not that its representatives are not ployment rate of six per cent, the Netherlands is in business. framework. Successful labour market policies of leader should want to see such a touch- more or less in half, becoming the cap- capable. The problem is that its medi- a much better position than Germany. 4 Welfare. We must cut spending on a sector Sweden some EU countries such as Britain and the Nether- stone of discontent had already deeply ital of a future Palestinian state as well. ators are not accepted by both sides Sweden has proved that it is possible to reform which currently swallows more than one-third of lands show that the answer is not a broadening of irritated Benjamin Netanyahu; if that The homes built at Har Homa sum at the table. It is a known fact that the a bloated welfare state fundamentally. It had been our gross national product. A major part of paying bravely cut active labour market policy. Rather, institutional were not enough, Cook met a couple up the policy of Netanyahu, according Netanyahu government takes advice constantly expanded but this course was reversed for this social burden is loaded on to the costs of reforms, the breakdown of old labour market struc- of Palestinian leaders at Har Homa, to which Jerusalem is wholly Israeli – if at all – only from the United States. in the early 1990s. Several core elements radically jobs. Demographic trends also demand that changes tures and a modest and rational wage policy bring violating an explicit Israeli ban and and the 200,000 Palestinians who live Because the situation seems so changed the system: introducing unpaid days of be made. We urgently have to introduce market the tax success. implicitly recognising Yasser Arafat’s there must choose between exile or muddled, it is even more important also get involved, the danger arises future of the region: the economic sick leave in health and job insurance, less paid elements into our social security systems. It is the The only way to meet the challenges of growing authority over the contested quarter. the life of foreigners. that the triangular negotiations that the two parties in the dispute could recovery of the occupied territories. leave, raising the age of retirement, relaxing pro- only way to lower the additional labour costs that burden on worldwide competition for investment and for jobs To understand the furious reaction That’s the reason Cook has started between the US, Israel and Palestini- play the two mediators off against each To demand a place at the negotiating tection against dismissal and reducing unemploy- destroy jobs. Real reform is needed, not just tinkering is by concentrating on more realistic market prac- of the Israeli government, which can- this war between Israel and the Euro- ans remain in progress. At least they other. Europe should concentrate on table or produce its own peace plan ment benefits. Consequently, Swedish labour costs at the edges or merely shifting costs around. tice and by a readiness to change the points on the celled a dinner between Cook and pean Union. are used to each other. Should the EU only one aspect to help ensure the leads straight to yet another disaster. – once the highest in Europe – dropped significantly. 5 The wage round. Negotiations should be based business tracks our economic train is following.

28 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 29

CyanMagYelloKey CyanMagYelloKey SPECIAL REPORT BUSINESS MANAGEMENT EDUCATION MBA COURSES

An MBA of real quality is recognised by those who matter, High-flyers’ route to high rewards MBA most importantly by employers. KATZ An established Masters in Business Administration programme commencing in Paula Hawkins many require two years’ full-time September 1998 which: study. Recruiters at investment banks “Yes, I think it’s great to LL MBAs are not created are at pains to point out that many Emphasises the Integration and Implementation of Managerial Action. equal. There is a big dif- students are under the impression that • ference between an an MBA is a ticket to the highly paid • Addresses an International Business Agenda with an International have a Warwick MBA. MBA from Wharton at fast-track set. This, they say, is not true, Participant Group. the University of Penn- and assuming it is could be an expen- A Includes a Study Visit to the European Mainland in the Course Fee. sylvannia and one from Leeds. Over sive mistake. • More importantly, the past 10 years business schools – The head of recruitment at a Euro- once an American phenomenon – pean investment bank says: “Unless • Places a High Emphasis on Interactive Small Group Work and have sprung up all over Europe. There you possess a real determination to Tutor Support. are more than 300 European business get into banking or consultancy, you so does everyone else.” schools offering MBAs but only a are very bright and very determined, Admission onto the programme requires no prior formal study of Business handful are seen as top of the class: you should think very carefully about or Management subjects. Applicants not in possession of a recognised degree IMD in Lausanne, London Business doing an MBA.” But should young or professional qualification may be considered on the basis of extensive Warwick is one of Europe’s truly great Business Schools, School, Bocconi in Italy, Insead near high-flyers of such star quality have work experience. Paris, Warwick and Rotterdam. to do an MBA at all? which attracts high quality students from around the world, “There is a huge range of quality It is a myth, recruiters say, that an Accommodation can usually be arranged in the University’s halls of residence and offers the choice of full-time, distance learning, modular among business schools,” says the MBA has become an absolute require- if desired. head of a British MBA course. “They ment in European investment bank- or evening study, all accredited by The Association of MBAs. vary from the excellent to the ing, although it is an advantage. But Fees are £7,000 for non EU residents and £5,500 for EU residents. Outstanding MBA programme content and support are appalling.” A number of schools, he MBAs are extremely important in says, concentrate more on making America and at most American banks. For further information contact: assured with Warwick’s excellence in teaching as well money than on producing good grad- Last year Chase Manhattan hired nine Irene Urquhart/John Penlington, GLASGOW as research. uates: they try to attract as many MBAs for their Europe, Middle East Department of Management, foreign students as possible, as they and Africa division. Three years’ expe- Would you like to hear more? Then call the number below, Glasgow Caledonian University, pay higher fees. Standards are not top rience at a blue-chip company, cou- quoting reference EU237. priority. pled with an MBA, are prerequisites 70 Cowcaddens Road, Tel.+44 (0)1203 524306 Despite the rapid growth and higher Connected: business bocconiani, an alumnus of Italy’s a degree followed by a couple of years to join Chase’s New York-based fast- Glasgow G4 0BA, profile of European business schools school alumni can Bocconi Business University. in investment banking or consul- track Corporate Finance Associates Fax. +44 (0)1203 523719 in recent years, they are still seen as network with some A good undergraduate degree, even tancy,” says one headhunter. “That is training programme. Scotland E-mail: [email protected] inferior to their American counter- powerful peers. The when coupled with a Masters or PhD, what really makes them attractive.” In Europe, undergraduate recruit- Tel:+44 (0) 141 331 3173, Fax: +44 (0) 141 331 3269 CALEDONIAN http://www.wbs.warwick.ac.uk/mba BOOK NOW parts. “We only recruit from one Euro- leader of Britain’s rarely promises such rapid career This suggests there is less intrinsic ment levels remain high, although it E-mail: [email protected] UNIVERSITY pean school and that’s Insead,” says Conservative Party, advancement or high salaries. “MBAs value in the MBA programme than takes people who come straight out Warwick Business School, University of Warwick, 7th & 21st5th April, May Sophie Walker, head of graduate William Hague, seen are well-rewarded,” says the head of may at first appear. of university a few years to catch up Coventry CV4 7AL, England. one day Masterclass Seminars – recruitment for Europe at Credit Suisse in his school days, is recruitment at a leading European In some circles, MBAs carry little with MBA graduates. At Credit Suisse WHERE CAREERS COME FIRST First Boston. “The other schools we a graduate of Insead investment bank. “The right MBA can cachet. Traders in the City of London, First Boston, MBA graduates enter the look at are Harvard, Wharton, Colum- make you highly marketable.” It is not most of whom are self-made men, are firm at associate rather than analyst bia and Chicago. The standard of just the right school you have to doubtful. “We’re much more interested level and are guaranteed a bonus in teaching tends to be much higher at choose, however: certain programmes in hard skills, we want people who their first year. Analysts who work the top American MBA schools.” – such as the Master in Finance, or have engineering or maths degrees. their way up through the firm take The market clearly values some MIF diploma – are seen as more valu- Computation skills are the key thing,” three years to reach associate level MBAs: the starting salary of an IMD able than others. says a trader at one London invest- There can be practical disadvan- graduate is $106,000. Stanford grad- Yet despite the huge popularity of ment bank. tages in doing an MBA course. Many uates get an average of $105,000, MBA programmes – there are four While there will always be a place European undergraduate courses are while an MBA from London Business times as many applicants for Euro- for MBA graduates at management longer than their British and US School will get you about $75,000. pean programmes as there are places consultancies and in most investment counterparts, so that people finish “An MBA can add about $15,000 to – sceptics, who are often graduates of banks, there is still a reluctance on the their first degree only in their mid- your starting salary,” says Helena Frith more traditional universities or self- part of European industrialists to treat twenties. Two years’ work experience Powell, research associate at NB Selec- made business people, question how the MBA graduate as something spe- and a two-year MBA course on top of tion, a leading head-hunting firm. ‘The right much real value there is in the aver- cial. According to George Bickerstaffe, that would mean starting their “real” There are more intangible benefits, age MBA programme. author of Which MBA?, more tradi- career path very late. such as a network of well-connected Recruitment heads at investment tional managers are concerned that To get around this some schools, classmates and alumni organisations MBA can banks cite a better “general all-round the theoretical knowledge of the MBA such as Insead, offer shorter courses. full of big names in banking, finance business sense” as one important dif- graduate is no substitute for practical But detractors say one year is not and business. William Hague, the UK make ference between an MBA graduate knowledge of how to manage people. enough. “To cover the ground in just Conservative Party leader, is an Insead and an undergraduate. But they also Even investment banking recruiters a year is not appropriate,” says a senior graduate, as are the chief executives point out that one of the main attrac- are wary of encouraging people to do vice-dean of Columbia Business of the Economist Intelligence Unit, you highly tions of MBA holders is that they tend an MBA. They are very expensive: School. “It would be a travesty to our L’Oréal and Cartier. The CEO of Cred- already to have some business expe- some schools charge more than students. Especially in a complex ito Italiano, Alessandro Profumo, is a marketable’ rience. “Usually, they will have done $60,000 for the entire course, and international environment.”

GRANT SCHEMES INSTITUT MONTE ROSA - Executive class rises in the East on new business age INTERNATIONAL FOR BOYS AND GIRLS EAST EUROPEAN high-flyers can get advantage of this loan scheme: to be the LBS has an energetic research team many thousands of Russian managers In Hungary, the former Karl Marx special loans to help them with MBA eligible, students must be citizens of at the CIS and East European Centre would be sent abroad to study business University has teamed up with the LBS • American Junior and High School fees. In March 1995 the European Bank an east or central European country which, under the auspices of Dr Saul practice in the West, which is tangible to offer a two-year, part-time MBA, • Postgraduate course (Grade 13) for Reconstruction and Development and must be prepared to work in east- Estrin, not only brings future managers recognition of the westernisation of while in Poland at the Warsaw School • Business studies program and ABN-Amro introduced a scheme ern Europe for three consecutive years from the East to study in the West but business among a new generation of of Economics a one-year, full-time • programs under which students from the region within three years of graduation. is also developing business education aspirant executives in the East. course is on offer with weekly modules • German Section program can get MBA fees paid at Insead In the late 1980s the LBS had the courses for use in Poland, Hungary and These people will become a new force developed with the Norwegian Busi- • Summer Holiday Courses (June-July-August) (Fontainebleau), IESE (Barcelona) and foresight to explore the possibilities of even Kazakhstan. of globally aware and technically more ness School at Bergen, the ISA at HEC the London Business School (LBS). offering business education to eastern Indeed, Boris Yeltsin, the Russian proficient managers who will play a key School of Management and the LBS. 57, Av. de Chillon CH - 1820 Montreux Seventy-five young people have taken Europe and the then Soviet Union. Now president, recently announced that role in Russia’s integration into Europe. GALINA SLEPNEVA Tel. 0041.21.963 53 41 Fax. 0041.21.963 47 83

30 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 31

CyanMagYelloKey CyanMagYelloKey SPECIAL REPORT BUSINESS MANAGEMENT EDUCATION

STUDENT CHOICES 21st Century Getting down to business Business Leaders should be talking to us Galina Slepneva ings. There are good on-campus sports facilities and a restaurant with rea- At Sheffield Business School, more than 1,250 For full details of our postgraduate and HE would-be MBA has the sonable food. postgraduate and post-experience managers post-experience portfolio, come along to one of required Graduate Man- The programme consists of a mix are already honing their skills and shaping their our OPEN EVENINGS on Tuesday agement Admission Test of core courses, electives, “business 21 April, Thursday 21 May or Monday (GMAT) score, passed the policy and strategy modules” and strategies to equip, qualify and inspire them to 15 June 1998 at the Business and Information T relevant exams and sold “expert modules”. The expert mod- meet the challenges of the 21st Century. Technology Centre between 5.30 and 8.30pm. his record collection to raise the ules consist of week-long seminars, Across a wide range of business disciplines money. He has filled in all the forms, such as “Doing Business on the Inter- Or contact Sheffield Business School from HR Management and Organisation has four years’ business experience net”. The programme also includes a Sheffield Hallam University City Campus and has made it to business school. three-month in-company project and Development through to International Howard Street Sheffield S1 1WB England But what does an MBA do when a thesis. Marketing, International Business, Telephone 00 44 114 225 2820 selecting his course? IMD in Lausanne on the northern Management Studies, Health Management, Fax 00 44 114 225 5268 The first point is to check how long shore of is a small but TQM or Strategic Information Systems http://www.shu.ac.uk/ the course is expected to last. The highly respected school of only 40 stu- Management. Please quote reference EUR01 shorter the course, the harder the stu- dents. This is a place where students dent must work. For those looking for will not be able to snooze quietly at What’s more, whether it’s on one of our a less frenetic pace, IESE (Barcelona), the back of the class – though why impressive, flexible and innovative MBAs, Sheffield Helsinki and London Business School should they want to, after paying specialist MSc or MA programmes, (LBS) take two years, ISA at HEC near Sfr33,000 ($22,000)? At least seven fast-track learning or Executive courses, Business School Paris and SDA Bocconi are 16 months hours a day are spent in group work. they’re really enjoying the experience. Education for business and the professions each, and for those who are happy to The Team Initiated Enterprise (TIE) gallop, Insead, also near Paris, is 10.5 consists of a self-selected group that months. can do anything – projects could What else should weigh on the stu- include setting up an on-campus UNIVERSITY OF STIRLING dent’s mind? The beer is free in the kindergarten. FACULTY OF MANAGEMENT What`s the difference between a student bar at LBS and the school is There are eight modules: from an well located near Regent’s Park. The overview of general management to POSTGRADUATE MANAGEMENT PROGRAMMES course begins with 15 first-year core “Leading Self”, which deals with per- The one year full-time MBA programme is 590 GMAT* score and a 670 GMAT score? subjects, starting with the basics: mergers and acquisitions there is a is the core of the syllabus and includes sonal values such as business ethics both intensive and challenging, combining financial analysis, management highly sophisticated course on man- all the staples: finance, accounting, MBAs can’t and management action. One of the essential business knowledge with in-depth accounting and developing effective agement buyouts, mergers and other marketing and strategy. most interesting modules is “man- specialist options. Elective courses include Simply 80 points? organisations. Later, students will corporate reorganisations. There are Emerging from this he tackles snooze at agement of a global business”, which Entrepreneurship, International HRM, Finance, move on to managerial economics, also electives on “Small Business” and “Exploration Itineraries” or “Orienta- includes international accounting, Marketing, International Business, Or acceptance to a great Business school Management Information Systems. information management, marketing, “New Venture Development” as well tion Itineraries”. In this period he can crossborder strategies and the future rather than a good Business school? understanding international micro- as on “The Global Manager”. select workshops and projects, such the back of of the international business envi- In association with the University of economy and strategic management. SDA Bocconi in Milan encourages as fashion and design. ronment. Groningen, Netherlands and CERAM School According to the 1996 US News and World Report on Best Graduate Schools, of Business, France, the university offers and the difference in starting salaries within the top 25 business schools is £15,000 The first year culminates in LBS’s Italian culture. Founded in 1902, it Giorgio Armani or Franco Zeffirelli class, but If location is important, Insead is Msc in International Business which gives pièce de résistance: a three-month has one of the largest business libraries may appear in the classroom – the unrivalled. Situated on what was once students the oppurtunity to also study within And remember, the GMAT is now only available on computer - “action-learning opportunity” during in the world, boasting more than “Horizons – Management Testi- a private hunting ground for French different European countries, with a choice of why take your chances with outdated books, and old released examinations which students are paid and may find 500,000 volumes. The course is monies” includes a series of meetings after paying royalty, Insead is in the heart of the management specialisation. Kaplan is the World Leader in GMAT-CAT test preparation, with the resources, themselves being road-tested by a divided into five sections. with distinguished people from out- forest at Fontainebleau. Campus life Both programmes offer an international facilities, and proven results that can only come from 57 years of test prep expertise recruiting organisation, which will “Prelude” is a pre-programme home side finance and consultancy. It is nec- resembles that of a top Oxbridge or perspective on key issues facing today's $22,000 business and management community. We will teach you what to study, when to study, and how to study; offer a job at the end of the summer. study designed to get ready for the essary to be reasonably fluent in Ivy League college on speed. This is a so come test day, the GMAT-CAT will be second nature Year two builds on the summer course proper. There are exams on this Italian, as some lectures are in Italian. fast, some say tough, course. Fluent Stirling University is situated at the heart of placement. Students choose 12 out of on arrival. What if students need a dose of the who would English is required, as well as work- Scotland and its campus is one of the most ...... just 80 points really can make the difference, the 75 electives available, with options “Pillars” is an introduction to basic Protestant work ethic to keep them at ing French (a $3,000 intensive French beautiful in Europe. and 80 points is our GUARANTEED score improvement such as “Managing in the East”. With management – it will cover business their spreadsheets? Welcome to 18 want to? course is offered by the school prior Applications are invited for September 1998 a partner each student flies to Russia administration, instruments, tech- months at Nijenrode University: the to the start of the MBA), as well as a entry from suitably qualified graduates or Choose the course that means business....choose Kaplan and other countries in the wild East niques and markets. Netherlands Business School. Located third language. One of Insead’s sell- holders of appropriate professional Call about our free, monthly GMAT CAT seminars... to help a local company find an Then there is another exam, after in the woods 20 minutes’ drive from ing points is its internationalism: a qualification.Contact: The Postgraduate Office, Department of exportable item. He has a week in which each MBA student progresses Utrecht, the school is certainly aes- quarter of the students are European. ¨ which to succeed. to “Functional and General Manage- thetically pleasing, housed in a Its teaching staff is similarly multi- Management & Organisation, University of For those who get their kicks from ment”, which lasts five months. This moated castle and various outbuild- cultural: the school employs 82 pro- Stirling, Stirling, FK9 4LA. fessors from 22 countries. Tel: 01786 467 415 or KAPLAN WHAT THE COURSES HAVE TO OFFER Insead takes 460 students a year, e-mail [email protected] 3-5 Charing Cross Road, London, WC2 OHA and combines the basics with more Tel: 0171 930 3130 Fax: 0171 930 8009 IMD Insead London Business School Nijenrode University SDA Boconni complex topics, such as Turbo Finance, Country Switzerland France United Kingdom Netherlands Italy Email: [email protected] an advanced finance elective, corpo- ᗂ GMAT is a registered trademark of the Graduate Management Admissions Council which is not affiliated with this programme. Address MBA Office Boulevard de Constance Sussex Place MBA office Masters Division rate strategy, economic analysis, inter- AGSB Chemin de Bellerive 23 77305 Fontainebleau Cedex Regent’s Park Straaweg 25 Via Balida 16-18 national political analysis and THE AMERICAN GRADUATE SCHOOL OF PO Box 915 London NW1 4SA 3621 BG Brekelen 20136 Milano competitiveness. 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MIBA Bachelor of Science in Business Administration, Name of programme MBA MBA MBA International MBA Bilingual MBA (English/Italian) The truth is that even two-year courses Programme fees Sfr 33,000 Ffr 155,000 £50,500 Nfl 37,000 L32 million BSBA may not be enough to get an in-depth Authorized by the 1 Programme duration 11 months 10 /2 months 21 months 1 year 16 months understanding of the subjects on offer, Member of Nonpublic Postsecondary Off-campus rent Sfr11,000 Ffr100,000 £10,000 Nfl 7,500 L28.8 million The College Board Educational Istitutions but perhaps that’s the best lesson of Act, State of Georgia, Avenue Marnix 20 Student intake 83 251 228 60 130 USA all. After they leave business school, Place des 1000 Brussels - BELGIUM Applicants to places 7 to 1 n/a 5 to 1 6 to 1 4 to 1 graduates will never be in possession Anciens-Fossés Tel. C/Ganduxer 70 • 08021 Barcelona, Spain Women students 22% 20% 22% 29% 27% of all the facts, so learning how to cope 1814 (+41)21-944 9501 Tel: 34.3.201.81.71 • Fax: 34.3.201.79.35 Phone: 32 2/548 04 80 Average age 30 28 28 29 28 La Tour-de-Peilz Fax. Email: [email protected] with the frenetic pace of the MBA is (EU) (+41)21-944 9504 Fax: 32 2/548 04 89 Foreign students 96% 87% 75% 84% 45% a good starting point for a successful SWITZERLAND e-mail: [email protected] Graduate starting pay $106,700 n/a $74,724 $52,182 n/a career. Source: Which MBA?1997 32 THE EUROPEAN ■ 23–29 MARCH 1998 23–29 MARCH 1998 ■ THE EUROPEAN 33

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34 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 35

CyanMagYelloKey CyanMagYelloKey Ghosts stir in the stadium built for the Nazi Olympics PAGE 48

SYGMA EXPO 98 ■ With only two months to CHRISTINA LAMB’S go, mud and big ideas mark the site of the last world fair of the millennium Lisbon

EVERY night in Lisbon’s opened bridge over the Tagus is to be named main Rossio square, Marco, after Vasco da Gama, the greatest explorer of a pony-tailed Brazilian them all. astronomer, sets up his The government hopes to remedy the infe- telescope and offers riority complex this summer with Expo 98 passers-by the chance to and its theme of “oceans”. Its organisers hope Showdown look upon Venus for 100 to remind their countryfolk how great the escudos (54 cents). Marco claims it is the Portuguese once were and to show the world bargain of the century but there are few a country once again looking outwards, only takers. “The Portuguese are more into navel- this time for cultural and commercial con- gazing than star-gazing,” he grumbles as the tacts rather than territory. Antonio Mega Fer- water-jet for a council road-cleaning truck reira, director of Expo, describes it as “ a new narrowly misses him. “They have lost their attitude towards life, towards the world”. sense of adventure.” Expo will be the first real opening of Por- on the This is a damning charge for a people who tugal to the world since the revolution in were once the boldest explorers on Earth, 1974, which ended more than 40 years of “discovering” two-thirds of the world and stifling fascist dictatorship. Joining the EU mapping its seas, skies and continents as was the first step towards normality and the well as establishing the first of the modern country has since seen rapid modernisation, empires. The Portuguese were the first Euro- benefiting as its poorest member from peans to cross the Equator, sail round the funding for a modern network of roads and Cape of Good Hope, set foot in Africa and communications and giving the other mem- South America, find a sea route to India, bers a lesson in how to get the most from waterfront trade with Japan and China and see Aus- Brussels, while ignoring all its decrees. But tralia, more than ARMANDO FRANCA the image clings Hugh Pearman evokes the sailing ships that used to sail past 200 years before of a country stop- LISBON on their voyages of discovery. This May is the Captain Cook. ped in time. The 500th anniversary of Vasco da Gama’s epochal But that was all national music, UTSIDE, it is a dustbowl as lor- arrival in India. Hence the celebratory Expo a long time ago. fado, is a sad ries roar to and fro and thousands with its aquatic theme. These days the mournful sound. of workmen and women desper- The Oceans Pavilion is to be a permanent closest my Por- While gleaming ately struggle to get Expo 98 in building once the Expo is over. So is the slightly tuguese friends buildings such as OLisbon, the last and biggest world sinister metal-clad grey hulk of the Utopia get to seafaring is the new Colombo fair of the century, finished on time for opening Pavilion – a giant auditorium a little farther to take the ferry shopping mall are on 22 May. Newly planted trees are wilting, along the waterfront that looks like an abstract across the river springing up the waterside cable car ride still has no cables, sculptor’s take on a shark’s head. This, by the Tagus. Most never across the city, the stick-on national flags are peeling off the giant American architectural practice SOM, venture beyond Lisbon’s squares pavilions, the roads are a nightmare and every- turns out to have an unexpected and inspiring neighbouring are still the pre- where there are unprotected holes to fall down. all-timber interior like a huge ship’s hull. Spain (where they serve of old men But at least one building is completed. The Oceans Pavilion will remain as Lisbon’s buy cheap cigars in caps playing Inside the Oceans Pavilion, architect Peter Oceanarium while the Utopia Pavilion, once and asparagus), backgammon. In Chermayeff is making baby noises at the its multimedia Expo show is over, will become preferring to rural areas little penguins and otters already settled in peace- a venue for concerts and stage spectaculars. spend money on has changed for ful habitats high up under the glass-and-steel Nearby is a new theatre. Office and apartment clothes and cars centuries: canopies of his great aquarium. blocks are being built. The ambitious Por- than exotic travel. women clad in “Hey, little guys,” says tuguese Pavilion, by that nation’s best archi- To the outside black wash the Chermayeff to the animals. tect, Alvaro Siza, incorporates a ceremonial world, Portugal has faded into an insignifi- cobbles every morning and the main mode “How are you today? Come square beneath a vast swooping U-shaped cant strip at Europe’s bottom left-hand cor- of transport remains the donkey. here, come here …” The tone concrete canopy, hung from its ner. Portugal was one of the first countries Against such a backdrop Expo is causing and delivery are unexpected. Cher- edges as if it were a sheet pegged to qualify for entry to the European single great excitement. Hotels are being repainted, mayeff cuts a distinguished figure out to dry. Framing a view of the sea currency, yet European Union posters pro- the metro system is being extended and the in a well-tailored double-breasted beyond, this will act as the gateway moting the euro left the country off alto- whole of Lisbon seems to be undergoing ren- suit. His hair is swept back, he has to this all-new part of Lisbon. million bridge – one of the longest in the world ing to distract from the main event. Every- instance. The experience is cleverly syncopated, Point of departure: Calatrava’s station goes gether by omitting the border with Spain. ovation. People talk of Expo in awed tones a deep, rich New England voice The area used to be a standard – over the Tagus estuary is complete and acts thing inside seems to be painted black, so moving from one panoramic window to a little up and (left) the fair’s mascot. Portugal’s Mozambique, a former colony, turned its as a panacea for all the country’s ills. Its river- and he wears the kind of thick- rundown dockside industrial as a backdrop to the whole show. It effortlessly focusing attention on the huge clear acrylic one at a different angle, and so on. “The idea explorers set sail from where Expo is rising nose up at the Association of Lusophone front site still resembles a sea of mud in the rimmed spectacles beloved of zone. Now it will become upstages the ugly new Vasco da Gama walls of the aquarium – a third of a metre thick, of all of this is that it is not revealing of itself Countries and joined the British Common- middle of which are emerging other-worldly architects of a certain genera- virtually a self-contained 60- observation tower on the waterfront, which though you would never know it. “It has four all at once. You don’t see everything exposed. the kind of quiet design in-joke that wealth. And, humiliatingly, Portugal has been glass tents with steel protuberances. They tion. But Chermayeff, besides hectare new town between is like an upturned truss from a railway bridge, different habitats represented inside it, as well You keep discovering new views and chang- Chermayeff enjoys. suffering a kind of reverse colonisation, with have grand names such as the Pavilion of being a very successful product the old city and the airport. topped with that 1960s cliché, a revolving as in the outside corners,” he explains. “Here’s ing perspectives,” Chermayeff says. But there is one thing he enjoys more. As Brazilians monopolising the country’s tele- the Future; each will have a replica caravel of the American East Coast and That is, if they ever fin- restaurant (it is meant to look like a ship’s the Tropics, here’s the North Atlantic, over We re-emerge blinking into the sunlight, we shake hands, he reveals that he is prepar- vision and advertising market and bringing docked outside. son of the famous Russian-born ish it. With two and a half mast, sail and crow’s nest, but it doesn’t). A there the Southern Ocean or Antarctic, and already strong here even in March. Visitors to ing for the treat he gives himself just before Rio street slang into Lisbon parlance. Some say it would have been better to let modernist pioneer Serge Cher- months to go before the new railway and metro line serve the Expo over there the Pacific. The four things come the Ocean Pavilion will be streamed in and the opening of any of his great aquariums: to Were it not for the stunning palaces and the ghosts rest. In India there have been mayeff, happens to be a world authority on opening, the Expo looks way behind to me via a spectacular station by Santiago Calatrava, together inside and make the point that the out on a double-decker bridge connecting don a diver’s aqualung and swim quietly abbeys, such as the Jéronimos monastery on protests against plans to commemorate Vasco aquariums. The theme of Expo 98 in Lisbon and, believe me, I’m used to desperate last- the Spanish architect-engineer. Imagine a world’s oceans are really one great ocean. Even across the dock. As they queue in the shade, among the sometimes fearsome marine ani- Lisbon’s riverfront, built with profits from da Gama as a hero, arguing that he opened is the world’s oceans. The Oceans Pavilion is minute dashes to get places finished. modern Gothic cathedral where the arches though, of course, it’s a bit of poetic licence, they can gaze at the world’s biggest tiled mural mals he has gathered there. Just for a few min- the spice trade with the colonies, it would the way to centuries of oppression. Within thus the linchpin of the whole event. And Cher- The roads around the site are still hopelessly are white steel and the vaults glass and you because the animals are all in one temperature, on the side of the landside building with its utes, a human will become a water creature be hard to believe that in the 16th century Portugal there is discomfort over the pre- mayeff, who has built all over the world, was chaotic; some buildings seem scarcely half- will get the idea behind Calatrava’s in one place.” shops and restaurant. on display. Only his family, however, will get Portugal was the richest, most powerful sentation of the empire as benign, ignoring the obvious choice to design it. built. As soon as paving and planting is put architecture. From here, visitors move up to the open Designed by Chermayeff’s graphic designer to see the architect of the Oceans Pavilion test- nation on Earth. Many of the younger gen- the brutality of the slave trade. Set in a former dock where flying boats used in, it is covered instantly with a thick layer of All this activity is throwing dust over areas in the corners under the glass roof. The brother, Ivan, a fellow partner in the ing it out on behalf of the users. eration simply do not. But the Portuguese are laid-back people to moor, it appears like – what? A moated dust or simply dug up again. Chermayeff’s Ocean Pavilion, and he does not pool where sea otters float lazily on their backs, Cambridge, Massachusetts practice, Cam- Expo 98 in Lisbon runs from 22 May to 30 Sept. Such is the threat of the country’s glory who enjoy nothing more than a long lunch. fortress? No, the imagery is, of course, nautical. “When it rains it’s even worse,” says one of like it dulling the glitter of his glass-and-steel for instance, goes right down to the aquarium bridge Seven Associates, the mural merges Information: tel +351 (0)1 8680426, fax +351 days being forgotten that the government Their biggest complaint is that their favourite Floating on the water like a top-heavy galleon, Chermayeff’s assistants. “With the brown mud roof, settling in the crevices of his riven-lime- beneath, so they can also be seen swimming computer-aided design with the ancient Por- (0)1 8681800. E-mail: [email protected] created a Commission for Commemorating summer dish of sardines will not be avail- it rises high to a mini-forest of white suspension and the stones, it’s like working in chocolate stone walls, coating the high-tech external underwater. The cleverness of Chermayeff’s tuguese craft of handmade blue-and-white Website: http://www.expo98.pt the Discoveries. Charged with promoting able in Expo restaurants because Eurocrats masts. These hold up the dramatically ice-cream with chopped nuts in it.” There was staircases. design is that the animals in each corner tiles. Close up, it appears to be entirely abstract. Hugh Pearman is architecture and design Portugal’s golden age, it is sponsoring an have decreed that sardines cannot be grilled projecting leaves of the glazed roof, under a lot of rain earlier this year. That is one rea- Once inside, however, the assertive archi- habitat do not mingle in the middle: huge Stand back, and the forms of fish – here a critic of The Sunday Times, London. His book, exhibition on the flora and fauna brought to in closed spaces. But they will probably find which otters and penguins splash and frolic son why things were held up. tecture vanishes completely: Chermayeff’s invisible underwater windows separate div- shark, there a seahorse – appear. Each tile rep- Contemporary World Architecture, Europe by the discoverers. The soon-to-be- a way around that. in the sunlight, but their rigging deliberately On the other hand, a graceful new $760 boyish love of wildlife means he wants noth- ing penguins from predatory sharks, for resents one pixel on a computer screen. It is is published by the Phaidon Press in August

36 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 37

CyanMagYelloKey CyanMagYelloKey BOOKS Globalisation, our true friend Keine Angst vor Lafontaine and Müller are also drawn to The basis for the policy of reform which der Globalisierung this Anglo-Saxon view of education. They Lafontaine and Müller propose is constant expose the insufficient degree to which con- long-term growth. To work, they stress that it by Oskar Lafontaine servative policies (or, if one so chooses, the should be linked to a framework of govern- and Christa Müller market-oriented “neo-liberal” policies) reflect mental order to allow the market some breath- Dietz, DM28 basic values. Here, they outline for the first ing space. At the same time, the state should time what factor must characterise Social have the task of maintaining justice. The N EXTRAORDINARY new book Democratic policies: an orientation towards United States sets an example from which oth- by Oskar Lafontaine, leader of values. ers should learn, though they should adapt it Germany’s Social Democratic In this sense, the book is utterly topical. Not to the European or German situation. Party (SPD), and his wife, Christa even Chancellor Helmut Kohl is tired of pro- The authors demand not a simple adoption AMüller, almost doubles as a man- claiming that the next parliamentary election of Anglo-Saxon concepts but an intelligent ifesto for a red-green coalition government. will be decided “on values”. Applied to the adaptation of them. For this, as ever, a pow- Keine Angst vor der Globalisierung (No Wor- forthcoming election, this is certainly not true; erful state is required. The power of a gov- ries about Globalisation) builds the frame- but applied to the political discussions of the ernment is the only force that can bring work for future SPD policies, awakening the next several years, it most definitely is . ecology and economy together. This is a clear party from its slumbers in the realm of theory. Neither Kohl nor his friends in the party – rejection of a state that merely goes about its This book is the first serious attempt to rec- aside from a few unconvincing attempts by business. oncile social democratic and ecological poli- Wolfgang Schäuble – have imbued these val- Within this context Lafontaine and Müller TRAVEL cies. The authors have coined the expression: ues with meaning. The authors’ remarks on develop two concrete ideas: sustained growth “Reform and the capacity for reform.” The this discussion might suggest the direction the through the consistent development of term “reform” is used differently from the way Social Democrats wish to take but unfortu- durable, high-quality, ecologically friendly it is in most German political discussion. For nately they dwell too much on vague com- products; and the creation of a new “corpo- the authors, it means a fundamental process munitarian ideas. This kind of flirtation with rate culture” involving increased competition of rethinking. They associate progress and a communitarianism is no substitute for seri- in the area of productivity (even between the competitive economy with social justice. If ous political theory. state and corporations). that sounds like pie in the sky then at least it One of the most impressive feats of the book If the authors’ ideas compare with Blair’s, The book is buoyed by a belief in the neces- My other car’s a plane is a brave idea which the current government is to posit future social democratic policy which there are elements that differ. The Germans sity and possibility of innovation. Globalisa- has thus far neglected. until now has been pure wishful thinking. An do not share Blair’s religious beliefs; nor do tion (when properly understood) is then no This is where the book’s sober factual ori- important example, the concept of Bildung they have the socially oriented ideas of Britain’s longer a danger to but rather a prerequisite Simon Reeve Scientists working on the GAP project to Bologna and back, or Barcelona to entation proves its worth. The proposals are (“education”), illustrates the point. Bill Clin- Liberal former prime ministers, William Glad- for such policies. believe their research will also lead to Berlin and back, in one day. not idly non-committal; they are concrete. ton and Blair both consider the concept of edu- stone and Anthony Asquith, the reform ideas The pragmatism of Gerhard Schröder, the ORGET a Jaguar or a the price of a small jet engine dropping Commuting in the air would be Lafontaine and Müller give “reform” back its cation to be extremely wide ranging and have of the Fabian Society or the tradition of the SPD’s candidate for Chancellor, is thoroughly Porsche – the vehicle you by a factor of 10, from hundreds of even easier in Europe, if we were to original meaning. Reform, as opposed to rev- afforded it central significance in their politi- Labour Party. The references to John Maynard compatible with this agenda, as are the ideas will be test-driving in just thousands to tens of thousands of follow the lead of America and build olution, means changing policy while observ- cal agendas. In the Anglo-Saxon tradition, Keynes, whose works the authors say must be of the Green Party’s , who, like a few years’ time could be dollars. Cheaper traditional engines more “airparks”, where homes built ing the same fundamental framework. The both men take “education” to mean a funda- properly re-read, to the liberalism of the Lafontaine and Müller, is among those politi- F a new personal plane. with rotary blades are also being on a modern estate all come with a text recalls the writings of Anthony Crosland, mental, ethical frame of reference. “Educa- Freiburg School and to the social market econ- cians who write their own books. It would be According to experts at the American improved. Teledyne Continental hangar for a small plane and a taxiway whose ideas paved the way for Britain’s Labour tion” refers less to practical training or omy of the economist Alfred Müller- interesting to see how teamwork between space agency, Nasa, a new range of Motors is well on the way to finishing to a communal runway. In America government of the 1960s. It is also reminis- university schooling (at least, that is only a Armack do not make up for this philosophical Schröder, Lafontaine and Fischer would cheaper, simpler aircraft should be development of an advanced diesel there are more than 500 such estates, cent of the Fabian Society pamphlets which small part of it) than to “orientation towards hole. The ideas of the writers are a start but develop these ideas into government policy. available in three years’ time, costing engine with vastly increased reliability with thousands of homes. John Tra- prepared Tony Blair’s path to power. values”. more detail would be helpful. DIETMAR HERZ about $40,000, roughly the same price and passenger comfort. It should cost volta, the actor, bought a house in the as an executive car. half as much as current engines. world’s first airpark at Spruce Creek The planes could revitalise the You will not need a degree in rocket in Florida, where the 1,600 homes Almanach de Gotha of descent and precedence; in list- of the house of Bourbon-Two Sicilies, dynastic law allowing female suc- aviation industry and encourage thou- science to be able to fly an Agate plane. are worth between $300,000 and 1998 ing the royal house of Bavaria, for which has raged since 1960, by cession which would make the next sands of business travellers to pilot According to Bruce Holmes, the $3 million, but he moved out when example, it does not refer to the fact recognising the Infante Don Carlos, heir his eldest daughter, Princess themselves to meetings along what general aviation manager for Nasa, neighbours complained about the Almanach de Gotha Ltd, £60 that, in the last century, the life of a Duke of Calabria as head and Grand Margarita, famous for her friendship Nasa describes as “highways in the the aircraft will be almost as simple noise of his Gulfstream G-2 jet. Wittelsbach princess was ruined by Master of the Sacred Military Con- at Edinburgh University with Gordon sky”. “We believe this could to fly as a car is to drive: to increase Europe, by contrast, has just six OR those who agree with her conviction that she had swal- stantinian Order of St George, dis- Brown, now Britain’s Chancellor of revolutionise air travel,” said Keith speed when airborne, for example, airparks, in Belgium, France and Field-Marshal Prince lowed a grand piano made of glass. regarding a spurious “renunciation” the Exchequer. Henry from Nasa’s Langley Research the pilot would push on the throttle the aid of a GPS (global positioning Get high: still image from Spain. Two innovative schemes for Windisch-Graetz, who put The Gotha has never been free of in 1900 and following primogeniture. The Gotha fails to mention Prince Center in Virginia, the base for much just as a driver would press an system) and an advanced cockpit Agate animation of single airparks in Britain were recently down the 1848 rebellion controversy. The president of its On Monaco, the editors record Paul of Hohenzollern-Romania, of the research into the new aircraft. accelerator on a car with an automatic display you would be able to see the aircraft at take-off from abandoned, despite the support of against the Habsburgs, Committee of Patrons is King Juan that Prince Rainier’s mother was the grandson of King Carol II by his run- The technology has been under gearbox. There would be no need for weather patterns and conditions all medium-sized airport, and many local pressure groups, after F away but valid marriage to Ioana (below) an interior showing that der Mensch beginnt beim Baron Carlos, and the publishers make illegitimate daughter of Louis II, but development since 1994 when Nasa, the bewildering array of devices around you, so you can avoid bad planning permission was refused by (mankind begins with barons), the much of the fact that Alfonso XIII do not mention the exclusion of the Lambrino when he was Crown the US Federal Aviation Authority needed in existing planes to control weather and continue to fly,” said computer-generated displays the government. Europe will also need Almanach de Gotha is holy writ. The formerly held the same position. In legitimate heir, Duke Wilhelm of Prince. When it appeared in the (FAA) and a consortium of 75 air flow, propeller pitch, ignition Henry. Information about the weather to build more small airports to catch work is the ultimate authority on the fact, Alfonso was so incensed by the Urach, under anti-German pressure Gotha, Carol’s mother Queen Marie American companies, including timing or fuel mixture. and route would be projected on to up with America, where there are royal, princely and noble families of Gotha’s refusal to recognise his sta- from the French government in 1918. shouted: “It’s another dirty Boche Cessna, Honeywell and Raytheon, Navigation will be as easy as the windscreen, as in a military plane. more than 17,000, because larger Europe. Journalists love citing the tus as rightful King of France as well The most astonishing omission is trick!” launched the Advanced General pressing a button. A pilot planning to Another factor discouraging many airports such as London’s Heathrow Gotha but few have ever seen a copy. as Spain (the Almanach gave prece- in the section on the Russian impe- In the latest Gotha it is possible to Aviation Transport Experiment fly from Rome to London will touch aspiring pilots is the expense and time or Amsterdam’s Schiphol are reluctant Now, after 54 years, it is back in print. dence to the junior line of Orléans) rial family. The editors share the discern the changed royal lifestyles. (Agate). Although Nasa’s involvement the relevant departure and destination it takes to earn a licence, so the to allow too many flights by smaller It was first issued in 1763 by the that he asked Count Zeininger de Romanov Family Association’s view The telltale “m diss by div” or divorce in the project is set to finish at the end airports on a computer and the best scientists at Nasa have worked with a planes. However, the skies over publishing house Justus Perthes in Bora to produce an alternative vol- that the head of the house is Prince – formerly rare – peppers the pages. of this year, the research will continue route will be chosen and a flight-plan team from the American Embry- Europe are already packed with large the Thuringian duchy of Saxe-Gotha. cial reason is that English is now the ume, although it never appeared. Nikolai of Russia, and they record A creditable number of princes still in the private sector, with firms rac- automatically filed with air traffic Riddle Aeronautical University to jets and there will need to be close co- The Gotha appeared annually until language of international diplomacy, Today the Gotha reiterates that false the rival claim of the late Grand Duke become soldiers or priests, but a ing to release cheap aircraft. controllers. With computerisation of develop a “revolutionary” training ordination and revised air traffic its 181st edition in 1944 when Gotha but the decision is clearly commer- position. The Comte de Paris, head Vladimir and the marriage of his large contingent is in banking. Prince Later this year two American all the most complicated procedures programme. Classes for those want- In three years control regulations to avoid chaos. became part of East Germany and it cial, reflecting the hegemony of Eng- of the house of Orléans which daughter, Grand Duchess Maria, to Paul of Russia has asserted his polit- aviation firms, Cirrus and Cessna, will and the addition of large airbags, the ing to fly the Agate planes could be Scientists on the Agate project are was suppressed. With the fall of lish (or American) in information usurped the throne from the senior Prince Franz Wilhelm of Prussia ical instincts by becoming mayor of launch planes with new cockpit new personal plane will be as safe as taught with the aid of computer a personal working out solutions for this prob- communism, ownership returned to technology. The new Gotha has its Bourbons in 1830, is described as (now dissolved). Incredibly, no Palm Beach, Florida. electronics developed through the other modes of transport. Even the simulators, which would reduce the lem. The GPS systems which monitor the Perthes heirs who sold it to the own website. “Henri VI”. The actual head of the mention is made of their son, the 17- The Gotha’s revival will be wel- project. Two years after that a section actual body of the planes has not been time needed to obtain a pilot’s licence the weather will be linked to air traffic present publishers. The managing The 670-page volume details the House of France, Louis XX, Duc d’An- year-old Prince Georgi, whom Boris comed by diplomats, academics and of Agate which has been developing spared from change: the use of and the cost. plane will control computers to keep planes at editor is a former Burke’s Peerage royal families of Europe and Brazil jou, features in a junior position Yeltsin wished to have educated in journalists – as well as restaurateurs better engines, the General Aviation composite materials will make the Although the project to develop the a safe distance. A variation of this researcher, Charlotte Pike. and the princes and counts of the among Spain’s royal family – an Russia, possibly with a view to a and good old snobs. This is a gallant Propulsion project (GAP), run from Agate aircraft lighter and stronger. new technology has been exclusively cost less technology, called Heli-Star, has The publication in London of the Holy Roman Empire who lost their absurdity, as he descends from Louis tsarist restoration. This is a glaring enterprise, splendidly defiant of egal- the Nasa Lewis Research Center in The Agate project has looked at American, the aircraft could be proved itself in helicopters. When it 182nd edition defies the Cool Bri- sovereignty in 1806 but rank as XIV while the Orléans line derives and inexplicable oversight. itarian cant. An old friend has Ohio, should bear fruit when Williams every factor involved in owning and beneficial on this side of the Atlantic. is included in the Agate planes it will tannia ethos: this is Uncool Europa. royal. A second volume will list the from the king’s younger brother. There is a similar lacuna in the sec- returned to our bookshelves and for International demonstrates a new jet using a small plane, right down to bad With faster travel times and lower than a be possible for thousands of aircraft In one way it is revolutionary: it is non-sovereign princely and ducal But the Almanach correctly inter- tion on Romania. On 30 December that we can be grateful. engine which can propel a small plane weather, which often prevents small costs, Agate planes would allow trav- to be flying at once. The traffic queues in English instead of French. The offi- houses. The Gotha is a neutral record prets the dispute over the headship 1997 King Michael announced a new GERALD WARNER twice as fast as existing engines. planes from taking to the skies. “With ellers to fly themselves from Warsaw luxury car in the sky will start shortly after. 38 THE EUROPEAN ■ 23–29 MARCH 1998 23–29 MARCH 1998 ■ THE EUROPEAN 39

CyanMagYelloKey CyanMagYelloKey PROPERTY STATE SELL-OFF Everything must go in Italy’s grand heritage sale GRAZIA NERI Michele Puccioni The jewel in the crown of Italy’s sale of the century is Modena airport, HE Italian government with an asking price of L30bn. has revealed its master- Slightly cheaper is the Palazzo plan for raising enough Ducale in Sassuolo, for which just money to repay its huge L20bn is asked. Tbudget deficit and meet For more modest budgets there the Maastricht criteria for economic are properties such as a rundown and monetary union. It has deemed warehouse near Piacenza, whose the time ripe to sell off the country’s 260sqm come with a price tag of just myriad army barracks, farms, light- more than L6m. houses, aircraft hangars and any A Rome-based public limited com- other draughty old edifice that might pany, Consab, has been placed in constitute a saleable building. charge of the sell-off of historic prop- Four million square metres of erties. It is still in talks with the min- property is on the market, attract- istry of defence to settle prices ing private individuals and foreign before it starts accepting offers. companies in search of solid But the government hopes to investments abroad. make its biggest killing from the sale The first lots to become available of polluted and abandoned land over the next few weeks will be 302 near the coast, comprising some properties belonging to the ministry 2.4m sqm in all. The Italian treasury of defence. This initial sale includes is banking on raising more than historic sites such as the 16th- $1.7bn. It is in these derelict areas Spacious dwelling, some original features: the Palazzo Ducale at Sassuolo, on sale for $11m century Palazzo Prosperi Sacrati in that the most interesting properties the centre of the north Italian town are to be had, with watchtowers, Yet, this being Italy, money-grab- Local authorities in Ferrara have hands deal and every situation will of Ferrara, valued at some L3 billion warehouses and lighthouses into the bing opportunities are not as easy also shown an alarming tendency have to be considered individually. ($1.7 million). bargain. After a commission decides as they may at first seem. Most of to flaunt their power by buying prop- However, we are prepared to sup- In Naples, three ancient buildings which buildings (if any) are of cul- the properties up for sale were orig- erty from the ministry of defence port private buyers with technical which have been used for decades tural interest, the rest will be sold on inally state-owned and run. A mass before anybody else even knows that support in all negotiations with local as barracks are about to be sold for a first-come-first-served basis. Com- of red tape will have to be cut it is for sale. Luigi Scimia, Consab’s authorities. Inquiries from abroad $11m each, while 50 others will go panies are now battling to win the through at local authorities before president, refuses to discuss such are most welcome.” on sale at an average of $6m each prized contract to sell off the coastal private buyers are allowed to do dubious practices. He says simply: Consab, Via Paisiello 33, 00198 Roma throughout the rest of the country. land and buildings. what they want with their purchases. “We cannot offer any key-in-your- tel +39 6 857961, fax +39 6 8418231

ITALY ILLUSTRATION CATHY FELSTEAD Advertise your property NOW HEALTH SARDINIA - CASA TRAVELLA THE MARCHE Linguria: 2 bed 14 Century Tower, PRICES 1998 EXAMPLE apartment, 2KM from 2 hectares of land, CAPO D'ORSO, PALAU the sea - £44,000 Luxury Mediterranean-style villas in excellent condition. If you are selling or renting Detached House: 20mins 230 million Lire. "Borgo". Studio, 1,2,3 beds, spectacular from Med - £82,000 your house or holiday home, Other properties, views of La Maddalena Islands, high Lake Maggiore: 3 bed The right wavelength for insomniacs recommended follow let The European help you find a buyer/tenant with our restored flour mill - quality finish, patios, gardens, beamed up service. Cath Blackledge the brainchild of Dr Boris Pasche, who Three sessions of 20 minutes each times lower than those from cellular special private advertiser offer. Complete with black and £125,000 ONO ceilings etc. Sailing and windsurfing Lake Como: 3 bed house - Summer rentals. founded Symtonic in Renen, Switzer- a week are recommended and can be Unlike pills, phones, which have been associated white or colour photograph, your house can be displayed Contact HRONIC insomnia suf- land, 16 years ago. The research com- taken whenever convenient. Contr- with an increased risk of cancer. TUSCANY/UMBRIA paradise. From around 290m Lire. £88,000 in the style shown for a period of four weeks. All you BORDER Phone for Brochure Danny Beattie at ferers may soon be able to pany also has offices in New York. ary to expectations, the insomnia The signal-generator device is Beautifully restored home Tel: 00 39 335 800 1893 or stop counting sheep and Pasche believes that the right spoon does not produce a feeling of the ‘sleep expected to go on sale for around have to do is: Send us a description of your house in plus outbuilding (400m2) Tel: + 44 (0) 1322 660 988 Tel/Fax: 25 acres land available. 332 457 296 also fax. Fax: + 44 (0) 1322 667 206 popping sleeping pills, electromagnetic frequencies induce sleepiness, because it is not a hypnotic; $100, with a separate charge for the not more than 35 words including photograph plus details 50' swimming pool, +39 737 630545 thanks to the discovery by the brain to wind down. Studies sug- rather, it restores natural sleep pat- lollipop’ is programmed prescription cards. of how you can be contacted. Include a clear black and stunning views. C Currently run as summer a Swiss company, Symtonic, that a gest that the electromagnetic field pro- terns so that when the patient chooses Pasche says that the LEET device’s use white or colour photograph. rental yielding 12% p.a. mixed frequency of radio waves duced in the brain by a combination to go to bed, sleep comes easily. may not be limited to insomnia: Price..... TRAVEL & COMMERCIAL beamed into the brain can soothe of different radio frequencies may Watching television or reading a book not addictive differing frequencies appear to have Telephone.... EAST AFRICA

insomniacs to sleep. stimulate the production of neuro- are allowed while receiving the treat- different effects on the brain. Sym- LEISURE

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But sleeping pills provide only of the spoon antenna,” explains do not become tolerant or addicted safety certification mark, the insom- dd

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because patients become tolerant to The signal generator is the size of Pasche says concerns about safety end of the year – if a partner is found. dd worldwide. Write W.P.C. (E) Natalie Star, 36 years experi- Bargain UK properties. Residential & Commercial dd dd

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their medication. Pills can also cause a CD player and has a slot-in pre- are minimal. Studies following up Discussions have been held with a dd UK 817 6080424

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addiction. Low-energy emission ther- scription card which determines the more than 500 patients over five years number of large pharmaceuticals com- dddddddd ______

cddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddceddddddddecddddddddcedddddddd cdddddddd dddddddd WE ARE A few students seek- lot No, guide price, PEN PALS ing to travel with discerning apy (LEET), Symtonic claims, is the frequencies produced. Each card is showed no increased cancer and heart panies, including Pharmacia & Upjohn This offer is open to private advertisers only. *VAT must be added to all advertisements placed by residents of countries which are gentlemen as guides. Please members of the EU. This is charged at the UK rate of 17.5%. PEN-PALS, friendship or mar- Principle contact tel No, etc. first non-drug therapy for insomnia. programmed with a number of treat- disease risks. The frequency of the and fellow Swiss companies Novartis riage. Write 190 Caro Mio 1, write with business card to: Pick up an investment bargain. THE EUROPEAN, 200 Gray’s Inn Road, London WC1X 8NE. Sark, Channel Islands, GY9 Nina, 217 E. 85th St., Ste. LEET technology, using radio ments, like a pharmacist putting the electromagnetic waves used (between and Roche, but no deal has yet been OSE, U.K 203. N.Y., 10028, USA www.ideal-home.com frequency electromagnetic waves, is required number of pills in a bottle. one and 100 hertz) is 100 to 1,000 struck. Telephone +44 (0)171 418 7889 Fax: +44 (0)171 713 1835 E-mail: [email protected]

40 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 41

CyanMagYelloKey CyanMagYelloKey PROPERTY – RESIDENTIAL BUSINESS DIRECTORY

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Artist/Sculptor wishes to change lifestyle. To be sold lock, stock and barrel. Exciting studio, gallery and sculpture garden dcdddddddcd dcgdcd dcgdcd

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dcdcdddddcd with other top executives at our training centre in Florida. dcdcdddddcd

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dcdddddcdcd PROVIDE A dcdddddcdcd

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development. A number of large sculptures by Max Barrett possibly available for Sculpture Park if required. (A sort of mini dcdcdcedcd

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dcdcdddddcd allows you to work in the morning and then be trained in

FULL RANGE OF OFFSHORE SERVICES dcdcdddddcd

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Tate of St Ives). To be sold completed. Overlooking Porthminster beach and harbour, probably the only site of it's kind in dcdddddcdcd

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the afternoon. Package includes First Class travel and dcdcdcedcd dcdcdddddcd dcdcdddddcd

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dcdcgd the Duchy. Valuation in place at £275,000 completed. Also available in St Ives opposite Pelemont Park. A newly built dcdcgd

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INCLUDING COMPANY AND TRUST FORMATION dcdcdddddcd

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accommodation, transportation, meals, entertainment, dcdcdcedcd dcdcdddddcd dcdcdddddcd

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Western Liguria Property Specialist dcgdcd

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has an extensive selection dcdcdcedcd

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house, 5 bedrooms, 3 en-suites triple aspect lounge (25ft x 15ft). Kitchen 15ft x 17ft. Study, downstairs utility and toilet dcdcdcdcdcd dcdcdcdcdcd

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training and secretarial services. We will also supply dcdcdcedcd

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etc. 25ft x 15ft Cellar. To be completed to purchaser's specifications. Approximate valuation £120,000. Also available dcdddddddcd dcgdcd dcgdcd

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IN LIECHTENSTEIN you with the latest portable computer. dcdcdcedcd

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Largest choice of property available from the only British agents dcdcgd

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nearby, newly built industrial unit with secure yard 3 phase. Also piece of land at Carbis Bay, St Ives with magnificent dcdcdcedcd

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based in the heart of this unspoilt corner of Italy. dcdcdcedcd

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Exclusively designed and hosted business web sites dddddddddddddd

Rural and village properties to renovate from less than £10,000! views with detailed plans available for underground house, (no planning consent).

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dddddddd seaside villas and apartments. dddddddd dddddddd about company forms in dddddddd Full professional service and legal assistance in English. Free internet access and installation/training. US TAXATION For details call/fax: Liechtenstein and other Finance Available Consult the experts directly. We live here! ALDERNEY £400 Packages to suit every budget, from a simple page to BY CPA IN LONDON Good quality business offshore places. For property listings, information and help contact: +39 75 941 0113 JERSEY £480 a multi-page interactive site. US/UK tax return service projects/business ideas London International service. required. Finance Jenny Rona, Casa Antica Properties, Piazza dei Carri, E-mail: [email protected] www.ideal-home.com B.V.I. £320 Fiduciana and US/UK tax advice for US 18010 Melini di Triora, (IM), Italy Residence Same day service available by phone, fax or email. citizens and US "green-card" available. Business www.pavilion.co.uk/ Verwaltungsanstalt TEL/FAX: 00 39 184 94633 valleverde Bargain UK properties. Residential & Commercial IRELAND £225 Top specification, internet-ready PCs supplied at best holders living/working abroad. plan/details/summary etc. DELAWARE LLC £200 Egon Kaiser, Egerta 53, prices with free or discounted website. Serving individuals and to Auctions & repossessions. estate agents POB 2, FL-9496 Balzers MHC Insurance & S.DAKOTA £175 corporations. Full range of LAKE OF ORTA - Pearl of Northern Italy Principality of Liechtenstein Call for details accounting services available. Mortgage Services ITALIA 94 Details of addresses, descriptions, 5, Beauchamps Place, Knightsbridge, London SW3 Highest Investment Yield TURKS & CAICOS £450 Maximis +44 (0)115 946 8948 6 Cambridge Road, The "Lago d'Orta" is one of the most beautiful Lakes lot No, guide price Tel: +44 (0)171 584 1333 Fax: +44 (0)171 589 4118 Tel: +41 – 75-388 02 02 NR LUCCA. Farmhouse, 5 rooms with 4 acres olive grove, I.O.M. £250 I.N. MOKHTAR FCA CPA Hastings, TN34 1DJ

in Northern Italy. Characteristic, enchanting vineyard, fruit orchard. £44,000. Mobile: +44 (0)370 523 777 Fax: +41 – 75-388 02 19 Email [email protected]

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ddfddddddddddfddgddfdddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddd ddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddfddgddfddddddddddfdd

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Tel: +44 (0)1908 265008. www.ideal-home.com PLEASE CONTACT US FOR OUR FULL Fax: +44 (0)1908 569190 SERVICES BROCHURE OR DETAILS AND COSTS FOR A SPECIFIC JURISDICTION LUXEMBOURG GIBRALTAR SPAIN EVELINE KARLS St Anne's House, Victoria Street, OCRA (LUXEMBOURG) S.A. ™ 19 RUE ALDRINGEN, L-1118 LUXEMBOURG Alderney, Channel Islands GY9 3UF TEL: +352 224 286 FAX: +352 224 287 Boat-houses Villa WORLD WIDE LIECHTENSTEIN Floor space approx. 60m2 Floor space approx. 300m2 Vincente Tur Ortola BARBARA BAUM Enlargement possible. Main and adjoining build- Tel: +44(0) 1481 824218 Fax: +44(0) 1481 824219 OCRA EST Wonderful Sight ing. Perfectly restored PO BOX 70, STAEDTLE 7, FL-9490 VADUZ, LIECHTENSTEIN Price: SFr. 850,000 Price: Sfr. 400,000 Abogados / Solicitors Email : [email protected] THE WORLD'S LEADING TEL: +41 75 236 1440 FAX: +41 75 232 6393 FINLAND Lothar Kahl Immob. CH-5032 Rohr / AG www.alderney-international.ay.gg TILL SAHLGREN BSc (Econ) TEL: 0041/62-824 28 65 Fax: 0041/62-824 87 37 OFFSHORE COMPANY AND OCRA (SCANDINAVIA) LTD WORLD TRADE CENTRE, ALEKSANTERINKATU 17 Would you buy or sell a property in the U.K. without using an English solicitor? TAX PLANNING SPECIALISTS FIN-00100 HELSINKI, FINLAND TEL: +358 9 6969 2569 FAX: +358 9 6969 2565 ITALY, UMBRIA Of course not!!!! More and more businesses and high net worth individuals are using Offshore Corporations SWEDEN BJARNE BORG Near Todi, hillside Therefore, when purchasing or selling a property in Spain, do as the Spanish do, use an and Trusts for International Tax, Asset Protection and Estate Planning. Since 1975 Overseas OCRA SWEDEN Company Registration Agents worldwide team have specialised in providing confidential BOX 23008 UPPLANDSGATAN 83, S-10435, INDEPENDENT SPANISH SOLICITOR. STOCKHOLM, SWEDEN 40 acre farm. and cost effective company and trust formation in the world's major low tax areas. Clients TEL: +46 8 334 720 FAX: +46 8 322 370 are supported by a team of over 275 multi-disciplined staff including Lawyers, Qualified LITHUANIA The farmhouse has been beautifully converted Our office has a prominent reputation, built up over 15 years, in Foreign Investment and RAMIGIJUS KABECIUS BSc.(Econ) into three separate but optionally TAYLOR WOODROW Commercial Law, on the Costa Blanca - from Valencia to Alicante, advising, assisting and Accountants, Company Secretaries, Bankers and Trading Specialists who provide the OCRA LITHUANIA interconnecting maisonettes. following services: LIAUKSMINO ST 8/2, 2nd FLOOR, GIBRALTAR protecting our clients in all aspects of their investment in Spain. 2600 VILNIUS, LITHUANIA Views over Tiber valley and Assisi from the ● A choice of over 750 ready-made companies incorporated TEL: +370 2 623 081 FAX: +370 2 623 081 With our multi-lingual ( English, Spanish, German and French) team of SOLICITORS E-mail: [email protected] house and the hill top swimming pool. in the Bahamas, BVI, Belize, Cayman, Delaware, and ACCOUNTANTS we offer a complete service to our clients, including: HUNGARY Present summer holiday rental income LUXURY APARTMENTS Nevis, Panama, Isle of Man, Ireland, Liberia, Mauritius, LASZLO KISS, BSc. (Econ) approx. 40K OCRA (EASTERN EUROPE) LTD Hong Kong, Seychelles, Turks, and Western Samoa H-1143 BUDAPEST, ILKA STREET 61, HUNGARY Conveyancing; Fiscal Representation; Taxation; Finance and Mortgages; Wills; For full description IN A PRIVATE MARINA ● Domiciliation and Registered Office Facilities TEL: +36 1 351 9959 FAX: +36 1 351 9958 Inheritances; Litigation; Offshore Companies; Powers of Attorney; Business Feasibility POLAND leaflet phone ● Arrangements of Full Nominee Service KRZYSZTOF KUBALA, Attorney-at-Law Studies; Business Acquisition, etc. OCRA POLSKA (00) 39 6 807 8520 or PRICES FROM £230,000 ● Full Management and Administrative Services BAJONSKA 9, 03-963, WARSZAWA, POLAND If you need advice or assistance then please contact our Client Liason Manager, Barry Minett OFFSHORE MANAGEMENT for International Trade and Investment TEL: +48 22 6177173 FAX: +48 22 6160957 fax (00) 39 6 807 8524 & INCORPORATION OF ● GREECE Enjoy the Tax Advantages or Jane Kite on Ship and Yacht Registration DORA NAKOU, Attorney-at-Law INSURANCE & REINSURANCE ● OCRA GREECE Accountancy and Audit Services 2 PLOUTARCHOU STR, SOPHIAS AVENUE, USA 00 34 (9) 6 573 1635 or 1688 or Fax them on 00 34 (9) 6 573 1964 or write to them at COMPANIES ● ATHENS 11521, GREECE in a Mediterranean Climate Letter of Credit Services TEL: +30 1 723 0766 FAX: +30 1 721 7376 FLORIDA Sarasota, Siesta Key. ● Wilmington, Private Luxury Villas Self BAHAMAS CAPTIVE MGT LTD. Value Added Tax Registration Services CYPRUS - Abogados / Solicitors CHRISODOULOS VASSILIADES, Attorney-at-Law catering or For rent. Vicente Tur Ortolá West Bay Centre, West Bay Street ● Bank Introductions Vermont U.S.A., Telephone 01432 264100 Fax OCRA CYPRUS 354632 C/SAN PEDRO No 5, 03720 BENISSA, (Alicante), ESPANA. ● 20 QUEEN FREDERICA STR, EL GRECO HOUSE, Architecturally Nassau, The Bahamas Offshore Trusts and Licensed Trustee Services OFFICE 104, NICOSIA, CYPRUS designed 7,000 sq. ft. FOR SALE FLORIDA Sarasota, Tel: (242) 327-1481 ● Banks and Insurance Companies available TEL: +357 2 473211 FAX: +357 2 463463 Contemporary, on 19 wooded Siesta Key. Lux to qualified applicants MADEIRA acres, 35-ft high rotunda holiday/investment property. TIMESHARE FRAUD Fax: (242) 327-1482 DR DAVID FISKE DE GOUVEIA, BSc. MBA, MSI introduces the three-level High (guaranteed) return E-mail:[email protected] MM CIA LDA

interior 5 bedrooms, 5 1/2 $268,850 01432 264100 ALL MAJOR CREDIT CARDS ACCEPTED RUA DOS MURCAS NO. 68,

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UK Mistral Estate Services cdddddddd and own river frontage. (Only up to 6 month old contracts ● HUNGARY $1995 ● TURKS/CAICOS $700 SINGAPORE Large solar heated pool. DIANA BEAN can be accepted) Freephone: 0800 279 3263 OFFSHORE ● ● OCRA (ASIA) PTE LTD Kitchen and living room IRELAND £225 UK LTD £95 24 RAFFLES PLACE, 26-04 CLIFFORD CENTRE, FINE FRENCH PROPERTIES COMPANIES SINGAPORE 048621 leading onto South facing Tel:0171 735 999 TEL: +65 5353382 FAX: +65 5353991 terrace with wonderful Tel: +345 283 6092 ISLE OF MAN - HEAD OFFICE: COLIN FORSTER 55 PARK LANE, •• TAX PLANNING HONG KONG LONDON mountain views. 4 bedrooms. www.polaris.net/mistral OVERSEAS COMPANY REGISTRATION AGENTS LTD RAYMONDRAYMOND CHOI, CHOI, MBA, MLIA MLIA (DIP) (DIP) Fax: +345 292 8078 OCRA ASIA LTD Coming to London for 1 week 4 bathrooms. Full central COSTA DEL SOL BANK INTRODUCTIONS PO BOX 54, RAMSEY, ISLE OF MAN, GREAT BRITAIN, IM99 4ED. 2402 BANK OF AMERICA TOWER, or more? Why stay in a hotel heating. Unusual galleried www.mairena.com E-mail: [email protected] 12 HARCOURT RD, HONG KONG SEAFRONT STUDIOS / APARMENTS OFFSHORE TRUST TEL: +852 2522 0172 FAX: +852 2521 1190 when you can stay in a luxury library/study. Cellars [email protected] For Immediate service and our 185 page colour brochure serviced apartment for the same To Advertise in the from £14,000 P R CHINA price or less? and outhouses. ERIC LUND TEL: +44 1624 815544 FAX: +44 1624 817082 BART DEKKER, LLM COUNTRY PROPERTIES WITH 1905 SHANGHAI OVERSEAS CHINESE MANSION, Hyde Park Residence offers International Property PHONE/FAX LONDON - R E COOK,BSc (Hons) OR PETER SIDNEY 129 YAN AN ROAD WEST, SHANGHAI 200040, P R CHINA you the opportunity to stay in £165,000 LAND OVERSEAS COMPANY REGISTRATION AGENTS LTD, 72 NEW BOND ST. LONDON, W1Y 9DD TEL: +86 21 6248 4355 FAX: +86 21 6248 1421 your own apartment in London from £10,000 COSTA DEL SOL / GOLF +41 27 323 7288 TEL: +44 (0171) 355 1096 FAX: +44 (0171) 495 3924 USA WEST COAST while enjoying the services Tel: +33 4 67 81 25 91 Section KEVIN MIRECKI, Attorney-at-Law available in a 5 star hotel. please contact BUSINESS - OVER 100 AVAILABLE OFFSHORE COMPANIES AICS LTD Sotogrande to Mijas 3501 JAMBOREE ROAD, SUITE 2100, Discounted rates available for Beach & Golf By English Lawyers READERS’ NOTICE USE THE DEFINITIVE OFFSHORE READERS’ NOTICE Robert Jolliffe, Sophie Henry or Laura Hughes Villas-Apts. inc 10 bars under £10,000 Properties of all sizes, types and price range. NEWPORT BEACH CA 92660, USA longer stays. Readers are advised to seek appropriate TEL: +1714 854 3344 FAX: +1 714 854 0938 Readers are advised to seek appropriate OCEAN ESTATES Call now for free colour Property Gazette. from £250 COMPANIES INTERNET SITE CALL US ANYTIME on professional advice before sending any on +44 (0)171 418 7844 FREE 50 PAGE professional advice before sending any MARBELLA Offices also in: +44 171 409 9000/9240 money or entering into any commitments. BROCHURE / BUYERS GUIDE Phone now : U.K. Tel : 01-672 511 135 money or entering into any commitments. or Fax +44 (0)171 713 1835 ᔒ+(345) 2811750 www.ocra.com Certificate Number 91196 AUSTRALIA, SOUTH AFRICA, Fax: +44 171 493 4041 or The European cannot be held responsible Tel: (34) (9) 5 288 6699-Fax: (34) (9) 5 288 6667 Tel: +44 (0)1398 331061 The European cannot be held responsible Fax: +(345) 2814595 SIROCO ESTATES Isle of Man and London BAHAMAS, CZECH REPUBLIC e-mail: for loss or damages incurred as a result Costa del Sol for loss or damages incurred as a result of [email protected] of responding to advertisements. e-mail: classifi[email protected] www.ocean-estates.com Fax: +44 (0)1398 331918 • • +44 (0) 1253 402188/349831 INTEREALTY Premier Estate Agency responding to advertisements. No. 1 OFFSHORE COMPANY SPECIALISTS

42 THE EUROPEAN ■ 23–29 MARCH 1998 23–29 MARCH 1998 ■ THE EUROPEAN 43

CyanMagYelloKey CyanMagYelloKey For more information or to advertise in the classified pages, please contact us on BUSINESS DIRECTORY Tel: +44 171 418 7883, Fax: +44 171 713 1835, E-mail: [email protected]

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44 THE EUROPEAN ■ 23–29 MARCH 1998 23–29 MARCH 1998 ■ THE EUROPEAN 45

CyanMagYelloKey CyanMagYelloKey For more information or to advertise in the classified pages, please contact us on APPOINTMENTS Tel: +44 171 418 7883, Fax: +44 171 713 1835, E-mail: [email protected] Opportunities in the Euro-Market ADMINISTRATION The EUROPEAN PARLIAMENT secretariat SUPPORT ASSISTANT Stimulated by many EU programmes, Belgium and is holding three open competitions for (m/f) Luxembourg enjoy a favourable job climate for jobs Our client, the London Branch of and career advancement: English-language a Japanese bank, is seeking International Business Consultants applications for the above Global Account Managers consultancy accountancy management government USA, Singapore, Germany, Italy, Netherlands & UK position. The suitable candidate ADMINISTRATORS with legal training London * France * Holland * Italy * Germany restructuring training construction agribusiness will be educated to degree level, (competition EUR/A/132, jointly organized with the £80,000 Package engineering utilities chemicals petroleum £65,000 - £85,000 Package infrastructure medicine ...social sciences many more... fluent in English and Japanese COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES) Telstra is globally recognised as a pioneer in the Globalisation of Telecommunication products and services. With an and have experience working for An exciting and dynamic organisation, Origin is a principal player in the Job competition is high. The key to success is to communicate a annual turnover of £7.5billion and 70,000 employees in over 30 countries they provide turnkey communications solutions, a Japanese Bank. They will be provision of leading edge technology and solutions. Employing 15,000 clear image of competence, drive, creativity, problem-solving, people world wide, with an annual turnover in excess of $1.5 billion, Origin incorporating all aspects of Telephony, Data and Intelligent Network services to an international portfolio of high profile computer literate with at least ADMINISTRATORS (competition PE/85/A) versatility, achievement,...poised for the next challenge with a new is one of the biggest global professional service providers in the field of organisations. Utilising a consultative approach to business, they are able to offer innovative solutions to complex two years experience working communication problems that not only add value to their client's businesses, but also reduces their costs. employer. Business and IT Solutions. We offer a comprehensive package of consultancy, within an IT environment. Duties systems design, implementation and systems management across a wide ASSISTANT ADMINISTRATORS (competition PE/86/A) Already established as one of the world's largest fully integrated telecommunications carriers, Telstra is now investing in the YOU CAN TARGET POTENTIAL EMPLOYERS, BUT will include translation work from range of technology. responsible for: continuing growth of their Europe operation by recruiting a number of high calibre Global Account Managers. CAN THEY FIND YOU? and into Japanese language Origin is seeking to develop it’s business concepts and create a dynamic ■ managerial, planning and research duties on the basis of general guidelines (60+% of time) and liaison international force within the field of Business Consultancy by recruiting The Role will be to lead virtual teams in Job changes are rare events along the career path: few seekers have ‘Business Gurus’ with expert knowledge within the target markets of Oil and (competitions PE/85/A and PE/86/A) support for UK staff dealing ■ similar duties and, where required, assisting the institution and preparing its defence in legal cases • optimal skills in "self-marketing". Our professional input of advice Gas (Down-stream Clients), Retail, Pharmaceutical, Finance or Supply Chain identifying and securing as new customers, global corporate accounts. and practical support will strengthen your own efforts and speed-up with general administration, Distribution. (competition EUR/A/132). • negotiating with multi-national organisations at Board level, across all their sites/offices on a world-wide basis. the search: operational procedures and the Based either in the UK, USA, Netherlands, Italy, Germany or Singapore, installation of software and Location: Luxembourg, Brussels or any other place of work of the organizing institutions. • building and managing business relationships as necessary to meet the mutual business needs of both the ¥ writing a professional CV: European Phare/Tacis, US formats focusing into a home or global market, these roles are an unique opportunity computer systems developed by for Senior Business Consultants who are looking for ultimate career customer and our client. ¥ selecting career directions ¥ targeting opportunities Main entry requirements: development. The key skills required to deliver the Business Change within • controlling and co-ordinating the appropriate resources to maximise customer satisfaction and the parent company in Japan. Qualifications: ¥ fruitful networking ¥ handling other sensitive issues your target markets are Business Process Improvement, Strategic commitment/retention. Annual salary Consultancy and Programme Management. Administrators and assistant administrators (PE/85/A and PE/86/A respectively) To explore career options // discuss goals // call in confidence. ■ The Individual will ideally possess £15,000 You can be a Business Consultant based either in our target market sectors or University degree. Admission to competition PE/86/A is reserved for applicants who obtained their degree New Horizon Careers in a Consultancy. If you are looking to shape the future and seek an unique after 24 April 1995. • experience of either the Retail, Manufacturing, Finance, Travel, Industrial or Business Services sector. Tel. (32 2) 280.01.48 Send CV & indication of business opportunity, Origin will be interested in talking to you. • Administrators with legal training (EUR/A/132) European and/or International experience to enable him/her to develop our Client's global portfolio. Gordon Allen - Counsellor current salary package to: Call Ruth Alway quoting ref: RA/5609. • ■ University degree in English, Scottish or Irish law. a high level of professional/technical competence within the telecommunications industry gained from at least Fax: (32 2) 230.29.27 Chris Hunter Associates three years experience as a Major Corporate Account Manager. E-mail: [email protected] Suite G07, Grosvenor Professional experience: • the drive and commitment required to contribute to the Corporate goals and revenues of this major House, Central Park, Telford Administrators with legal training and administrators (EUR/A/132 and PE/85/A respectively) international service provider. TF2 9TW, England. ■ DIRECTOR At least two years' professional experience. To apply, in the strictest confidence, please write, enclosing your CV and current salary details, Closing date 17th April. Assistant administrators ( PE/86/A) quoting reference 724 to Anthony Benjamin International, at Sun House, 31-35 Sun Street, for UK company involved in exports of branded ■ No professional experience is required. London EC2M 2PY. Telephone: +44 (0)171 377 7510. Fax: +44 (0)171 377 7511. consumer products/consumer durables to Video Conferencing: +44 (0)171 247 2458. African markets. JIGSAW INTERNATIONAL Requirements for all three competitions: ■ Applicant should be a graduate in economics/science/ A thorough knowledge of English and a very good knowledge of another official language of the European MEMBER OF GLOBAL RESOURCING NETWORK WITH OFFICES IN UK, Communities (Danish, Dutch, Finnish, French, German, Greek, Italian, Portuguese, Spanish or Swedish). A good engineering, having postgraduation qualifications in FRANCE AND BELGIUM management (MBA or equivalent) with marketing A Cousins Group Company knowledge of French is required for competition EUR/A/132. Knowledge of other official languages of the specialisation. Sales/marketing work experience of 5-7 European Communities will be taken into account. ■ Nationality of one of the Member States of the European Our focus is the Healthcare, Scientific, one of our focus industries. Fluency in 60 Albert Court, Prince Consort Road, London SW7 2BH Ken Clark International years at middle to senior level, preferably in a multinational Communities. ■ Applicants must have been born after 24 April 1952. Exemptions from the age limit may be Consumer and Industrial Products and English and French is essential, as well organisation with 2-3 years actual work experience in a Tel: 0171 584 5433 Fax: 0171 581 2901 Email: [email protected] is among the fastest growing, Services Industries. With offices in as firsthand experience of the French major West African country like Nigeria important. allowed in certain cases. global executive search North America, Europe, Asia and Latin market. Evidence of professional growth arising from excellence in THE EUROPEAN PARLIAMENT APPLIES A POLICY OF EQUAL OPPORTUNITIES FOR MEN AND WOMEN America, KCI serves multinational performance essential. We are looking for a bottom-line IN ALL POSTS. IT STRONGLY ENCOURAGES APPLICATIONS FROM WOMEN. speciality firms in the world... oriented individual with initiative, leadership ability, w w w.jigsawintl.com clients in the search and recruitment of Initial base salary and bonus potential Closing date for applications: 24 April 1998. senior level executives in all functions is in the £55,000-£80,000 range salesman's skills and product management expertise who is and disciplines. Our firm includes fifty depending on past experience and demonstrably comfortable working the markets of the For copies of the Official Journal containing the official application form and further details (50) consultants and support personnel. qualifications. Eventual cash developing world in Africa and Asia and who can pioneer send a postcard by 15 April 1998 to one of the following addresses, compensation can easily exceed development of new markets and new products in the quoting reference EUR/A/132, PE/85/A or PE/86/A: region. Extra-curricular achievements would not be MANAGING Our global clients have asked us to £100,000. overlooked. The job entails extensive travel while also ■ European Parliament information offices: further grow our French Practice in focusing on board-related duties such as finance, budgeting ¥ Ireland, Molesworth Street 43, IRL - DUBLIN 2 the search and recruiting of leaders - Please respond by writing or sending a and administration. ¥ United Kingdom, 2 Queen Anne's Gate, GB - LONDON SW1H 9 AA DIRECTOR Marketing and promotions in Germany £25K + Com typically Regional Presidents and Vice fax with a cover letter, CV and ■ Presidents, Country Directors and compensation information. No Salary commensurate with qualifications and experience: Experienced German speaker needed for Munich based publishing co. Lots of involvement in European Parliament, Competitions Department, BAK 1031, L-2929 LUXEMBOURG Marketing, Sales and Finance Managers. telephone calls please. Reply to Box No. P518 Universal Stainless an exciting environment. Please write your name in BLOCK CAPITALS. This position is located in our European Steel Exhaust Fitter French Speaking Frankfurt secretaries! £20K Headquarters at Windsor near London. Attn: Mr. Chris Seabourne required, Petroleum marketing associate with proven training skills. Various positions for secretaries with German to work for top law firms/banks. Scientific Games International Limited is the International subsidiary of Markets Vice President, Europe Young teams of English/German nationals. EQUITY RESEARCH You will work with clients to plan Salary: £28,500 Must be able to bespoke fit Scientific Games Incorporated, the leading North American, world wide Ken Clark International systems on any vehicle, organisation structures, write position Itochu Petroleum Co (UK) Limited is a leading international Customer services team leader £19K A top tier global investment bank with an extensive manufacturer of instant lottery tickets and promotional games, and UK Base 11 High Street crude oil and oil products trading company who require a TIG weld in position, and descriptions, profile candidate Italian speaker needed for int'l high tech. co. in Surrey. Make your mark in a European office network undertakes research, provider of support services which has a fast - growing turnover specifications, identify and research Windsor, Berkshire SL4 1LD marketing expert for their London office. be fully conversant with trading and sales for equity and equity related Huth Bending methods. rapidly expanding division. currently approaching £200 million per annum for the group. recruiting targets, contact and develop United kingdom Applicants must possess a relevant post-graduate securities in Central and Eastern Europe, Middle FAX: +44 (0) 1753 620906 qualification and should be able to demonstrate their Fluent English is an East, North Africa and Turkey. They are now preliminary candidates, evaluate knowledge of the marketing role within the industry. Media/travel £18K + Com To meet the future market requirements the UK Operation is now looking potential candidates and recruit the essential requirement for Are you a good sales exec with French and the ability to develop business? This seeking to hire Economists and Analysts for these The company conducts a large proportion of its business in the this post. markets. for two experts in the field of finalist candidate. Extensive training will CIS and therefore fluency in English and Russian is essential is your chance to prove yourself with a co. which thrives on success. Apply, in writing to be provided. together with an understanding of one other Each role will require the candidate to provide high language within CIS countries. Mr Robin Abrey, Bookeeper in Paris £18K quality and detailed company and sector research Managing Director, Some exp. needed to join small int'l co. Good French required. Attached Card Systems Applicants should be graduates with 5- Please forward CV's to: Mr T Kikuyama at Itochu and monthly notes, to produce written evaluations Longlife Exhausts Ltd., and forecasts and to develop external relations at Applicants should possess proven skills in the following: 15 years experience in marketing, human Petroleum Co (UK) Limited, Austin Friars House, 2-6 Goldcroft, Yeovil, resources or consulting experience in Austin Friars, London EC2N 2HE. Recruitment Consultant German or Italian £18K senior level. Somerset, RA21 4DH, UK. Are you a people's person? Looking for a career dealing with high level int'l • Extensive working knowledge of rotary web press production of clientele? Join this company in Hants which gives excellent training and great The candidate should be a graduate and an business forms and Direct Mail experienced equity research professional; possess JAPANESE INSURANCE BROKER TELECOMMUNICATIONS prospects. Europe • Latin America • Middle East • North America • Northern Asia • Southern Asia excellent understanding of his equity market. • An understanding of the insertion capabilities of high speed REQUIRE ENGINEERS Int'l Private banking £15K + Bens Competitive banking packages can be expected Rotogravure and Heatset in-line presses. It is essential that applicants CRUISESHIP JOBS & An insurance account executive / internet operator who has Some banking exp. required to work as an assistant using your French, Spanish Please reply to: Box No. P510 have a complete working knowledge of quality assurance requirements Research Associate WORKING HOLIDAYS experience of working in Japanese and Far Eastern cultures, Nokia DX200 & Ericsson or Italian. Excellent training. Dynamic int'l environment. for inserting a secondary substrate of paper in an inline high speed Visit USA, Australia, The Caribbean, especially in the insurance industry. 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Your brief will be to use your excellent telephone card products manner and strong communication skills to target, source and approach individuals to meet the FLUENT JAPANESE speaking contact John Smith on Bilinguagroup Rec. Cons. A UK based small company is seeking an ambitious Sales recruitment requirements of our Clients. This is not a back office role, our Research Associates are p/time & temp. staff required Mary Kay Cosmetics (UK) Ltd. tel: +44 (0) 1342 304020 49 Maddox Street, W1R 9LA and Marketing Executive aged between 30 to 35 years old. • Extensive business contacts within the Direct Marketing and Product for admin, JWP op, clerk, mkt Fluency in Albanian, Greek and English language is closely involved in the total recruitment process, including Client presentations, telephone research & other positions Sales Manager Tel: +44 (0)171 493 6446 Fax: +44 (0)171 493 0168 Promotion field. screening of potential candidates and attendance at selected trade exhibitions and other with Int’l Co’s. Ashford To provide training, development and motivation of required. Knowledge of the Albanian market industry is marketing events. You should possess a minimum of two years research or telesales experience Associates Tel +44 (0)171 Mary Kay Beauty Consultants at all levels. CHIEF BAKER essential. This is an influential role, reporting directly Applications in writing, with a genuine interest in developing a career in Executive recruitment. Success in this role could 6264592 to the Managing Director, in which the successful Applicant must have substantial experience REQUIRED To advertise in the APPOINTMENTS SECTION please contact enclosing full CV, should be lead to an Account Development position if desired. Experience is not essential, however a (five to ten years) in working with independent applicant will develop and expand a new market. positive, proactive attitude is required, and a knowledge of our specialist industries would be an BOX NUMBERS Beauty Consultants and be able to demonstrate SPECIALIST IN ARABIC Charlie Attenborough, Sam Harvey or Peter Aplin on: forwarded to Mr W Christie, All box number replies Please apply in writing to: advantage. prefixed by the letter “P” credibility as a role model through a proven BREAD, MIN 5 YEARS Managing Director, Scientific should be sent to: background of success in this field. EXPERIENCE Tel: +44 (0)171 418 7883 Classified Sales Department PLUSGRADE LTD Games International Limited, Please apply, in the strictest confidence, to our Managing Partner J Layton-McIntosh, Anthony THE EUROPEAN, 200 Gray’s Inn Based in London. CONTACT: ELI - Road, London WC1X 8NE Fax: +44 (0)171 713 1835 RAILWAY ARCHES, MOOREFIELD ROAD 81 Kirkstall Road, Leeds LS3 1LH. Benjamin International, Sun House, 31-35 Sun Street, London EC2M 2PY. Please mark clearly Write with details to: EA Cameron (London, England) Tel: +44 (0)171 377 7510. Fax: +44 (0)171 377 7511. Video Conferencing: +44 (0)171 247 2458. the box number you are replying to. 39 Park Street, London W1Y 3HG. +44 (0)181 493 9933 E-mail: classifi[email protected] LONDON N17 6PY, UK.

46 THE EUROPEAN ■ 23–29 MARCH 1998 23–29 MARCH 1998 ■ THE EUROPEAN 47

CyanMagYelloKey CyanMagYelloKey SPORT GERMANY ■ Indecision may ruin Berlin’s Olympic Stadium Hitler’s arena falls apart

Clive Freeman Inside is a different matter. Built for a thou- continue to be used for major sporting events. rejects this idea of two stadiums in close prox- BERLIN sand-year empire, the stadium is falling apart. But Strieder does favour the proposal to build imity. He believes the money would be better The athletics track where Owens won his a new football-only stadium on the nearby spent restoring the old arena. Rudi Thiel, the HE cranes helping Berlin resume medals remains as a reminder of the stadium’s Olympic hockey grounds, provided it does not septuagenarian organiser of Berlin’s Grand its role as the home of the German glory days, but last year parts of the brittle look out of place with the rest of the 130- Prix athletics event, staged each summer at federal government next year are outer ring had to be shored up for months by hectare complex. the Olympic Stadium, agrees. a nagging reminder of how little scaffolding. A net was suspended beneath its In Berlin, football is booming. Hertha He says that the idea of his event moving Thas been done to preserve one of Plexiglas roof awning to protect visitors from Berlin’s home gates in the Olympic Stadium to the Jahnsportpark, a 22,000-capacity sta- the city’s greatest landmarks. Last autumn the falling masonry and the stadium’s lower ring this season have averaged 53,000, second only dium in east Berlin, is nonsensical. Thiel is Berlin city government hired a Munich con- seats have rotten foundations. The place is to world and European champions Borussia calling for restoration and modernisation of sultancy firm at a cost of $550,000 to draw falling down and the town council and the Dortmund at the top of the Bundesliga’s atten- the Olympic Stadium, as much for the pres- up a plan for the development of the crum- government are arguing over whether to ren- dance table. Backed by big companies, Hertha tige it brings as for its value as a sporting venue. bling Olympic complex. Its report is due this ovate or demolish it. has the potential to become one of the most “If it is pulled down, Berlin’s chances of ever spring. Either way it will be a hugely expensive powerful clubs in Europe in the next five years. staging European or world athletics champi- Immortalised by Olympia, Leni Riefenstahl’s operation. The bill for repairs has been esti- Manager Dieter Hoeness hopes to sign sev- onships, or of attracting the Olympic Games documentary of the 1936 Games, the Olympic mated at $366 million; a new stadium would eral international players for next season; the again would disappear,” he warns. While they Stadium is the most famous sporting arena in cost between $550m and $600m. thrill of playing in the Olympic Stadium is argue, the stadium is decaying; by the time a Europe. It was there that Adolf Hitler tried to The German Football Association (DFB), clearly a big draw. Thomas Hässler, a German consensus is reached, it may be too late. promote his twisted theories of Aryan supe- which is keen to host the 2006 World Cup, has international, is one of the players Hertha “With the German Football Association riority through the Olympic movement; black been urging the Berlin senate and the Bonn would like to buy. A Berliner, he has said that eager to secure the 2006 World Cup, a deci- American Jesse Owens provided the perfect government to modernise the stadium so that he could happily wind up his playing career sion about the Olympic Stadium’s future has riposte with four gold medals. it can be used as a venue for the tournament. in the Olympic Stadium. to be reached soon,” says Ingrid Stahmer, Thanks to Riefenstahl’s film, the Nazis’ racial Two matches in the 1974 World Cup were But not everyone shares his views, even Berlin sports minister. The DFB hopes to use propaganda remained imprinted on the pop- played there after minor renovation work was within Hertha. Manfred von Richthofen, the the stadium for the opening match of the ular consciousness and was a factor in Berlin’s carried out. But because of the huge cost the president of the German Sports Federation, World Cup, and also for a semifinal and the failure to win its bid to stage the 2000 authorities have delayed renovating the sta- said he saw little sense in investing money in final. “But in its present condition, there is no Olympics. But, stripped of its historical asso- dium complex which, as well as the arena, restoring the Olympic Stadium. Richthofen, chance of that,” Stahmer warns. ciations, the stadium is one of the world’s great incorporates field hockey, horse riding and a nephew of the “Red Baron”, the German First Twenty-four German cities are offering sporting arenas. water polo facilities. Hopes that a business World War flying ace, argues that even if the grounds for the World Cup; the DFB will pick When it was being built, Hitler demanded: consortium might be found to take over Olympic Stadium is renovated it might still 15 in February 1999 and will not put Berlin “If Germany is to host the world, the prepa- responsibility for its future development have fail to meet the standards of the world foot- on the list without confirmation that a plan of rations must be complete and magnificent.” been dashed. ball authorities. action has been put in place. He got his way. After Berlin flopped in its bid to host the Otto Hoehne, president of the Berlin Foot- Hitler’s orders, issued during the construc- Built for the 1936 Games, it was constructed 2000 Olympics four years ago, the govern- ball Association, and Manfred Zemaitat, the tion of the Olympic Stadium, echo down the on the colossal scale that the Nazis loved. Much ment reneged on promises that the stadium boss of Hertha, share Richthofen’s doubts. years. Sadly, it looks increasingly unlikely that, of the work was done by hand by a 2,400- would undergo renovation and modernisa- Hoehne says that building a new stadium on the latest occasion when Germany hosts strong workforce. Natural stone from all over tion, including the construction of a roof. in Berlin is realistic and sensible. “The Olympic the world, the arena will be either prepared Germany was used and from a distance it still Nothing has been done since, but Peter Stadium would play a multifunctional role or magnificent. looks magnificent, with huge pillars, National Strieder, Berlin’s urban development minis- during the time the new arena was under con- Socialist statues of strapping nudes and a 77- ter, says the stadium is far too important a his- struction,” he said. Crucible of history: the dramatic setting for metre bell tower. torical venue to be demolished and should Klaus Löhe, Berlin’s state secretary for sport, the Nazis’ 1936 Berlin Olympic Games KOBAL ITALY ENGLAND Newcastle directors Venezia’s ambitions may leave fans high and dry dogged by controversy Chris Endean Venezia football club with Mestre, the lagoon. There, football plays a sec- kickabouts in the Campi, the Venetian Venice, embraces the two places. In Like the damp and dreary housing HE backlash suffered called local women “dogs”. The VENICE rival on its northwestern shore, the ondary role to history. equivalent of the piazza. This suc- reality, though, Venice and Mestre are that drives young Venetians to the by Newcastle United two men have apologised for the side has been preparing to join the The tide turned at Venezia with the cessful season would coincide with two different entities. The former is mainland in search of modern apart- over insulting rem- remarks but do not deny them. OR two decades, grounds- Italian football elite. arrival of Gianni Di Marzio, acknowl- the centenary of the official demise of an island city of art, tourism and a ments, Venezia FC has outgrown its arks made by its direc- While it will be virtually impos- man Umberto Mellara has With just one trophy in 91 years and edged as perhaps the shrewdest sports La Serenissima. shrinking population; the latter is a historic home. The stadium’s rickety T tors could cost the sible to sack them, their comments fished footballs out of the no first division appearance since manager in Italy. Under his guidance In 1941 the club’s cup victory was fast-growing blue-collar community. terraces can hold just 15,000 fans; club dearly. It may also discour- are likely to have a serious effect canals that surround 1967, Venezia’s football pedigree and Novellino’s management, Venezia overshadowed by Italy’s entry into the Each week this confrontation is seen new rules propose a minimum capac- age the continental European on club finances. Wearing the FVenezia’s stadium on the bears no comparison with the city’s has blended together a team of excit- Second World War, while the team’s on the lagoon’s playing fields. ity of 35,000 for first division clubs. clubs who are flocking to follow team’s shirt is almost obligatory island of Sant’Elena. Apart from the cultural heritage. But it is a highly mar- ing new talent and battle-hardened last appearance in Serie A coincided At Sant’Elena their fans refuse to sit “It’s outrageous,” says Renato Ser- the Magpies in floating on the in Newcastle; of the club’s £41.1m day Pele graced the stadium for an ketable commodity. veterans. with the disastrous flood in Novem- in the same stands. At the northern ena, head of the supporters’ club. “The stockmarket. sales in the year to July 1997, £9m exhibition match in the 1960s, most “Most teams must win something There is also space for some of the ber 1966 that made Byron’s vision of end fans shout “Venezia”, believing team will no longer have the right to Douglas Hall, vice-chairman of came from branded products. Fans of the stray shots have come from the to become a commercial success, but lagoon’s own. Stefano Polesel lives on Venice sinking “like a seaweed into their club has absorbed its neighbour; call itself Venezia.” the English Premiership side and who are derided for buying these clumsy feet of little-known players. Venice already has an international Burano, a five-minute boat trip from whence she rose” look frighteningly at the southern end, former Mestre Reverence for the past, however, owner of 57 per cent of its hold- goods may decide not to bother. Next season there may be bigger trademark,” says Giuseppe Marotta, the stadium; the midfielder turned real. supporters prefer “Unione”, viewing has long since yielded to progress. ing company, and Freddie Shep- They may also decide the team, fish in the lagoon. Managed by Wal- the club’s managing director. down the chance to move to a bigger The other problem Zamperini faces the two clubs’ amalgamation as a Marotta says the new stadium will herd, the chairman, who owns currently in the relegation zone, ter Novellino, Venezia are currently Venezia unashamedly exploits the club to help his beloved Venezia into is that while he has united the foot- merger. increase support from towns in the seven per cent, were reported as is not worthy of their support. second in Serie B, and the world’s top image of La Serenissima, the repub- the top flight. ball teams of Mestre and Venezia, he It is a battle that native Venetians Venetian hinterland and Zamperini having boasted about selling The boom in football is based ANTONELLO NUSCA players could soon be boarding a lic of Venice that ruled the Adriatic for If Venezia is promoted to Serie A has never bridged the gulf dividing are destined to lose. As more and more has planning permission for land near replica shirts to fans at 10 times on the exploitation of fans’ devo- vaporetto down the Grand Canal and centuries. Most football clubs fill their this season, the descendants of the the city and the town. On and off the Venetians desert the sinking city to Venice’s airport. cost and selling striker Andy Cole tion, but even the most loyal fol- through a small flotilla of supporters’ Internet sites with club colours and Doges are unlikely to celebrate with pitch, the two communities keep up pursue their ambitions on the main- The new stadium will include apart- for a then British record of £7 mil- lowers can reach breaking point. boats to the 85-year-old stadium. insignia; Internet surfers who visit the traditional regatta. This is not sim- the appearance of being Venetian. The land, so the football club will soon ments, a cinema and a shopping lion ($11.4m) without revealing When that happens, the share Since 1987, when supermarket www.veneziacalcio.it are taken on a ply because of an aversion to football, club is officially known as Venezia FC. abandon Sant’Elena for a new, pur- centre. And the groundsman will not that he might have a serious price is sure to tumble. TIme for a change: ‘We want a new stadium,’ say the supporters tycoon Maurizio Zamperini twinned multimedia trip into the heart of the although the city’s rulers have banned The governing unit, the council of pose-built stadium on terra firma. need a boat licence. injury; they were also said to have DOMINIC O’REILLY

48 THE EUROPEAN ■ 23–29 MARCH 1998 23–29 MARCH 1998 ■ THE EUROPEAN 49

CyanMagYelloKey CyanMagYelloKey SPORT

TENNIS Graf’s return looks a long shot Andrea Leand everything possible to compete again.” Graf had planned to return last OR the past 15 years Steffi autumn but had problems with the INJURY LIST Graf has overcome per- three 6.35 centimetre metal screws FEBRUARY 1990 1996 sonal and physical prob- holding her knee together. Doctors Broken right thumb Chronic lower back pain lems to dominate tennis, removed them last November and OCTOBER 1993 caused by a bone spur Graf has had them framed. F but she now faces her Surgery to remove bone JULY 1996 toughest challenge in the twilight of Once she returned to practice, she fragments in right foot Inflammation of patella her career. Having returned after compensated for the weaker limb and JUNE 1995 tendon in left knee major knee surgery Graf, who has won suffered minor calf sprains. When Graf Treatment to ease OCTOBER 1996 seven Wimbledon titles, must beat the finally did reappear in Hannover last sinus troubles Aggravated left knee PHOTOGRAPHS RICHARD O’ROURKE teenage stars who have usurped her month, her performances raised ques- DECEMBER 1995 NOVEMBER 1996 CZECH REPUBLIC pre-eminence and will be determined tion marks about her future. Surgery to More back pain forces retirement in to hasten her retirement. But while She looked fit and trim but still remove bone tournament final her rivals are wasting little sentiment moved gingerly on the leg. Her strokes fragments MARCH 1997 on her, Graf has discovered she holds remained strong but she was a stride in left foot Arthroscopic surgery on left knee a new place in the fans’ affections: the slow in getting to shots. JUNE 1997 one reserved for an underdog. Two weeks later, Graf showed Dirty old town puts steel in hockey hopefuls Surgery to reconstruct partially torn In her first tournament after nine noticeable improvement at the State patella tendon and ligaments in left knee months of injury, the once-invincible Farm Event Cup in California. The tim- NOVEMBER 1997 Dominic O’Reilly out an audit ended when they second job, but it is hard to see where Graf succumbed in straight sets to a ing on her ground strokes and con- Further surgery on left knee to remove screws PRAGUE declared that the near total absence they find the time. humble Belgian. But Graf’s gallant sistency on her serve had improved, of documentation made it impossible. Frantisek Postpusil, the general efforts in defeat drew unprecedented but she was forced to retire against EVASTATED by what has They had seen enough, though, to manager, says the staff work “from affection from the Hannover crowd. Lindsay Davenport in the semifinals been called the biggest doubt Stehlik’s boasts that it was a seven to late”, coaching or scouting. “I have never had a reaction like after straining her left hamstring. blunder in Czech privati- growing concern. Having devoted almost 20 years of his that before,” the 28-year-old German Even if Graf continues to regain her sation, Kladno is fighting Three years later, after running up life to the club, he is saddened by its said. “It was incredible. I started to cry form, questions will remain about Dback through its ice losses of more than Kc800m, Poldi plight. But there is hope: a combina- when they clapped as I walked on whether she can make it back to Nº1. hockey club. The town, about 20 kilo- closed down. Stehlik’s parent com- tion of a post-Olympic ice hockey court. I’ve never done that before. But During her convalescence, a new gen- metres northwest of Prague, has pany, Bohemia Glass, is bankrupt and boom and the local youth’s realisation I was just so happy to be back.” eration of young stars has emerged; COURT VIEW always been known for two institu- he is being prosecuted for non-pay- that sport might be the only route out Only a year ago Graf was the undis- they idolised Graf years ago but have tions: the Poldi steel mill,which once ment of social insurance, the illegal of town, has sparked off huge interest. puted world champion, with unpar- long since shed any deference. CHRIS EVERT ANDRE AGASSI employed 20,000 people; and its ice transfer of Poldi assets and fraud The club now runs 22 junior or chil- alleled athleticism, speed and power. Graf knows that the game may have ‘She needs a few more tour- ‘We’re in the same position. hockey. Five of the Czech squad that involving his first payment for the dren’s teams and the ice is almost Her reign came crashing to an end 10 passed her by during her absence and naments to get back that We’ve both been Nº1 and are won gold at last month’s Olympics company. always packed with lads practising months ago when she tore the patella her intolerance for nothing but the match toughness but it’s all now ranked in the 40s after a learnt the sport in Kladno. The NPF accepts that it will never furiously. Unusually for teenagers, tendon and ligaments in her left knee best makes it difficult to predict how there. In her last tournament while off. We both love the Nicknamed Cerny (Black), for the see the rest of the money it was owed they listen earnestly to the coaches, during the French Open. It was the she would deal with the possibility of she tired but she will get that game and have got into pretty smog from the steel mill that con- by Stehlik. “It was one of the worst knowing these are the men who made latest and most serious setback in a playing second fiddle. strength back. The forehand, good shape. But getting back stantly hung over the town, Kladno cases of privatisation,” said the NPF’s Jaromir Jagr into a star paid $8m a seemingly endless string of injuries. But as she stared at her atrophied serve and intensity are all to where we were is not going was never a picturesque place to live, Milos Ruzicka. “Stehlik played for time year by the Pittsburgh Penguins. “When I came round after the leg and ran her fingers over the vari- there. She impressed me and, to be easy for either of us.’ but there was plenty of civic pride. and was able to do that because the It was previously called Poldi after its Tough times: like the “I come here whenever I can,” said surgery I heard the doctors say that I ous lumps, bumps and red marks on if anyone can come back and In June 1993 the Poldi Steel com- contract had been badly formulated.” main sponsor but found itself strug- town, Kladno’s ice hockey 13-year-old Tomas Sedlak. “If I am not would eventually be able to exercise her battered knee, Graf was clearly challenge Martina Hingis, it’s MARTINA HINGIS pany was sold to Vladimir Stehlik, a Such incompetence and naivety are gling for funds; forced to rely upon team has struggled since skating, then I watch the older play- without pain,” Graf said. “But I did not thinking about that. Steffi.’ ‘Women’s tennis has im- Czech architect, for Kc1.75 billion typical reasons why the Czech econ- youth players and other teams’ cast- the steel mill closed ers and try to learn from them. All of not hear them say that I would be able “I’ve already succeeded in my proved a lot since Steffi has ($50.87 million), more than twice the omy is struggling. But while the Poldi offs, it plummeted to the bottom of my family worked in the steel mill and to compete again.” first goal, which was to be back on TRACY AUSTIN been out. She can‘t just try and next highest offer. The other bidders, fiasco was an expensive lesson for the the league. The club has found another I had always thought I would join The persistence and passion that court,” she said. “I’m not worried ‘She is hesitating on big points keep the ball in play on her from America, Germany and Sweden, country in general, it was a disaster backer, Velveda, a car polish and wax them. Now that cannot happen I must drove Graf to the top propelled her about whether I win or lose now and guiding the ball on her backhand. It won’t be as easy had proposed extensive restructuring, for the people of Kladno and their ice company, which should allow it to look for something else.” through months of rehabilitation. She but that might change. As long ground strokes but that is for her because players like but Stehlik promised to increase both hockey club. avoid relegation, but it is unlikely to Like all of his schoolfriends, Sedlak also had to cope with the stress of see- as I love to play I’m not going understandable; it will improve. me, Venus Williams and Lind- production and employment. The loss of the mill, which domi- regain the levels of excellence. dreams of playing alongside Jagr in ing Peter Graf, her father and man- to give up hope of reaching the She still has a big heart and, in say Davenport don’t have He paid the first instalment to the nates the town’s skyline, shattered That it is in existence at all is testa- North America’s National Hockey ager, jailed for tax evasion. top again. I know that I am still the past, whenever she has set weaknesses. But it was excit- National Property Fund (NPF) by morale. Unemployment in the town ment to the devotion of the staff who League, but he would settle for less. “There were days that I was down competitive and will not give up. her mind to something she has ing to see her playing well transferring money from Poldi. An is 13 per cent and rising and many are work for a monthly salary of just “I would be happy to play any- but I never let myself get into a slump,” “I would not try to come back achieved it.’ again.’ abortive attempt by Coopers & now leaving to seek work in Prague. Kc2,000. This pittance of a wage where, even here in Kladno,” he said. she said. “I kept going because I if I did not feel I could go all the Lybrand the following year to carry The ice hockey team suffered, too. means that they must all have a “At least it would be a job.” wanted to know that I had done way.”

OLYMPICS BOOM LIVE - Tennis - Key Biscayne Semi Final No joke as curling fever sweeps Swiss away tune in Friday Michael Butcher highest television viewing figures of get some of the $4 million that the figures to the Swiss, more than 13,000 the Games. Patrick Hürliman’s suc- international curling federation ‘We haven’t watched a world championship match 19.00 (CET) and throughout the week F the many ridiculous cess has led to an upsurge of interest earned from the Games,” says Glarner. in Bern. The sport had been in what sports at the Nagano in a sport that, while totally irrelevant The sport was introduced to the seemed to be an irreversible slump Olympics, none was quite to most of the world, had been dying country by British tourists in 1867 and been able since those glory days – until Nagano. as absurb as curling. The a lingering death in Switzerland. the first tournament was held at the The membership of the Swiss curl- LIVE - NASCAR - World Series from Bristol O sight of a gaggle of podgy “We’ve been swamped,” says out- Hotel Kulm, St Moritz, 13 years later. to meet ing federation was about 7,000 at the men pushing oversized doorstops going Swiss federation president The Jackson Cup, an outdoor event start of the year but is now rising along an ice rink while two assistants Hanspeter Glarner. “We haven’t been at St Moritz, took place for the 100th rapidly. Glarner’s successor, Beat swept furiously in front of them made able to organise enough beginners’ time this year, with 100 teams the demand Rickli, who takes over in June, thinks a mockery of this pastime being called classes to meet demand.” participating. there is the potential to more than dou- tune in Sunday a sport. With the springboard of Olympic Along with Canada, Scotland, the for classes’ ble the current membership to 20,000. Nobody is laughing in Switzerland, gold, Glarner’s team is looking at United States and Sweden, Switzer- They have the capacity to cater for 20.00 (CET) however. The excitement of an growth. “We will shortly be present- land is one of the main curling nations. the demand: the country has 187 Eurosport, Europe’s No.1 Sports TV Channel, available on cable and satellite Olympic gold is such that the men’s ing our plans to the International In the heady days of the Attinger clubs and 44 curling halls. Clearly, the curling final enjoyed the country’s Olympic Committee so that we can brothers in the 1970s, legendary future for Switzerland is curling.

50 THE EUROPEAN ■ 23–29 MARCH 1998 23–29 MARCH 1998 ■ THE EUROPEAN 51

CyanMagYelloKey CyanMagYelloKey FINANCE Is Europe’s best-paid banker really worth $60 million a year? PAGE 55

CENTRAL BANKING ■ The ECB EQUITIES needs a chief economist – quickly Germany goes to Markt Eric Culp and Easdaq, another pan-European index, FRANKFURT cannot make. There are a few anomalies: Sachsenring was formed from the ruins of ORGET the dusty old DAX. While the firm which produced the former East Frankfurt’s leading stock index Germany’s legendary Trabant automobile; has reached record highs since it now makes auto components. Over- the start of the year, investors whelmingly, though, it is filled with bio- F looking for a thrill have woken up technology and media firms. THE BRAINS to the gains to be made on the Neuer Markt, Despite the volatility, institutional Frankfurt’s first foray into small cap stocks. investors have started to make edgy “The exchange is changing the way Germans advances towards what they used to see as look at investment,” says a Swiss banker. “If potentially dangerous plays. A Swiss bank, you wanted to encourage them to drop their Warburg Dillon Read, has appointed an ana- too conservative mentality towards equities, lyst to follow the market. Some German it has succeeded with a bang.” banks remain reluctant, hoping that the Frankfurt’s latest blossom is a rare exam- exchange will go away; Deutsche Girozen- BEHIND ple of the increasing European appetite for trale says that it has no plans to copy its Swiss risk. It has left its older cousin, London’s competitor. Alternative Investment Market (AIM), trail- Traders complain that the liquidity in ing in its wake. The AIM has been overtaken many shares is far too low, in some cases by Frankfurt, and its growth has stalled. Its with only one million shares, representing market capitalisation has barely moved over 30 per cent of the paid-in capital, on the open the past year, remaining around $9.7 billion. market. A 50,000 share trade can drastically It is a similar story at other continental small shift a share’s price. The boom could also be cap indices in France, Belgium and the heading for a bust: one trader said the aver- THE EURO Netherlands. age price-to-earnings ratio of the Neuer Doug Cameron suggesting a split four-year term. It is possible After a difficult birth – it was launched Markt runs between 60 and 65, eight times that he might accept the role of chief with just two stocks and little fanfare in the level of the DAX. These are ambitious HE financial markets remain economist, though market-watchers claim March 1997 – the Neuer Markt has grown to multiples which could prove difficult to sus- obsessed with the identity of the that he would be happier with the grander 18 listings with market capitalisation climb- tain after the next reporting season. president of the fledgling Euro- sounding but less important position of vice- ing from DM722 million ($390m) to The exchange says that it wants to add pean Central Bank (ECB). It is just president. DM21bn. The Neuer Markt has attracted the another 20 listings over the next year. The T two months before the bank’s Rojo also has an outside chance as a com- type of media and technology stocks which next share to enter the market will be 1&1, launch. It loses credibility with each day it promise candidate. He would upset neither have been the staple of America’s Nasdaq a computer services and sales firm, and trad- remains rudderless. But the bank lacks a head France nor Germany and give southern Europe market. The downside is that despite spec- ing is set to begin on 23 March. as well as a heart; just as uncertain is the iden- a potentially powerful voice in the running of tacular returns, the market remains tiny. Its There are still punters keen to join in the tity of the ECB’s intellectual driving force, the the ECB. However, the 63-year-old Rojo has volatility could prove to be its undoing. bonanza: many private investors glean their chief economist. Whoever is chosen will be a low profile in the financial markets despite Returns have been spectacular. Mobilcom, tips from snappy TV programmes and stock- the true guardian of the euro-zone’s economic being the intellectual driving force of the Span- a telecoms company, has seen its share price market game publications, so when a new stability. ish bank during his 20-year tenure. He was soar 1,844 per cent over the past year. In share appears they pounce. The chief economist will set the tone for the appointed for a six-year term as governor in early March the share price leapt 35 per cent For example, Technotrans, first issued ear- ECB’s stance on monetary policy through con- 1994 having climbed the ranks after an out- in one trading session alone. Other stocks lier this month at DM67, opened at DM210, trol of research and information flows within standing academic career. Bookish and pri- have experienced similar dizzy climbs. bolted to DM290, fell back to DM161 and the bank’s economics department. Wim vate, he was Spain’s first truly independent EMTV+Merchandising, a media company, closed last week at DM230. Duisenberg, the Dutch head of the European central banker whose profile has risen only has risen 785 per cent, and SCM Micro- Because of the increased interest in the Monetary Institute and frontrunner for the with his insistence that Spain join the first systems, an American software house, rose market, the exchange has decided to extend ECB presidency, has already said he prefers wave of EMU and his doomsday warnings of by 622 per cent. trading hours on 1 April. The Neuer Markt hitting golfballs to crunching numbers. punishment from investors should it fail. However, with such wild swings in share will also be linked to similar bourses – the “The position of the chief economist will be The final candidate, but a rank outsider, is ILLUSTRATION BILL BUTCHER prices, the market is not for the faint-hearted. Nouveau Marché in Paris, the Euro.NM in the most important job at the ECB after the Antonio Fazio. His appointment to such a pow- Boffins bidding to be brains (clockwise, from the Low Countries, if Duisenberg gets The Bank of England, for example, locks a national statistics; the chief economist will be SCM and Mobilcom have been all over the Brussels and the NMAX in Amsterdam – once president and may even rival his influence,” erful position would strike terror into the from top left): France’s Jean-Claude Trichet, the presidency, and would be seen as provid- couple of journalists in a room for 30 minutes at the heart of creating a common platform. place, though most of the movement has rules and regulations have been harmonised. says Julian Callow, European economist at hearts of Germans already worried that the Otmar Issing of Germany, Spain’s Luis Ángel ing too much sway to that region. with its monthly inflation figures. It knows The candidates for the six seats on the super- been upwards. All 18 stocks now trade above This may not be a complete answer to the Dresdner Kleinwort Benson. Interest rate euro is going to turn soft. Rojo and Italy’s Antonio Fazio Rojo’s appointment would leave the way exactly how the data will be disseminated. visory board are due to be named in Brussels their initial offer price, a claim which AIM Nasdaq, but it’s a start. policy, the ECB’s primary policy tool, will be Along with this problem is the question of open for Germany or Italy to provide the direc- Other banks have only just started to manage when European leaders thrash out the final REX dictated by the interpretation of inflation and how to please 11 countries when there will Germany can have a board member only in a tors of international policy and banking the release of statistics, which remains more details of EMU membership and the compo- money supply data, the sole be just six members on the more junior role than that of president or chief supervision. The final executive board slot – akin to throwing papers from the rooftops and sition of the ECB executive board before its preserve of the chief executive board. This will con- economist. Hence, Issing’s chances may not personnel – will probably go to Finland to give seeing which way the wind blows. formation on 1 July. economist. ‘The chief sist of the president and a vice- be as strong as the markets believe. the board balance with someone represent- The ECB chief economist will have ultimate The timetable has been squeezed even more The dream ticket for the two president, the chief economist Trichet has tried to distance himself from ing a Nordic country and one of the euro zone’s control over co-ordinating inflation and money by the battle between Brussels and Strasbourg top jobs at the ECB – except in economist will and directors covering inter- the presidential fray and appears almost smaller economies. supply data from the 11 member states and to host the European Parliament during its France – would be Duisenberg national affairs, regulatory embarrassed at the attention he has received. Issing’s candidacy still makes the most sense. compiling EMU-wide information. Green- ECB hearings. Parliament has the right to inter- and Otmar Issing, the Bun- be the most supervision and personnel The Frenchman, who started his career as an The ECB has been modelled on the Bundes- span’s reputation was built on his ability to view and scrutinise candidates for all six exec- desbank’s chief economist. Iss- and administration. There are engineer but later trained as an economist, bank and Issing is as influential on its ruling interpret data and, crucially, spot flaws in the utive board places. Parliament sits in Brussels ing is the best qualified important job various permutations. would be acceptable to the financial markets council as its high-profile chairman, Hans Tiet- information generated by his team. This intel- during the first half of the month and Stras- candidate – the Bundesbank’s after the Will the French tolerate a as chief economist. Rita Schumacher, Euro- meyer. The Bundesbank takes the collegiate lectual clout has given him control of the Fed- bourg in the second. Brussels is bidding to host economic research is only hawkish German chief econ- pean economist at Nikko Securities, believes approach common in German industry. Other eral Reserve, whose other members know they all of the ECB hearings, requiring all candi- rivalled by the Bank of Eng- president and omist alongside a Dutch pres- that the French will have to back down on council members have the chance to com- are on a hiding to nothing if they try to argue dates to be proposed and heard before the land’s and the UK is not join- ident with the same history? Trichet’s presidential candidacy and will have mission reports from the economics team but against policy on the basis of economic data. middle of the month. ing the euro in the first wave may even rival Will the Germans accept any- to accept a lesser role; but insiders insist that Issing retains overall control for the compila- The ECB chief economist will have an even Releasing national financial statistics is a – but his support is limited to thing else? With Germany’s he would turn down the chief economist slot. tion and release of money supply and infla- harder task. First, the available research staff dangerous game in today’s globalised finan- Germany. his influence’ size and its championing of If Issing and Trichet fall by the wayside, the tion data. This contrasts with the American will be far smaller than that of the Federal cial markets. Speculators are ready to attack There are three other likely the euro, without which the EMU 11 will have to cast further afield for Federal Reserve, which lacks a formal chief Reserve, at least in its first 12 months. It is currencies and economies in an instant on the candidates in the race: the currency would be doomed, their head number-cruncher. Rojo and Fazio economist. Its chairman, Alan Greenspan, has inevitable that the ECB will expand at the back of adverse numbers and central banks governor of the Banque de France, Jean- the country must have a seat on the executive are at least viewed as suitably hawkish on maintained an iron grip on the country’s eco- expense of national central bank staff and the need to be ready to defend themselves. If finan- Claude Trichet; his opposite number in Spain, board. But there is a feeling among south Euro- monetary policy, which bodes well for a hard nomic policy and the rapt attention of the mar- chief economist will also be able to hand-pick cial markets have to accept a golfing ECB Luis Ángel Rojo; and Italy’s bank governor pean countries that Germany will have to euro as far as the markets are concerned. kets through his mastery of economic data, his own executive, but this will take time. president, they will be looking for a high Antonio Fazio. Trichet’s nomination for the make concessions to establish that the Frank- Philippe Maystadt, the Belgian finance min- backed by the best staff in the business. Second, the collection of data on inflation degree of intellectual rigour from the chief presidency has thrown politicians into a lather. furt-based ECB is more than just an extension ister, was briefly in the fray but has opted to The quality of research generated by – the central driver of ECB policy-making – economist. A political fudge that leaves the The French government persists in pushing of the Bundesbank, although that is probably seek the vacant presidency of the European Europe’s 65,000 central bank staff varies enor- remains fragmented among the 11 member ECB with a compromise candidate as chief him forward as a presidential rival to Duisen- what the financial markets would prefer. Bank for Reconstruction and Development. mously, as does their ability to manage the states. All employ different methodologies – economist will be worse than having a presi- Investment vehicle: Sachsenring, formed from the Trabant car firm, is a Neuer Markt stock berg, first as an exclusive candidate and then The simplest option would be to accept that Maystadt would be the second representative flow of information to the financial markets. themselves fluid – to generate their own dent stuck at the 19th hole.

52 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 53

CyanMagYelloKey CyanMagYelloKey FINANCE

STILL PICTURES RUSSIAN OIL PROFILE Greenmailer Hands in takes on the Nomura’s deep pockets robber barons Louise Bowman UY HANDS may earn $164,000 a Charles Piggott than the combination of Russia and day but he’s cheap at the price. MOSCOW oil. The collapsing oil price is threat- Since joining Japanese securities ening to drag down the Russian econ- house Nomura in December 1994, HEN bankers at Gold- omy. Urals, the main Russian export Ghe has pioneered the concept of man Sachs were grade, is down to $11 per barrel from principal finance in Europe, winning his arranging a $500 mil- an average of of $18 in 1997. The gov- employers $13 billion worth of deals. One deal, lion loan last month ernment raises much of its revenue the sale of rolling stock operator Angel Trains Wfor Yukos, a Russian from export sales. It is these sales in 1996, made a profit of $640 million. Another, oil company, they were surprised to which are disputed by Dart and Yuksi. involving AT&T Capital, the leasing arm of the receive a letter from an American busi- Dart alleges that Yukos is selling off American telecoms firm, netted $700m. His nessman. “Do not proceed with this assets from its subsidiaries and tak- group is responsible for the lion’s share of loan,” it warned. “Yukos does not own ing hefty commissions on the sales – Nomura’s profits. In this context, his $60m-a- the assets [to secure the loan]”. quite legal and foolproof in Russia, year salary looks a pittance. Goldman Sachs ignored the warn- where oilmen are used to dictating A former Goldman Sachs bond trader, 38- ing and completed the deal. But this their own terms to a government year-old Hands shot to prominence on the back was just one in a series of attacks by dependent on their tax receipts. In of a straightforward idea. His group buys a

Kenneth Dart, the billionaire owner 1996 Yukos reported a net profit of business for cash, installs its own management, ILLUSTRATION: MICHAEL FRITH of an American plastics empire, $95m, while subsidiaries made net reorganises and refinances through a securiti- designed to bring Yukos to heel and losses of $353m. In Russia’s neophyte sation issue (the issue of paper backed by future Credit Suisse First Boston, Lehman Brothers increase his wealth by forcing the oil financial markets nobody was too con- cash flow as collateral) and then sells it a cou- and Goldman Sachs. The principal finance company to buy his stake in some of cerned. The only drawback for Yuksi’s ple of years later for a huge profit. Not exactly market in Britain is seen by many as “ridicu- 24 hours FOREX DESK its own subsidiaries at an inflated owners is that Dart has emerged as a rocket science. lously competitive”. Even Hands is not invin- price. Dart has spent the past few years major shareholder in the subsidiaries It has been applied to a handful of deals over cible. “If everyone started to do it our way, I’d Financial consultancy, building stakes in several Yukos satel- and he wants his money back. the past few years with impressive results. It switch to doing it another way,” he says. “Peo- lites, buying up privatisation vouch- Last week Dart’s lawyers upped the is a successful partnership. Nomura has the ple catch up and you have to move on.” daily market comment. ers through a network of offshore stakes in the battle to regain profits necessary funds to finance the business, Hands Despite his team of well-paid boffins, Hands’s Inter banking rates, no commission. companies. which Dart claims were illegally writing to Russia’s Federal Securities Something rotten in small print in the 1996 annual report Dart has been joined by an unlikely has an uncannily accurate eye for a deal. He greatest advantage is Nomura. In this business At the heart of the matter is share- siphoned off by Khodorkovsky. Dart Commission (FSC). At the end of Feb- the state of Russia: which said Yukos “may have a liabil- ally. One week ago Russia’s state prop- takes an intellectual approach to principal you need to have deep pockets. He has a seem- Investment credit line and holder rights in Russian companies. is demanding compensation for the ruary the FSC chairman, Dmitry shareholders can still ity” to subsidiaries. erty committee said that it would take finance: his staff of 80 includes a “cyber room” ingly inexhaustible supply of low-cost funds Business in Russia has never been for loss of value in Yukos subsidiaries Vasiliev, requested that Yuksi review be taken for a ride Foreign investors such as Dart risk Yukos to court. The ministry said it filled with a team of academics whose sole pur- which Nomura London’s new chairman and special conditions. the faint-hearted. Two years ago an which could reach $200m. its decision to give company directors losing everything in what has been was blocked from a shareholders’ pose is to crunch numbers and devise models. chief executive, Max Chapman, is unlikely to American investor, Paul Tatum, was Dart was tipped off by an auditor’s the power to transfer assets from the described as the test case of the year. meeting in which a Yukos subsidiary, Hands says that the key to the process is limit. But there is a growing sentiment in the gunned down outside a flagship footnote, buried at the back of the subsidiaries to the holding company. “Unless Russia gets this right, there Eastern Oil, ceded management con- focus. For the deals to work, the business must market that Hands pays too much. When Investment strategies without risk. Moscow hotel in which he had a sig- 1996 Yukos annual report. In the small In a statement from the FSC, Vasiliev won’t be any more foreign investment, trol to Yukos, severely deflating the have strong cash flows which can be securi- Nomura bid for William Hill, the management nificant stake. Tatum’s mistake was print Price Waterhouse added a note made it clear that decisions concern- full stop,” said one Moscow econo- value of the government’s holding. tised. “Ensuring that the management of the team at the betting chain backed an alterna- 100% Capital return guarantee. not to sell out to his partners. Dart is that Yukos may have to repay its ill- ing the management of Samaran- mist. “The government needs to prove Lawyers said that Yukos may be in company is high quality is very important, but tive offer from CVC Capital Partners. Nomura not venturing to Moscow. He avoids gotten gains. Dart saw an opportunity eftegaz and Yuganskneftegaz were that it can protect shareholders.” The breach of Russian law for transferring it is not the glamorous side of the business,” simply blew the competition out of the water High return on investment. publicity, bans photographs of him- to bring Russia’s oil barons to heel. not made by sufficient majorities and Russian legal system still offers little management and assets without the he adds, warning against approaching such with its £700m bid. Confidentiality guaranteed self and lives in tax exile and consid- Last week, lawyers acting on his behalf were therefore in breach of Russian comfort. Investors tend to think of the approval of other shareholders. deals with a trading mentality. Hands looks Hands’s group makes its money in high-risk erable luxury in the Cayman Islands. staked their claim to the missing mil- company law. law as a panacea. In practice, it is still If Yukos is charged with breaking for arbitrage assets which are undervalued paper. You cannot make the kind of returns he according to Swiss Law. It will be a tough battle: Russia’s lions. “Court action has not been ruled Although admired in financial mar- almost impossible to bring criminal the law, it will be by the chief prose- because of illiquidity. He looks for the deals does without throwing everything you have robber barons are used to getting their out,” said a Dart aide. kets, the FSC still lacks real power to charges for commercial crimes. cutor’s office and not the FSC. But the the markets missed. “The more boring, unglam- at a deal. The unpredictable nature of William own way. Yukos is merging with Analysts say that it was obvious that punish errant Russian companies. It At the Davos World Economic betting is that neither will act. A report orous, messy and out of fashion it looks, the Hill’s cash flows (which affect the prospects another oil firm, Sibneft, to form Yuksi. Russian oil companies would seek has resolved issues of shareholder Forum in February, George Soros lam- by the Moscow investment bank, more attractive it tends to be,” he says. for a securitisation) was simply too acute for It is controlled by Mikhail Khodor- overall control of their subsidiaries. abuse in the past – most recently by basted Russian government officials, United Financial Group, claims that To date, Hands has bought and sold a chain several other principal finance team’s tastes. kovsky, who also heads the Menatep Some say that Dart may have been cancelling a convertible bond issue by including the former finance minis- “actions [adverse] to minority share- of 1,800 pubs (Phoenix Inns), a rolling stock But simply throwing money at businesses Group, a large industrial and finan- waiting for that to happen in the hope another oil company, Sidanco – but ter, Anatoly Chubais. “Russia was on holders are not always illegal – either leasing company (Angel Trains), an equipment you like the look of does not always work. cial holding company. Boris Bere- of holding the oil companies to ran- the FSC has limited resources to the verge of the transition from insider because loopholes exist or because leasing company (AT&T Capital) and 57,000 Nomura withdrew its bid for the Energy Group zovsky, head of the Logovaz industrial som. Even Yuksi says it has no idea enforce its decisions. It can cancel dealing and robber capitalism to legit- there is little in the law to stop major- British ministry of defence houses. The group on 10 February, making way for Pacificorp. conglomerate and reputedly Russia’s how much Dart owns, although stakes prospective bond and equity issues, imate capitalism and respect for share- ity shareholders from doing what they has also bought two more pub groups (Inntre- While Hands could easily have topped Pacifi- richest man, is also said to be in the in two subsidiaries, Yuganskneftegaz but has little power to interfere in cor- Unless holder rights. But there have been want with a company’s assets”. preneur and Spring Inns) and the London- corp’s 765p-per-share bid, it was hampered by consortium. He is rumoured to have and Samaraneftegaz, are thought to porate governance matters. Unable retrograde events and a change of Whether Yukos is the corporate vil- based betting chain, William Hill. Last week the threat of an investigation by the monopo- had a large stake in Sibneft. They are be over the level needed to demand to decide whether Yukos had been Russia gets direction in government,” said Soros. lain or a victim of greenmail, the com- Nomura launched a bid for the UK motorway lies and merger commission. Nomura’s empha- two of the most powerful men in an independent audit. asset stripping, Vasiliev passed the Houston alleges that Russian oil pany has little sympathy from service station group, Road Chef. The cost of sis on securitisation was a handicap, as it would Moscow, with the support of President Earlier this year Dart hired a finan- documents to the federal prosecutor’s companies are manipulating their analysts. “The fact that Dart is an launching each bid is large – estimated by one have necessitated the sale of Energy Group’s Boris Yeltsin and Viktor Chenomyrdin, cial investigator, Graham Houston, office and the prime minister. this right share prices in order to buy up sub- aggressive investor, like Soros, does official at between £3m ($4.9m) and £4m. For regulated UK-based Eastern Group business. the prime minister. from an American economic consul- Yukos is adamant that it has done sidiaries at knock-down prices. In most not change the fact that what Yuksi is the Angel Trains deal, which involved buying With Nomura’s bid costs, this was an expensive They should not underestimate tancy, Nera, to pursue his claim. nothing wrong. “It’s greenmail, pure there will developed countries this would be doing is wrong,” said Alexei Kokin, an rolling stock from the UK government for mistake. Dart. He is one of the world’s most “There are several ways crony man- and simple,” said Yuksi’s head of cor- criminal. “They are saying: agree to oil analyst at MFK Renaissance. “Nor £696m, the legal fees alone amounted to £1m. It is surprising Hands has not yet ventured aggressive proprietary traders in agers rip off subsidiaries,” said Hous- porate finance, Eugene Tenenbaum. our terms or we will strip every last does it compensate investors for the Hands is obviously very clever. He is seen – into continental Europe: there are dozens of emerging markets, willing to take big ton. “In one case, we discovered that “He’s written to everyone – bankers, be no more asset,” said Houston. The markets loss in value of their shares.” even by his competitors – as a visionary. But large conglomerates and family businesses positions and risks. “He held up the a subsidiary company had handed investors, lawyers. They want special have already offered their conclusion: Russian companies are still loath to should not someone be snapping at his heels which would be ideal targets for Hands’s meth- Bahnhofstrasse 64 8001 Zürich Brazilian debt restructuring when he over the entire ownership rights to its treatment, but we are not going to be foreign during the past three years the con- admit that minority investors have by now? London is not short of competition. ods. He says he will not be drawn on poten- took on the government and won,” oil – lock, stock and barrel.” held to ransom.” Tenenbaum said version rate between shares in a sub- any rights at all. More investors like There are more than 35 principal finance teams tial deals but is looking at possibilities. Expect Tel: 41 1 213 18 00 Fax: 41 1 222 08 30 said an American investment banker. Last month Houston, acting on Yukos is under no obligation to return sidiary company, Yuganskneftegaz, Dart will be needed before the mar- battling it out in the square mile, including the lights in the cyber room to burn long into The risks don’t come much bigger Dart’s behalf, handed a complaint in profits to its subsidiaries, despite the investment and Yukos has fallen from 60 to four. kets of the wild east are tamed. such names as Deutsche Morgan Grenfell, the night before deals are clinched.

54 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 55

CyanMagYelloKey CyanMagYelloKey MARKETS Do index-linked bonds have a future if inflation is dead? PAGE 60

ALPHA CREDIT BANK Minorco-Bearer...... Lux 590.0 - - 0.1 Springer (axel) Verlag ...... Ger - - 5.3 1.8 Ea-Generali ...... Aus 4240.0 65.1 2.2 0.3 Hochtief...... Ger 77.9 9.0 2.5 2.2 Carrefour...... Fr 3610.0 2345.9 -0.1 1.1 Banks 25000 Mo Och Domsjoe...... Swe 250.0 3.8 -0.8 3.6 Suedzucker...... Ger 920.0 597.8 2.2 2.6 Edinburgh Investment...... UK 513.0 7.9 4.5 2.7 Holderbank Fin Glarus...... Swi 1464.0 168.7 0.6 1.2 Casino Guichard Per...... Fr 415.9 270.3 4.0 1.6 THE EUROPEAN Pechiney...... Fr 278.2 4.3 1.2 1.8 Synthelabo...... Fr 860.0 558.9 0.4 0.9 Ewart...... Ire 1.0 0.0 - - Imetal...... Fr 841.0 96.9 2.4 2.9 Comptoirs ...... Fr 3165.0 2056.7 -2.6 1.3 Preussag ...... Ger 648.8 10.0 -0.2 2.6 T & N ...... UK 257.5 4.0 0.0 - Exor...... Lux 92.7 - -0.9 3.2 Imi...... UK 458.0 6.9 0.9 3.1 Delhaize-le lion...... Bel 2510.0 1631.1 -1.4 1.4 Dr Rio Tinto...... UK 796.0 12.2 -3.6 4.0 Tabacalera...... Sp 17700 11502.1 10.1 1.2 Finaxa...... Fr 514.0 7.9 3.0 1.9 Kvaerner ...... Nor 310.0 35.7 1.6 2.3 Dixons...... UK 497.5 7.6 5.4 2.7 SGL Carbon...... Ger 214.3 3.3 -6.8 1.6 Tate & Lyle ...... UK 517.0 7.8 0.6 3.5 Foreign & Colonial ...... UK 201.0 3.1 3.1 1.5 Lafarge...... Fr 526.0 60.6 6.5 2.8 Great Universal...... UK 786.0 12.1 0.8 3.0 20000 Skw Trostberg...... Ger 67.8 1.0 7.6 2.5 UCB...... Bel 158950103291 1.2 0.6 Forenings Sparbanken...... Swe 247.0 3.8 -1.2 2.4 Lahmeyer aktiengesell ...... Ger 90.0 10.4 5.9 1.5 Greenalls ...... UK 463.5 7.1 -1.3 4.5 Solvay ...... Bel 2740.0 42.1 -3.5 2.7 Unigate...... UK 714.5 10.7 5.3 3.6 Fortis ...... Bel 11175.0 171.6 6.9 1.1 Legrand...... Fr 1625.0 187.2 6.8 0.4 Hagemeyer...... Neth 97.5 63.4 3.7 1.4 Ssab Svenskt Stal...... Swe 156.0 2.4 4.7 2.9 Unilever-CVA...... Neth 140.7 91.4 0.1 1.6 Fortis Amev ...... Neth 126.9 1.9 6.0 1.6 Linde...... Ger 1249.0 143.9 -2.8 2.2 Hermes...... Fr 519.0 8.0 8.1 0.7 Stora Kopparbergs...... Swe 128.0 2.0 4.5 2.9 Unilever...... UK 545.0 8.2 1.8 1.9 Gan Assurances...... Fr 169.0 2.6 -0.5 - Man...... Ger 593.0 68.3 2.3 2.4 Karstadt...... Ger 747.0 11.5 5.7 1.9 Svenska Cellulosa...... Swe 214.5 3.3 2.1 2.7 United Biscuits...... UK 266.5 3.9 3.5 4.9 General Accident ...... UK 1480.0 22.7 8.1 3.2 Mannesmann...... Ger 1306.0 150.5 0.1 1.1 Kingfisher ...... UK 1149.0 17.6 9.8 2.5 15000 Upm-Kymmene...... Fin 152.0 2.3 -2.9 3.6 Valeo ...... Fr 534.0 8.2 2.7 1.1 Groupe Brux. Lambert ...... Bel 6380.0 98.0 2.9 3.1 Norsk Hydro ...... Nor 370.5 42.7 2.2 2.0 Marks & Spencer...... UK 575.0 8.8 1.8 2.9 M T W T F Usinor...... Fr 103.2 1.6 4.4 4.4 Volkswagen ...... Ger 1406.0 21.6 8.2 1.2 Guardian Royal...... UK 442.5 6.8 -1.8 2.6 Peninsular & Orient...... UK 842.5 12.6 1.5 4.3 Metro...... Ger 83.0 - - - Volvo...... Swe 256.0 3.9 2.6 2.0 Hammerson...... UK 517.0 7.9 2.8 2.9 Philips Electronics...... Neth 149.0 17.2 -3.8 1.3 Morrison ...... UK 261.5 3.9 8.1 1.0 Company Country Price (local) Price (Ecu) %change Yield Whitbread...... UK 1114.0 16.7 2.9 2.8 Ifil...... Ita 9177.0 140.9 3.3 1.4 Railtrack ...... UK 999.5 14.9 2.6 2.8 Next ...... UK 716.0 11.0 -4.0 2.8 Abbey National...... UK 1180.0 18.1 1.1 3.3 GROUPE DANONE Wolseley...... UK 423.3 6.5 -20.4 3.4 INA ...... Ita 5587.0 85.8 2.0 1.2 Rexam ...... UK 289.5 4.3 -0.5 - Pinault-Printemps...... Fr 4254.0 65.3 -1.9 1.1 ABN Amro ...... Neth 47.5 0.7 2.6 2.5 Consumer 1500 Zeneca ...... UK 2519.0 37.8 -6.8 1.9 Incentive...... Swe 758.0 11.6 -3.4 1.3 Rexel...... Fr 2300.0 265.0 1.3 1.3 Safeway...... UK 385.0 5.8 2.1 4.7 Alliance & Leicester...... UK 920.0 14.1 0.5 2.8 ING Groep ...... Neth 117.8 1.8 3.2 1.8 RMC...... UK 985.0 14.8 2.5 3.2 Sainsbury...... UK 508.0 7.6 1.4 3.2 Allied Irish...... Ire 9.5 0.1 2.2 1.9 Ffr Insinger...... Lux 113.5 - 15.8 - Rolls-Royce...... UK 285.0 4.3 3.1 2.6 Tesco ...... UK 570.0 8.6 7.3 2.3 BARCO Investor...... Swe 427.0 6.6 0.5 2.3 Rwe...... Ger 99.1 11.4 1.2 2.3 Vendex Intl...... Neth Alpha Credit Bank...... Gre 23455.0 360.2 37.9 3.9 1400 134.2 2.1 -2.3 1.6 Banca Commerciale It...... Ita 8628.0 132.5 4.2 1.9 Diversified 10000 Istituto Mobiliare It ...... Ita 26657.0 409.3 4.6 2.1 SKF...... Swe 188.5 21.7 5.6 2.8 Banca di Roma...... Ita 2791.0 42.9 1.3 - La Fondiaria Ass...... Ita 12125.0 186.2 1.4 1.1 Sandvik...... Swe 240.5 27.7 6.4 2.9 Bfr La Gaiana...... Ita 7000.0 107.5 -4.8 1.7 Scancem...... Swe 343.5 39.6 1.0 2.2 ALCATEL Banca Fideuram...... Ita 12931.0 198.6 -2.2 0.9 1300 Technology 1200 Banco Bilbao Vizcaya...... Spa 7120.0 109.3 2.9 1.2 Land Securities...... UK 1098.5 16.9 0.6 3.1 Schneider...... Fr 415.0 47.8 6.1 1.8 Legal & General...... UK 735.5 11.3 9.2 2.2 Sidel...... Fr 449.5 51.8 3.3 1.5 Banco Central His...... Spa 4910.0 75.4 1.1 1.3 9000 Ffr Banca Intesa...... It 4918.0 75.5 4.7 1.5 Liberty Int...... UK 613.5 9.4 1.8 3.6 Siebe ...... UK 1312.0 19.7 5.7 1.2 1100 Banco Com Portugues ...... Port 6593.0 101.2 9.3 1.2 1200 Liechtenstein Global...... Swi 1343.0 20.6 3.0 1.9 Siemens...... Ger 116.3 13.4 2.0 1.8 Banco Esp Credito...... Spa 2350.0 36.1 5.6 - M T W T F Mediolanum...... Ita 51923.0 797.3 12.9 0.7 Skanska...... Swe 366.5 42.2 -3.0 3.0 Mepc...... UK 596.0 9.2 4.1 3.6 Smiths Industries ...... UK 911.5 13.6 1.2 2.6 Banco Espirito Santo...... Port 8000.0 122.8 5.7 1.7 Company Country Price (local) Price (Ecu) %change Yield 1000 The European’s exclusive index of Europe’s top companies MAM...... UK 1691.0 26.0 - 3.5 Smurfit...... Ire 2.1 0.2 -2.3 2.1 Banco Popular Español...... Spa 13890.0 213.3 4.4 2.0 8000 Banco Santander ...... Spa 7580.0 116.4 5.0 1.6 Accor...... Fr 1392.0 - -0.9 - M T W T F Muenchener Rueckver...... Ger 500.0 - -1.9 0.5 Stagecoach...... UK 987.0 14.8 14.1 1.3 900 500ranked by market capitalisation, priced in ecus Adidas ...... Ger 313.8 4.8 4.5 - Norwich Union...... UK 468.0 7.2 1.2 - Suez Lyonnaise Des E...... Fr 901.0 103.8 7.4 2.0 500 Bank Austria...... Aus 883.0 13.6 -3.4 1.4 Bank Fuer Intl Zah-Belg.....Swi 8825.0 135.5 -0.3 3.2 Airtours ...... UK 500.0 7.7 0.3 - Company Country Price (local) Price (Ecu) %change Yield Pharma Vision 2000...... Swi 1039.0 16.0 -2.9 - Thyssen...... Ger 430.0 49.5 4.2 3.3 800 Bank Fuer Intl Zahlungs.....Swi 9375.0 144.0 0.8 3.0 Alitalia ...... Ita 22597.0 347.0 8.2 - Provident Financial ...... UK 984.5 15.1 -0.8 2.5 Ti ...... UK 540.0 8.1 6.1 3.0 M T W T F Allied Domecq...... UK 581.0 8.7 0.9 4.2 Barco...... Bel 9370.0 228.3 11.3 0.7 Prudential...... UK 898.0 13.8 2.6 2.1 Va Technologie...... Ger 1817.0 209.3 0.8 1.7 STOCK PICKS Bank Of Ireland ...... Ire 15.5 0.2 9.1 1.2 BTR ...... UK 189.8 4.6 1.5 4.8 Bank Of Scotland ...... UK 726.0 11.1 10.5 1.5 Altana...... Ger 153.8 99.9 0.7 1.4 Ras ...... Ita 25186.0 386.8 14.1 1.4 Valenciana De Cem Port....Por 2950.0 339.9 0.2 - Company Country Price (local) Price (Ecu) %change Yield Gevaert...... Bel 2170.0 52.9 3.3 - Royal & Sun Alliance...... UK 789.0 12.1 3.2 2.9 Veba...... Ger 124.0 14.3 -1.6 2.2 Bankgesellschaft Berlin ....Ger 40.0 0.6 -0.1 3.9 Associated British Foods....UK 625.0 9.4 -1.9 2.0 Alcatel Alsthom...... Fr 1087.0 163.3 23.2 1.4 Industrivarden ...... Swe 542.0 13.2 2.1 2.8 Royale Belge...... Bel 13250.0 203.5 3.7 3.4 Viag...... Ger 1015.0 116.9 4.6 2.0 Bankinter...... Spa 10710.0 164.5 8.1 2.7 Astra ...... Swe 165.5 107.5 1.5 1.1 Ares-Serono...... Swi 2410.0 362.0 -1.2 0.3 Lagardere...... Fr 236.1 5.8 2.2 2.4 Safra Republic...... Lux 134.0 2.1 - 1.7 Williams...... UK 426.0 6.3 6.3 3.5 Banque Gen Du Lux ...... Lux 71800.0 - - 1.9 Audi...... Ger 1600.0 - -3.0 - ASM Lithography...... Neth 192.8 29.0 -2.4 - Autopistas Con...... Spa 2405.0 1562.9 0.8 3.0 Metallgesellschaft...... Ger 38.7 0.9 -5.4 0.7 Sampo Insurance...... Fin 224.3 3.4 6.3 1.3 Oil prices scrape the barrel Banque Nat de Paris ...... Fr 448.9 6.9 2.3 1.8 Montaigne Participat...... Fr 1996.0 - - 0.4 Baan...... Neth 103.0 15.5 10.4 - Schw lebensv & Rent ...... Swi 1243.0 19.1 -3.9 0.6 Barclays ...... UK 1839.0 28.2 5.0 2.5 BAT...... UK 642.5 9.6 0.9 4.5 RANK British Aerospace...... UK 1903.0 28.5 -0.7 1.3 Bass ...... UK Ste Gen de Belgique ...... Bel 4920.0 119.9 9.9 2.4 Schw Rueckversich...... Swi 3253.0 50.0 1.7 0.9 IF ANY industry in Europe is being hurt by the oil stocks should not be viewed as having a one- Bayerische Vereinsbank....Ger 117.5 1.8 3.6 1.9 1100.0 16.5 2.1 3.5 Media 400 British Telecom...... UK 667.5 10.0 10.7 3.6 Tomkins ...... UK 356.5 8.7 -3.4 3.4 Scottish Mort &Ttrust ...... UK 382.5 5.9 4.2 1.7 BBL...... Bel 9400.0 144.3 2.2 2.7 BMW...... Ger 2132.0 - - Cable & Wireless...... UK 750.5 11.2 7.2 1.8 aftershocks from last year’s Asian crisis, it is for-one exposure to the price of crude. They Skandia Forsakrings...... Swe 555.0 8.5 4.7 0.7 BG Bank...... Den 422.0 6.5 0.5 4.7 Beiersdorf...... Ger 91.1 59.2 -1.2 1.6 £ Cap Gemini...... Fr 749.0 112.5 13.5 0.4 Bic...... Fr Slough Estates...... UK 415.5 6.4 4.0 2.0 oil. The spot price has been falling since evi- derive a sufficient portion of their earnings from BHF-Bank...... Ger 53.8 0.8 1.4 3.9 457.8 297.5 1.2 2.0 ELF AQUITAINE Dassault Aviation ...... Fr 1770.0 265.9 10.6 2.7 British Airways...... UK Stillhalter Vision...... Swi 930.0 14.3 2.2 - dence gathered last year suggested that the downstream activities, such as refining, or have Christiania Bank...... Nor 33.1 0.5 -1.8 3.6 594.5 9.1 3.5 3.3 Energy Dassault...... Fr 241.5 36.3 1.8 0.5 800 Storebrand ...... Nor 63.5 1.0 -3.8 - Cie Financiere De Paribas...Fr 587.0 9.0 3.9 3.3 Cadbury Schweppes...... UK 825.0 12.4 0.2 2.2 375 Ericsson...... Swe 380.0 57.1 2.6 0.9 Asian economies were going to contract. With cut costs recently to bolster their margins...... UK 606.0 9.3 6.7 2.4 Commerzbank...... Ger 66.1 1.0 -2.7 3.2 Carlsberg...... Den 438.0 284.6 -1.4 0.8 Ffr Sun Life & Provincial Getronics...... Neth 90.0 13.5 6.9 0.5 ...... Swe 240.0 - - - demand clearly set to fall, the rising supplies The equity markets will follow closely a gath- Compagnie Bancaire...... Fr 1025.0 15.7 3.5 1.4 Castorama Dubuis Inv...... Fr 1000.0 15.4 -3.4 1.7 750 Trygg-Hansa Misys ...... UK 2722.5 40.9 -1.3 0.6 ...... UK 595.0 9.1 0.7 4.1 Corp Bancaria De Esp...... Spa 11680.0 179.4 1.7 2.5 CCP ...... Spa 2775.0 42.6 8.0 2.3 United Assurance Nokia...... Fin 598.5 89.9 6.3 1.3 from the creaking quota agreements of the Opec ering of Opec members on 30 March, which has ...... Ger 2175.0 - - - Den Danske Bank...... Den 917.0 14.1 5.4 2.0 Christian Dior...... Fr 796.0 517.3 9.3 3.0 Victoria Novo-Nordisk ...... Den 1060.0 159.2 -4.1 0.5 700 ...... Ger 837.0 12.9 -1.5 2.3 member states meant prices could head only been called to discuss overproduction. The event Den Norske Bank...... Nor 41.3 0.6 -1.7 3.3 Cie Ffinanc Richemont ...... Swi 1979.0 1286.0 1.7 - Volksfuersorge 350 Oce...... Neth 303.2 45.5 -0.8 1.2 Cie Generale Des Eaux...... Fr Witan Investment ...... UK 380.5 5.8 4.7 2.3 M T W T F one way. Warm weather in Europe and America could turn into an emergency meeting. Opec Deutsche Bank...... Ger 135.1 2.1 1.9 1.9 990.0 643.3 0.6 1.8 Orange...... UK 426.0 6.4 11.3 - ...... Ger 2770.0 - 0.7 0.7 Deutsche Pfandbrief...... Ger 141.5 2.2 1.1 1.5 Colruyt ...... Bel 25450 16538.3 5.8 0.7 650 Wuertt Versich-Beteil Premier Farnell ...... UK 405.0 0.8 -1.1 3.9 helped depress the spot price further. Any move- members openly flout their quotas: an increase ...... Swi 843.0 12.9 1.2 0.9 Company Country Price (local) Price (Ecu) %change Yield Dexia Belgium...... Bel 5550.0 85.2 4.1 2.1 Compass ...... UK 988.0 15.2 1.3 1.3 Zürich Versicherungs Sap ...... Ger 753.5 113.2 6.9 0.5 Continental...... Ger ment in the spot price has been accompanied by Iraq last month took crude oil production to Dexia France...... Fr 708.0 - - - 45.9 0.7 -3.2 1.9 600 Audiofina...... Lux 1570.0 24.1 6.4 1570.0 Sema...... UK 2295.0 34.5 6.7 0.4 Daimler-Benz...... Ger by volatility in oil producers’ share prices. 28.77 million barrels a day. Opec is now pro- Dresdner Bank ...... Ger 84.9 1.3 -5.0 2.6 169.1 2.6 4.9 1.4 M T W T F British Sky Broadcasting....UK 457.5 7.0 5.0 1.6 Sgs-Thomson ...... Fr 433.8 65.2 1.3 - Generale De Banque...... Bel 19050.0 292.5 0.4 2.9 Danisco...... Den 452.0 293.7 0.5 1.1 HEIDELBERGER DRUCK Canal Plus...... Fr 1108.0 17.0 -9.9 2.6 Telecel-Com Pessoai ...... Port 29111.0 4373.2 4.8 - The benchmark Brent crude price has fallen ducing 1.27m barrels a day more than its pro- Company Country Price (local) Price (Ecu) %change Yield Halifax...... UK 941.0 14.4 3.7 - Deutsche Lufthansa...... Ger 39.3 0.6 -0.8 3.3 Industrial 150 Carlton Communications....UK 494.5 7.6 6.0 3.2 Thomson...... Fr 254.3 38.2 12.5 1.7 Diageo...... UK 697.5 10.5 3.0 2.6 39 per cent since its peak of $21.61 a barrel in duction quota. HSBC...... UK 1827.0 28.1 3.8 3.4 British Petroleum...... UK 869.0 13.3 6.2 3.3 Dm Daily Mail&General ...... UK 2420.0 37.2 -0.6 1.2 TIM...... It 9007.0 1353.1 5.1 0.9 Elan ...... Ire 45.7 29.7 4.3 - Istituto Banc San Paolo...... Ita 22354.0 343.3 8.7 1.3 Burmah Castrol...... UK 1098.0 16.9 1.4 5.3 Elsevier...... Neth 34.1 0.5 -0.3 2.8 Vodafone...... UK 618.8 9.3 10.6 1.1 1997. Global surpluses forced this down to $12 If Opec can manage to restore some credi- Electrolux...... Fr 648.0 10.0 2.0 1.9 Kredietbank...... Bel 19700.0 302.5 11.6 1.8 Cia Espanola de Pet...... Spa 5600.0 86.0 12.0 2.1 Emap ...... UK 1102.0 16.9 2.2 1.6 EMI...... UK 526.0 8.1 -1.2 3.2 140 a barrel, its lowest level since the 1973 Opec cri- bility to its more unruly members – Venezuela Lloyds TSB...... UK 970.0 14.9 5.2 2.2 Electrafina...... Bel 4200.0 64.5 2.7 3.4 Havas...... Fr 509.0 7.8 0.4 2.5 Eridania Beghin-Say...... Fr 1165.0 757.1 3.5 4.2 sis. Investors are anxious to see prices rise to has agreed to attend the 30 March meeting but Mediobanca ...... Ita 22215.0 341.1 10.2 0.9 Elf Aquitaine ...... Fr 766.0 11.8 12.6 2.7 Mediaset ...... Ita 12137.0 186.4 -1.4 1.6 HELLENIC TELECOM Essilor International ...... Fr 2107.0 1369.2 -1.4 1.2 Merita...... Fin 30.5 0.5 -1.0 3.0 Eni...... Ita 12245.0 188.0 8.5 2.0 Pearson ...... UK 1015.0 15.6 2.7 2.5 Utilities around $15 to $16 a barrel over the next four Saudi Arabia has yet to confirm its presence – Fiat...... Ita 7525.0 115.6 6.4 - 130 9000 National Bank of Greece...Gre 32786.0 503.5 44.0 - Enterprise Oil ...... UK 553.0 8.5 0.0 4.0 Polygram...... Neth 113.8 1.7 4.6 0.9 Fresenius Medical Care...... Ger 135.0 87.7 0.0 - Dr months to restore equilibrium. However, most and achieve a reduction in demand then the sec- National Westminster...... UK 1100.0 16.9 5.4 3.6 Lasmo...... UK 273.5 4.2 -0.3 0.8 Rank...... UK 388.8 6.0 12.8 5.8 Gallaher...... UK 345.0 5.2 -1.8 6.9 Rolo Banca ...... Ita 37573.0 577.0 1.3 1.5 Neste...... Fin 149.0 2.3 0.3 2.0 Reed International ...... UK 630.0 9.7 1.0 3.0 8500 market participants have realised that several tor offers good long-term potential. Gehe...... Ger 104.0 67.6 -2.7 1.8 Royal Bank of Scotland...... UK 958.5 14.7 3.4 2.8 Petrofina...... Bel 13550.0 208.1 3.2 3.4 120 Reuters...... UK 632.5 9.7 -0.8 2.7 GKN...... UK 1630.0 25.0 5.2 1.8 M T W T F Schroders...... UK 2416.0 37.1 7.4 1.2 Petroleum Geo-Services...Nor 437.0 6.7 -4.9 - Télévision Française TF1...... Fr 760.0 11.7 2.0 3.2 8000 Glaxo Wellcome ...... UK 1625.0 24.4 -1.0 2.4 ENI business. It derives a substan- and Italy and established new Schweizerischer Bank ...... Swi 493.0 7.6 -1.6 2.4 Repsol...... Spa 7650.0 117.5 9.0 2.5 Company Country Price (local) Price (Ecu) %change Yield United News & Media...... UK 816.0 12.5 4.9 2.9 Granada...... UK 1039.0 15.6 6.1 1.8 Skandi Enskilda Banken....Swe 105.0 1.6 1.0 2.9 Royal Dutch Petroleum ...Neth 116.1 1.8 3.3 2.7 VNU ...... Neth 67.7 1.0 -1.9 0.9 ENI, the Italian oil and gas con- tial portion of its earnings from fields in the Gulf of Guinea and Groupe Danone...... Fr 1405.0 913.0 11.5 1.8 7500 Societe Generale...... Fr 1130.0 17.4 4.6 2.3 RWE-DEA...... Ger 445.0 - 1.7 5.1 ABB-B...... Swe 107.0 12.3 -0.5 2.0 Wolters Kluwer...... Neth 294.6 4.5 -3.4 1.0 Hays...... UK 1087.5 16.3 11.2 1.1 cern, picked one of the worst downstream activities and it has the Gulf of Mexico. Standard Chartered...... UK 903.0 13.9 0.1 2.6 Saga Petroleum ...... Nor 115.0 1.8 -0.9 3.0 ABB-Bearer...... Swi 2179.0 251.1 -0.8 1.8 WPP...... UK 334.0 5.1 2.6 0.6 Heineken ...... Neth 465.5 302.5 2.4 0.8 weeks of the year for oil stocks just taken a controlling stake in Elf’s downstream operations Svenska Handelsbanken ..Swe 336.0 5.2 4.3 1.9 Saipem...... It 11004.0 169.0 7.1 1.4 Asea Brown Boveri...... Ger 531.0 - -10.0 1.6 7000 Imperial Tobacco...... UK 413.0 6.2 0.1 6.5 M T W T F UBS...... Swi 2284.0 35.1 -1.7 2.2 Shell Transprt&tradng ...... UK 432.3 6.6 2.2 3.3 Associated British Ports.....UK 387.5 5.8 3.7 2.9 to announce some of its best a Romanian oil refinery while broke even last year after five Jeronimo Martins...... Port 7050.0 108.3 4.9 0.6 VENDEX Unidanmark...... Den 555.0 8.5 1.8 2.7 OMV...... Aus 1613.0 24.8 2.7 1.6 Atlas Copco...... Swe 250.0 28.8 8.2 1.7 Company Country Price (local) Price (Ecu) %change Yield Klm-Konin Luchtvaart...... Neth 87.2 1.3 4.3 1.1 Retail 150 ever results. Net profits climbed building a chain of petrol sta- loss-making years. It has also Woolwich ...... UK 376.5 5.8 1.4 3.2 Total...... Fr 687.0 10.5 5.5 2.8 BAA...... UK 596.0 8.9 0.0 2.7 Koninklijke Ahold...... Neth 65.9 42.8 -1.1 1.1 Aguas De Barcelona...... Spa 7080.0 41.9 -1.8 1.3 Worms et Compagnie...... Fr 388.0 6.0 4.7 18.6 BBA...... UK 450.5 6.8 5.0 1.8 Nfl 14.6 per cent to L5,100bn tions in America. opened new capacity in Leuna La Rinascente...... Ita 18201 11827.7 0.9 1.1 Anglian Water...... UK 901.5 5.3 7.3 5.0 Blue Circle...... UK 382.5 5.7 5.8 4.2 Ladbroke...... UK 334.0 5.1 3.8 2.7 Berliner Kraft Und Licht....Ger 79.0 0.5 6.8 1.8 ($2.83bn) on a 5.2 per cent rise Lukoil’s main attraction is that in east Germany where there is Muenchener Rueckver Bouygues...... Fr 955.0 110.0 5.3 2.7 140 L’Oreal ...... Fr 2770.0 1800.0 1.5 0.8 BG...... UK 303.3 1.8 -0.4 3.6 in sales to L60,700bn. Operat- it exports only about 30 per cent little competition. JOHNSON MATTHEY Financial 600 BPB...... UK 387.0 5.8 6.9 3.2 Basic LucasVarity...... UK 239.0 3.7 0.3 2.4 British Energy...... UK 508.0 3.0 1.5 3.5 600 CGIP-Gen d’ind & de Par...... Fr 2670.0 307.6 4.7 2.2 ing costs fell sharply and the of its production. This used to Elf owns half of the French LVMH ...... Fr 1331.0 864.9 9.2 2.5 Centrica...... UK 113.0 0.7 5.6 - £ Dm Cimenteries CBR Cement..Bel 3805.0 438.4 4.5 2.5 130 Materials Michelin...... Fr 358.9 5.5 -8.4 1.4 Deutsche Telekom...... Ger 40.2 0.2 3.5 4.3 company’s shares bounced up be a sign of weakness because pharmaceuticals company, Cimpor Cim de Port ...... Port 6549.0 754.5 5.1 1.9 575 Montedison ...... Ita 2442.0 1586.9 7.6 0.8 Edison...... It 14563.0 86.3 6.0 1.4 Compagnie de Saint ...... Fr 969.0 111.6 8.0 2.6 two per cent on the news. local customers were prone to Sanofi, which has a PCF ratio of Nestle...... Swi 2705.0 1757.8 4.2 1.1 Electrabel...... Bel 9770.0 57.9 3.1 4.8 500 Cookson ...... UK 248.0 3.7 3.3 3.7 The markets liked Eni’s story default on their bills. It has 20; if this is stripped out of the 550 Northern Foods...... UK 314.5 4.7 8.2 3.9 120 F Electricidade De Port...... Port 4320.0 25.6 0.3 2.9 D/S Svendborg...... Den 483250 55677.7 1.7 0.2 M T W T F Novartis-Bearer ...... Swi 2645.0 1718.8 -2.6 0.9 Elektrowatt...... Swi 560.0 3.3 0.0 1.4 because of its lower exposure become a major asset since Elf numbers, the parent com- Electrocomponents ...... UK 477.5 7.1 -2.0 2.1 Nutricia Verenigde Bed...Neth 72.5 47.1 5.8 1.0 Company Country Price (local) Price (Ecu) %change Yield Endesa...... Spa 3780.0 22.4 0.1 1.9 525 FKI...... UK 203.5 3.0 -0.7 3.3 to price fluctuations. ”For every domestic oil prices have barely pany’s PCF falls to four. Over the Nycomed Amersham...... UK 2250.0 33.4 - - Energy...... UK 840.0 5.0 0.4 2.0 Fomento de Con Constru..Spa 7900.0 910.2 9.9 0.5 Adecco...... Swi 570.0 370.4 6.3 0.9 dollar fall in the price of a bar- moved despite the global drop last month Elf’s share price has Orkla...... Nor 753.0 489.3 -2.3 1.1 France Telecom...... Fr 309.1 1.8 -2.8 - 400 Fried.Krupp Hoesch...... Ger 365.5 42.1 12.1 3.1 Argos...... UK 605.0 9.3 -0.6 103.2 500 Parmalat Finanziaria...... Ita 3727.0 2421.9 6.4 0.4 M T W T F Gas Natural...... Spa 9050.0 53.6 19.1 0.8 rel of oil, Eni’s net income will and Lukoil is getting better at risen from Ffr660 ($107.60) to General Electric...... UK 465.0 6.9 9.5 3.6 Asda...... UK 209.5 3.1 7.9 1.9 MTWTF Pernod-Ricard...... Fr 445.2 289.3 10.2 2.9 Hellenic Tel...... Gr 8150.0 48.3 20.7 2.0 Hanson...... UK 363.3 5.5 3.1 - Benetton...... Ita 37363.0 573.7 7.5 1.3 fall three to four per cent,” esti- recovering payments. Ffr760 and target prices are now Pharmacia & Upjohn ...... Swe 343.5 223.2 0.6 2.5 Company Country Price (local) Price (Ecu) %change Yield Hyder...... UK 987.0 5.8 5.2 5.8 Company Country Price (local) Price (Ecu) %change Yield Heidelberger Druck...... Ger 144.0 16.6 15.7 - Boots...... UK 910.5 14.0 -0.1 2.9 Pilkington...... UK 126.0 1.9 5.0 4.6 Iberdrola...... Spa 2420.0 14.3 0.6 2.9 mates one analyst. “The aver- ranging from Ffr840 to Ffr900. Heidelberger Zement...... Ger 135.0 15.6 -6.6 1.8 Burton ...... UK -- - - AGA ...... Swe 107.0 1.6 -4.9 2.8 Pirelli...... Ita 5865.0 90.1 7.9 1.7 3I...... UK 588.0 9.0 -0.2 2.0 Italgas...... Ita 7678.0 45.5 2.4 1.7 age for integrated oil firms is Elf Aquitaine Akzo Nobel...... Neth 427.3 6.6 -1.2 2.0 Pirelli Spa-rnc...... Ita 4331.0 66.5 0.0 2.8 Aegon...... Neth 255.3 3.9 2.4 1.2 Koninklijke PTT Ned ...... Neth 107.3 0.6 -1.6 2.7 seven to eight per cent.” That ELF Aquitaine is almost univer- Total Allied Colloids ...... UK 202.5 3.1 0.0 2.0 Promodes ...... Fr 2769.0 1799.4 5.4 0.8 AGF...... Fr 332.4 5.1 0.3 2.3 National Grid...... UK 351.0 2.1 4.1 4.8 reflects the importance of its sally rated as a straight buy, TOTAL is seen as a good buy. Alusuisse Lonza...... Swi 1799.0 27.6 0.2 1.0 PSA Peugeot Citroën...... Fr 981.0 15.1 9.9 0.5 Alleanza Assicurazioni...... Ita 25853.0 397.0 9.1 0.6 THE EUROPEAN 500 National Power ...... UK 580.0 3.4 1.0 6.0 Arjo Wiggins Appleton...... UK 190.0 2.9 -1.3 4.2 Raisio...... Fin 890.0 578.4 1.1 0.3 Alliance Trust...... UK 2985.0 45.8 5.4 2.5 Neckarwerke Stuttgart...... Ger 515.0 - - - pipeline earnings rather than oil described by one analyst as The company has production Oest Elektrizatswirt...... Aus Assidoman ...... Swe 222.0 3.4 1.1 2.5 Randstad ...... Neth 96.0 62.4 4.7 1.0 Allianz ...... Ger 560.5 8.6 1.0 0.5 The European 500 lists Europe’s 1409.0 8.3 5.0 1.1 sales. Reserves increased from “ludicrously cheap”. The com- growth of nine per cent that will Basf...... Ger 74.0 1.1 2.2 3.9 Reckitt & Colman...... UK 1132.0 16.9 4.2 2.1 Allianz Lebensversich...... Ger 1877.7 - 0.0 0.9 KEY Portugal Telecomister...... Port 10425.0 61.8 -5.6 1.3 top companies, ranked by market 13.1 to 13.6 years compared with pany has a price/cashflow ratio be maintained until the end of Bayer...... Ger 82.2 1.3 3.3 3.3 Renault...... Fr 253.7 3.9 2.1 - Almanij ...... Bel 2525.0 38.8 1.6 1.2 Powerfin...... Bel 6400.0 37.9 -1.5 2.5 Billiton...... UK 160.3 2.5 -5.4 - Rentokil Initial ...... UK 343.3 5.2 7.5 1.1 Amvescap...... UK 653.0 10.0 10.3 1.1 capitalisation and divided by indus- Powergen...... UK 818.0 4.8 -2.5 4.0 1997 while output rose 3.8 per of 5.7 compared with 7.5 for Eni the decade. It now produces Aus Gr Port ...... UK Boc...... UK 1032.0 15.8 6.5 3.3 Rhone-Poulenc ...... Fr 283.9 184.5 -0.8 1.9 Asr Verzekeringsgroep ..Neth 151.8 2.3 4.0 1.7 try sector. It has several unique Austria Greece Portugal Scottish Hydro-Electric 578.0 3.4 4.5 3.9 cent to exceed one million bar- and 7.4 for Spain’s Repsol. It has 800,000 barrels a day and has British Steel...... UK 149.5 2.3 7.2 8.4 Roche Holding-bearer...... Swi 26150 16993.2 -3.1 0.3 Assicurazioni Generali ...... Ita 53972.0 828.8 3.2 0.6 Bel Belgium Ire Ireland Spa Spain Scottish Power...... UK 586.0 3.5 20.1 4.1 Ciba Specialty Chems...... Swi 189.0 2.9 -1.0 1.1 SMH-Bearer...... Swi 1010.0 15.5 1.6 1.0 Axa-UAP...... Fr 640.0 9.8 5.6 1.8 features. The index is priced in Severn Trent...... UK 998.0 5.9 6.7 4.9 rels a day for the first time. also cut costs and improved the a target of one million per day Clariant...... Swi 1553.0 23.8 1.0 0.6 Sairgroup ...... Swi 2110.0 32.4 1.9 - Axa Colonia Konzern...... Ger 237.0 3.6 5.3 1.2 ecus as well as in local currencies Den Denmark Ita Italy Swe Sweden Sevillana De Electric ...... Spa 1750.0 10.4 3.2 2.9 profitability of its downstream in 2000 and 1.25 million in 2005. Courtaulds...... UK 371.5 5.7 2.2 4.5 Sanofi ...... Fr 692.0 449.7 1.3 1.4 Baloise...... Swi 3170.0 48.7 -2.1 - (we will report prices converted Fin Finland Lux Luxembourg Swi Switzerland South West Water...... UK 949.0 5.6 6.5 5.0 Southern Electric ...... UK Lukoil operations. It has a PCF of 8.5 compared Degussa...... Ger 105.5 1.6 0.0 1.4 Scania...... Swe 204.0 3.1 4.6 2.7 Bayer Hypo-Und Wech...... Ger 89.3 1.4 4.4 2.3 Fr France Neth Netherlands UK United 537.5 3.2 0.3 5.1 DSM ...... Neth 214.9 3.3 -0.5 4.4 Schering ...... Ger 213.3 138.6 -0.8 1.7 BHW...... Ger 32.5 0.5 5.5 4.0 into euros when the new currency Sydkraft...... Swe 213.0 1.3 3.9 2.0 THE share price of Lukoil, one It has also made a series of with 10.7 for Shell and 9.7 times Enso...... Fin 55.5 0.9 2.8 4.0 Scottish & Newcastle...... UK 880.0 13.2 1.6 3.1 BK Vision...... Swi 1748.0 26.8 2.6 - is launched). In coming weeks, The Ger Germany Nor Norway Kingdom Tele Danmark ...... Den 615.0 3.6 18.7 2.9 of Russia’s largest oil compa- deep offshore discoveries off for BP. The stock is seen as FPB...... Ger 325.0 4.9 1.9 7.7 Seb ...... Fr 975.0 15.0 2.2 1.7 Britannic Assurance ...... UK 1292.5 19.8 1.6 3.2 European 500 index will be avail- Telecom Italia...... Ita 13320.0 78.9 3.0 1.0 nies, fell on the Opec news, but Angola and in the Congo where undervalued rather than a Henkel Kgaa...... Ger 122.0 1.9 8.0 1.6 Securicor...... UK 413.0 6.2 6.2 0.5 British Land...... UK 788.5 12.1 3.8 1.4 Telefonica De España...... Spa 6480.0 38.4 1.3 1.6 Hoechst...... Ger 71.2 1.1 3.3 3.0 Seita...... Fr 248.3 161.4 -6.5 4.0 CCF ...... Fr 494.7 7.6 7.3 2.0 able in real time on Bloomberg SOURCE: Bloomberg The information is derived from sources believed Thames Water...... UK 948.5 5.6 6.7 4.7 less than its domestic rivals. production costs are just $3 a straight buy as the market has Imperial Chemical...... UK 1083.5 16.6 -3.2 3.0 Sgs Soc Gen de Surv ...... Swi 2675.0 1738.3 -0.9 2.5 Cetelem...... Fr 730.0 11.2 1.2 2.1 screens. We will also be adding sec- to be accurate but neither The European nor Bloomberg warrant that Tractebel...... Bel 4000.0 23.7 2.2 2.6 Lukoil is one of the few Russian barrel. It has divested unprof- already discounted strong Johnson Matthey...... UK 600.5 9.2 11.8 2.7 Smith & Nephew...... UK 183.0 2.7 -0.3 3.4 Cobepa...... Bel 2100.0 32.2 -1.2 5.5 tor-by-sector movement graphs. the information is accurate or complete and it should not be relied upon Union Electrica Fenosa...... Spa 2090.0 12.4 3.7 2.6 Koninklijke Knp...... Neth 54.1 0.8 -0.9 2.0 Smithkline Beecham ...... UK 751.5 11.3 0.1 1.9 Commercial Union...... UK 1178.0 18.1 7.5 2.7 United Utilities...... UK 836.0 5.0 2.8 5.8 firms with a well-diversified itable assets in Tunisia, Equador demand. L’air Liquide...... Fr 1090.0 16.7 -0.9 1.9 Sodexho Alliance...... Fr 3840.0 59.0 0.0 1.4 Credit Suisse ...... Swi 294.5 4.5 9.1 1.7 The European 500 is edited as such; nor do they accept any responsibility for errors, inaccuracies, Vew ...... Ger 633.0 3.8 3.4 2.3 Laporte...... UK 755.0 11.6 0.3 3.4 Sophus Berendsen...... Den 1225.0 - - - Credito Italiano ...... Ita 7283.0 111.8 2.1 0.8 by Melanie Bien omissions or any inconsistencies therein Yorkshire Water...... UK 529.00 3.13 4.74 4.61

56 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 57

CyanMagYelloKey CyanMagYelloKey MARKETS

ROUND-UP FUTURES

London With the German market set- that the anti-tobacco lobby cold water on the bolsa last week almost single-handedly pulled fairly,” says the head of a Moscow Budapest ting record upon record, many declared victory too early,” says STOCKMARKETS as the Madrid General index the market down on 16 March. investment fund. “We have had Now Chicago FTSE 100 investors are beginning to won- one analyst. floated between 820 and 830. A Food and Drug Administration too many dubious privatisations.” BUX Latest % change % change 12 month 12 month 6150 der when profit-taking will begin. Among last week’s best per- MARKET INDEX Week ago Year ago High Low But new money from domestic panel in America was dead- Most potential bidders are other 10000 5950 “Institutions have a lot of money formers was Merrill Lynch, the investors fleeing falling bond locked over whether to recom- Russian firms: Lukoil, Gazprom, moves in on Liffe 5750 in the market — they are not investment bank, which saw its Amsterdam AEX 1121.0 1.1 57.8 1121.0 702.1 yields and low interest rates is mend approval of Roche’s Yuksi and Sidanco are thought 8000 5550 going anywhere,” says one share price leap six per cent on Athens General 1919.9 24.9 51.3 1919.9 1268.9 still entering the market and Xenical anti-obesity drug to be considering bids. The only Melanie Bien leaders, setting the benchmark 5350 Frankfurt analyst. Most market speculation that it is being tar- Brussels Bel-20 2924.9 2.3 40.8 2924.9 2079.3 surges could easily be triggered because of worries about a pos- major foreign firm in the running, for euro-traded products after 5150 pundits see the shares climbing geted by Chase Manhattan as a Budapest BUX 8786.6 4.3 73.3 8786.6 5084.8 by movements among the major sible increased risk of contract- analysts say, is Royal/Dutch Shell, 6000 EWS that the 4 January 1999. Monetary 4950 higher on promising funda- possible acquisition. The news is Copenhagen Stock Market 737.8 1.8 37.1 737.8 520.5 traded companies. ing breast cancer. The negative the Anglo-Dutch oil company. world’s largest union will shrink the European 4750 mentals and excellent company likely to drive financial stocks Dublin Ireland SE 5293.9 3.8 30.6 5293.9 2923.6 Telefónica’s announcement outlook, which saw Roche President Boris Yeltsin’s return derivatives derivatives markets by reduc- 4550 Frankfurt Dax 5001.6 2.3 53.2 5001.6 3215.2 4000 Dec Jan Feb Mar reports. higher this week. Oil stocks have that it will reorganise its business shares plunge, spread to Novar- to the Kremlin after a week’s Dec Jan Feb Mar exchange, the ing fluctuations in currencies SOURCE: BLOOMBERG SOURCE: The telecommunications sec- made a comeback, too, rebound- Helsinki Hex 4356.8 1.9 55.7 4378.1 2734.4 into separate units, some of which tis, the world’s largest health- absence due to a respiratory Chicago Board of and interest rates. Winning liq- London FTSE 100 5956.3 3.0 39.9 5997.9 4214.6 NTrade (CBOT), is joining forces uidity in the ecu, the basket of THE question on market-watch- tor has come to the forefront at ing on news that the Organisa- may be floated, was seen as the care company, and the rest of infection will give the market an THE Hungarian market has had ers’ minds this week will be: can the CeBIT show in Hannover tion of Petroleum Exporting Madrid General 827.1 0.8 76.9 828.4 461.7 final boost for a company that, the market. extra boost, since Moscow stocks a bullish run triggered by strong with Eurex, the alliance of the European currencies, is con- the FTSE hold the 6,000 level? after a number of German Countries (Opec) may cut oil Milan Mibtel 22792.0 4.7 94.3 22792.0 11609.0 along with the banks, has led this However, the SMI index man- tend to weaken in sympathy international demand, but ana- German and Swiss futures sidered vital to the battle for Following last week’s budget providers announced price cuts production. Oslo OBX 728.2 -0.1 7.7 758.5 566.0 year’s bull market. The company’s aged to shrug off most of the whenever Yeltsin falls ill. lysts expect a slowdown over the exchanges – the DTB and Sof- products denominated in statement, the FTSE is expected for the coming months. This has More surprisingly, technology Paris CAC-40 3688.9 4.2 44.5 3688.9 2514.5 shares are expected to settle in losses with small daily gains and next few months. “Some of the fex – is another nail in the cof- euros. Liffe has its own plan, to be bombarded with inflows focused eyes on Deutsche stocks bounced back from the Prague Stock Market 515.5 6.5 4.1 561.3 452.4 the short term. Future surges will a strong rally on 20 March – its Amsterdam blue chips have had very good fin of the London International aiming to become the first from tax-exempt private equity Telekom, Mannesmann and turmoil caused by Intel’s profits Stockholm Affarsvarlden 3525.9 0.9 32.3 3545.9 2610.5 depend on its success in bidding biggest one-day gain since mid- runs,” says Gergely Varkonyi, ana- Financial Futures and Options exchange to list futures con- Vienna Credit Aktien 521.3 2.8 27.5 521.3 392.8 portfolios. Investors will be anx- Viag, and investors will be watch- warning, despite similar bad tid- for parts of the soon-to-be-pri- January – to end the week down AEX lyst at ING Barings in Budapest. Exchange (Liffe). tracts on a pan-European ious to beat the year-end dead- ing the sector this week as com- ings from Compaq and the elec- Warsaw WIG-20 1859.6 -3.5 16.5 1928.0 1312.9 vatised Brazilian phone compa- just 0.4 per cent. 1125 ATP has risen 20 per cent and CBOT is linking its elec- stockmarket index, the Euro- Zürich SPI 4561.8 -0.1 61.3 4566.9 2833.9 line. In 1997 £2.6 billion ($4.3bn) petition intensifies in Germany's tronics and semiconductors nies. Companies in the building 1075 Matav by 25 per cent over the tronic trading network with top 100. of personal equity plan (PEP) liberalised telephone market. group Rockwell. However, news New York Dow Jones 8906.4 3.5 30.5 8906.4 6391.7 The energy sector, especially materials sector put on an excel- past month. Market fundamen- Eurex to provide global access But in the face of this latest 1025 money was created in March and A slew of companies are pre- that Hewlett-Packard intends to Tokyo Nikkei 16830.5 -1.4 -9.0 20681.1 14664.4 undervalued Repsol, looks to ben- lent show with some stocks gain- tals remain strong, but valuations for the trading of both threat, Liffe is once again April . This is expected to rise to senting more details about their compete against Sun Micro- Hong Kong Hang Seng 11564.2 4.6 -7.3 16673.3 8121.1 efit short-term from lower oil ing as much as eight per cent, 975 are becoming too high. The aver- exchanges’ contracts via a sin- maintaining a laid-back atti- SOURCE: DATASTREAM, BLOOMBERG £3.5bn in 1998. annual numbers: chemical mak- systems with its own version of prices and will also respond to an although the jump was seen as 925 age price-earnings ratio is 14.1, gle terminal from next spring. tude to the threat from its The chancellor of the exche- ers BASF and Bayer, both of Java software meant that Sun direction. its of Ffr525m expected for lux- will be around L165bn ($91.6m), expected announcement on lib- a blip rather than a trend. which is expensive relative to Eurex will enable traders European competitors. At 875 quer, Gordon Brown, announced which set records for 1997, are did not join in the rally. As the 1997 Looking further ahead, ury goods producer Hermès, and based on the parent’s results eralisation of the gas industry. Attention will focus on smaller other central European markets around the world to buy and Liffe, Eurex has long been 825 that PEP money can now be expected to break down last reporting season is all but over, Japan’s depressed economic a significant rise in income antic- earlier this year and a profits The signs are that Gas Natural stocks this week as even the Dec Jan Feb Mar The electricity utility Demasz sell futures contracts via a sin- viewed “as an alliance which rolled over with no tax penalty. If year's business. In automobiles, this week will see a mixture of situation and the effects of the ipated for electrical engineering warning last December. The cor- has won its battle to have a long market’s bulls turn cautious and has a $40m secondary issue gle computer link and without is trying to get to where Liffe this volume materialises, it will Volkswagen and Audi will reveal profit-taking and window-dress- Asian crisis will be the biggest firm, Schneider. Peugeot Citroen, responding figure for 1996 was transition period to the open mar- become selective, rather than THE Amsterdam market should coming up on 1 April . The $30 open outcry across a trading already is”, rather than as a represent an increase of about their annual figures. The tyre ing by institutional investors. influences on the market. the car manufacturer, which L603bn. ket. Expectations of a decision in relying on a general upward extend gains made earlier in offer price for MOL’s $300m float floor from January 1999. The serious contender for Liffe’s 0.75 per cent on institutional cash maker, Continental, will also pro- “Investors have lost confidence reports this week, is expected to Earnings have been eroded its favour boosted its price last trend. March, despite a patchy perfor- was announced on 20 March and new partnership will expand dominant European position. piles, which now stand at 8.25 vide more facts about its record Tokyo after the failure of so many secu- announce net profits of Ffr260m. by a sharp rise in bad debts on week, although electricity shares mance last week as traders was aggressively bid up through- access to benchmark interest- But this time CBOT is per cent of total portfolios. Fund year. In financials, Dresdner bank rities houses and poor yields,” One reason for the glowing property lending and a fall in such as Endesa and Iberdrola can Moscow awaited the expiration of futures out the day. rate contracts on CBOT and involved, making it much more managers will be looking to and the life and car insurance says one strategist. With inter- health of the French market is an trading profits. The compres- be expected to suffer if Gas and options contracts on 20 At the end of trading it had lower costs. of a threat to London. CBOT NIKKEI “The objective is to enable will combine its electronic reduce cash holdings quickly; the divisions of Allianz are due to 17500 est rates at a historic low, most increase in American and British sion in interest margins that Natural wins. RUSSIA RTS March. topped HUF6,500 ($30.80). ideal level is somewhere between report, and further information Japanese investors prefer to money flowing into French equi- accompanied convergence in Insurance company Mapfre, 500 As in many markets, the Analysts expect MOL to reach the members of CBOT and after-hours system, Project six and 6.5 per cent. about last year's business and buy foreign currency bonds to ties. “French stocks are now seen 1997 has also depressed has followed Telefónica’s exam- strongest gains were made in HUF7,000 by early April. Eurex to trade the world’s A, for which terminals have The end of the corporate possible predictions for the 16500 boost their yields rather than as something of a safe haven,” earnings figures. ple and said it may float its Latin the oil sector. Royal Dutch/ benchmark contracts been installed, with plans to 400 reporting season is drawing near, current term are also expected risk going into the equity says one analyst in Paris. Another IMI, with which San Paolo has American business separately. Shell’s stock looks particularly Warsaw directly,” said CBOT chairman extend to other European and the majority of the 30 stocks from Linde, Varta and Veba. market. market driver has been the push announced plans to merge, will Other companies, seeing market attractive. Not only are oil prices Patrick Arbor. “We are trying cities shortly, with the com- 15500 expected to report this week are Macroeconomic influences by French insurance houses to announce its results on 25 values rise on the back of such 300 starting to recover, but news that WIG-20 to standardise the trading net- puter network for Eurex, ini- from the FTSE-250 or smaller cap on the German market this week move funds from bonds into March. Net income is expected decisions, may follow suit. All the the company will spend $1bn 2000 works because that’s what the tially allowing side-by-side companies. P&O Ferries and include the release of February 14500 equities. to be around L740bn. Also big banks, construction compa- developing three Gulf of Mexico industry wants. It represents trading of each exchange’s Dec Jan Feb Mar Paris 200 Amersham, the drugs firm, are production, import and export Last week’s main beneficiaries reporting next week is Banca di nies and utilities now have large Dec Jan Feb Mar oil and natural gas fields, adding an outstanding opportunity contracts on a computer two of the bigger names due. But prices. Initial CPI figures for PUBLIC funds will support the Latin American operations and for us to link up with a leading screen. Next year the software CAC-40 of this flow of funds were the oil Roma, which recorded a 300 million barrels of oil to its 1500 annual results are unlikely to shift March are also due this week. Nikkei stock index for the rest 3800 stocks, which also benefited from L2,900bn loss in the first half of can be expected to restudy their TOP picks in Moscow this week reserve base, gave the stock an overseas exchange.” will be integrated, allowing the market much: there have of March as the government 3700 a slight recovery in crude oil last year, but whose full-year loss share structure. are in the oil sector. Speculation extra boost. Royal Dutch/Shell’s The link-up will heap even traders to better monitor 3600 more pressure on Liffe, espe- prices. The system will include been few shocks so far this year, New York strives to lift the index above the 3500 prices. The good news drove will be around L3,000bn. that Opec may agree to cut oil share price gained nearly three and most results have been in crucial 18,000 level. That was 3400 Total’s share price up by around The only uncertainty sur- Zürich output led to surge in crude oil per cent last week. The company cially as Eurex is also involved all CBOT contracts and is likely line with, or slightly lower than, the trading level of the index at 3300 1000 in a planned alliance with to be very profitable for the DOW JONES 3200 eight per cent, while Elf rounds Credito Italiano, which prices, with Lukoil and Surgut- is also a front-runner in the pri- Dec Jan Feb Mar analysts’ expectations. 8900 the end of March last year; a 3100 Aquitaine’s stock grew more than reports on 26 March. It has SPI neftegaz expected to benefit vatisation of Rosneft, the Russ- France’s Matif, known as the exchange. 3000 This week also sees the expiry 8700 decline would force Japanese six per cent. invested less in property and the 4550 most. Both stocks have seen ian oil firm, so this should provide POLISH stocks should recover Euro-Alliance. Liffe has already The arrangement will not 2900 been forced to back down on cut into CBOT’s open outcry, of quarter-end futures and 8500 investors into the unpalatable 2800 consensus is that net income 4350 good runs recently: Lukoil’s share the basis for further upside over from poor trading this week, options positions, so investors position of recognising their 2700 will be around L500bn. its total commitment to open floor-based trading system 8300 Dec Jan Feb Mar Milan price gained nearly six per cent the next few weeks. ahead of European Union dis- will either be closing short posi- losses when the financial year With the results adding little 4150 last week. The outlook is not so positive cussions on enlargement at the outcry trading, announcing during regular trading hours 8100 tions or staying long. ends. But analysts say the gov- THE stock to watch this week is new information, traders will pay 3950 The other hot tip for the week for KLM, the Dutch national air- end of the month. But the cen- last week that it will list its in Chicago. 7900 MIBTeL It is a light week for economic ernment will have to intervene Castorama, France’s largest DIY 23200 more attention to the news that 3750 is Tatneft, another oil firm, which line. KLM is being sued for more tral bank’s decision to hold inter- products on an electronic plat- For European traders, the data, with just the money supply 7700 heavily to achieve its goal, given firm, which is rumoured to be the 22200 Rupert Murdoch’s News Corp announced that it will begin a than $1.3bn by a group of Amer- est rates to curb inflation after form by the end of the year, agreement will offer greater 3550 7500 figures expected. Unless there is Dec Jan Feb Mar that the index was trading below target of a takeover bid by King- 21200 failed to reach an agreement on roadshow for its American ican employees. The former and consumer prices rose more than creating more of a hybrid access to American markets, 3350 an adverse effect from economic 17,000 for all of last week. fisher, the UK retail group. King- 20200 acquiring a 50.6 per cent stake Dec Jan Feb Mar depositary receipt listing on the current employees allege sex- expected early in the year could exchange – combining elec- while increasing American data in America, the market is THE Dow Jones Industrial Aver- Apart from its direct inter- fisher has been building up its 19200 in Mediaset. That could deflate New York Stock Exchange on 21 ual and racial discrimination by hold shares back. The WIG-20 tronic trading alongside its access to European markets. expected to hold on to its gains. age broke through the 8,900 bar- vention in the secondary mar- Castorama holding, buying 10 per 18200 a market driven for most of the SWISS stocks are expected to March. The listing will take place a KLM supervisor. fell 3.5 per cent last week. traditional pits. “This alliance is more rier after a climb of over three ket, the Japanese government cent of the stock two weeks ago. 17200 year by bid rumours. decline this week amid investor on 30 March: domestic shares Looking ahead, DSM, the Construction company Budi- “We will have our new elec- progress in our international- per cent last week. Despite the has disappointed investors. Last Meanwhile, the Paris stock 16200 concern that near-record share are bound to soar once the stock chemicals and plastics manu- mex is poised for gains after ris- tronic trading system ready isation strategy,” said Jorg Frankfurt 15200 historic high, analysts are still talk- week it failed to introduce a exchange CAC-40 index contin- Dec Jan Feb Mar Madrid price highs are not justified by starts trading in New York. facturer, is one stock analysts ing 6.5 per cent to Zl 16.5 ($4.71) by the end of 1999, so we will Franke, chief executive officer DAX ing the market up. “We expect package of income tax cuts that ues its record-breaking run. His- growth in companies’ earnings. Meanwhile the Russian gov- are tipping for growth. On 24 on a monthly report showing be able to compete on a global of Eurex. “It adds liquidity to 5500 the Dow Jones to keep on rising investors had been hoping would tory was made on 20 March as THE Italian reporting season GENERAL Food giant Nestlé is expected ernment has announced a start- March DSM begins a public offer- that February profit rose more basis,” said a Liffe spokes- our market and allows our 5300 until April when the first-quarter stimulate the market. the index pushed through the gets going in earnest this week 830 to release its results, as is ing price for the privatisation of ing of shares and convertible to Zl 707.3m. Construction woman. “Their timetable members easy and cost- 5100 seems to be fairly ambitious, efficient access to a wide range 4900 reporting season starts,” says Equity analysts say that the 3,700 barrier for the first time when most of the top banks for- 780 Suedelektra, the mining extrac- Rosneft, the last major Russian bonds in Royal Gist- stocks – which comprise 15 per 4700 one trader. At this point anxiety yen/dollar exchange rate will before falling back at the close. mally announce their consoli- 730 tion group with promising inter- oil firm which remains in state Brocades, a pharmaceuticals cent of the WIG-20’s capitalisa- especially as we have first- of new products.” 4500 about first- quarter results could have a significant influence on “It’s a raging bull market,” says dated results for 1997. There will 680 ests in Vanadium. Tag Heuer will hands. Bids for the 75 per cent- firm DSM offered to buy last tion – generally look healthy. hand knowledge of the diffi- CBOT and Eurex are hunt- 4300 set in, derailing New York’s the short-term performance of one stock-watcher. Even a poor be few surprises: earlier disclose more about the effects plus-one-share stake in Rosneft month. DSM will pay Nfl 2.9bn Impex-metal may also extend culties involved. These ing for a strategic partner in 4100 630 3900 upward climb. Until then the exu- the market. Foreign investors performance by France Telecom, announcements of parent bank of the Asian currency crisis on will start at $2.1bn; the firm was ($1.4bn) for Gist-Broacades, and gains. Its shares rose 2.8 per alliances will not really be nec- the Asia-Pacific region. Poten- 580 3700 berant mood, irrational though are sellers of stock if the yen which accounts for 10 per cent of figures combined with a couple its business. valued by Dresdner Kleinwort has also agreed to assume sev- cent to Zl 37 per share after essary anyway. Our new sys- tial contenders include the 3500 530 Dec Jan Feb Mar it may be, looks set to endure. depreciates below ¥130 to the the CAC-40’s capitalisation, could of profits warnings mean that But the litmus test will come Benson at between $2.3bn and eral hundred million guilders of management approved a tem will put personal Tokyo Futures Exchange and 480 Tobacco stocks such as Philip dollar. The central bank was not drag the market down. France investors already know what Dec Jan Feb Mar on 25 March when Basel-based $2.4bn. the company’s debt as part of Zl 120m restructuring plan. computers on traders’ desks, Simex which is based in Sin- FRANKFURT traders spent 20 Morris, Loews and Nabisco Hold- forced to intervene last week to Telecom shares lost Ffr60 most of the figures will be. pharmaceuticals giant Roche The sale of Rosneft will be a the deal. Other stock picks which will be sufficient. They gapore. Meanwhile, Liffe pre- March indulging in cake and ings could be the hot picks of the defend the currency at that level. ($9.80) after the announcement On 23 March Istituto Bancario MADRID’s stockmarket has Holding announces its results crucial test of the Russian gov- include Akzo Nobel, the chem- Cath Blackledge, are looking to build a network.” pares on its own for its Euro champagne, courtesy of the Ger- week after the rejection by an However, the exchange rate of record results but flat growth San Paolo di Torino, Italy’s entered a period of relative calm, for 1997. Any bad news will rein- ernment’s commitment to good icals and plastics maker which Melanie Bien, Louise Bowman, With the onset of EMU, roadshow next month, man bourse. The occasion: the Indiana jury of a $6.4bn lawsuit will also influence the prospects. largest private bank, will following the frenetic activity of stall a mood of gloominess which corporate governance, analysts has bought a majority stake in Eric Culp, Gavin Gray, Paula Europe’s exchanges are under intending to make up some lost DAX 30 closed above 5,000 for claiming that passive smoking performance of Japanese This week is unlikely to be any announce net income at the con- the past two months. A long hung over the market for much say. “It is vital that this sale is seen a Turkish paint producer, and Hawkins, Nicholas Moss, pressure to emerge as global ground. the first time in floor trading. causes lung cancer. “It’s a sign exporters in the opposite different, with healthy net prof- solidated group level. The figure weekend holiday helped pour of last week. It was Roche which to be conducted openly and NPMC, the investment company. Giles Tremlett

58 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 59

CyanMagYelloKey CyanMagYelloKey BONDS CURRENCIES

DEREGULATION EURO-STERLING FIVE YEAR YIELDS FORECAST 8.00 Risks still worth taking in the short term 7.50 Can index-linked bonds Avinash Persaud before being examined for member- mark and Swiss franc. Greater stabil- ship. Examinations normally occur six ity in Asia will undermine the Swiss A RISKY BUSINESS HE wider implication of months before membership. This franc, as will an environment of low 1.0 7.00 the European Monetary timetable would suggest the latest inflation and falling commodity prices. 1.0 Committee’s decision to time a second devaluation could occur The foreign exchange market is full of 1.0 rise from the dead? revalue the Irish punt by is late summer 1998. Devaluing twice rumours that European central banks 1.0 6.50 three per cent on 16 March in six months would shatter Greek are intervening modestly to keep the 1.0 Doug Cameron The gap is particularly sharp when Tis the clear desire of European central exchange rate credibility and is highly dollar in a tight range. INFLATION-PROOF SECURITY inflation is low – between two and bankers to preserve stability and con- unlikely. In an environment of stability and 0.0 HE index-linked bond Volume of index-linked bonds three per cent – offering real yields of 6.00 vergence in the run-up to European Generally, when volatility – a mea- low German interest rates, the dollar -0.2 market promises to pro- outstanding ($bn) around 4.5 per cent on five-year paper Oct 97 Nov Dec Jan 98 Feb Mar monetary union day on 1 January sure of risk – is low, investors’ appetite and sterling should climb higher -0.4 vide EMU member states Canada 6.7 and 5.5 per cent on 10-year bonds. 1999. for risk grows and they show a pref- against the deutschmark, towards -0.6 with a hedge against infla- Sweden 13.1 Australia 3.5 German pension funds, for example, EURO-DOLLAR FIVE YEAR YIELDS If there was an economic case to erence for high-yielding, traditionally DM1.85 and DM3.1 respectively. -O.8 tionary pressures and pro- have a nominal interest rate target of disturb the sanctity of existing ERM risky markets. The capital inflows that However, this positive dollar -1.0 T 7.00 mote long-term investment among 7.2 per cent, and they have tended to central parities by realigning a few are now driving the Czech koruna, environment may not last long – a Jan 97 Apr 97 Jul 97 Oct 97 Jan 98 savers if planned reforms of the sov- steer clear of overseas index-linked currencies, then the case was for a Polish zloty and Greek drachma to matter of weeks rather than months. The Global Risk Appetite Index measures investors' appetite for risk. Negative values mean they are risk-averse, while positive values reflect risk-loving behaviour. ereign bond sector go ahead as issues. much larger re-evaluation of the punt expensive levels are therefore likely The key forces that will drive the dol- Source: JP Morgan expected. The German market holds the key 6.75 – perhaps in the order of 10 per cent. to continue. Despite worsening long- lar and sterling lower are a recovery The expansion of the index-linked to unlocking the potential of index- Ireland can boast strong economic term fundamentals, such as the in the euro’s credibility, which is cur- These countries are all on Europe’s market remains theoretical in the cur- linked paper in Europe. The country’s growth, above six per cent, and a current account, investors should not rently low as investors worry that a Recovery periphery but they are all highly rent low inflation climate. However, overriding target of quashing infla- 6.50 hearty current account surplus, above be too quick to sell or hedge these broader euro will be a weaker cur- dependent on exports to Europe’s should monetary union prove disas- tion actually led to index-linking being two per cent of GDP. In revaluing the currencies. rency, and the prospect of higher Ger- core. Strength in the periphery is a trous and the European Central Bank America 32.7 UK 89.5 outlawed by Germany’s 1948 cur- punt by just three per cent, the cen- Our chart shows JP Morgan’s Risk man interest rates. These two forces in the euro’s harbinger of strength across Europe; fail to quell inflationary pressures, the Source: Commerzbank rency act. This ban remains in place tral bankers place the new central par- Appetite Index, a measure of whether appear faint today, keeping the dollar remember that the ECB will co-ordi- structure could prove to be an invalu- but will fall away when the single cur- 6.25 ity at the current market rate, thereby “risky” markets are generally out- strong, but they could grow stronger credibility nate European interest rates after May able tool. “This market will only take the UK accounting for more than half rency is introduced next year and the causing the least market disruption. performing “safe” ones. Volatility has surprisingly quickly. in response to economic pressures off when an inflation mentality returns the market, followed by America and deutschmark disappears. The decision to let Greece join the a strong influence over investors’ risk The euro’s credibility will get an across Europe, not just in Germany. to Europe,” says Klaus Holschuh, Sweden (see chart, above). Indexed Holschuh argues that this will clear 6.00 ERM at a sharply devalued rate now, appetite. The index shows that important boost once the wrangling will drive Signs of gathering economic review global head of bond research at Com- paper accounts for around 15 per cent the way for some German public sec- Oct 97 Nov Dec Jan 98 Feb Mar rather than a few days before EMU investors are responding favourably surrounding the presidency of the in Germany are not matched in Japan, merzbank. of total government bonds outstand- tor entities to start issuing indexed begins and the new ERM is consti- to risky environments. European Central Bank (ECB) is over the dollar so we could see the greatest volatility Index-linked bonds started life in ing in the UK and Sweden. The attrac- paper as part of funding programmes EURO-YEN FIVE YEAR YIELDS tuted, also smacks of concern over If investors are going to show a pref- and the new president starts to take not in sterling against the deutsch- the UK during its high-inflation era of tion to investors has been to provide which reached DM200bn ($108bn) instability in the run-up to EMU. It is erence for high-yielding currencies a hawkish line, as a new central bank mark or $/DM – the British and Amer- the early 1980s and spread to Amer- income flows matched with their own in debt issuance last year. He argues 2.00 widely expected that Greece will want delivered by independent monetary president is likely to do. German rates and sterling ican economies remain strong – but ica, Canada and Australia. In Europe long-term liabilities. The issues have it would not spur inflation but ulti- to join EMU by early 2001. If it were authorities, it is not just east Europe remain stuck around 3.3 per cent to in the DM/yen exchange rate. We they have also gained a small foothold long maturities, typically 25 years, mately strengthen the government’s to do so, one of the conditions laid that stands to benefit. The American 3.4 per cent. However, it is clear that lower expect DM/yen to be heading towards in the sovereign markets of France and and provide a useful match for pen- interest in price stability. Moreover, a down in the protocols to the Maas- dollar and sterling enjoy a large inter- European interest rates are rising. On ¥80 in the autumn. Sweden. The bonds incorporate sion companies seeking to hedge their commitment by the government to tricht Treaty is that Greece must not est rate advantage over the core Euro- 19 February rates were hiked in the The author is JP Morgan’s head indexation of the principal or interest own long-term exposures against the take over part of the risk of unexpected devalue the central parity two years pean currencies – that is, the German Czech Republic, Norway and Finland. of currency research payments during the life of the bond possibility of a return to a higher infla- inflation from investors would be “a 1.75 against standard inflation indices such tion environment. useful adjunct” to the EMU stability SYNTHETIC EURO EURO RATES as the consumer price index. The downside is that the premium pact and create an incentive for pri- There is around $160 billion out- for the index-linkage is sharply lower vate sector saving, with principal pro- Currency Latest % Change on % Change on High Low Exchange rates for sterling and dollar against the synthetic euro standing in index-linked bonds, with yields than from plain vanilla bonds. tected against erosion by inflation. a week ago a year ago £/euro $/euro British pound 0.72 10.8 -10.19 0.72 0.65 0.74 1.18 French franc 6.53 -2.7 2.47 6.70 6.53 0.73 1.16 1.50 MARKET PREVIEW Oct 97 Nov Dec Jan 98 Feb Mar German mark 1.94 -3.0 3.07 1.99 1.94 0.72 1.14 Italian lira 1940.45 -1.5 1.34 1969.74 1910.60 0.71 US dollar 1.12 Japanese yen INVESTMENT bankers are expecting back of demand from Europe. This is ing last week. It is hoping to borrow at 141.38 -0.3 0.75 145.71 122.46 0.70 1.10 another wave of bond issues from cor- rare for a sterling issue with such a long 80 basis points over US Treasuries, a EURO-DM FIVE YEAR YIELDS US dollar 1.09 0.0 -5.15 1.17 1.05 0.69 1.08 porate and emerging market borrowers maturity. spread that most bankers regard as too 6.00 THE SYNTHETIC euro has been developed to allow investors to calculate financial 0.68 1.06 this week, following recent successful Over the next two weeks, a handful low for a country whose credit rating data in euros ahead of the official introduction of the new currency next year. 0.67 Sterling 1.04 deals from the Spanish electricity util- of corporates are aiming to issue bonds was depressed for much of the 1990s. Datastream/ICV’s rate is based on the current formula of the ecu, which is measured ity Endesa and the Italian dairy prod- in sterling. Ciba Specialty Chemicals is Russia should also finally launch its 0.66 1.02 against a basket of currencies, calculated by tracking the movement of these ucts group Parmalat. planning its first issue in the sector, first international bond of the year. Last 0.65 1.00 currencies back to 1975. The Austrian schilling and Finnish markka have not been There are clear signs that the cur- with a 15-year bond scheduled in the week it met major investors in Europe’s 5.75 0.64 0.98 included because the current ecu formula uses the likely list of “euro-in” countries. Mar97 Apr May Jun Jul Aug Sept Oct Nov Dec Jan98 Feb Mar rency focus of the market is changing. £200m to £250m range. Yorkshire top financial centres and the transac- Source: Datastream From May, when currency rates between member states are fixed, a revised version Investors’ enthusiasm for the Ameri- Water is aiming to raise 10-year debt, tion is set to be launched at the begin- of the synthetic euro will be calculated based on these fixed rates and GDP weightings can dollar is flagging, temporarily at but bankers expect there may be sev- ning of this week. It will be a seven-year EUROPEAN CROSS RATES of each country, including all “euro-in” countries. least, with most analysts expecting the eral opportunistic borrowings on the issue in deutschmarks and will proba- 5.50 contraction in spreads on dollar back of the surging demand for sterling. bly total at DM1bn. Bankers expect it 23 MARCH Aust Belg Dan Ger Neth Fin Fr Grec IR Ital Nor Port Spain Swe Swi UK US Jpn Can Eur Sch Fr Kr Dm Fl Markka Fr Drach Punt Lira* Kr Esc Pts Kr Fr £ $ Yen $ Ecu Eurobonds over the past month to slow. In a week that is likely to be domi- to be priced at 450 to 500 basis points EAST EUROPEAN CURRENCIES 1998 Although demand for bonds denom- nated by corporate and high-yielding over German bunds. That represents a Austria Schilling - 0.341 1.844 7.032 6.240 2.318 2.098 0.040 17.66 7.146 1.694 0.069 0.083 1.613 8.620 21.43 12.87 0.099 9.083 13.97 COUNTRY US$ DM UK£ Ffr Ecu Belgium Franc 2.932 - 5.407 20.62 18.29 6.797 6.151 0.117 51.77 20.95 4.966 0.202 0.243 4.729 25.27 62.82 37.74 0.290 26.63 40.95 inated in the currencies of the 11 euro- sovereign debt, one of the few deals sharp increase over last year, but well 5.25 zone countries remains strong, the most expected from European sovereign risk below the rate paid recently by Central Oct 97 Nov Dec Jan 98 Feb Mar Albania Lek 158.8 86.7 264.3 25.9 172.3 Denmark Krone 0.542 0.185 - 3.813 3.383 1.257 1.137 0.022 9.574 3.874 0.918 0.037 0.045 0.875 4.674 11.62 6.980 0.054 4.925 7.572 significant emerging trend change over will be for Cades, the French body cre- European countries. Belarus Rouble 52500.0 28678.1 87380.5 8555.5 56954.6 Germany Deutschmark 0.142 0.049 0.262 - 0.887 0.330 0.298 0.006 2.511 1.016 0.241 0.010 0.012 0.229 1.226 3.047 1.831 0.014 1.292 1.986 the past week has been the surge in ated to pay down France’s social secu- European investors are expected to Bulgaria Lev 1822.2 995.4 3032.9 297.0 1976.8 Netherlands Guilder 0.160 0.055 0.296 1.127 - 0.372 0.336 0.006 2.830 1.145 0.271 0.011 0.013 0.259 1.382 3.434 2.063 0.016 1.456 2.238 EURO-ECU FIVE YEAR YIELDS demand for sterling bonds. rity debt. Last week, Cades launched a continue snapping up a recent flurry of Croatia Kuna 6.5 3.5 10.8 1.1 7.0 Finland Markka 0.431 0.147 0.796 3.033 2.692 - 0.905 0.017 7.617 3.082 0.731 0.030 0.036 0.696 3.719 9.243 5.553 0.043 3.918 6.024 Sterling started rallying last week in FFr4bn ($652m) 15-year bond. Early issues in exotic currencies. The Inter- 6.006.00 Czech Rep Koruna 34.0 18.6 56.6 5.5 36.9 France Franc 0.477 0.163 0.879 3.352 2.974 1.105 - 0.019 8.417 3.406 0.807 0.033 0.040 0.769 4.109 10.21 6.136 0.047 4.330 6.657 the wake of the first full budget from this week it will launch a DM1.5bn national Finance Corporation and the Estonia Kroon 14.7 8.0 24.4 2.4 15.9 Greece Drachma 25.13 8.573 46.36 176.8 156.8 58.27 52.73 - 443.8 179.6 42.57 1.728 2.085 40.55 216.7 538.5 323.6 2.488 228.3 351.0 Data is for a composite Britain’s Labour government. This com- ($824m) issue, also with a 15-year European Bank for Reconstruction and Hungary Forint 211.2 115.4 351.5 34.4 229.1 Ireland Punt 0.057 0.019 0.104 0.398 0.353 0.131 0.119 0.002 - 0.405 0.096 0.004 0.005 0.091 0.488 1.213 0.729 0.006 0.514 0.791 basket of five-year Italy Lira* 139.9 47.73 258.1 984.1 873.2 324.4 293.6 5.568 2471 - 237.0 9.624 11.61 225.7 1206 2998 1802 13.85 1271 1954 bined with the drop in the sovereign maturity and the same 5.25 per cent Development both launched experi- 5.755.75 Latvia Lat 0.6 0.3 1.0 0.1 0.6 bond market to make the UK bond yields coupon. The deals will merge into one mental bonds denominated in Russian AAA-rated bonds Lithuania Litas 4.0 2.2 6.7 0.7 4.3 Norway Krone 0.590 0.201 1.089 4.152 3.684 1.369 1.239 0.023 10.43 4.219 - 0.041 0.049 0.952 5.090 12.65 7.601 0.058 5.363 8.246 more attractive to European investors. issue and will be converted into euros roubles. The World Bank also issued in Source: ISMA Macedonia Denar 56.7 30.9 94.3 9.2 61.5 Portugal Escudo 14.54 4.960 26.82 102.3 90.73 33.71 30.51 0.579 256.8 103.9 24.63 - 1.206 23.46 125.4 311.6 187.2 1.439 132.1 203.1 That reinforces sterling’s inherent from January next year. The Polish zloty, while a couple of issues in 5.50 Moldova Leu 4.7 2.6 7.8 0.8 5.1 Spain Peseta 12.05 4.111 22.23 84.76 75.21 27.94 25.29 0.480 212.8 86.13 20.42 0.829 - 19.44 103.9 258.3 155.2 1.193 109.5 168.3 attractions as a high-yielding currency deutschmark deal is scheduled for Turkish lira have attracted speculative 5.50 Poland Zloty 3.5 1.9 5.7 0.6 3.7 Sweden Krona 0.620 0.211 1.143 4.359 3.868 1.437 1.301 0.025 10.95 4.430 1.050 0.043 0.051 - 5.344 13.28 7.980 0.061 5.631 8.658 and a safe haven to give investors a launch on Monday or Tuesday. investors. Investment bankers predict Russia Rouble 6.1 3.3 10.1 1.0 6.6 Switzerland Franc 0.116 0.040 0.214 0.816 0.724 0.269 0.243 0.005 2.048 0.829 0.196 0.008 0.010 0.187 - 2.486 1.493 0.011 1.054 1.620 hedge against any potential failure of Among central European borrowers, more such issues as European investors Romania Leu 8155.0 4454.7 13573.1 1329.0 8847.0 UK Pound 0.047 0.016 0.086 0.328 0.291 0.108 0.098 0.002 0.824 0.334 0.079 0.003 0.004 0.075 0.402 - 0.601 0.005 0.424 0.652 monetary union. Hungary should proceed with its planned seek new ways of boosting their invest- 5.255.25 Slovakia Koruna 35.2 19.2 58.5 5.7 38.1 US Dollar 0.078 0.026 0.143 0.546 0.485 0.180 0.163 0.003 1.372 0.555 0.132 0.005 0.006 0.125 0.670 1.664 - 0.008 0.706 1.085 Last week the European Investment five-year issue, although the issue size ment yields during a period of low inter- Slovenia Tolar 170.7 93.3 284.1 27.8 185.2 Japan Yen 10.10 3.446 18.63 71.05 63.04 23.42 21.20 0.402 178.4 72.20 17.11 0.695 0.838 16.30 87.10 216.5 130.1 - 91.78 141.1 Bank succeeded in raising £750m has been scaled back to $300m from est rates. Ukraine Hryvna 2.0 1.1 3.4 0.3 2.2 Canada Dollar 0.110 0.038 0.203 0.774 0.687 0.255 0.231 0.004 1.944 0.787 0.186 0.008 0.009 0.178 0.949 2.359 1.417 0.011 - 1.54 ($1.24bn) of 30-year debt, partly on the the $500m that bankers were predict- GAVIN GRAY 5.005.00 Yugoslavia New Dinar 4.9 2.6 8.1 0.8 5.3 Europe Ecu 0.072 0.024 0.132 0.504 0.447 0.166 0.150 0.003 1.264 0.512 0.121 0.005 0.006 0.116 0.617 1.534 0.922 0.007 0.650 - Oct 97 Nov Dec Jan 98 Feb Mar SOURCE: BZW * Italian lira rates in the vertical column have been multiplied by 1,000 for clarity. Divide by 1,000 for actual figures. SOURCE: BZW

60 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 61

CyanMagYelloKey Letters to the Editor, The European, 200 Gray’s Inn Road, London WC1X 8NE, England. Fax: +(44) (0)171-713 1840. E-mail: [email protected] INDICATORS LETTERS Shorter letters are preferred. Letters may be edited for clarity METALS FARMING Millennium AGRICULTURAL INCOME British rail: a privatisation on the wrong lines Steel market loses its sheen -20 -15 -10 -5 0 5 10 THE chaotic sell-off of the British rail system is GREATER MANCHESTER Passenger Transport structure independent of the state. Two key 1997 change on The Netherlands an abject lesson in how privatisation can be Authority has criticised Virgin Trains for the poor measures will change the entire rail transport previous year (%) Belgium countdown STEEL production is set to fall and the scale of the problem per cent of their total pro- production in the EU. As well Germany mishandled when ideology and political punctuality and reliability of its train services on environment. The member states must make Luxembourg sharply during the first half of is only just starting to emerge. duction to the region. The as consumer products, stain- France expediency overcome common sense. As Louise routes serving Greater Manchester. There has the relationship between rail operation and THE Millennium Bug is the the year as producers react to Europe’s steel mills heavy structural and seamless less steel is an integral part of Denmark Bowman points out (“The great train robbery”, been little improvement in performance infrastructure management transparent. An result of computer Sweden the growing global oversup- exported four million tonnes tube sectors have seen a broad range of manufac- Spain issue 407), railways cannot run around corners compared with the position before privatisation. accounting separation between both areas is programmers’ efforts to save ply caused by the combina- to Asia last year – three per demand slashed as large turing sectors, notably con- Ireland and John Major’s government cut a few too When Virgin Trains was awarded the obligatory, while a more extensive structural precious memory by EU15 tion of new capacity and the cent of total output – and infrastructure projects are on struction. Prices have been Greece many in its headlong rush to sell off the system. franchise, it promised to improve services for rail separation is optional. The traffic operations of truncating the date fields in fallout from the Asian crisis. around one million tonnes are hold throughout the region. falling since the middle of last Italy Privatisation of the British network has cost passengers. We have yet to see evidence of this. the railway companies will have to be conducted computer programs to a two- Finland World steel output increased expected to be lost this year The stainless steel market year (see chart, below) and Austria taxpayers more than £700 million ($1.14bn). It Ruth Morley like those of a private-sector undertaking digit year. December 31, 1999, by more than six per cent last and in 1999. Turkey, which is facing the greatest pressure stand at just half their 1996 Portugal has created a complicated network of operators Manchester, England operating in the market, while the rail network for example, takes on the Britain year, well above the long-term sends two-thirds of its exports in the wake of new capacity level. EU production hit an all- Source: Eurostat and providers. There are more bureaucrats than will be managed separately on behalf of the familiar format of 12/31/99. growth path. to Asia, will be the worst coming on stream in Europe, time high of 6.8 million TILLING the soil was once the contributed to a 20-year high. ever, rail services have deteriorated, prices have WE are entering a new era in rail transport in national governments. The latter will then bear Under this date convention, The dramatic slowdown in affected. Poland, Romania America and Latin America tonnes in 1997, a rise of 10 most honourable of profes- The slump is the result of gone up and there are dire concerns about safety. Europe. While the general direction can be the financial infrastructure burdens and collect the century field is held growth in the Asia-Pacific and Bulgaria also export 10 as well as booming per cent. The long-term sions. But Europe’s agricul- lower crop prices – down 5.1 Much of the track is unsafe. discerned, nobody can predict today how user charges. The devil is in the detail. constant at “19”, the century region has, as expected, led growth of the market indi- tural performance has per cent – and cheaper animal Replacing antiquated, underfunded state tomorrow’s railway market will look. But with Dr Paul Anderson in which computers were to import pressures in Europe STAINLESS STEEL PRICES cates that this level is unsus- embarked on a downward products, down 3.1 per cent. monopolies with equally disorganised private traffic jams a common sight in all European Geneva, Switzerland born. As a result, many and America. South Korea tainable, according to MEPS trend. Plans under discussion The countries which suffered companies is no way to get railways on the right countries and international traffic within the programs in use today by DM/tonne and Taiwan, Asia’s largest 4,500 (Europe), a UK-based steel in the European Commission heavily faced additional prob- track. We were told that a nationwide system European Union expected to increase by 60 per WE need to favour rail over road. Of the businesses and government steel exporters, have switched consultant. for modest reform in the Com- lems of their own. Britain saw could never be cost-effective and that assets cent between now and 2010, rail networks proposed Trans European Networks (TENs), agencies will read 01/01/00 their focus in the face of The expected consolidation mon Agricultural Policy will a 22.4 per cent fall, influenced needed to be divested to local and regional cannot be overlooked. there are 140 road projects, 57 combined as January 1, 1900. falling local demand. South 4,000 in the steel sector this year is not ease the situation. by the strength of sterling. agencies. But Britain is small enough for an State-operated railways are being privatised transport schemes, 26 inland waterway links The consequences for Korea will export an extra one starting to take shape follow- Last year agricultural Portugal was down 13.3 per integrated passenger and freight system to work. in most west European countries. EU Directive and only 11 rail links. many businesses are million tonnes of flat rolled 3,500 Cold rolled coil ing last week’s $1.4 billion income dropped by 2.8 per cent, owing to poor weather Privatisation, yes. Regionalisation, no. 91/440 on railway undertakings obliges all 15 More roads? You must be choking. potentially severe. Nearly all steel this year to make up for purchase of America’s Inland cent in the European Union. which affected crop output and Christopher Read member states to reduce railway company Anthony Moynihan data used by computers in Eurostat, the statistical office quality. commerce involve a date in slack domestic demand. 3,000 International by Ispat Inter- Reading, England indebtedness and to establish a management Cardiff, Wales There have been few signs national, the UK-based com- of the EU, delivered this Doing rather better are the some form or another, of production cuts in the first pany. This makes Ispat, which depressing picture after sig- Netherlands with an 8.7 per whether it is a payment date, quarter in the face of boom- 2,500 has European production nificant rises in the previous cent rise, Belgium (3.7 per a shipping date, an expiration ing European and American Hot rolled coil facilities in Germany and Ire- three years – 9.3 per cent in cent), Germany (3.2 per cent), Blair’s realpolitik Bilingual Brussels date or some other date markets, but there is strong 2,000 land, the eighth-largest steel 1994, 5.2 per cent in 1995 and Luxembourg (0.8 per cent) and DRAWN FROM EUROPE significant to the transaction. evidence that mills have been Feb 96Feb 97 Feb 98 producer in the world. 5.5 per cent in 1996, which France (0.7 per cent). WHAT gain does the British prime min- LEO PEETERS, the Flemish interior The only solution to the stockpiling finished product Source: MEPS (Europe) DOUG CAMERON ister, Tony Blair, expect from his craven minister, has not decided “to expand problem is to rewrite software support for the latest moves in President into the federal capital”, Brus- programs so that they will Clinton’s disastrous Middle East policy? sels, or “caused outrage among Wal- recognise a four-digit year, ie INTEREST AND MONEY MARKET RATES ECONOMIC DATA Is he looking for US patronage and loons” (Seven Days, issue 417). The six looking ahead to 01/01/2000 support in Nato, in the US-dominated municipalities where French-speakers not back to 01/01/1900. A * † †† COUNTRY OFFICIAL INTEREST RATES MONEY MARKET RATES COUNTRY INDUSTRIAL OUTPUT INFLATION UNEMPLOYMENT bodies of world trade and finance, the will in future have to ask if they want common standard for this has 3 months Benchmark bond Latest Previous Year Latest Month Year Latest Month Year IMF and the World Trade Organisation? official information in French are part to be agreed and adopted by quarter quarter ago month ago ago month ago ago Rate Previous Date of Name This Week Year This Week Year Name Does he hope that his relationship with of the Flemish (Dutch-speaking) region programmers. rate change week ago ago week ago ago 5 Austria 3.9 n/a 3.7 Jan 1.2 1.0 1.7 Feb 4.5 4.4 4.1 the world’s leading economic and mili- and have nothing to do with Brussels, Rodolfo Mendoza Austria 2.50 3.00 18.4.96Discount 3.60 3.60 3.30 4.93 5.13 5.69 Oest Bund Belgium 1.7 1.9 0.7 Feb 0.7 0.4 2.0 Feb 12.9 13.1 13.4 tary power will give him an advantage except that they border it. Brooklyn, New York, USA Belgium 3.30 3.00 9.10.97Central 3.63 3.69 3.52 4.98 5.15 5.83 OLO Denmark 2.22 3.7 2.7 Dec 1.7 2.3 2.3 Jan 7.4 7.4 8.3 in his bid for leadership in Europe? The wants to Denmark 3.75 3.50 9.10.97Repo 3.88 3.88 3.66 5.11 5.31 6.40 DGB Finland 6.02 6.2 3.8 Feb 1.9 1.9 0.4 Feb 13.2 13.8 15.8 Certainly, he is doing little to counter encourage newcomers to Flanders to WE ARE told that the Finland 3.40 3.25 19.03.98Tender 3.42 3.43 3.07 5.00 5.15 5.98 FGB France 2.62 2.2 1.7 Jan 0.5 1.1 1.8 Jan 12.1 12.2 12.7 the impression that he is prepared to sac- learn Dutch, the official language of the “Millennium Bug” will cause France 3.30 3.10 9.10.97Intervention 3.52 3.56 3.38 4.92 5.06 5.54 OAT Germany 2.6 2.4 2.2 Feb 1.1 1.3 1.7 Feb 11.5 11.6 11.2 rifice peace and human rights in the Mid- region. As you rightly point out, Brus- millions of computers to Germany 4.50 5.00 18.4.96Lombard 3.51 3.52 3.25 4.86 5.04 5.73 Bund Greece 10.65 n/a 11.3 Feb 4.3 4.4 6.5 Dec 8.7 8.4 8.4 dle East to this self-serving realpolitik. sels has an altogether different linguis- crash at midnight on 31 Germany 3.30 3.00 9.10.97Repo n/a n/a n/a n/a n/a n/a Ireland 7.81 n/a 10.13 Feb 1.7 1.8 n/a Feb 9.7 9.7 10.6 Samantha Blick tic status: it is officially bilingual. We do December 1999, losing vital Germany 2.50 3.00 18.4.96Discount n/a n/a n/a n/a n/a n/a Italy 2.8 2.1 0.1 Feb 1.8 1.6 2.4 11.74 12.2 11.7 Stuttgart, Germany not understand why an administrative data and crippling businesses Greece 14.50 15.50 13.5.97Discount n/a n/a n/a n/a n/a n/a Luxembourg 5.51 3.83 2.4 Feb 1.1 1.4 1.5 Nov 3.7 3.6 3.6 measure of the Flemish government great and small. Lloyd’s Ireland 6.75 6.25 2.05.97Short Term 3.88 5.94 5.75 5.06 5.21 6.59 Gilt Netherlands 2.92 3.1 3.0 Feb 2.2 1.8 2.2 Feb 5.1 5.0 6.4 Indonesian corruption should upset the Walloons, as they live underwriters in London Italy 5.50 6.25 23.12.97Discount 5.62 5.78 7.44 5.18 5.32 7.75 BTP Norway 4.4 2.3 4.3 Feb 2.0 2.0 3.3 Jan 3.0 2.6 4.1 in an altogether different region. have been told by one “bug Luxembourg 3.30 3.00 9.10.97effective rate* 3.63 3.69 3.52 4.98 5.15 5.83 related to OLO Portugal 3.01 2.3 2.0 Feb 2.1 1.9 2.9 6.52 6.5 7.1 TWO months ago The European pub- André Monteyne specialist” that claims are Netherlands 3.30 3.00 9.10.97Special Adv. 3.44 3.44 3.22 4.92 5.02 5.60 DSL Spain 3.6 3.5 2.6 Feb 1.8 2.0 2.5 Jan 12.9 12.8 14.1 lished a selection of letters accusing the CARTOONISTS AND WRITERS SYNDICATE TOM – TROUW, AMSTERDAM, THE NETHERLANDS President, Flemish Committee expected to exceed $1,000 Norway 5.75 5.50 19.3.98Overnight 4.13 4.07 3.47 5.22 5.32 5.91 NGB Sweden 3.3 2.7 1.8 Feb 1.2 1.3 -0.4 Feb 6.7 2.4 8.8 International Monetary Fund of aggra- for Brussels billion in the US alone. Portugal 4.90 5.20 18.11.97Discount 4.61 4.63 6.20 5.02 5.16 6.79 OT Switzerland 2.0 1.1 -0.6 Jan 0.0 0.4 0.9 Feb 4.9 5.0 5.7 vating Asia’s financial crisis and prop- Krajina wasteland the long-established international fron- Brussels, Belgium One expert has even Spain 4.50 4.75 13.2.98Repo 4.58 4.50 5.78 5.05 5.23 7.00 Bono Turkey 6.64 6.6 8.1 Feb 99.3 101.6 77.7 5.86 6.37 6.6 ping up authoritarian regimes (“Is the tier between Serbia and Albania dating claimed that the heavy cost Sweden 4.35 4.10 16.12.97Repo 4.61 4.66 4.34 5.34 5.53 7.07 SGB UK 2.9 3.0 2.7 Jan 3.3 3.5 2.8 Feb 4.9 5.0 6.2 IMF undermining the free market?, issue ONE of the most peaceful parts of back to 1912 really would establish a Flying into danger and resulting catastrophe will Switzerland 1.00 1.50 27.9.96Discount 1.06 0.94 1.87 2.74 2.93 3.60 Swap rate US 3.9 3.9 3.2 Feb 1.4 1.6 3.0 Feb 4.6 4.7 5.3 401). My immediate reaction was that Europe – in stark contrast to Kosovo destabilising precedent, in the first trigger a worldwide recession. UK 7.25 7.00 6.11.97Base 7.47 7.44 6.16 5.96 6.04 7.34 Gilt Japan -0.2 1.0 3.2 Jan 1.8 1.8 0.6 Jan 3.5 3.5 3.3 such criticism was unjustified. Having (“Igniting powder keg of Europe”, issue instance for neighbouring Macedonia TRAVEL is dangerous enough (“Wish We are also told that one of US 5.00 5.25 31.1.96Discount 5.56 5.59 5.51 5.58 5.72 6.69 Treasury Canada 4.5 4.3 2.7 Jan 1.1 0.7 2.1 Feb 8.6 5.9 9.7 recently visited Indonesia for the first 407) – is Krajina, now a depopulated whose large and already fractious Alban- you weren’t here”, issue 407) without the bug’s most worrying US 5.50 5.25 25.3.97Fed Funds n/a n/a n/a n/a n/a n/a *Gross domestic product year on year. † Annual per cent. †† Per cent of workforce. SOURCE: STANDARD & POOR’S MMS aspects is that it is almost 4 4 3 4 2 time, I have changed my mind. wasteland after the clearance of the ian population forms a compact minor- having to go on “terror tours” to Iraq, Japan 0.50 1.00 9.7.95Discount 0.78 0.89 0.58 1.61 1.68 2.25 JGB q 1997 except where stated: 1=q 96 2=q 97 3=q 95 4=q 97 5=year 97 6=Oct 96 7=Apr96 During my stay in Jakarta, Suharto Krajina Serb nation by the American- ity in the area abutting the border with Algeria, Chechnya or Afghanistan. I am impossible to estimate the Canada 4.70 4.65 03.3.98Call Loan 4.70 4.94 3.15 5.40 5.60 6.53 CGB was nominated for a seventh term as trained Croatian military. Kosovo and Albania. And if Serbia were a nervous flyer and the latest statistics number of people and * Tied to Belgian Franc SOURCE: STANDARD & POOR’S MMS EAST EUROPEAN DATA president – the only candidate. He has Zagreb’s unwillingness to allow the to be partitioned, why not Bosnia? on air accidents bring me out in a cold businesses affected and

* † †† been president since 1967. I heard him return of the Krajina Serbs, even though Mike Finch sweat. Seventy-five per cent of accidents advise them of the steps COUNTRY INDUSTRIAL OUTPUT INFLATION UNEMPLOYMENT launch a scathing attack on the reforms they would not pose a threat to Croatia’s Teddington, England happen in countries that account for they need to take to debug ECONOMIC INDICATORS Latest Month Year Latest Month Year Latest Month Year being demanded by the IMF, accusing sovereignty, has yielded only the mildest only 12 per cent of world air traffic. their computers. GERMANY recorded a cur- by an annualised 2.8 per 4.50 per cent, the level the FRENCH hourly wages month ago ago month ago ago month ago ago the organisation of trying to undermine of diplomatic rebukes. The member Oppressed Kurds If you are flying anywhere in Africa There is, however, reliable rent account deficit of cent between the fourth Bank of England considers rose 0.4 per cent in the Bulgaria Sept -19.9 6.2 -22.1 Nov 0.5 1.0 754.8 Nov 13.5 13.4 12.0 the constitution. President Suharto is no states of the European Union bear a the chances of crashing are multiplied and inexpensive WebRover DM12.5bn ($6.8bn) in Jan- quarter of 1997 and Febru- consistent with meeting fourth quarter of 1997, a Croatia Nov 6.5 6.0 2.3 Nov 0.4 0.2 3.2 Nov 22.7 22.8 21.7 friend of liberal economics, preferring special responsibility for Croatia’s new- THE western media are to be congrat- by 20. The odds of being killed in a plane software that can run a quick uary, after a surplus of ary 1998. This compares the government’s target smaller gain than those Czech Rep Oct 9.1 6.6 6.3 Dec 0.5 0.4 10.0 Dec 5.2 4.9 3.5 “family principles” and regulated “co- found ethnic purity. They, after all, “god- ulated for recent coverage of the events crash are less than one in a million for check on computers large and DM10.9bn in December, and with a headline growth rate rate of inflation. posted in the previous Estonia Oct 12.5 13.7 4.8 Oct 0.9 0.6 12.2 Sept 3.6 3.5 4.2 operatives” rather than the free market. fathered” Croatia by their premature in Kosovo and their search for a just North America, Canada and western small. I have just paid £20 compared with a deficit of of 3.1 per cent in January. three quarters and further Hungary Nov 13.3 14.2 10.6 Dec 1.1 1.2 19.4 Dec 10.4 10.2 10.5 Indonesia is run as a Suharto family recognition, presumably having deemed solution, such as autonomy, for its Europe, against one in 50,000 for Africa. ($32.75) for a diagnostic test DM10.6bn in January last ITALIAN GDP rose 0.2 per evidence that wage growth Latvia Sept 10.9 1.9 -2.9 Sept 0.2 0.4 8.1 Sept 7.1 7.3 7.0 business. Corruption is rife and there is it fit to look after the interests of all its oppressed people. The most dangerous places to fly are on on my computer. It was year. The data shows that FIGURES for average earn- cent in the fourth quarter is not pushing inflation Lithuania Oct 10.8 -5.2 -5.4 Oct 0.4 0.3 9.0 Oct 5.9 5.6 6.4 a confusing web of family monopolies peoples. I hope it won’t be too long before the local carriers in China, North Korea, money well spent. Prevention export volumes remain ings growth in Britain for of 1997 after a 0.6 per cent higher. Monthly salaries Poland Nov 11.7 10.7 4.7 Dec 1.0 1.2 13.2 Nov 10.3 10.3 13.3 and state subsidies. Hyperinflation is The Krajina Serbs’ primordial fears of media pay as much attention to the Colombia, central Africa and the former is better than cure. buoyant. M3 growth, the November and December rise in the previous period. grew at a slower pace in the Romania Oct -11.6 -15.6 13.2 Nov 4.3 6.5 165.6 Oct 7.6 7.2 6.3 having a destabilising effect and I wit- being railroaded into a secessionist oppressed Kurds in Turkey. Autonomy Soviet republics. The American state Richard Chilton Bundesbank’s primary 1997 were revised sharply Year-on-year GDP grew 2.8 last three months of the Slovakia Sept 0.1 -0.8 3.1 Dec 0.7 0.7 6.7 Nov 12.6 12.9 12.2 nessed huge student demonstrations Croatia, one that was unrepentant about for the 12 million-strong Kurdish minor- department, Britain and Canada have Birmingham, England barometer for future infla- downward to 4.50 per cent per cent. Exports and stock year, rising 0.2 per cent in Slovenia Nov -1.5 1.3 3.6 Dec 0.3 0.6 9.5 Oct 14.5 14.4 14.0 across the country. It is time for change. its genocidal Ustasha predecessor state, ity would help eradicate human rights instructed government employees to tion and a key guide for set- compared with earlier esti- building provided the impe- the quarter and 2.4 per Russia Aug 3.0 3.4 -6.6 Oct 0.2 -0.3 9.5 Oct 8.9 9.1 9.2 The IMF should not continue to support were dismissed by outsiders back in violations and go some way towards avoid using all Russian airlines unless I DON’T believe in fairies, ting interest rate policy, mates of 4.75 per cent. The tus for stronger growth in cent from a year earlier, the Ukraine June -2.4 -1.8 -4.5 Nov 0.9 0.9 9.6 Oct 2.7 2.7 1.3 such a rotten regime. 1991 because the internal administra- preparing Turkey for EU membership. absolutely necessary. ghosts or the Millennium Bug. slowed last month; growing figure for January was also the last quarter. labour ministry reported. *Change over same month of previous year in per cent. † Month-to-month change in per cent. SOURCE: PLANECON Daniel Mullins tive lines defining Croatia were decreed Patricia De Wit Helen Dodds Roger Bacon †† Rate in per cent. Adelaide, South Australia to be inviolable. The forcible change of Como, Italy Lagos, Portugal Sydney, NSW, Australia

62 THE EUROPEAN ■ 23-29 MARCH 1998 23-29 MARCH 1998 ■ THE EUROPEAN 63

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