Business in Brief

Slowdown likely as growth hits six-year high

The eurozone economy grew at its fastest pace for six years in the second quarter of this year, according to a business climate indicator report released by the Commission on Tuesday (31 October).

Economic confidence in the area is at its highest level for five years, with particular cause for optimism in the industrial, services and retail sectors.

But, the growth outlook for next year is less rosy.

Higher interest rates, tighter fiscal policy and a sluggish US economy are all expected to weigh heavily on the eurozone economy.

Energy break-ups

Neelie Kroes, the commissioner for competition, has called for radical action to break up major energy groups that own infrastructure and supply energy. "At present there is no such thing as a competitive single market for energy in Europe," she said, pointing out a lack of price trans-parency and barriers to new market entrants. Her remarks follow the publication of preliminary results from an inquiry by the Commission’s competition department into the energy sector. DG Competition is expected to press for the break up of companies such as E.ON of Germany and Electricité de France but will first require the support of Andris Piebalgs, the energy commissioner.

Chip firms raided

The Commission confirmed on Tuesday that it had raided the premises of several producers of static random access memory (SRAM) chips in Germany.

The Commission is co-operating with US antitrust regulators who are investigating price-fixing in the memory chip market. The US Justice Department is currently investigating potential anti-trust abuses by manufacturers including Sony, Matsushita, Toshiba and Samsung. SRAM chips are used in electronic devices such as mobile phones and disk drives.

Deutsche Telekom law gets German go-ahead

German state secretary Bernd Pfaffenbach indicated on Monday (30 October) that Germany will press ahead with a controversial law allowing telecoms incumbent Deutsche Telekom to maintain exclusive access to its high-speed broadband network.

The Commission has been holding talks with Germany’s national telecoms regulator over the past few months aimed at opening up the network.

Tata Steel’s bid for ailing Anglo-Dutch steelmaker Corus has made less of a splash than the recent mega-merger between industry giants Mittal Steel and Arcelor, but it heralds important developments in the global steel market. Should the €7.62 billion friendly bid from India-based Tata succeed next year, it would kick-start significant production developments to ensure the survival of smaller companies.