European Stocks Rise on China Pledge of Help; BNP, Heineken Gain

Feb. 15 (Bloomberg) — European stocks climbed as China pledged to help resolve the region’s debt crisis and companies from BNP Paribas SA to Heineken NV reported earnings that beat analysts’ estimates.

BNP Paribas, France’s largest bank, and Heineken, the world’s third-biggest brewer, rose more than 3 percent. Clariant AG advanced 4.5 percent after earnings exceeded projections and the chemical maker said it may sell its textile and paper units.

The Stoxx Europe 600 Index added 0.6 percent to 264.16 at 2:03 p.m. in London, paring an earlier gain of 1 percent amid speculation a Greek aid package could be delayed until after April elections. The gauge has rallied 8 percent this year as U.S. economic data improved and optimism grew that the euro area will contain its sovereign-debt crisis.

“China has pledged to contribute to the bailout fund, which not only could increase the firepower available but might also persuade other countries like Japan, Russia, oil-rich states and possibly even the U.S. to actively take part in combating the crisis,” said Markus Huber, head of German sales trading at ETX Capital in London.

China pledged to invest in Europe’s bailout funds and sustain its holdings of euro assets. The commitment offers an incentive to European finance ministers, who are increasing pressure on Greece to deliver budget cuts in exchange for a second bailout.

China Assistance

“China will always adhere to the principle of holding assets of EU sovereign debt,” People’s Bank of China Governor Zhou Xiaochuan said in a speech in Beijing today. “We would participate in resolving the euro debt crisis,” he said, echoing comments by Premier Wen Jiabao yesterday.

National benchmark indexes gained in 14 of the 18 western European markets today. France’s CAC 40 added 0.4 percent and Germany’s DAX rose 0.7 percent. The U.K.’s FTSE 100 Index was little changed.

Euro-area finance ministers canceled a Brussels meeting slated for today and will hold a teleconference instead to prod Greece to do more to clinch an aid package worth 130 billion euros ($171 billion) along with about 100 billion euros of debt relief from private bondholders. Greece needs the aid to make a 14.5 billion-euro bond payment on March 20.

Antonis Samaras, the leader of Greece’s second-biggest political party, said today he and his party New Democracy were committed to the implementation of terms and conditions for a second financing package for the country.

‘Playing With Fire’

Stocks pared earlier gains as Reuters reported that policy makers are examining delays to a second bailout program for Greece. Greek Finance Minister Evangelos Venizelos said that Europe’s wealthier countries are “playing with fire” by toying with the idea of expelling it from the euro area.

Europe’s economy shrank less than economists forecast in the fourth quarter as a better-than-predicted performance in Germany and France helped mitigate the region’s first contraction since 2009. Gross domestic product in the 17-nation euro area fell 0.3 percent from the prior three months, the first drop since the second quarter of 2009, the European Union’s statistics office said today.

BNP Paribas rallied 4.9 percent to 35.16 euros as fourth- quarter net income declined to 765 million euros from 1.55 billion euros a year earlier. That beat the 587 million-euro average estimate of 10 analysts surveyed by Bloomberg.

Banks Advance

Bank shares were the top gainers in the Stoxx 600, adding 2.4 percent as a group. Societe Generale SA rose 3.4 percent to 22.64 euros after three days of losses, while Credit Agricole SA gained 1.7 percent to 4.96 euros. UBS AG advanced 1.2 percent to 13.06 Swiss francs. Banca Monte Dei Paschi di Siena SpA rallied 8.3 percent to 33 euro cents and UniCredit SpA increased 3 percent to 4.19 euros. Royal Bank of Scotland Group Plc added 2.5 percent to 27.32 pence.

Heineken increased 3 percent to 37.65 euros after the brewer reported annual profit that beat estimates and unveiled new cost-saving targets.

Clariant gained 4.5 percent to 12.92 francs after saying it may sell or find other strategic options for business units generating 1 billion francs ($1.09 billion) in revenue as it moves away from commodity products. Finding the right option for the textile-chemical, paper specialties and emulsions units is a mid- to long-term goal, the Muttenz, Switzerland-based company said today.

Danone, TUI

Danone advanced 1.6 percent to 49.78 euros. The world’s biggest yogurt maker reported a 4.5 percent gain in 2011 earnings, helped by growth in infant nutrition and bottled water products.

TUI AG, the owner of Europe’s largest travel company, rose 4.6 percent to 6.50 euros after saying it will sell a stake in Hapag-Lloyd and may dispose of its remaining holding in the shipper in an initial public offering.

ING Groep NV added 2.9 percent to 6.76 euros. Capital One Financial Corp.’s planned purchase of ING’s U.S. online bank won approval from the Fed, clearing the way for the credit-card lender to add about $80 billion in deposits.

Puma SE rose 2.5 percent to 245.75 euros after Europe’s second-largest sporting goods maker reported profit that beat analysts’ estimates and its own projection and forecast growth in sales and earnings in each of the next two years. Rival Adidas AG gained 2.5 percent to 59.23 euros.

TomTom NV, Europe’s biggest maker of portable navigation devices, soared 7.5 percent to 4.21 euros after saying it plans to introduce the HD Traffic service to China.

Swisscom AG, Switzerland’s biggest phone company, fell 2.6 percent to 358.10 francs after predicting lower revenue in 2012 and posting its first quarterly loss in almost a decade on a writedown of Italian fixed-line unit Fastweb SpA.

National Bank of Greece SA, the country’s largest lender, sank 6.7 percent to 2.65 euros, dropping for a second day. Alpha Bank SA and EFG Eurobank Ergasias dropped 6.5 percent to 1.58 euros and 6 percent to 1.10 euros respectively.

–Editors: Andrew Rummer, Srinivasan Sivabalan

'Black-hole' resorts: Turn up, tune out, log off

Defeated, you return to your room, flick on British satellite television and fire up the laptop. You may as well be at home.

It is a scenario all too familiar to the modern traveller. There was a time when we went away to get away. You don’t have to be too much of an ageing hippy to recall the small thrills of the pre-travel blog world when finding a handwritten letter or postcard waiting at some far-flung post restante felt like being contacted from outer space.

Now of course, wherever you go your friends, family and boss come too, instantly, courtesy of digital technology. But things could be about to change.

A recent article in The New York Times by influential travel writer Pico Iyer entitled “The Joy of Quiet” identified a growing desire to silence the incessant babble of the information age.

“In barely one generation we’ve moved from exulting in the time-saving devices that have so expanded our lives to trying to get away from them …. The more ways we have to connect, the more many of us seem desperate to unplug,” he observed.

Even Danah Boyd, Microsoft’s perpetually switched-on social media guru has recently returned from an “email sabbatical” in Patagonia and Easter Island having warned his followers: “In order to function, I need to take time off… this means saying goodbye to email and, more importantly, not letting myself anxiously worry about all that’s waiting for me when I return.”

The travel industry is now waking up to the technology backlash. Independent travel expert Alastair Sawday has already identified it as growing trend this year.

“My generation is quite relieved at getting away from it all but also young people who are super-stressed,” he says. “A lot of our hotel owners have deliberately set up shop away from it all for the same reason.”

After years of creating destinations bristling with connective gadgets, resorts are now trumpeting their unreachability heralding the advent of so-called black-hole resorts. The St Vincent and The Grenadines Tourism Authority is currently marketing a week-long trip to two private islands where mobile phones are banned on the beach, there are no televisions and even alarm clocks are frowned upon.

Tom Marchant, co-founder of specialist travel operator Black Tomato, says busy people prefer to connect with the simpler things in life.

“There is definitely a growing appetite out there for technology-free holidays; it’s almost the ‘anti-trend’ or reverse of the proliferation we saw a few years ago in state of the art technology in hotel suites and 24/7 ever-present Wi-Fi connection,” he says.

The life coach Louise Gillespie-Smith has just returned from running a Caribbean “digital detox” in which she helped to guide five professionals through seven screen-free days.

All gadgets were locked away in the resort safe and instead clients focused on themselves and those around them.

Most found it remarkably easy – despite recent studies showing 80 per cent of students exhibited anxiety and stress at being severed from their digital connection.

“Because of the situation, which is so beautiful and you feel so removed from back home, by the time you get there it is amazing how you switch off,” she says.

She encouraged them to fill out handwritten diaries and discussing the good things in their lives. At the end they were talking about making positive changes to their relationships, health and business lives.

“It was so much fun. Without distraction we all focus on each other. We were the entertainment. Everyone really bonded,” she says.

Oxford Internet Institute’s Viktor Mayer-Schönberger, author of Delete: The Virtue of Forgetting in the Digital Age, is a big fan of black-hole resorts which he sees as increasingly important in escaping the “useless simplistic drivel” of much modern technological life. He says they can also help us improve our creativity and decision making.

“There is constant pressure from a huge amount of past information and memories – a huge repository that is constantly there. This makes it hard for us stay in the present and to make decisions because we are tethered to the past,” he explains.

“Vacations take you out of the comfort zone and expose you to new feelings, impressions and thoughts. As you start forgetting, as you stop surrounding yourself with the artefacts of the past all the time, you make space for something new.”

Silent nights: no phones allowed

Post Ranch Inn, Big Sur, California

Often cited as the original black-hole getaway this exclusive cliff-top resort inspires guests to get back back to nature with its Pacific sea views, spa and fine dining. Guests can ditch screen-based entertainments for woodland walks and stargazing.

St Vincent and the Grenadines

The first dedicated “digital detox” began this month. Guests arrive by sea plane and are stripped of their electronic valuables. The holiday is split between two islands where mobile phones are banned on the beach and a life coach will help you get your digital habits under control.

Soneva Fushi, Maldives

The original Robinson Crusoe experience set on the unpopulated island of Kunfunadhoo. There are no phones or televisions but guests can fill the digital void with diving, tennis or waterskiing.

Old Kilmory Church, Kilmory, Argyll Bute, Scotland

Wild, rugged and miles from anywhere but the ocean. There is no mobile reception, television nor a shop or restaurant for more than three miles. There is however a log-burner, a selection of board games and books.

Mount Athos, Macedonian Peninsula, Greece

A stay at the ancient monasteries is popular with those seeking out the rugged spirituality of the Orthodox Church. Prince Charles stayed there after the death of Diana. Monks welcome pilgrims to the spartan quarters where they are provided with a simple meal and left to fend for themselves. No phones, no cameras, no women.

Greece Struggles to Win Aid Package

Enlarge image



Angelos Giotopoulos/Falcon/Redux

The historic Attikon cinema in Athens.

The historic Attikon cinema in Athens. Photographer: Angelos Giotopoulos/Falcon/Redux

Enlarge image
Greece Struggles to Win Second Bailout

Greece Struggles to Win Second Bailout

Greece Struggles to Win Second Bailout

Simon Dawson/Bloomberg

People react to a fire damaged building following the demonstrations in Athens on Feb. 13, 2012.

People react to a fire damaged building following the demonstrations in Athens on Feb. 13, 2012. Photographer: Simon Dawson/Bloomberg

European officials ratcheted up
the pressure on the Greek government to deliver budget cuts in
exchange for a second bailout as they insisted that default is
not an option.

Finance ministers canceled a Brussels meeting slated for
today and will hold a teleconference instead to prod
Greece to
do more to clinch an aid package worth 130 billion euros ($170
billion) along with about 100 billion euros of debt relief from
private bondholders. Greece needs the aid to make a 14.5
billion-euro bond payment on March 20.

“The risk of a disorderly default has risen,” Thomas Costerg, a London-based economist at Standard Chartered Bank,
said yesterday in an e-mail. “The timetable is already over-
stretched to cover the March redemption and gives no room for
maneuver or additional delay. The question remains whether we
have reached the point of no return for Greece. I don’t think
it’s the case yet, but we’re dangerously close to it.”

Two years after pledging to pull Greece back from the
brink, European leaders are torn between pouring more aid into
the struggling economy or risking an unprecedented national
bankruptcy that might force the country out of the euro and
prompt renewed market tumult.

“The decision was the result of an evaluation by the head
of the eurogroup,
Jean-Claude Juncker, that there weren’t
sufficient elements of consensus to be sure that a meeting would
be successful,” Italian Prime Minister
Mario Monti said late
yesterday on Sky Italy Television.

Greek Pledges

After Juncker cancelled the gathering, citing the lack of
political assurances from Greek leaders to stick to austerity
pledges, a government official in
Athens said the leaders of
Greece’s two biggest political parties, New Democracy’s Antonis Samaras and Pasok’s
George Papandreou, will today provide the
written commitments demanded.

The euro erased a loss of as much as 0.8 percent on the
news of the Greek politicians’ pending promises. The currency
traded at $1.3129 at 5:55 p.m. in
New York.

Meantime, evidence mounted that the euro’s guardians have
made progress ring-fencing Greece’s woes. Italy yesterday sold 6
billion euros of bonds at lower borrowing costs as investors
shrugged off a downgrade of its
credit rating by Moody’s
Investors Service.

Speaking on ZDF television, German Finance Minister Wolfgang Schaeuble said Feb. 13 that if efforts to prop up Greece come to
naught, “we’re better prepared than two years ago.”

Bailout Limit

Finance Minister Jan Kees de Jager of the Netherlands, one
of four AAA rated states left in the euro area, pushed back
against suggestions from Athens that the aid bill will be 15
billion euros higher than planned.

“We agreed upon 130 billion,” De Jager told Dutch RTL
television yesterday. “If now it seems more is needed, we
should explore other ways.”

Greece’s prospects hinged on Prime Minister Lucas Papademos’s Cabinet finding 325 million euros of the extra
budget cuts demanded by European governments and the
International Monetary Fund as conditions for fresh loans.

The Cabinet late yesterday agreed to trim pensions at
state-owned companies and banks by 300 million euros, according
to an official who declined to be named. Parties backing
Papademos’s interim government also need to endorse the savings.

Creditor governments also want Greece’s feuding political
parties to pledge planned cuts in writing, no matter who takes
power in elections due in coming weeks.

Greece has depleted its credibility by missing targets for
deficit reduction, economic reforms and asset sales that were
set when it obtained a 110 billion-euro aid package in May 2010.

Euro Exit

As a result, the once-taboo notion of a departure or
expulsion from the
euro zone has crept into the mainstream
political debate.

“If they don’t do this, they exclude themselves from the
euro zone and the impact on the other countries now would be
less important than maybe a year ago,” Luxembourg Finance
Minister Luc Frieden said at the Atlantic Council in
this week.

Also unclear was whether the European Central Bank, buyer
of 219.5 billion euros of weaker countries’ bonds in the past
two years, would contribute to debt relief in the new package.

Euro statutes bar the central bank from financing
governments. One workaround would be for the ECB to funnel
profits from its Greek holdings back through its national
branches to euro governments.

ECB Holdings

“These bonds were acquired at an average price that is
below face value,” ECB Executive Board member Benoit Coeure
told Liberation newspaper in an interview published yesterday.
“If there is a profit, as with all monetary holdings, it should
be distributed to the states. They can use it to contribute to
sustainability of Greece’s debt.”

The central bank probably spent about 47 billion euros to
buy Greek bonds with a face value of 60 billion euros, yielding
potential profits of 13 billion euros, according to Juergen Michels, chief European economist at Citigroup in

Representatives of Greece’s private creditors had planned
to travel to Brussels in expectation of progress on the
“voluntary” debt-relief accord that was another condition for
the official aid.

“Policy makers are still scrambling, and markets have
gotten used to it, but there is still a general feeling that the
Greece situation will not have a happy ending regardless of what
they agree to,” said
Jay Mueller , who manages about $3 billion
of bonds at
Wells Fargo (WFC) Capital Management in Milwaukee.

To contact the reporter on this story:
James G. Neuger in Brussels at
[email protected]

To contact the editor responsible for this story:
James Hertling at
[email protected]

Austerity Tourism: Greek Travel Deals

Athenians rioted in the streets following Greece’s passage of fiscal austerity measures on Sunday. But for tourists who aren’t put off by the turmoil there, experts say now may be the time to visit.

Flights to Greece are less than half of what they cost in the summer and, even for this time of year, the lowest-tier fares are still available for last-minute getaways, according to travel websites like and As Greeks brace for more austerity measures, it has never been more important to attract visitors, travel experts say. “Tourism is Greece’s number one source of revenue and they need cash,” says David Lytle, editorial director at

For flights leaving in the next two weeks, for instance, Delta Airlines, Swissair, Iberia and American Airlines all have roundtrip tickets to Athens for $770 to $800. Odysseas Papadimitriou, CEO and founder of, says they’re usually closer to $1,000. Hotel rates across Greece’s major tourist spots have dropped by up to 20%, according to a recent survey of 1,300 hotels by travel website

Of course, travel pros warn that prices are down for a reason. While the U.S. State Department has not listed Greece as a no-go destination, experts warn that travel insurance companies likely won’t cover cancelations if the turmoil spreads. (Most policies don’t cover civil unrest and “known risks” ahead of traveling.) Plus, the risk of more strikes could lead to the closing of museums and restaurants. Even with low prices, Papadimitriou cautions travelers to bargain on hotel prices. And, for those who are content on spending time closer to home, a milder winter in the U.S. has also led to more domestic travel deals, too.