Margareta Pagano: Merkel is smart to say 'nein danke' to nuclear
Sunday 05 June 2011
What amazes me most about the reception given to Chancellor Angela Merkel's historic decision to abandon nuclear energy is the way so many commentators have mocked the move as "political".
What they really mean is that Merkel has hijacked the Green Party's agenda just to win votes.
They are wrong and they are missing a trick, a brilliant trick. By dropping nuclear and going hell-bent for renewables, Merkel is giving German industry an enormous boost and the chance to lead the world in alternative energies.
Germany is already a world leader in clean coal and gas technology, as well as in solar, biothermal and wind power, so it makes complete sense for Merkel to want to encourage their expansion. Siemens is already way ahead of its competitors in solar energy production and is now building solar-powered stations with serious capacity around the world.
At the same time, some of the latest cutting-edge renewable technologies are being developed by small German mittelstand engineering companies. By contrast, the nuclear industry is dominated by the US and France, and if Germany had wanted to increase its nuclear programme, it would have needed to rely on more outside expertise – not a very German way of doing things.
RWE and E.ON may be threatening to sue the government, but I doubt they will go through with it, and will turn their hand instead to building up their own renewables.
Nuclear is only a small part of the mix in Germany – about 23 per cent of its electricity comes from nuclear power – and Merkel is confident this gap can be filled in time, as there is surplus capacity in the grid.
Compared with most of Europe, Germany has already increased the amount of electricity from alternatives sources in a significant way. Over the past decade the share of solar and wind has gone from 6.6 per cent to 16.5 per cent.
Perhaps Merkel is being too optimistic, but she reckons German industry can easily double that amount to 35 per cent by 2022 – the year the power stations are closing. It's doubtful she would make such claims unless her industrialists have given her a fairly clear promise they can deliver; both government and public will have now to do their bit to allow the building of new infrastructures.
Another big question is over whether German can keep its commitment to reduce CO2 emissions by 40 per cent. Again, Merkel made a public promise last week that this would be adhered to and, however desperate she is for votes, I doubt a physicist with a doctorate in quantum chemistry would make such a statement without some back-up.
Even if Merkel's U-turn had been driven by pure politics, would that be such a bad thing? It seems to me a rather smart idea that a politician is actually listening to her voters, people who have been violently against nuclear power for decades, and whose fears became intensified again after the explosions at Japan's Fukyushima reactor.
But Merkel, it seems, is going back to the previous government's policy, which was to phase out nuclear power by 2022. So her decision is neither as radical nor as dangerous as it might have seemed on first reading. Much better, surely, to have youngsters waving placards calling for ökostrom ja bitte, than atomkraft nein danke.
Is Maple a fig leaf for banks to monopolise Canada's stock exchanges?
The London Stock Exchange's proposed merger with TMX, Canada's exchanges, is suddenly looking rather perky again. First, the two sides published their prospectuses and then the bid got the green light from one of the many competition hurdles it has to go through.
Canadians are also getting to hear first hand from Xavier Rolet, the LSE's chief executive, more details about the proposals, as he spent the week in Toronto and Montreal talking the talk with customers and shareholders. He will have made a big point explaining how and why the merger between London and the Borsa Italiana works so well – that Milan is still run as a local market but has all the benefits of being part of a bigger international organisation.
From what I hear, the feedback is sounding pretty good, and even those stakeholders who were said to be so worried about being taken over by a foreign predator are warming to the concept and can see the attractions not just as investors, but for Canada itself.
There's also the growing realisation that the rival bid by Maple, the group of four banks and pensions funds, hasn't been triggered by just protectionism either. Were the Maple bid to succeed, it would see Canada's four biggest banks and traders own and control more than 90 per cent of all share trading in the country's exchanges. And in whose interest is that? Well, the banks, of course, as they are the biggest customers and they will keep trading costs high.
Surprise, surprise, this rival bid looks like being born out of a desire for power and control rather than the much-vaunted national interest. It would also leave smaller firms – the IDBs and the market-makers – rather vulnerable too as there would be no alternative markets to trade on.
There are questions too about how the Maple men – ex-TMX Luc Bertrand and Richard Nesbitt, now a banker – are going to finance the rest of the bid. At the moment, they are promising C$33 a share in cash but are not saying where the rest is going to come from or, indeed, who is going to run the exchange group. Maybe the Maple will turn out to be just a fig leaf.
If the shoe fits: Kurt Geiger sale reveals Londoners' £200 fetish
Cinderella may be proof that shoes can change your life, but Kurt Geiger shows that selling 5in heels and red espadrilles can be a fairytale, too.
Kurt Geiger – started in London by the eponymous Austrian designer in 1963 – was sold for £200m last week to the Jones Group, the US retailer with 700 shops including Nine West. It was good to hear that 53 of Kurt Geiger's management team – including chief executive Neil Clifford and creative director Rebecca Farrar-Hockley – will share in £20m of the riches.
But the most astonishing fact to emerge was that the average spent on a pair of shoes in London is now £230 – compared with £34 nationally. Further proof that the capital is becoming another country – a land far, far away.
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