January 27, 2021

End Roaming Charges Across Europe, E.U. Chief Says

BRUSSELS — The European Commission president, José Manuel Barroso, called on Wednesday for an end to the high fees charged for making mobile phone calls across national borders, seizing on one of the few truly popular European initiatives at a time of rising skepticism about the European Union.

In his State of the Union address before the European Parliament in Strasbourg, Mr. Barroso threw his support behind a plan that would phase out roaming fees starting in 2014 as part of a wider overhaul of the telecommunications sector.

European authorities have already “dramatically brought down roaming costs,” he said, and the latest proposal will go further to “lower prices for consumers and present new opportunities for companies.”

The European Union already caps roaming fees, and Neelie Kroes, the Union’s commissioner responsible for telecommunications, suggested in May that the fees be ended. Mr. Barroso’s support for breaking down barriers between telecommunications markets should give the initiative added momentum, but it comes as France, Germany and Britain have grown more wary of giving Mr. Barroso and the commission more powers.

During his speech, Mr. Barroso also highlighted the advances being made by the economy, saying that “recovery is within sight.”

But on a day when the French government said it would miss its deficit target this year and Portugal called for an easier deficit goal in 2014, Mr. Barroso also warned that “even one fine quarter doesn’t mean we are out of the economic heavy weather.” Many Europeans, including the 26 million people who are unemployed, still face hardship, he said.

Against the backdrop of such thorny issues, the question of mobile phone roaming charges was a relatively easy and straightforward one for Mr. Barroso to highlight. When they cross borders, the fees Europeans pay for mobile calls or Internet access increase sharply. That, in turn, has caused travelers in Europe to switch off or limit their phone use — a situation that the industry says is slowing the development of some services.

Yet many companies have already objected to the initiative. Roaming charges have been subject to a variety of caps since 2007. Ms. Kroes’s proposal must be approved by the European Parliament and by European governments before becoming law and is likely to face ferocious lobbying because roaming charges make up a big chunk of telecommunications operators’ profits.

In a sign of the battle to come, Anne Bouverot, the director general of the GSMA, a telecommunications industry group, said in a statement Wednesday that the focus of the sector reforms should be “increased investment in Europe’s telecoms infrastructure” as part of a “more thorough and comprehensive approach.”

On Wednesday, Ms. Kroes called for people to be allowed to switch operators when abroad as a way of putting pressure on the industry to offer better deals. She also called for operators to be allowed to forge alliances to offer cheaper calls and Internet services across the European Union.

The sector still “operates largely on the basis of 28 national markets” and there is still “no telecoms company that operates across the whole” Union, she said in a statement Wednesday.

Ms. Kroes stopped short of proposing legislation that would force an operator to offer the same broadband speed to all of its subscribers. She said that some companies and service providers in sectors like videoconferencing and medical imaging needed more bandwidth to ensure quality.

“All networks and technologies are different,” she said. “So are consumer needs; therefore subscriptions with different Internet speeds or data volumes remain possible.”

But Ms. Kroes said consumers should have the right to walk away from their telephone and Internet contracts if an operator failed to provide them with the speeds that they had paid for.

David Jolly contributed reporting from Paris.

Article source: http://www.nytimes.com/2013/09/12/business/global/end-roaming-charges-across-europe-eu-chief-says.html?partner=rss&emc=rss

DealBook: France Expands Inquiry Into Tax Evasion at UBS

The Swiss bank UBS in Zurich.Michael Buholzer/ReutersUBS said it was working with authorities in France to arrive at a resolution.

8:41 a.m. | Updated

PARIS – UBS, the biggest Swiss bank, is the target of a widening tax evasion investigation in France, a spokeswoman for the Paris prosecutor’s office said on Friday, an indication that the lender’s problems with the French government are growing.

A French judge on Thursday placed UBS AG, the Swiss parent company, under formal investigation on suspicion that it illegally sold banking services to French citizens that helped them to set up secret accounts abroad, according to Agnès Thibault-Lecuivre, the spokeswoman for the Paris prosecutor’s office. The Swiss bank also was identified as an ‘‘assisted witness,’’ a less serious status, in a concurrent investigation of suspected money laundering and tax evasion, she said.

The expanded inquiry comes just a week after the bank’s local subsidiary, UBS France, was put under formal investigation on similar suspicions. In the French legal system, a formal investigation, sometimes compared to an indictment in the American system, can drag on for years, and does not necessarily lead to charges or trial. An assisted witness is required to answer prosecutors’ questions with a lawyer present, but is thought less likely to ultimately face charges.

Yves Kaufmann Lobato, a UBS spokesman in Zurich, sought to play down the significance of the latest development, noting that the investigation had been the subject of news reports since early last year.

‘‘We will continue working with the authorities in France within the applicable legal framework to arrive at a resolution to this matter,’’ he added, citing a bank statement.

The investigators are examining the question of whether bankers from the Swiss parent company broke a French law against “illicit solicitation” by actively approaching potential French clients.

According to a report on Friday in the French newspaper Le Monde, UBS bankers regularly sought to ingratiate themselves into networks of affluent people, mingling at sporting events and concerts in order to seek out possible clients for tax evasion. At least 353 French citizens suspected of evading taxes through UBS have been identified, and the French government has sought administrative assistance from the Swiss government in four cases, the newspaper reported, without citing its source.

Mario Tuor, a spokesman for the Swiss Federal Finance Ministry in Bern, declined to comment on the case, saying the details were confidential.

There is a broad push in the United States and Europe to stop offshore banks from aiding tax cheats. Switzerland – where the secrecy laws punish banks for revealing client data – has been in an uncomfortable spotlight. In France, President François Hollande has made ending tax evasion a top priority after his former budget minister, Jérôme Cahuzac, was found to have set up secret Swiss and Singapore accounts to hide some of his wealth.

UBS itself has been under international scrutiny since 2008, when the United States Justice Department threatened to indict it for conspiracy to defraud the Internal Revenue Service. In 2009, UBS eventually agreed to pay a $780 million fine to avoid prosecution, and turned over data on 4,450 client accounts held by United States citizens suspected of evading taxes.

Obama administration officials followed that case with a broad push to expose all the American accounts hidden behind Swiss banking secrecy laws. With about a dozen Swiss lenders facing the possibility of indictment in the United States, the Swiss government agreed last month on a framework for banks to hand over information on American clients, a deal it hoped would permanently end the threat of United States prosecution. That agreement still must be approved by the Swiss legislature.

UBS said on Friday that it ‘‘fully supports the strategy of Switzerland to limit itself to the management of declared assets.’’

‘‘We believe that Switzerland and the countries of the E.U. need to find a solution for the past,’’ according to a statement from the bank. ‘‘This is an industry issue that UBS has taken significant steps to resolve since 2009. UBS does not tolerate any activities intended to help its clients circumvent their tax obligations.’’

Article source: http://dealbook.nytimes.com/2013/06/07/ubs-under-investigation-for-tax-evasion-in-france/?partner=rss&emc=rss

Cost Cuts Helped Air France-KLM Trim Operating Loss in 2012

Air France-KLM, Europe’s third-largest airline by passengers, recorded an operating loss of €300 million, or about $400 million, for 2012, compared with a €353 million loss a year earlier, as efforts to rein in seat capacity led to higher average fares. Revenue for the year rose 5.2 percent to €25.6 billion, while net debt declined to €6 billion from €6.5 billion in 2011.

But one-time expenses associated with a deep restructuring begun last year widened the airline’s net loss to €1.19 billion from €809 million in 2011.

“They have made a good start, but it is an improvement that is still just barely visible,” said Yan Derocles, an analyst at Oddo Securities in Paris.

Air France-KLM unveiled plans last June to shave more than €2 billion in costs, reduce debt and return to profit by the end of 2015. Despite the modest improvements achieved in the plan’s first six months, Jean-Cyril Spinetta, the carrier’s chief executive, stressed Friday in a statement that the company had laid the ground work for a more significant recovery this year.

“In 2013, we will maintain strict discipline in terms of capacity management, investments and costs,” Mr. Spinetta said.

Air France-KLM said passenger traffic rose by 2.1 percent last year, while seat capacity increased by just 0.6 percent. But while revenues per available seat rose by 5.9 percent from a year earlier, cargo revenues continued to slide, falling by 6.3 percent despite a 3.5 percent drop in capacity, as the economic slowdown reduced shipments.

Despite intense pressure from the French government to avoid layoffs, Air France-KLM has moved ahead with plans in 2012 to slash more than 5,100 jobs at its Air France unit by the end of this year — just over 10 percent of its work force of 49,000. Another 1,300 jobs are being eliminated at its smaller KLM unit.

Philippe Calavia, the chief financial officer, said Friday that the company had reduced staff by around 2,000 in 2012 through early retirements and other voluntary departures. Restructuring costs linked to those job cuts amounted to €471 million in 2012.

Labor costs have been a major drain on profit at Air France-KLM for years — equivalent to more than 30 percent of the group’s total revenue and even exceeding its fuel bill, which amounts to around 26 percent. By contrast, labor costs as a share of revenue are less than 10 percent at its low-cost rival, Ryanair, and 12.4 percent at EasyJet, according to the Center for Aviation in Brussels.

Given the uncertain outlook for the European economy this year, Air France-KLM declined to provide a forecast for 2013, although Mr. Calavia maintained the company’s targets of reaching net profit within two years. Analysts said they expected a modest improvement in operating profit this year, although annual restructuring costs were also expected to rise, possibly above €500 million.

Air France-KLM continues to lag behind its larger rival, Lufthansa of Germany, in its efforts to return to profitability. Lufthansa, which announced its own painful restructuring last year that involved 3,500 job cuts, this week reported a net 2012 profit of €990 million, bolstered by asset sales, compared with a loss of €13 million in 2011. The carrier also suspended dividend payments to shareholders in order to make more cash available to finance its turnaround.

Article source: http://www.nytimes.com/2013/02/23/business/global/23iht-airfrance23.html?partner=rss&emc=rss

Cost-Cutting Helped Air France-KLM Trim Operating Loss in 2012

Air France-KLM, Europe’s third-largest airline by passengers, recorded an operating loss of 300 million euros, or about $400 million, for 2012, compared with a 353 million euro loss a year earlier, as efforts to rein in seat capacity led to higher average fares. Revenue for the year rose 5.2 percent to 25.6 billion euros, while net debt declined to 6 billion euros from 6.5 billion euros in 2011.

But one-time expenses associated with a deep restructuring begun last year widened the airline’s net loss to 1.19 billion euros from 809 million euros in 2011.

“They have made a good start, but it is an improvement that is still just barely visible,” said Yan Derocles, an airline analyst at Oddo Securities in Paris.

Air France-KLM unveiled plans last June to shave more than 2 billion euros in costs, reduce debt and return to profit by the end of 2015. Despite the modest improvements achieved in the plan’s first six months, Jean-Cyril Spinetta, the group’s chief executive, stressed Friday in a statement that the company had laid the ground work for a more significant recovery this year.

“In 2013, we will maintain strict discipline in terms of capacity management, investments and costs,” Mr. Spinetta said.

Air France-KLM said passenger traffic rose by 2.1 percent last year, while seat capacity increased by just 0.6 percent. But while revenues per available seat rose by 5.9 percent from a year earlier, cargo revenues continued to slide, falling by 6.3 percent despite a 3.5 percent drop in capacity, as the economic slowdown reduced goods shipments.

Despite intense pressure from the French government to avoid layoffs, Air France-KLM moved ahead with plans in 2012 to slash more than 5,100 jobs at its Air France unit by the end of this year — just over 10 percent of its work force of 49,000. Another 1,300 jobs are being eliminated at its smaller KLM unit.

Philippe Calavia, the group’s chief executive officer, said Friday that the group had reduced staff by around 2,000 in 2012 through early retirements and other voluntary departures. Restructuring costs linked to those job cuts amounted to 471 million euros in 2012.

Labor costs have been a major drain on profit at Air France-KLM for years — equivalent to more than 30 percent of the group’s total revenue and even exceeding its fuel bill, which amounts to around 26 percent. By contrast, labor costs as a share of revenue are less than 10 percent at its low-cost rival Ryanair and 12.4 percent at EasyJet, according to the Center for Aviation in Brussels.

Given the uncertain outlook for the European economy this year, Air France-KLM declined to provide a forecast for 2013, although Mr. Calavia maintained the company’s targets of reaching net profit within two years. Analysts said they expected a modest improvement in operating profit this year, although annual restructuring costs were also expected to rise, possibly above 500 million euros.

Air France-KLM continues to lag behind its larger rival, Lufthansa of Germany, in its efforts to return to profitability. Lufthansa, which announced its own painful restructuring last year that involved 3,500 job losses. Lufthansa this week reported a net 2012 profit of 990 million euros, bolstered by asset sales, compared with a loss of 13 million euros in 2011. The German carrier also suspended dividend payments to shareholders in order to make more cash available to finance its turnaround.

Article source: http://www.nytimes.com/2013/02/23/business/global/23iht-airfrance23.html?partner=rss&emc=rss

Debt Crisis Lurches Toward Heart of Euro Zone as Rifts Grow

A major credit agency warned of a cut in the top-grade rating of France, which was one factor in a slide of more than 3 percent in many of Europe’s major indexes.

Moody’s Investors Service said that rising borrowing costs and a deteriorating economic outlook were putting pressure on France’s creditworthiness. Moody’s has maintained France’s AAA rating so far, as have the other major ratings agencies, but it warned in October that it could put the rating on review.

“This crisis is hitting the core of the euro zone,” Olli Rehn, the European commissioner for economic and monetary affairs, said Monday. “We should have no illusions about this.”

A loss of France’s AAA rating would have implications beyond Paris. It would signal that the crisis had spread to core euro zone members and that its effects could no longer be contained to peripheral nations like Greece, Portugal and Ireland.

Spain and Italy have also had their borrowing costs rise significantly. The yields on Spanish 10-year bonds rose 0.20 percentage point, to 6.513 percent, on Monday, while the yield on Italian 10-year bonds rose 0.16 percentage point to 6.64 percent. In Germany, by contrast, yields on 10-year bonds were at 1.913 percent.

In addition, efforts to bulk up the euro zone’s bailout fund, the European Financial Stability Facility, to around $1.35 trillion would be dealt a huge blow were France to lose its top-notch credit rating.

Since the French government is providing a large guarantee to the fund — 158 billion euros — a reduction of its credit rating could sway euro zone leaders to abandon the idea of pumping up the fund to buy troubled countries’ bonds, and switch to a more radical set of proposals.

In the meantime, European policy makers are trying to push ahead with the deal they struck at a summit meeting late last month, which calls for the fund to take on debt to buy bonds and a 50 percent write-down of Greece’s debt.

But even the Greek part of the deal is far from done. Though Greece needs 8 billion euros in international aid next month to avoid bankruptcy, Lucas D. Papademos, the new Greek prime minister, said after talks Monday in Brussels that he was still seeking a written guarantee of support for additional austerity measures from Greece’s leading politicians.

Euro zone members have demanded those pledges in exchange for signing off on any new funds. Antonis Samaras, who leads Greece’s center-right party, New Democracy, has rejected the demand, characterizing it as a humiliation.

Mr. Papademos said the undertaking demanded by the euro zone was “necessary to eliminate uncertainties and ambiguities concerning actions to be taken in the future by parties that may be in power.” Turning to Greece’s hopes of restoring its finances, he said that “the task ahead of us is a Herculean one.”

With Germany resisting calls for the European Central Bank to be given a direct role in protecting Spain and Italy by buying both countries’ bonds, pressure has returned to allow the central bank to help finance the rescue fund, allowing the fund to intervene in the bond market.

Drafts of a European Commission feasibility study due this week on euro bonds, securities that would be backed by all 17 members of the European Union that use the euro, made clear that for the bonds to be effective, the European Union’s founding treaty would have to be changed — a lengthy process that can be vetoed by any member nation.

The draft paper also stressed that the project would “require an immediate and decisive advance in the process of economic, financial and political integration within the euro area.”

“Increased surveillance and intrusiveness in the design and implementation of national fiscal policies would be warranted,” it added.

The paper outlined three possible approaches, including the most radical proposal in which countries would jointly offer “several” guarantees covering all euro zone debt.

But only the most limited option — one that would provide the least advantages — “would seem feasible without major treaty changes and therefore relatively little delay in implementation,” the document said.

Under this approach, the bonds that would be only partly used by individual nations would be underpinned by pro-rata guarantees of euro zone member states, the document added.

“This approach to the stability bond would deliver fewer of the benefits of common issuance but would also require fewer preconditions to be met,” the document said.

The government in Berlin signaled its opposition, however. “The chancellor and the German government do not share the belief of many that euro bonds would be a kind of cure-all for the crisis now,” said Steffen Seibert, the spokesman for Chancellor Angela Merkel, according to Reuters.

Euro bonds would not be expected to provide a short-term fix to the problem, José Manuel Barroso, president of the European Commission, said in Brussels.

“We believe that when there is the appropriate level of integration and discipline it makes sense to have some kind of stability bonds in Europe,” he said.

Stephen Castle reported from Brussels and David Jolly from Paris.

Article source: http://www.nytimes.com/2011/11/22/business/global/signs-mount-that-european-debt-crisis-is-spreading.html?partner=rss&emc=rss

General Mills to Buy Control of Yoplait

General Mills, which has held the American distribution rights to Yoplait since 1977, entered into exclusive talks two months ago with the private equity fund PAI Partners and the French dairy cooperative Sodiaal.

General Mills said on Wednesday that it would buy 51 percent of the company that runs Yoplait’s operations and 50 percent of the entity that holds the licensing rights to Yoplait, the world’s second-largest yogurt brand after Danone. Sodiaal will hold the remaining stakes in both entities.

General Mills expects the deal, which is subject to regulatory approval, to close in the quarter that begins at the end of May.

General Mills and Yoplait will also end an arbitration case over the American license, and General Mills will continue to market Yoplait yogurt under that license.

The deal follows months of tense and highly political negotiations involving members of the French government and the influential agricultural lobby, concerned about the loss of jobs in France.

The deal has received antitrust approval in the United States, the Federal Trade Commission said.

Article source: http://feeds.nytimes.com/click.phdo?i=574914a6db068e01d02982c3cbcc4306

Peugeot and Renault to Repay Government Loans Early

The French industry minister, Éric Besson, told  France Info radio that the remainder of the 6 billion euros, or $8.7 billion, owed would be repaid “in the next few days,” which was “faster than anticipated.”

The decision, he said, showed that “confidence has returned” to the  sector.

In 2009, amid plummeting sales and the prospect of large layoffs, the French government announced that it would lend Peugeot  and Renault $4.4 billion each over five years at 6 percent interest. Renault Trucks, now owned by Volvo, also received aid.

In conjunction, the automakers introduced part-time work arrangements and curbed production at some plants.

Since then, the health of the two companies has slowly improved. The turnaround was helped initially  by government incentives for buyers that lifted sales in Europe but have now expired. Sales were also robust in emerging markets like Brazil, China and Russia.  

A report this week from the European Automobile Manufacturers’ Association,, showed new passenger car sales in the European Union fell 5 percent in March from the period a year earlier. Sales in Germany and France both grew, but they were weaker in Britain, Italy and Spain.

The two French companies have followed the same repayment rhythm, returning a first tranche of 1 billion euros ($1.5 billion) in the second half of 2010, then another 1 billion euros in February with the final 1 billion euros due on Tuesday.

Article source: http://www.nytimes.com/2011/04/23/business/global/23auto.html?partner=rss&emc=rss