European strikes: who is protesting and why?

Italy
The Italian union CGIL led a four-hour general strike in Italy to protest against labour reforms instituted by Mario Monti’s government easing hiring and firing rules, as well as rising unemployment and austerity-driven spending cuts and tax hikes which are hitting families hard, just as the recession sends thousands of businesses under. But students were also well represented on the streets, protesting against education cuts and what they see as a jobless future. One banner singled out the labour minister, Elsa Fornero, who recently warned graduates not to be “choosy” about jobs when they enter the job market. “Stay Choosy? Choose to fight,” read the banner.

Spain
Spanish unions have launched their second general strike this year to protest at budget cuts they say are strangling the economy, killing jobs and hurting all but the well-off. They accuse the conservative People’s party government of breaking promises made in their election campaign a year ago and of using the crisis as a smokescreen for dismantling public services, creeping privatisation and undermining working rights. Ignacio Fernández Toxo, leader of the Comisiones Obreras union group, accused the government of implementing “impositions from Brussels, or more exactly, the road map imposed by Berlin and Chancellor Merkel”. “I’m striking today because this last labour reform is a fast track to unemployment,” said Fatima Frutos, a local government equality officer in the northern town of Pamplona. “Spain’s welfare state is being sold off at bargain basement prices.”

Germany
In Germany, people were not particularly complaining about their own problems but rather seeking greater social equality in the whole crisis. Germany’s federation of trade unions (DGB) galvanised several thousand protesters across the country to demonstrate their solidarity towards strikers in southern Europe. Under the banner “against the social division of Europe”, it said workers in Greece, Spain and Portugal in particular were paying for a crisis for which they were not responsible. Doro Zinke, the boss of DGB Berlin who gathered protesters at the Brandenburg Gate, said that anger among German workers was growing over politicians’ lack of joined-up thinking. “The EU is concentrating solely on the economy but the EU also needs a social face and with that, job creation schemes for young people as well as an intensive effort across the continent to tackle wage dumping.”

France
The five main French unions organised around 100 protests across the country on Wednesday to protest at the “shock treatments” being meted out to workers, especially those in Greece, Spain and Portugal. Austerity, they warned, was plunging Europe into “economic stagnation, if not recession” and was unfair, adding that unemployment in France had not stopped rising for 17 months. “Precariousness is growing, millions of employees are getting work only with fixed contracts for shorter and shorter periods; 11 million people are affected by exclusion or poverty, many of them pensioners. Private and public salaries are stagnant.” Opposed to economic “libéralisme” (broadly, the free market), they called for the setting up of a European “social contract” giving European workers equal rights, ending competition between countries and creating “solidarity”.

Greece
Greeks, who on average have seen their purchasing power decrease by 35%, want pay and pension cuts to be revoked and collective work agreements, a hard-earned right going back decades, to be reinstated. The prospect of up to 150,000 civil servants being fired by 2015, with the first wave being laid off by December – a central tenet of the €13.5bn austerity package passed by the Greek parliament last week – is another grievance. “People haven’t been fired from the public sector in this country for over a hundred years,” said Nikos Alexopoulos, head of the union of interior ministry employees as he marched through Athens with black flag in hand on Wednesday. “At a time when almost no one can survive, they now want to get rid of 150 of the 600 people who work in our ministry.” Greeks are also demanding that unpaid pensions and wages – often going back months – be paid and that mass privatisations and the merging of loss-making, state-run organisations be dropped.

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Hard-up British families heading for an own-brand Christmas, says Sainsbury’s

Sainsbury’s boss Justin King on Wednesday predicted hard-up Britons would “splash out” to enjoy Christmas with their families but would ditch branded goods in favour of cheaper own-label supermarket turkeys and trimmings.

With last month’s shock rise in inflation adding to the squeeze on Britons’ spending power, King predicted shoppers would turn to its own brands, which include Taste the Difference and By Sainsbury’s, which are typically 20% cheaper than their branded equivalents.

“People are spreading the cost because they want to have a special Christmas,” he said, adding that parents started buying toys for their children’s presents in October.

“They will splash out and Christmas will be about quality food and own-label will be a key trend.”

Sainsbury’s flagged new products such as Taste the Difference Irish Cream Liqueur as an alternative to favourite Christmas tipple Baileys.

His comments came as the retailer reported half-year profits up more than 5% at £373m on sales of £13.4bn in the six months to 29 September. Like-for-like sales growth of 1.7% put it at the front of the supermarket pack with Sainsbury’s now sitting on a market share of 16.7%, its highest for nearly a decade.

Industry data has shown Sainsbury’s stealing market share from rivals aided by its successful “brand match” pricing initiative which uses the same technology as the Nectar loyalty programme to give customers money-off vouchers if branded goods could have been bought more cheaply at a rival store.

King, who is the longest-serving chief executive among the major supermarkets, also used the opportunity to deny reports he is considering stepping down: “I do understand why, when someone’s been in a job for eight years successfully, people think they’d have on their mind doing something else, but I’m very happy at Sainsbury’s.”

The grocer had by far the best growth opportunities of the supermarkets ahead of it, he said, adding: “I see myself playing my part in those.”

The supermarkets are battling tough trading conditions as higher fuel and food costs force Britons to cut back spending. The pressure on household budgets is changing how the nation shops, with the big “weekly shop” in decline as more Britons get their groceries delivered or shop locally to avoid wasting food.

The trend is hurting market leader Tesco, which has more than 230 of the sprawling out-of-town Tesco Extra stores, and smaller rival Morrisons which does not sell groceries online yet and is only just branching out into convenience stores.

With lingering concerns about the health of the economy, King urged the government to use next month’s autumn statement to introduce “anything to incentivise job creation or retention”.

He floated the idea of a national insurance holiday for new employees, adding: “Employment is by far the most powerful force for good in our economy.”

Sainsbury’s shares have been buoyed by the return of speculation regarding a possible renewed bid attempt from its Qatari shareholder, which owns 26% of the business.

But the shares closed down more than 2% at 338.8p as analysts feared a promotional bloodbath in the runup to Christmas as rival chains bombard shoppers with money-off coupons. Morrisons has upped the ante with the launch of a 10%-off discount card this week.

King said it looked like there would be a “kick on” in the number of coupons circulating ahead of Christmas but, with 40% of goods on supermarket shelves already on promotion, he said the grocery market had been intensely promotional for some time.

He argued its Nectar scheme was more potent as it targeted shoppers with money off products they actually wanted to buy: “It gives you the edge if you are giving customers vouchers they want to use,” he said.

Shore Capital analyst Darren Shirley said that given the tough market, Sainsbury’s had reported a “very solid” set of results after a period of “sustained out-performance” relative to its peers.

But he added that the supermarket had the most to lose from a resurgent Tesco, undergoing a £1bn makeover under chief executive Philip Clarke.

“If market leader Tesco does begin to regain share from its investment programme, then Sainsbury remains the most vulnerable given the scale of trading overlap between the two groups.”

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Energy company SSE’s profits surge by nearly 40% weeks after 9% rise in bills

SSE, the energy company behind Southern Electric, Swalec and Scottish Hydro, has revealed a leap in profits of almost 40%, just a month after announcing a 9% increase in bills.

The UK’s second-largest generator of electricity said its £398m half-year profit was necessary to “make investments that keep the lights on”. However, consumer groups, and even rival energy providers, questioned the scale of the increase.

Richard Lloyd, executive director of Which? consumer magazine, said it bolstered the case for an independent review of gas and electricity charges.

“Without greater scrutiny of energy prices, consumers simply will not believe that they’re getting a good deal,” he said.

Meanwhile, the Co-op’s fledgling energy business warned that the SSE results would further alienate customers. “Announcements of huge profit increases for shareholders do nothing to help the tarnished image of UK energy industry or get to grips with consumer concerns,” said Nigel Mason, of Co-operative Energy. “This profit announcement off the back off a 9% bill increase will be a bitter pill for SSE customers to swallow.”

SSE announced a 5% increase in its payout to shareholders. The company’s 9% price rise last month hit 5 million electricity customers and 3.4 million gas customers.

The big six energy companies, which include SSE, are trying to distance themselves from the furore over alleged gas price manipulation.

Ian Marchant, SSE’s chief executive, said he was keen to know whether the wholesale market had been rigged or not. “If there is evidence of manipulation I want to know as much as anyone else, as I buy gas for our customers and I want to know if we’ve been affected and whether our customers have been affected.”

SSE has said it participates in the energy market in a “fair and legitimate way”.

Scottish Power has distanced itself from the allegations by saying it was definitely not involved in any of the gas trades under particular scrutiny by the Financial Services Authority. “No day-ahead gas trades were executed by Scottish Power on 28 September,” it said.

EDF said it was confident that all of its trading activities were fully compliant with market rules in the UK. It added: “EDF Energy and EDF Trading can also say that they were not involved in the alleged activities on 28 September reported in the Guardian newspaper.”

A statement from Centrica said: “Centrica participates actively in the UK wholesale gas market in order to meet our commitments to our customers. We trade in the wholesale gas market every day. In this respect, 28 September 2012 was no different.

“We have reviewed all our trades executed around the close of the market on that day and have found nothing unusual about them or any cause for concern.”Unite, Britain’s biggest union, branded SSE’s profits “excessive” and blamed the government for failing to effectively control the industry.

Kevin Coyne, Unite national officer for energy, said: “These profits are excessive, especially when price increases have caused more hardship for those customers already struggling to get by.

“The government has washed its hands of all responsibility and left it to the market, which is clearly failing to deliver on price. This Tory government stubbornly refuses to properly regulate the energy industry.”

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Greek austerity is going too far, Charles Dallara warns

Eight months after he lobbied on behalf of Greece’s creditors during the biggest debt restructuring in the history of world finance, Charles Dallara launched a withering attack on the policies of austerity, saying a “new course” was needed to stop Greece’s economic death spiral.

As thousands marched through the streets of Athens on a day of co-ordinated pan-European protests against measures that have seen Greek wages drop by an average of 35%, the American head of the Institute of International Finance said a new strategy was vital.

“Greece now urgently needs a greater emphasis on growth, and less emphasis on austerity. Europe needs the same,” said Dallara, whose bank lobbying group negotiated the private sector bond swap that cut an estimated €107bn from the country’s debt mountain this year.

“A return to real, sustainable economic growth can be the only genuine solution to Europe’s crisis,” he told a gathering of Greek financiers. “It is time to recognise that austerity alone condemns not just Greece but the whole of Europe to the probability of a painful and protracted era of little or no economic growth. This would be a tragedy not just for Greece and for Europe, but for the world.”

With Athens on course to enter a sixth straight year of recession amid record levels of unemployment and poverty – despite the prime minister Antonis Samaras’s optimism that Athens would soon take stock of €44bn in EU-IMF rescue funds – policymakers now had to be more creative and “think outside the box” by easing the pace of fiscal adjustment, which had brought “tremendous stress to Greek society”.

“Greece’s unprecedented fiscal effort, which was more than planned, has triggered much larger contractions of economic activity and the tax base than the original program had assumed,” the IIF chief told the audience in the amphitheatre of the National Bank of Greece.

As a result all forecasts were off-target, he said, rattling off the figures. “Real GDP fell by 11.7% over the two years, rather than the [predicted] 6.5%, domestic demand fell by 15 %, rather than 7 % and unemployment rose to 25%, rather than 15%.”

Barely a week ago the Greek parliament passed what will be the most draconian package of spending cuts yet – a condition of further aid to prop up an economy that has lost an estimated 20% of its output since the crisis erupted in late 2009.

“We don’t need to throw out the [IMF-EU fiscal consolidation] programme altogether,” he said, insisting that the Greek rescue programme had “good” elements. “But we need urgently to change course. More moderate targets are more achievable, will have less negative effects on unemployment, and as demonstrated by Ireland, can have positive effects on market confidence, on the perception of performance, and put Greece on a more plausible path to an early restoration of market access.”

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Bullied teenager dies four days after suicide attempt

The teenage girl who tried to take her own life on Friday, allegedly because she was being bullied at school, died yesterday.

The girl lived with her parents in Torralba de Calatraval, and was in second year at the IES San Juan de vila secondary school in Ciudad Real, around 15km away.

The regional education minister for Castilla-La Mancha,Marcial Marn, has opened an investigation into the incident, and confirmed that the girl’s father has already made a formal complaint to the police against her daughter’s tutor, guidance teacher and the school headteacher.

Marn explained that the “first and only” knowledge the school had of the teenager’s situation was last Wednesday, when her father came into school to complain to the Head of Studies about the “climate of violence” that he felt his daughter was having to deal with.

Up until that time, the only indication the school had that anything was wrong was the student’s “unusually high” number of absences – one in September, 15 in October and 6 already in November – for which they had already contacted the girl’s father on two separate occasions.

On Wednesday, the guidance teacher met with the student to hear her grievances and afterwards spoke to two other students the teenager had said made her uncomfortable. In his subsequent report, the guidance teacher said he felt there was no evidence of “repeated and continual bullying amongst peers” which is, he said, the “pre-requisite” for moving a student to another school.

The school offered the pupil in question the opportunity to change to another class, however she made an attempt on her life early on Friday morning. This left her in hospital in a critical condition for four days, but medical staff lost their battle to save her life yesterday.

Marcial Marn has expressed his sympathy and “solidarity” with the family and has asked for “prudence” to allow the school inspectors to do their jobs and establish whether staff should take responsibility.

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Europe’s day of anti-austerity strikes and protests turn violent – as it happened

Hundreds of thousands of Europeans have mounted one of the biggest coordinated anti-austerity protests across the continent on Wednesday, marching against German-orchestrated cuts as the eurozone is poised to move back into recession.

Millions took part in Europe-wide strikes, and in city after city along the continent’s debt-encrusted Mediterranean rim, thousands marched and scores were arrested after clashes with police.

There were banners declaring “Austerity kills,” Occupy masks, flares, improvised loudspeakers and cancelled flights. But there was also a violent, even desperate edge to the demonstrations, particularly in Madrid and several Italian cities. In the Spanish capital, police fired rubber bullets to subdue the crowd; in Pisa, protesters occupied the Leaning Tower, and in Sicily cars were burned.

“There is a social emergency in the south,” said Bernadette Ségol, the secretary general of the European Trade Union Confederation. “All recognise that the policies carried out now are unfair and not working.”

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Adverse weather closes schools in Javea and Denia

The “adverse” weather conditions seen in the province of Alicante yesterday got worse overnight and schools remain closed in Javea, Denia, Ondara and Els Poblets with these and other coastal towns on red alert for high winds (up to 100kmph) and heavy rain.

In just one hour this morning, 44.8 litres of rain fell in Villalonga and over the past four hours 93.40 litre has fallen in La Carrasca (Vall de la Gallinera). The Spanish Meteorological Office (Aemet) has activated its emergency protocol in southern Valencia and northern Alicante where 220 litres of rain per square metre are expected to fall over the next 12 horas.

Heavy rain closed three roads in Pego this morning – the CV-727 (Els Marells), CV-728 (Pego-Rafol de Almunia) and CV-678, but all have now been reopened to traffic.

Local police have closed the CV-723 between Denia and Els Poblets because of the amount of rainwater accumulated on it.

Denia port has also been closed, with ferry services to Ibiza and Formentera suspended, and winds of up to 98kmph have brought down trees in Benidorm, Altea and Ibi, none of which caused damage to property nor injured anyone.

The rain is not letting up and latest reports show that Villalonga ( La Safor) has seen 181 litres per square metre already today and it is still raining.

A man, whose car was swept away by flood water in Marchuquera (Palma de Gandia) had to be rescued by firefighters. He was treated for shock and hypothermia.

Town councils in Javea and Denia have decided to keep schools closed again today because of the adverse weather conditions.

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ITV ad revenue hit by BBC’s London 2012 Olympic coverage

ITV has reported a 6% fall in TV ad revenues in the third quarter as advertisers held back spend while viewers tuned into the BBC’s London 2012 Olympic coverage, while a rejuvenated ITV Studios is forecast to make profits of more than £100m this year.

 

ITV took a battering during the third quarter thanks to the Games airing on the ad-free BBC – TV ad revenues fell 10% in July and 9% in August – but said a 1% fall in September means across the first nine months the broadcaster remains in “positive territory”.

 

With viewers defecting to the BBC the broadcaster’s flagship channel ITV1 has seen its share of viewing and share of commercial impacts, a key metric media agencies focus to drive deals for their TV advertiser clients, have fallen 6% year on year in the year to 30 October.

 

With the crucial, and tough, negotiating season for 2013 TV advertising deals set to start chief executive Adam Crozier was keen to point out that its decline has been due to one-off TV events this year.

 

“This has been an extraordinary year for UK television with many unique events including the Queen’s Jubilee, The London Olympics and the Paralympics,” he said.

“In fact nine out of the top 10 programmes aired will not return next year and as we expected this has affected our viewing performance. However, we do not expect our viewing performance in 2012 to impact our advertising share in 2013 and we are focussed on growing our share of viewing next year.”

 

ITV said it expects TV ad revenue to be down 2% across the fourth quarter – a fall of 2% in October and November and “broadly flat” in December.

 

Overall ITV reported total revenues up 4% in the first nine months of the year to £1.57m.

 

The real success story remains the rejuvenation of ITV Studios which grew revenues by 20% in the first nine months to £498m.

Hits for ITV Studios Come Dine with Me, Hell’s Kitchen US and Mr. Selfridge.

“ITV Studios has performed strongly as our strategy of investing in the creative pipeline and talent again shows through in our results,” said Crozier.

“We expect ITV Studios to report over £100m of profit in 2012, and the number of new commissions and recommissions already secured for 2013 gives us confidence that there will continue to be good underlying growth in the studios business.”

 

About 46% of ITV’s total revenues now come from sources other than TV advertising, diversification of revenue is a key goal for Crozier.

 

Revenue from online pay and interactive services also grew about 20% in the first nine months. In the full year of 2011 the broadcaster made £81m, with ITV recently launching a micro-payment services for its online TV service ITV Player.

 

ITV also said cost savings in 2012 will be £30m, £10m ahead of target, and that its net debt has been wiped out with the balance sheet at a £90m cash position.

 

“The economic outlook remains uncertain and we continue to see monthly volatility in the UK television advertising market, but the underlying trends have not changed,” said Crozier.

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Starbucks man faces a grand roasting

Before becoming the chief apologist for Starbucks’ microscopic UK tax bill, Kris Engskov was Bill Clinton’s flunky.

The coffee chain’s UK boss was close enough to the former president to be twice called in front of a grand jury during the Monica Lewinsky scandal, and those grillings look like just the type of experience needed tomorrow, when the coffee chain attempts to justify itself in front of members of parliament probing the taxation of multinational businesses.

It would have been useful, that is, before Engskov ducked the grilling and left Troy Alstead, the group’s chief financial officer, to appear by himself (apparently, Google and Amazon are also sending one witness each).

Alstead, of course, is in town after Starbucks got itself into a spot of bother last month when it emerged that it had paid just £8.6m in corporation tax since launching here in 1998 – which looks rather mean as the company’s last annual report states: “our Canada, Japan, UK, and China [businesses] account for a significant portion of … earnings”.

Alstead will attempt to fool MPs by spinning that the firm has “paid” £160m in UK taxes over the past three years, even though the line looks weaker than one of its Americanos: £87m of that was VAT, collected by Starbucks but, er, paid by its customers.

Facebook’s not making many friends
Since its May flotation, Facebook shares have attracted less friends than Mark Zuckerberg did during his Harvard days. They have almost halved from their initial $38 float price as Wall Street has fretted over the punchy initial valuation, as well as concerns that even the founder’s brain might not be large enough to figure out how to make money from the mobile site.

Yet there may be even worse to come for investors this week, when Facebook staff will be allowed to sell a massive tranche of their shares as another key lock-up period ends. Most floats have periods that bar employees from flogging shares, but the frequency with which Facebook’s sizeable lock-ups end has made life dicier than usual.

Employees will also owe taxes on their stakes – which Facebook will borrow billions to pay on their behalf – and hardly eases the pressure on the shares.Employees will actually owe taxes on their stakes, whether they decide to sell them or not, which is likely to create a whole new reason to cash in. “If there are substantial sales of shares of our common stock, the price of our … stock could decline,” the company said of the lock-ups in its flotation prospectus and, sure enough, the shares lost 3.7% last month when a (much smaller) batch came up for sale. Truly visionary.

King in pole position?
We know that Sainsbury’s boss Justin King is brilliant, principally because he says so. “[Sainsbury’s] really struggled to cope without clear and inspirational leadership,” he said earlier this year. “It took 10 years, four chief executives and my arrival in 2004 … to really start to turn the business around.”

But as the great retailer approaches nine years at the grocer, shareholders are starting to wonder when he might be inspired by his own slogan and try something new today.

Rumours abound that King might be preparing to announce his departure next year, and perhaps check out in 2014 so he can leave after a glorious decade. Friends have even started telling trade papers that he fancies being the new Bernie Ecclestone (running Formula One, not riling the Jewish Chronicle), so attention is turning to engineering an heroic exit.

Chances of that should be enhanced this week when King is expected to unveil an increase in first-half profits of around 4.4%, which should crown a decent 2012 in which the sponsorship of the Paralympics was a triumph. However, King’s view of his own abilities slightly glosses over the fact that Sainsbury’s shares have underperformed the FTSE 100 during his reign, as well as Tesco. Price match, as the grocers say, it is not.

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