1 Eurozone crisis set for repeat act (Larry Elliott
in The Guardian) The eurozone is perhaps one crisis and one deep recession away
from splintering. The more TV pictures of rioting on the streets of Athens or
general strikes in Italy between now and the election, the better support for
Nigel Farage’s UK Independence party will hold up.
Stronger support for Ukip will encourage the
Conservatives to adopt a more Eurosceptic approach, hardening their stance on
the concessions required for them to continue supporting Britain’s membership
of the EU. Meanwhile, a permanently weak eurozone economy will push Britain’s
trade balance into the red. The economic debate in the current parliament has
been about sorting out the budget deficit; the debate in the next parliament
will also be about sorting out the current account deficit.
Monetary union is a textbook case of the dangers of
allowing politics to trump economics. Germany is a completely different economy
to Greece. Portugal’s economy is not a bit like that of the Netherlands. Italy
was able to remain competitive in the pre-euro days only by regular
devaluations of the lira. To yoke all these countries together in a
one-size-fits-all single currency was an act of supreme folly.
A fresh Greek crisis will have spillover effects. It
will lead to a fresh recession and deepen deflation. Weak growth and falling
prices are a toxic combination for highly indebted countries, because they
raise the real value of debts while cutting national output.
The politics of this are simple. Voters no longer
see Europe as the solution to Britain’s economic problems. They are glad
Britain didn’t join the euro. Many are unconvinced that Britain should be in
the EU at all. The longer the euro crisis goes on, the bigger Nigel Farage’s
grin will get.
2 Gulf shares in sharp decline (Issac John in
Khaleej Times) Dubai’s benchmark DFM Index retreated 7.6 per cent to 3,321.3
points on Sunday as across the GCC share markets recorded sharp declines after
oil prices continued to tumble to five-year lows. The Dubai bourse, one of the
world’s best performers by climbing 60 per cent this year, ended on Sunday at
its lowest level so far in 2014 with the index closing 1.5 per cent lower than
2013’s finish.
It came under pressure with energy stocks declining
9.3 per cent and the real estate and banking sectors also falling. Over the
past one week, close to Dh65 billion has been wiped off the market value of in
the UAE with fund managers getting more cautious of further volatility ahead if
oil prices continue to decline.
With the exception of Qatar and Bahrain, all markets
in the Gulf are now below their 2013 close. Since September, the combined
capitalisation of the seven markets dropped around $190 billion to stay at
around $980 billion, according to the Arab Monetary Fund.
3 Why tech cos splurge on holiday parties (Wendy Lee
in San Francisco Chronicle) Leave it to the tech industry to disrupt the
holiday party. For Bay Area companies, events that in other industries might
warrant a potluck or an open bar are treated as lavish celebrations that cost
small fortunes. Analysts say holiday parties are key for retaining talented
employees who are often courted by rival firms. Many tech staffers are already
accustomed to perks — from free meals to dry cleaning — leaving companies
feeling pressured to make the year-end bash particularly memorable.
Some spend hundreds of thousands of dollars on the
festive events, splurging $100 to $150 per person on food and drink, according
to people familiar with the matter. The holiday party “is like a cherry on a
sundae,” said John Challenger, CEO of outplacement firm Challenger, Gray &
Christmas. “Companies are hoping that people will say to themselves ... 'This
is a great place to work. There’s no place like this.’”
The parties can be quite elaborate. Last year,
Twitter paid the city of San Francisco $73,100 to rent City Hall for a holiday
party. If food and drink cost $100 per person, which people familiar with such
events estimate, the bill for the food and drink alone would have added up to
$290,000. That doesn’t include entertainment, transportation, photography,
decor or lighting (a vendor spent 3½ hours putting filters on the structure’s
212 lights to turn City Hall Twitter’s blue hue).
Nearly 90 percent of companies nationwide are
hosting holiday or year-end parties this year, with roughly 1 in 5 businesses
planning to spend more on their events, according to a survey across several
industries by Challenger, Gray & Christmas. In 2011, only 68 percent of
companies surveyed threw those parties, the firm said.
Wall Street used to compete with Silicon Valley when
it comes to elaborate parties. Both wanted to project a fun image to talented,
younger workers, Challenger said. But that changed after the nation’s financial
crisis, he said. “Banks have become much more conservative about their holiday
parties, reflecting again a much more somber, cautious culture,” Challenger
said.
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