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SPAIN’S government bowed to the
inevitable over the weekend and
asked the Eurozone for a bailout to
recapitalise its devastated banks.
The Eurogroup backed the request,
praising the government’s efforts to
reform the economy, and offering up
to €100bn (£81bn) from the
Eurozone’s bailout funds.
The bailout announcement came
after a week in which Spain’s credit
rating was slashed close to junk sta-
tus by agency Fitch and the govern-
ment’s borrowing costs rose above six
per cent at a 10-year debt auction.
Leading lender Bankia had already
called for a €19bn bailout, and
Liberbank, Ibercaja and Caja 3 are set
to merge after making heavy losses.
Prime Minister Mariano Rajoy con-
fidently declared that the €100bn
deal had “resolved” the banking cri-
sis, allowing him to fly to Poland to
watch the Spanish football team take
on Italy.
“If the crisis had not been resolved,
I would not be travelling for hours to
be there,” he said.
The PM also refused to call the
arrangement a “bailout” or “rescue”,
preferring to term it a “credit line”.
He argued the deal will not come
with the same stringent financial
strings attached that the Irish, Greek
and Portuguese governments faced
when they were bailed out by the
Eurozone.
That lack of conditions is in part
because the Eurogroup believes
Rajoy has already shown his deter-
mination to trim the budget deficit
and so does not need additional
monitoring.
“The Eurogroup notes that Spain
has already implemented significant
fiscal and labour market reforms
and measures to strengthen the cap-
ital base of the Spanish banks,” it
said in a statement.
“The Eurogroup is confident Spain
will honour its commitments under
the excessive deficit procedure and
with regard to structural reforms,
with a view to correcting macroeco-
nomic imbalances in the framework
of the European semester.”
A secondary reason may also be
that the International Monetary
Fund will not take part in this
bailout – it does not give funds pure-
ly for bank bailouts – and so its strin-
gent lending criteria will not be
applied to this rescue.
The bonds will instead come from
the European Financial Stability
Facility or its permanent successor
the European Stability Mechanism,
both of which are backed by
Eurozone governments.
G
E
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Y
A relaxed Spanish Prime Minister Mariano Rajoy chatting to Princess Letizia as he waits for Spain’s Euro 2012 match to start inGdansk yesterday
BY TIM WALLACE
SPAIN GETS €100BN
FORBROKENBANKS
MORE: Page 2,3,5,6,7
▲ ▲
ISSUE 1,649 MONDAY 11 JUNE 2012
CAMPAIGN STARTS WITH CRUNCH TIE AGAINST FRANCE
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
G
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MPs attack Osborne as he
passes buck on recession
GEORGE Osborne was attacked by
a Conservative backbench MP yes-
terday for “wasting two years” pur-
suing an economic policy that is
“not credible”.
The chancellor said Britain’s eco-
nomic recovery “is being killed off”
by the Eurozone crisis, calling for
the currency area’s governments to
pool more sovereignty and transfer
more money from strong govern-
ments to weaker areas in an effort
to end the crisis for good.
However, Conservative MP
Douglas Carswell told City A.M.
“this is clever politics, but not cred-
ible economics”.
“Other countries that do more
trade with the Eurozone are enjoy-
ing much better growth figures
than Britain is.”
Instead, Carswell argued, the gov-
ernment must address a long-run-
ning lack of competitiveness in the
UK, which he believes was con-
cealed by a lengthy credit boom.
“No amount of monetary stimu-
lus can overcome this – we need
competitiveness reform,” he said.
“The pity is we have wasted two
years applying the policies of conti-
nuity Brown, trying the same
failed remedies and allowing debt
to keep on rising.”
Osborne also used his Sunday
Big UK funds urge rethink on
incentives
Some of the UK’s biggest fund managers
are pushing banks and other blue-chip
companies to adopt a dramatic change in
pay practices, overhauling so-called long-
term incentive plans to make them
genuinely long term. Fidelity Worldwide
Investment, Standard Life Investments and
Hermes Equity Ownership Services are
encouraging companies’ remuneration
committees in Britain and globally to
model LTIP structures on a new HSBC
scheme.
Goldman nears hedge fund admin
unit sale
Goldman Sachs is close to sealing a deal
with State Street over the sale of its
hedge fund administration business in a
tie-up that would create the largest
administration services provider to hedge
funds worldwide.
Banks to win ground on Vickers plan
The UK’s biggest banks are expected to
win a potentially crucial concession for
their small business operations as the
government unveils its long-awaited
response to proposals set out by the
Vickers commission.
‘We’ll live to regret’ handing energy
subsidy to the French
Families will be forced to pay higher
energy bills to fund subsidies to the
French for a radical overhaul of the power
market, the boss of one of the country’s
largest energy companies has warned.
Ian Marchant, the chief executive of SSE,
said that subsidies demanded by the
French state-owned EDF Energy to build
new nuclear reactors in Britain would
saddle consumers with higher bills for
years to come.
Virgin Active plans expansion into Asia
Virgin Active is planning to open clubs in
Asia for the first time as the health club
business shifts its focus east in the face of
the economic slowdown in Europe. The
company is set to move into Singapore and
other countries in south-east Asia.
Bank account fraud reaches new
heights
Fraud involving current accounts soared to a
new peak in the first quarter, says Experian.
Some 44 in 10,000 applications for current
accounts were found to be fraudulent, it said.
GE weighs cuts to lending unit
General Electric is considering breaking
off big chunks of its lending business,
heeding the wishes of investors who are
uncomfortable that the conglomerate
owns what amounts to one of the
country’s largest banks.
Telefónica to Sell China Unicom
Stake
Telefónica agreed to sell a 4.56 per cent
stake in China Unicom to its parent
company China United Network
Communications Group for about €1.13bn.
WHAT THE OTHER PAPERS SAY THIS MORNING
SPANISH shareholder group
AEMEC said over the weekend that
more than a thousand investors
have shown an interest in pursuing
a civil claim against bailed-out caja
conglomerate Bankia.
Shareholders allege irregularities
in the way its stock market listing
was handled, according to their
lawyers Cremades & Calvo-Sotelo.
Spain’s public prosecutor last
week launched an anti-corruption
probe into the bank.
The country’s caja savings banks
are coming under renewed scrutiny
amid the government’s request for
a bailout of its banks.
Though not all of the cajas are
struggling, Madrid’s bailout plan
puts the spotlight on a disparate
and, until recently, lightly-
regulated cornerstone of the
Spanish banking sector.
Seven former savings banks,
already patched up with state aid,
will be first in line to tap European
rescue funds requested by the
country, the IMF has said.
Regional parliaments in Valencia
and Catalonia have launched
inquiries into the wider sector in
the last two weeks.
Meanwhile, Liberbank is
attempting to merge with Ibercaja
and Caja 3 – the latest in a long
line of attempts to shore up ailing
cajas through consolidation.
Shareholders
in Bankia gear
up for lawsuit
George Osborne has blamed the Eurozone crisis for Britain’s economic problems
2
EUROZONE IN CRISIS
BY CITY A.M. REPORTER
FRENCH President Francois
Hollande was on track for a
Socialist-led majority in parliament
after a solid win in a first-round
vote yesterday that should free him
from having to rely on hard leftists
hostile to European integration.
Hollande’s Socialist bloc looks
likely to win the 289 seats needed
for an outright majority in the 577-
seat National Assembly in next
Sunday’s run-off, and almost
certain to do so with its Greens
Party allies, polling institutes said.
While conservatives said this was
no “pink wave”, winning power in
the lower house for the first time
in a decade would be a triumph for
the left a year after it won control
of the Senate and weeks after
recapturing the presidency after 17
years. Socialist Prime Minister Jean-
Marc Ayrault warned against
over-confidence, telling voters:
“This is just the first round.
Everything hinges on next Sunday.
Change is beginning.”
Hollande, who won the
presidency five weeks ago, asked
for a coherent majority as he steers
France through the resurgent
Eurozone debt crisis. Initial
projections based on a partial vote
count suggested Hollande’s core
Socialist bloc could win 283 to 329
seats in the 577-member National
Assembly in next Sunday’s runoff.
French left set
for majority in
parliament
BY CITY A.M. REPORTER
BY TIM WALLACE
To contact the newsdesk email news@cityam.com
I
F you are tempted to celebrate
Spain’s bailout, or if you agree
with its football-mad PM that it
was a “triumph”, a great European
“victory”, I would urge you to
reconsider. Sure, chucking at least
€100bn at insolvent, incompetently
managed second-tier Spanish banks
will pour oil on stormy Eurozone
waters. It will reduce the immediate
threat of an explosive collapse. But
far from solving Europe’s crisis, it will
ensure that the ultimate
denouement, when it eventually
comes, will be even more painful.
If one looks beyond the spin, what
has been agreed is relatively simple.
The Eurozone bailout fund – backed
by taxpayers in Germany, France and
elsewhere – will lend the money to
Spain’s bailout fund at around three
per cent, half the market interest rate.
In return, Spanish taxpayers will guar-
EDITOR’S
LETTER
ALLISTER HEATH
It’s time governments stopped bailing out bankrupt banks
MONDAY 11 JUNE 2012
antee the loan, which will be added to
the Spanish government’s books.
Spain’s national debt will thus
increase massively; this is not a gift
but a subsidised loan. Usually, when a
country borrows a very large amount
of money (even at three per cent) to
nationalise and recapitalise insolvent
local lenders, the markets worry –
they do not celebrate. Deutsche Bank
is predicting that Spain’s government
debt will hit 97.2 per cent of GDP in
2014-15 if the bank bailout reaches
€120bn, a level that economists such
as Ken Rogoff have shown cripples
GDP growth. Yet without a return to
expansion, Spain will never be able to
repay the debt – and it will take years
before the nationalised banks will be
ready for reprivatisation.
That is what is so troubling about
the events of the past few days.
Nobody has learnt any lessons from
the failed bailout culture of the past
four years. No bank is being allowed
to go bust. Bad debt is not being writ-
ten off, it is being transferred from
the private sector to the public sector.
This is madness: eventually, even the
stronger European countries could be
overwhelmed. The recession and
falling house prices mean that there
will be hundreds of billions, if not tril-
lions, of bad loans across the EU in
the coming years, especially when
assets begin to be priced more realisti-
them down. The Americans have shut
well over a hundred small insolvent
banks since the crisis, protecting
insured deposits but wiping out
everybody else. The Danes have been
the best: they have actually imple-
mented bail-ins already, most notably
in the case of Amagerbanken, whose
senior creditors suffered substantial
losses but depositors were protected
(regrettably, Denmark has since dilut-
ed its approach). But Spain – and
Ireland before it – are still inanely pro-
tecting bondholders. This weekend’s
sovereign bailout won’t be the last.
Spain will need even more money –
and so will other countries. Taxpayers
are being pushed to the limit – at
some point, they, and governments’
balance sheets, will finally crack.
cally – if all of this ends up on govern-
ments’ books, some sovereigns will go
bankrupt. So why does the EU estab-
lishment still believe that every bank
should always be bailed out? We are
meant to be operating under capital-
ism, where successful firms do well
and bad ones go bust. The kind of cor-
poratism we are seeing in Spain – and
before that, in Ireland – is inflicting
untold reputational damage on the
global financial services industry.
The US, the G20, the FSA and even
the European Commission have all
endorsed plans to create new bank-
ruptcy and resolution procedures to
enable even the biggest banks to be
wound down in a controlled manner,
with bonds being turned into equity
to allow bail-ins and protect taxpayers
and depositors. Spain’s problems are
with small institutions; it should
have been relatively easy to wind
Telegraph article to argue he had
successfully cut the deficit by a quar-
ter, and that “our economy is bene-
fiting from safe-haven status because
of this government’s credible plan to
deal with Britain’s debts.”
“Lower corporate tax rates and
other reforms to make Britain open
for business are also sharpening our
competitive edge,” he added.
But Labour’s shadow chancellor
Ed Balls also accused Osborne of
passing the buck for the UK’s poor
economic performance, calling the
chancellor “deeply complacent and
out of touch”.
“He will fool nobody with these
increasingly desperate excuses,” said
Balls.
“Despite the Eurozone crisis,
Germany, France and the currency
area as a whole have so far avoided
recession while Britain’s recovery
was choked off in the autumn of
2010.”
“George Osborne needs to finally
realise his policies have failed. We
urgently need a change of course
and a plan for jobs and growth,” he
concluded.
The new jobs website for London professionals
CITYAMCAREERS.com
G
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INTERNATIONAL Monetary Fund
(IMF) boss Christine Lagarde wel-
comed Spain’s bailout deal as “key” to
the financial sector’s future stability.
But analysts warned that it may
offer only temporary reprieve from
the strains of the sovereign debt crisis,
in part because the deal adds up-to
€100bn (£81bn) to Spain’s already dan-
gerously large public debt.
“Providing a credible back stop to
recapitalise weaker segments of the
banking system has been a key recom-
mendation of the IMF’s recent
Financial Sector Assessment Program
(FSAP) conducted in Spain,” said
Lagarde.
“This scale of proposed financing,
which is consistent with the capital
needs identified in the FSAP, gives
assurance that the financing needs
of Spain’s banking system will be
fully met.”
However, it is exactly the scale of the
support that worries other observers.
Prime Minister Mariano Rajoy has
Analysts warn
bailout debts
may hurt Spain
BY TIM WALLACE
been pushing hard to cut the govern-
ment’s budget deficit and put it on a
sounder long-term financial footing –
but is now borrowing an extra €100bn
to recapitalise the country’s banks.
“The burden of recapitalising insol-
vent banks or loss-making acquisitions
of solvent banks will fall on Spanish
citizens,” said Karl Whelan, economist
at University College Dublin.
“For this reason, this weekend’s
announcement may well end up shut-
ting Spain out of the sovereign bond
market.”
Ratings agency Fitch downgraded
Spain last week from A to triple-B in
part thanks to the expected cost of the
bank recapitalisation, and economist
Jose Carlos Diez from Intermoney
warned more cuts were to come.
“We’re very close to junk bonds and
we’ll end up in the junk,” he said.
The national debt stood at 68.5 per
cent of GDP at the end of 2011, and
was already forecast to hit 78 per cent
at the end of this year. An additional
€100bn would push that up to over 87
per cent by the end of the year.
IMF boss Christine Lagarde has welcomed Spain’s bailout deal
MONDAY 11 JUNE 2012
3
EUROZONE IN CRISIS
cityam.com
Spain's debt is soaring - even before this bailout
2013 2012 2011 2010 2009 2008
40
30
50
60
70
80
90
100
How the Spanish bailout may work
EFSF/ ESM Banks ECB
Spanish
Government
bonds
withbailout
IMF projection
without bailout
bonds bonds
liquidity
D
e
b
t
,
%
o
f
G
D
P
Q
Where is the €100bn coming from?
A
The Eurozone has two bailout
funds – the temporary European
Financial Stability Facility (EFSF),
which is up and running now, and
the permanent European Stability
Mechanism (ESM), which is expected
to be available next month. They are
guaranteed by governments, and
issue bonds to raise money.
Q
Does it matter which fund gives the
money?
A
Yes – debt owed to the EFSF is
“normal” debt. Debt from the ESM
will be “senior” debt. If a debtor
cannot pay off all of its loans, the
senior debt must be paid off first.
Some analysts fear using senior debt
will make other investors scared to
lend the banks money, as their loans
will be deemed less important than
those of the ESM. Also, the ESM is
the larger, with a lending capacity of
€500bn to the EFSF’s €440bn.
Q
How does the bailout work?
A
The funds can only give money to
governments, not banks. That
means the Spanish government will
take the bonds and pass them on to
the banks. They will then pass them
to the European Central
Bank in return for liquidity, solving
their current problems.
Q
How much is left?
A
The EFSF has a lending capacity of
€440bn. It has already committed
€192bn to Ireland, Portugal and
Greece. The latest loan could total
€100bn. That leaves €148bn. When
the other countries took funding
from the EFSF, they ceased to be
guarantors. If Spain does the same,
the facility’s total lending capacity
will drop to €387bn – leaving just
€95bn for future rescues.
Q
A
and
How will the Spanish bailout work?
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ends Sunday
SPAIN has refused to say how much
cash its ailing banks need until audits
from two consultancies, Oliver
Wyman and Roland Berger, have been
completed.
While the IMF has already estimated
that Spanish banks need a capital
injection of between €40bn and
€80bn (£32.4bn and £64.7bn) under its
own stress tests, Madrid has decided
to wait for the results of two inde-
pendent audits before putting a fig-
ure on its required bailout, according
to economy minister Luis de Guindos.
Oliver Wyman and Roland Berger
have spent months scrutinising the
banks and were due to report their
Consultancies will help
to decide size of bailout
BY MARION DAKERS
findings on 21 June, but sources said
over the weekend that the govern-
ment expects the results “in a few
days’ time”.
The two reports are being conducted
completely separately from each other,
with each firm running the data inde-
pendently to add credibility to the
final figures.
Each consultancy is using Bank of
Spain data to run the same stress test
using the methodology of similar tests
carried out last July by the European
Banking Authority, said one banking
source.
Spain came off worst in last year’s
tests, with nine of its banks expected
to fall below a five per cent capital
PROFILE: OLIVER WYMAN AND ROLAND BERGER
MONDAY 11 JUNE 2012
5
EUROZONE IN CRISIS
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THE BANK of Spain is relying on two private
consultancies to tell it how much cash the
country’s floundering banks need.
It hired Oliver Wyman, a New York-based
consultancy, and Roland Berger, a strategy
specialist based in Germany, back in March to
conduct stress tests on its battered banking
sector and is now refusing to put a price tag
on its bailout until the firms report back.
Oliver Wyman has plenty of experience with
stress tests, boasting “decades of work with
the world’s top 100 companies”.
At last year’s World Economic Forum in
Davos it published an apocalyptic paper pre-
dicting the “financial crisis of 2015”, imagin-
ing a worldwide recession through the eyes
of John Banks, the fictional chief executive of
a multinational bank.
The firm, originally called Oliver, Wyman &
Company, was founded in 1984 and now
operates in 25 countries as part of the Marsh
& McLennan group.
Roland Berger Strategy Consultants, mean-
while, started life in Munich in 1967.
It has hundreds of banking experts, and lists
the turnaround of an unnamed European real
estate bank among its success stories.
Spain is not the first struggling Eurozone
nation to ask the private sector to survey the
damage done to its banks during the reces-
sion. Ireland hired BlackRock, Barclays
Capital and Boston Consulting Group in
January 2011 to test the health of its banks.
Greece followed in its footsteps, taking on
BlackRock to audit its lenders’ portfolios later
that year.
Not all Spanish banks are flailing, with the so-called big three – Santander, BBVA and La Caixa –
in no need of help. Ratings agency Fitch said: “The core of the system – Santander, BBVA and La
Caixa – will not require assistance in meeting more stringent provisioning and capital require-
ments and underpin Fitch’s confidence that the fiscal costs of restructuring the banking sector
remain manageable from a sovereign credit and rating perspective.” La Caixa is soon to become
Spain’s largest domestic bank following its merger with Banca Cívica, which is set to take place in
the third quarter of this year. Meanwhile, first-quarter net profits at Santander and BBVA were
€1.6bn and €1bn respectively.
Spanish savings bank Liberbank is set
to merge with rivals Ibercaja and Caja
3, as they struggle with around
€11.8bn of bad property debt.
The merger, yet to be cleared by com-
petition authorities, would give
Ibercaja 46.5 per cent of the group,
Liberbank 45.5 per cent, and Caja 3
eight per cent, with over €115bn assets.
THE LOSERS
threshold this year under the EBA’s
stress tests, if no capital raising efforts
were undertaken.
Several banks have since raised
money, including struggling Bankia.
But the two audits due in the coming
days will not be the last word on the
health of Spain’s banks. Another
audit, to be completed by the end of
the month, will be conducted by the
so-called Big Four accountants –
KPMG, Deloitte, Ernst & Young and
Price Waterhouse Coopers.
This will involve an inspection of
each bank, sources have said, valuing
assets and how the lenders are comply-
ing with new rules on recognising
heavy losses on real estate assets.
THE WINNERS
Bankia, which a few weeks ago asked for a €19bn
bailout, is facing a slew of legal claims from embittered
investors. Ratings agency Fitch said : “On 25 May, it was
announced that Bankia/BFA faces a €19bn capital short-
fall. Fitch now expects the fiscal cost of bank restructur-
ing and recapitalisation to be in the range of €50bn to
€60bn and in a negative stress scenario, the cost could
rise to €90bn- €100bn.”
THE HEAD of one of Europe’s largest
airlines, Dutch KLM, urged the
region’s leaders give a rapid signal of
confidence to help dispel the effects
of the European financial crisis.
“I hope they solve (the crisis)
rapidly or that we see clear
messages that confidence is
coming,” said KLM chief executive
Peter Hartman.
Consumer and business
confidence has been hit hard by the
crisis, which has pushed many
Eurozone countries into recession,
and caused total GDP to fall 0.1 per
cent in the year to the first quarter
of 2012.
Hartman, who is also deputy
chairman of parent Air France-KLM,
said that looking three months
ahead, premium bookings were
holding up relatively well but that
cargo was being hit by the
preference of many shippers to
switch to cheaper sea routes.
Speaking to reporters on the
sidelines of an industry summit
amid airline merger speculation in
the United States, he said
“consolidation is not over in Europe
either.”
He also said Air France-KLM was
still negotiating the final version of
a deal to buy Airbus A350 jets but
was disputing parts of the contract.
He expected a deal in coming
months.
Airline calls for
rapid solution
from Eurozone
BY CITY A.M. REPORTER
G
E
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Y
A REPORT that German Chancellor
Angela Merkel is not serious about
implementing a European financial
transaction tax threatens to under-
mine an initial deal struck last week
with the opposition over the EU’s
planned fiscal pact.
Der Spiegel weekly reported yester-
day that Merkel’s chief of staff,
Ronald Pofalla, had said such a tax
would not get passed in the current
legislative period so the centre-right
coalition could support the idea in
principle knowing it would not have
to act on it any time soon.
Last week, the government
and opposition parties agreed
on the outlines of a transac-
tion tax proposal. Further
talks between senior party
members are due today,
and Merkel wants
these to form a
basis for a final
Transaction tax
row threatens
German talks
BY HARRY BANKS
deal when party chiefs meet on
Wednesday.
Saturday’s agreement between
Eurozone finance ministers to lend
Spain up to €100bn to shore up its
banks will, if anything, raise the pres-
sure on her to quickly get opposition
support to ratify an EU deal on budg-
et discipline.
She wants to push the pact through
parliament in the next few weeks
together with a bill on the new
European Stability Mechanism (ESM)
bailout fund which Spain may use,
but needs the opposition to get the
required two thirds majority.
The Social Democrats (SPD) and
Greens are insisting on a plan
for a transaction tax and
measures to boost growth.
Highlighting the pressure
on Merkel to take a tough line
with struggling Eurozone
members, an Emnid poll for
Bild am Sonntag newspa-
per showed 66 per cent
of Germans are
opposed to sup-
porting Spanish
banks with
German money.
Angela Merkel is
facing domestic
pressure this week
DUTCH lawmakers will have to
approve their country’s
participation in a Eurozone deal to
lend up to €100bn (€81bn) to
Spanish banks, the Dutch Finance
Ministry said yesterday.
Dutch Prime Minister Mark
Rutte said Spanish banks had been
at risk of collapse and the
Netherlands had to support the aid
package to protect its investments
in Spain and trade relations.
“There is also a lot of (Dutch)
pension money invested in Spain
via banks and pension funds. The
collapse of Spanish banks, which is
Dutch PM says country will vote
on contribution to bailout funds
BY CITY A.M. REPORTER
currently at risk of happening,
would have big consequences for
the Netherlands,” Rutte said.
The Dutch lower house will be
asked to approve the Dutch
participation in the deal, a
spokeswoman of the Dutch Finance
Minister Jan Kees de Jager said. If
parliament voted against the deal,
it meant the Netherlands would
not take part in it, though the
rejection would not scupper the
whole deal, she said.
A majority of Dutch lawmakers
have so far supported all European
bailouts, but the lawmakers have
been increasingly critical of the
cost of the rescue packages.
MONDAY 11 JUNE 2012
6
EUROZONE IN CRISIS
cityam.com
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Prime Minister Mark Rutte said a lot of Dutch pension money is invested in Spain
ITALY is still at risk and could
require a bailout in the near future,
economists warned yesterday, as its
economy remains sluggish and
government borrowing costs are
still dangerously high.
Ten-year borrowing costs stood at
5.77 per cent when markets closed
on Friday, below the peaks of above
seven per cent seen in December
and January, but still far above the
3.7 per cent seen in late 2010.
Such high yields will continue to
take their toll on the government’s
finances, and steadily worsen the
country’s situation.
“With current market yields
Italy’s fiscal position is probably on
an unsustainable long-term path –
in the sense that the debt-to-GDP
ratio is set to rise for an extended
period,” warned Citi economist
Michael Saunders.
“Moreover, the situation could
rapidly become critical, because the
country is highly vulnerable if the
sovereign debt crisis persists or
intensifies. As we expect a further
escalation of the crisis, we believe
Italy will probably need outside
help at some point.”
Prime Minister Mario Monti has
repeatedly called for the Eurozone
bailout fund, the European Stability
Mechanism, to be increased to
reassure markets and so lower
borrowing costs.
Sluggish Italy
may need a
bailout too
BY TIM WALLACE
GREECE and Ireland could demand
changes to their own bailout deals,
it emerged yesterday, after Spain
was given much more lenient terms
on the terms of its bank rescue.
The two smaller countries, as well
as Spain’s neighbour Portugal, faced
tough constraints on government
spending and taxation before they
were able to access bailout cash.
But Spain has escaped such tough
conditions, both because it is
already undergoing a major fis-
cal consolidation, and because
the International Monetary
Fund is not taking part in this
bailout.
Ireland already renegotiated
the interest paid on its
bailout loans last year,
from six per cent
to between 3.5
and four per
cent.
After that, its
gover nment
called in
March for
some pay-
Irish and Greek
leaders could
want new deal
BY TIM WALLACE
ments to be deferred to spread out
the cost of paying back the loans, to
help the government access debt
markets again and avoid the need
for a second bailout.
Spain’s deal could encourage Irish
leaders to push further for the
strings to be removed from its own
debt.
In Greece, which faces another gen-
eral election this month, politicians
in the leftist Syriza party have called
for the bailout to be radically renego-
tiated – and their cause could be
boosted by the contrast between
the stringent conditions placed
on Greece and the ease with
which Spain received its cash.
The three leading parties
already failed to form a govern-
ing coalition after the last
election in May, as
Syriza opposed the
bailout in its current
form while New
Democracy and
Pasok both
favour it.
Syriza leader
Alexis Tsipras
MONDAY 11 JUNE 2012
7
EUROZONE IN CRISIS
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€85bn IRELAND
was loaned €85bn from
the Eurozone and the IMF
in November 2010
ITALY
Economists fear Italy could
also need a bailout if the
crisis worsens, as its
borrowing costs are
worryingly high
€240bn GREECE
. received a bailout worth
€110bn from May 2010,
and another €130bn in
March 2012, which included
imposing losses on private
sector creditors
€78bn PORTUGAL
was bailed out in May 2011
to the tune of €78bn from
the Eurozone, ECB and IMF
€100bn SPAIN
is set to receive up to €100bn
in aid for its banks from the
Eurozone bailout mechanisms
Spain is the fourth Eurozone country to
be bailed out so far
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people on RAG’s board, investors are
not willing to pay anything close to
that and are rather looking at a
valuation of around €12bn. One
banking source said that the threat
to pull the IPO is all part of a
strategy designed to achieve the
fuller valuation. Another meeting of
RAG’s board is planned for 18 June.
Deutsche Bank and Goldman
Sachs are joint global coordinators
and joint bookrunners for the
offering. BofA Merrill Lynch, Credit
Suisse and JP Morgan are additional
bookrunners.
G
E
T
T
Y
WPP conceded for the first time this
weekend, just days before the adver-
tising giant’s general meeting, that
its board could consider cutting
chief executive Sir Martin Sorrell’s
controversial pay package.
Chairman Philip Lader said the
WPP board has exercised “the best
commercial judgement” and
believes it is doing what is best for
shareholders.
But he said the board would be
willing to continue its deliberations
and consult with shareholders if
Wednesday’s polls do not back the
remuneration report.
Sorrell’s proposed pay package,
which was hiked to £12.9m last year
including a 30 per cent salary rise,
has failed to impress WPP’s
investors despite it being just his
second pay rise in 10 years.
Most expect the remuneration
report, which was passed by just 58
per cent of shareholders last year, to
fail at this week’s general meeting.
A WPP spokesperson said the
Sorrell’s salary
could drop as
meeting looms
BY LAUREN DAVIDSON
board would not necessarily tweak
Sorrell’s salary down – it could be
certain elements of the pay package
that are upsetting shareholders –
but it would not come to a decision
until after seeing the results of
Wednesday’s vote.
The spokesperson said to compare
Sorrell’s salary, as the boss of a mega
international company, to other UK
chief executives’ was like comparing
“apples and pears”.
A negative vote for the remuneration
report would be very damaging for
Sorrell’s leadership of the company
and the job of Jeffrey Rosen, chair of
the firm’s compensation committee.
Evonik threatens to scrap float
THE OWNERS of German chemicals
firm Evonik may pull the plug on
an initial public offering (IPO)
which, when announced, was billed
as Europe’s biggest flotation in
more than a year.
“The performance of financial
markets since the end of May has
added to the uncertainty whether
enough proceeds are achievable
that reflect the value of Evonik,” the
RAG Foundation said yesterday.
“The certainty of a flotation based
on an appropriate valuation of
Evonik is a prerequisite of the IPO.”
RAG owns 75 per cent of Evonik
while private equity firm CVC owns
25 per cent.
Sources close to the matter have
said Evonik is looking to raise as
much as €5bn (£4.04bn).
RAG said in April last year it was
preparing for an IPO of Evonik, but
put the plans on ice in
September due to
weak markets.
Sources close have
said Evonik’s owners
hope the IPO will
value the
chemicals
group at
around
€15bn.
According
to two
BY HARRY BANKS
WPP chief executive Sir Martin Sorrell’s pay package jumped to £12.9m last year
WPP PLC
8Jun 31 May 1 Jun 6Jun 7Jun
740
750
760
770
780
790 p
762.00
8Jun
Evonik, chaired by Klaus Engel, could
pull its €5bn float
SHADOW business secretary Chuka
Umunna yesterday blasted the
coalition for being “out of step
with the tide of investor opinion”,
after reports that business
secretary Vince Cable is set to
climb down on proposals to hold
an annual binding shareholder vote
on executive pay.
The about face comes despite a
spate of rebellions over business
chiefs’ remuneration – dubbed the
shareholder spring. Under revised
plans the vote is likely to be held
every three years instead.
“The Prime Minister said he
Labour slams Cable’s u-turn on
executive pay vote for investors
BY JENNY FORSYTH
wanted to empower shareholders,
but has failed to stand up to vested
interests and match these words
with action,” said Umunna.
“This latest u-turn, with the
government drastically watering
down its flagship proposal on
improving corporate governance...
only adds to the sense of chaos and
shambles at the heart of
government.”
Despite the successes of the
shareholder spring in reining in
pay, many have voiced fears that
yearly binding votes would make
investors less likely to protest in
case they destabilised management
teams and added to bureaucracy.
MONDAY 11 JUNE 2012
9
NEWS
cityam.com
DRINKS giant Diageo is looking at a
potential listing of its shares on the
Hong Kong stock exchange to help
boost its expansion plans in Asia,
part of its overall drive into fast
growing emerging markets.
The world’s biggest spirits group
already has its shares listed on the
London and New York stock
exchanges and a listing in a
developing region is being
considered as the group looks to
generate half its sales from
emerging markets by 2015.
“It’s something that we keep
under review, but there are no
imminent plans,” said a Diageo
spokesman yesterday.
Diageo chief executive Paul Walsh
has said a Hong Kong listing is
something Diageo’s board is
considering and will continue to
look at and there have been some
discussion documents produced.
But he has also said a move is not
imminent and Diageo should not
take its eye off the key issues of
meeting financial targets.
Industry sources said London-
based Diageo might only list in Asia
if it needed to finance a big deal,
probably in the Asian market.
The Johnnie Walker whisky and
Smirnoff vodka maker is looking to
emerging markets to offset sluggish
sales in Western Europe.
Diageo looks
at new listing
in Hong Kong
BY HARRY BANKS
UBS is thought to have lost up to
$350m (£226m) on the botched
Facebook float last month.
The Swiss investment bank racked
up the losses, far higher than those
initially estimated, after placing an
order for one million shares in the
social networking giant. When it did
not receive confirmation of the trade
it repeated the order several times,
each of which was fulfilled, leaving it
with more stock than it had intend-
ed, according to broadcaster CNBC.
The expected losses go well beyond
the $30m originally suggested by
industry sources. Now UBS, which
has not confirmed the figures, is said
to be preparing legal action against
exchange operator Nasdaq.
A spokesman for the bank said the
amount loss was “not material” and
added: “Given the size of our US equi-
ties business and our role as a major
market maker, UBS was affected by
these issues, as we believe other mar-
ket participants may have been... We
are continuing to consider avenues
UBS losses on
Facebook set to
soar to $350m
BY PETER EDWARDS to recover our losses in this matter,
but have not yet taken legal action.”
UBS was one of four major market
makers in the Facebook deal, along
with Citigroup’s Automated Trading
Desk, Knight Capital, and Citadel
Securities. Until Friday, the total loss
for the group was thought to be
upwards of $115m.
Last week Nasdaq apologised for its
mistakes in the float, on 18 May, and
said it would offer a total of $40m in
cash and rebates to clients harmed.
Its proposal has already been criti-
cised, however, as too little, while
rival index New York Stock Exchange
claimed it was “wholly inconsistent
with fair practice and an undue bur-
den on competition to allow Nasdaq
to use pricing and other machina-
tions as a guise for fairly compensat-
ing those impacted” in the float.
Facebook debuted with a valuation
of $104bn but its $38 share price has
fallen quickly.
On Friday it closed up 79 cents, or
three per cent, to $27.10 after
announcing an “app centre” recom-
mending new add-on software.
MONDAY 11 JUNE 2012
10
NEWS
cityam.com
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REBEL investors in troubled
exchange owner Plus Markets
yesterday called on ICAP to sweeten
its bid for the company’s junior
stock exchange or face a possible
rejection.
A group of shareholders owning
30 per cent of the firm said they
are committed to voting against
ICAP’s £1 takeover bid for Plus SX,
arguing that there is no value in
the deal for shareholders.
Dissenting investors, which
include Amara Dhari, a Middle
Eastern investment firm with 17.2
Shareholders threaten to derail
ICAP takeover of Plus Markets
BY KASMIRA JEFFORD per cent of the equity, have also
objected to a £423,000 payout to
Plus’s two executive directors Cyril
Théret and Nemone Wynn-Evans.
Plus, which agreed to sell its
stock market to ICAP last month,
urged shareholders on Friday to
back the bid and reiterated that
the Financial Services Authority
would revoke the licence if the sale
was not completed by 22 June, a
move they say would result in the
business being wound up.
Plus said investors would receive
an estimated £640,000 in cash if
they follow their recommendation.
ICAP declined to comment.
ICAP, led by Michael Spencer, has been urged to improved its offer for Plus Markets
THE United Arab Emirates’ public
finances swung into a surplus of 2.9
per cent of economic output in 2011
after two years of deficits as robust
oil income offset an increase in
government spending, a report by
the International Monetary Fund
showed yesterday.
The world’s third biggest oil
exporter booked a consolidated
fiscal surplus of 38.6bn dirhams
(£6.8bn) compared with a deficit of
23bn, or 2.1 per cent of gross
domestic product, in 2010, according
to calculations based on IMF
estimates and government data.
However, the 2011 surplus was
only a fraction of fiscal surpluses
enjoyed before the global financial
crisis. They averaged 167bn dirhams
annually in 2006-2008.
The data consolidate the accounts
of the federal government with
those of Abu Dhabi and Dubai, the
two largest emirates in the seven-
member UAE, as well as Sharjah.
The government has not yet
released consolidated figures for
2011. Oil-rich Abu Dhabi, which
accounts for around 78 per cent of
overall spending in the UAE, does
not publish yearly budget outcomes.
Government spending in the UAE,
the second largest Arab economy,
surged over 19 per cent to an
estimated all-time high of 401.5bn
dirhams in 2011, according to the
IMF.
UAE back into
$11bn fiscal
surplus for 2011
BY CITY A.M. REPORTER
G
E
T
T
Y
VODAFONE, one of the FTSE 100’s
biggest companies, did not pay a
penny of corporation tax in the UK
last year.
But the telecoms giant said it makes
it main contribution to the UK econo-
my via investment rather than taxes.
“Last year, Vodafone’s UK capital
expenditure went up from £516m to
£575m – which means we were spend-
ing about £1.5m per day on our UK
network,” a Vodafone spokesperson
told City A.M.
The company generates four per
cent of its group operating profits in
the UK, and said it paid the exchequer
about £700m last year through pay-
roll taxes and NI contributions.
“The UK law permits companies to
offset interest costs and capital expen-
diture against profits – and the tele-
coms industry is capital expenditure
heavy,” said the Vodafone spokesper-
son.
The London-listed telco made £1.3bn
before interest and taxes in the UK
last year, compared to the £14.5bn it
earned globally, of which £10.5bn was
generated across Europe.
UK received no
corporation tax
from Vodafone
BY LAUREN DAVIDSON But while Vodafone – whose global
tax charge increased by around £300m
to £2.3bn for the year, leading to a 25.3
per cent tax rate – claimed it was not
doing anything unusual for a UK com-
pany, some will see this as the latest in
a long line of problematic tax head-
lines for the mobile network operator.
Two years ago, HMRC agreed a
£1.2bn tax settlement with Vodafone
from a transaction thought to be
worth much more. The telco was also
accused of standing to gain £1bn in
tax benefits from its £1bn Cable &
Wireless Worldwide takeover, and is in
an ongoing tax spat with the Indian
government over its 2007 acquisition
of Hutchison Whampoa’s Indian arm.
Vodafone Group PLC
8Jun 31 May 1 Jun 6Jun 7Jun
169
170
171
172
166
167
168
173
174 p
171.50
8Jun
IMMIGRANTS who plan to bring
relatives to the UK will face much
tougher rules including a test of
their income, under plans set out
by home secretary Theresa May.
And judges will be encouraged to
deport more foreign criminals by
making it tougher for them to
claim a right to family life under
the European Convention on
Human Rights, if the government’s
plans win the backing of
parliament.
May told the BBC’s Andrew Marr
show yesterday that judges
“haven’t been qualifying” the right
to family life “in the way that the
May targets families in latest
attempt to cut migration to UK
BY MARION DAKERS
European Convention enables them
to”, meaning too many criminals
are allowed to stay in the country.
“This is not an absolute right”,
she added.
The proposal will be put to a
parliamentary vote, and new laws
would be introduced if judges try
to obstruct the plans. She added
that any immigrant hoping to
bring their spouse into the country
would have to prove they earned at
least £18,600 a year in order to
support them, jumping to £22,400
for a child and rising £2,400 for
every additional child.
May also plans to force migrants
to pass an English test and a “life in
the UK” test from next year.
MONDAY 11 JUNE 2012
11
NEWS
cityam.com
Theresa May said human rights laws being used unfairly by criminals and judges
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IN BRIEF
Gupta will not testify in own defence
nFormer Goldman Sachs board member
Rajat Gupta, on trial over insider trading
charges, has decided not to testify in his
own defence, it emerged yesterday. “After
substantial reflection and consideration, we
have determined that Mr Gupta will not be
a witness on his own behalf in the defense
case,” Gupta's lawyer, Gary Naftalis, wrote
in a letter to US District Judge Jed Rakof.
Roche won’t revisit Illumina bid
nRoche has no plans to warm up its play
for Illumina after its takeover bid for the US
firm failed, and will pursue smaller
takeovers instead, chief executive Severin
Schwan said yesterday. “We are constantly
looking at the market, and will concentrate
on smaller and mid-sized acquisitions,”
Schwan said in Swiss weekly Sonntag.
Dubai’s Friendi plans expansion
nDubai group Friendi plans to expand into
six more countries within four years after
the mobile virtual network operator agreed
a strategic partnership with Virgin Group,
its chief executive said yesterday. Friendi
will add Virgin Mobile’s South African unit
to its existing licences in Oman and Jordan.
G
E
T
T
Y
UPSTART lender Metro Bank wants to
open seven new branches by the end
of this year after completing a £126m
capital raising.
The high street bank also said it
aims to float within two years as its
investors consider a lucrative exit.
Hedge fund Moore Capital and bil-
lionaire investor Steve Cohen are
believed to have taken stakes in Metro
in the recent fundraising, which has
seen co-founder Vernon Hill cut his
stake of around a fifth.
In total the bank raised £126m from
new investors and existing backers,
which include asset managers Fidelity
and Wellington Capital, property
entrepreneurs the Reuben brothers
and New York property developer
Richard LeFrak.
Craig Donaldson, chief executive,
said Metro would launch an initial
public offering but “it won’t be before
2014”.
In the meantime the bank is contin-
uing with plans to grow to 200
branches in the Greater London area
Float looms for
growing Metro
BY PETER EDWARDS
by 2020. By the end of this year it aims
to have 700 staff and to have opened
further stores in towns including
Brighton, Reading, Hemel Hempstead,
Romford, Staines and Epsom.
“The capital raise will further
strengthen our growth plans and
build on our firm foundation,”
Donaldson said.
“The demand for this share place-
ment reflects Metro Bank’s unprece-
dented success in the market.
“Londoners are flocking to us to
open accounts and we’ve been blown
away by local reaction to our style of
community banking. In particular,
our strong lending book is a direct
result of our model of local bankers
making local loans.”
Metro was Britain’s first new high-
street bank in a century when it
launched in 2010. Today it has more
than 80,000 accounts.
A series of other banks have opened
since the onset of the crisis, including
Aldermore and Haymarket Financial,
while Marks & Spencer plans to open
banks at 50 branches over the next
two years.
Metro Bank chief executive Craig Donaldson says the lender is presiding over a “revolution” in the sector OASIS, the private equity-backed
dentist chain, has hired DC
Advisory to look at its long-term
expansion options.
The firm hopes to buy existing
branches and open new ones to
double its number of outlets to
400, and has asked DC to size up
fresh investment, further private
equity involvement or a trade sale
to fund the expansion.
The review is not expected to
result in a quick sale, with those
close to the firm expecting a
decision next year at the earliest.
Oasis Healthcare is owned by
private equity firm Duke Street
and Partners Group, following a
Oasis hires DC Advisory to look
at ways to fund expansion plan
BY MARION DAKERS
£77m deal to take the group
private in 2007. Since then it has
opened around 70 branches to
take its total past 200.
The firm, which offers both
NHS and private treatment, was
set up in 1996 and now has 1.5m
patients and 800 dentists on its
books.
Oasis hopes to capitalise on a
report from the Office of Fair
Trading, which last week hinted
at tougher regulations for
dentists after it found that
patients are often ill-informed
about the treatment options
available.
As the second-biggest chain of
dentists in Britain, Oasis hopes to
pick up smaller groups who are
hard hit by the incoming rules.
THE final bidders are vying for the
London Metal Exchange and a
winner could be chosen as soon as
today.
InterContinental Exchange (ICE)
and Hong Kong Exchanges and
Clearing (HKEx) are both believed to
have tabled bids of around £1.3bn
for the 135-year-old LME, the City’s
last open-outcry trading pit.
Directors are expected to vote on
the offers today. Any deal would be
likely to need the backing of major
shareholders, including JP Morgan,
Goldman Sachs and Barclays.
Both bidders pledged to keep the
LME’s unique make-up unchanged
for now, including its warehousing
network, complex prompt-date
structure and open outcry trading.
Parts of the City are concerned,
however, about the impact of an
HKEx victory and the power shift to
the east. China is also likely to
develop its own metal exchange.
Others in the square mile fear a rise
in membership fees.
If the LME is sold for £1.3bn it
could lead to a payout of more than
£5m for chief executive Martin
Abbott, based on his shareholding.
The LME could not be contacted.
Decision close on £1.3bn bids
for London Metal Exchange
BY PETER EDWARDS
MONDAY 11 JUNE 2012
13
NEWS
cityam.com
THE British commercial banking
scene gained two new parties
yesterday as the Silicon Valley Bank
and Cambridge & Countries Bank
joined the UK market.
Silicon Valley Bank – the first US
bank to open a commercial
banking branch in the UK in
several years – claims to be the only
global bank dedicated to the
innovation sector.
Silicon Valley Bank boss Greg
Becker said the opening of its
London branch is “a significant
step in the evolution of the tech
sector in the UK”.
Cambridge & Counties, a joint
venture between Cambridge
University college Trinity Hall and
Cambridge Local Government
Pension Fund, also claims to have
spotted a niche in the UK market
and will target small and medium
enterprises (SMEs).
The new bank said it was an
“opportune” time to launch, citing
data that shows that £3bn worth of
loan applications from SMEs were
rejected by banks in the last half of
2011.
Two UK banks
join the ranks
BY LISA MORAVEC
CHINA’S May trade data beat
gloomy market expectations,
figures from the customs
administration showed yesterday,
with crude oil imports surging and
US demand for exports offsetting
lacklustre shipments to Europe.
Exports rose 15.3 per cent in May
from a year earlier, a much
stronger rate than expectations of a
6.8 per cent increase.
Both exports and imports hit
record highs in value terms.
China’s trade surplus reached
$18.7bn (£12.1bn) in May.
But data out on Saturday showed
industrial output near its lowest in
three years, albeit up from April.
China’s trade
figures beat
dour forecasts
BY HARRY BANKS
BUSINESSES in the north of England
fell further behind their southern
rivals in May, helping to drag down
growth in the UK private sector, fig-
ures out today show.
The private sector remains in
growth overall, with a purchasing
managers’ index reading of 52.3 in
May according to Lloyds TSB.
However, it has slowed from 52.6 in
April to reach a six-month low.
The north west of England slumped
to a reading of 48.4 – below the 50
“no change” level and the region’s
worst performance since March 2009.
Lloyds blamed a fall in new order vol-
umes at manufacturing firms.
The north east and Northern
Ireland also reported a month-on-
month contraction, according to
Northern firms
drag down UK
private sector
BY MARION DAKERS
Lloyds TSB’s figures, while Scotland
hovered close to stagnation with a 17-
month low of 50.8.
In contrast, the east Midlands
recorded the fastest growth in the
country, jumping three points to 54.4.
London, meanwhile, slipped 0.9
points to 53.3 but its business activity
remains firmly in growth territory.
Companies across the country got
some breathing space in the form of a
slowdown in cost inflation, which
rose at its slowest rate since
September 2009.
“Companies again looked to price
discounting to support growth in
May,” said Lloyds TSB Commercial
director John Maltby.
“This was helped by a marked mod-
eration in cost inflation, with all
regions now seeing slower rises in
input prices than over the past 12
months.”
FORMER Dragons’ Den star Doug
Richard has been hired by the
government to review its stance on
apprenticeships.
His appointment comes as
business group the CBI urges the
coalition to find a “radical new
vision” for training school and
college leavers, after six in 10
businesses it surveyed complained
that youngsters are not ready for the
BY LISA MORAVEC &
MARION DAKERS
world of work.
Richard, a Californian
businessman who set up the School
for Startups to train aspiring
entrepreneurs, will look at how the
government can best spend money
on apprenticeships.
He is due to report his findings to
the department of business,
innovation and skills in the autumn.
The CBI said in its research,
carried out with Pearson, that firms
want the government to get rid of
unnecessary red tape and make
qualifications more relevant to
businesses before they can offer
more apprenticeships.
Around a third of the 542 firms
surveyed said they were unhappy
with school and college leavers’
levels of numeracy and literacy.
“The UK’s growth will depend on
developing a wider and deeper pool
of skills so that our economy can
prosper in the face of fierce
international competition for
business,” said CBI head John
Cridland.
Doug Richard, who appeared in the first two series of Dragons’ Den, will look at how to improve apprenticeships
MONDAY 11 JUNE 2012
14
NEWS
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From Dragons’ Den to apprentices
BRITISH businesses have gained
confidence about their current
performance but are increasingly
wary about Eurozone turmoil
hitting sales, new figures show.
A poll of polls from accountant
BDO shows that firms are upbeat
about current trading, with its
output index rising from 95.8 in
April to 96.7 in May.
The index has remained above
the 95 mark that indicates growth
for the last three months, BDO said.
However, the research showed a
third consecutive month of falling
confidence for the next two
quarters, from a peak of 98 in
February to 95.5 in May.
UK firms are
still nervous in
spite of growth
BY MARION DAKERS
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AS if the City was not competitive
enough, dozens of chief executives
yesterday donned their trainers and
swimming caps in aid of Sport Relief.
Organised by Phil Smith, chief exec-
utive of Cisco UK and Ireland, the
Leaderboard Triathlon Challenge put
over 30 business bosses through
their paces in the grounds of
Blenheim Palace, Oxfordshire.
And so far, the boardroom bunch
has raised a staggering £225,000.
“It’s amazing what you can do
when you come together,” Steve
Cooper, vice chairman of Barclays
Business Banking, told The Capitalist.
“It’s been good fun, with a good
bunch of people,” said Cooper, 42,
who finished the race in an hour and
34 minutes and – along with a few
nationwide teams doing a 24 hour
rowathon – has raised £25,000.
James Kelly, chief executive of
Lorien Resourcing, was just one
minute behind, finishing the race in
an hour and 35 minutes.
“I hadn’t ridden a bike since 1980,
so that was the toughest bit for me,”
said Kelly. “I only got back on a bike
three weeks ago – I almost had to get
the stabilisers out.”
So did the competitive streak that
took the athletes to the top of their
businesses find its way onto the
track?
“We pretend it didn’t,” said Kelly,
who has so far raised £18,000 for the
Leaderboard Triathlon Challenge.
He added: “The race was much
more about the fundraising than the
physical. We get weekly email
updates with who has raised what,
which always triggers a fresh bout of
pestering our friends and family.”
The LeaderBoard group saw bosses
from companies including Oracle,
RIM and Orange – joined by former
sports professionals Austin Healey
and Roger Black – complete a 750m
swim, followed by a 20k cycle, topped
off by a 5k run in aid of Sport Relief.
• To sponsor the Leaderboard group,
visit: my.sportrelief.com/sponsor/
leaderboardtriathlonchallenge
Leaderboard Triathlon Challenge members (left) and (right) Lorien chief James Kelly and Steve Cooper of Barclays Business Banking
Got A Story? Email
thecapitalist@cityam.com
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THECAPITALIST
VETERAN City commentator
David Buik revealed in his
daily email yesterday that he found
time last week to attend one of
Coldplay’s concerts at the Emirates
stadium in north London.
It wasn’t 68-year-old Buik’s first
pop concert – that was Eric Clapton
12 years ago – but it was the first
time he had seen Coldplay perform
live. Buik said he had an amazing
time and was thoroughly mes-
merised by Coldplay. But he paid a
cost for his enjoyment.
“One did not require a qualifica-
tion to realise that Chris Martin’s
troops gave an amazing perform-
ance which enthralled the 75,000
attendees, despite the atrocious
weather conditions – unseasonably
cold and latterly very wet,” the City
commentator opined ahead of com-
mentary about the Spanish bank
bailout.
“But I paid the price for being
inappropriately attired in a ‘T-shirt’
by spending the next week on
antibiotics fighting the ‘mother &
father’ of all chest infections – It
was worth it!”
MONDAY 11 JUNE 2012
City’s top dogs
race for Sport
Relief triathlon
David Buik’s unlikely decision to wear a t-shirt to Coldplay cost him dear
G
E
T
T
Y
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This summer the world will descend
upon London for the Olympic Games.
As the Official Logistics and Express
Delivery Supporter of the London
2012 Games, UPS wants
to ensure that all the
events run smoothly.
For all the hard work
and sacrifice it takes for athletes
to make it to London, there’s
an equal amount of effort to
transport the athletic gear and
assemble the installations. UPS
will help ensure that everything
is where it needs to be, when it
needs to be there, set up and ready
to go. We will track and manage
shipments and even expedite the
customs process. Like the athletes
competing this summer, UPS has
been preparing extensively
for this moment.
To ensure that all the events
at London 2012 run smoothly, we’ve
been testing our key strategic operations
during the London Prepares series of test
events. This series includes multiple
world-class sporting events,
scattered around various
Olympic venues throughout
the United Kingdom. Each
venue comes with its own
set of unique demands,
giving us the opportunity
to analyse the situation
and implement logistics to
create customised strategies. An
event of this magnitude can only
come together through
precise planning and
flawless execution. UPS
assists this process with
a range of logistical services
including UPS Quantum View
®
,
which gives the logistics team
at London 2012 the ability to see,
track and manage everything coming
in, and going out.
Having a readily visible and adjustable
supply chain will help us to be more
responsive from start to finish. It is this
world-class attention to detail that will
help UPS outfit the world’s greatest
athletes on the world’s biggest stage. We’ll
supply over 10,000 athletes with over a
million pieces of sports
equipment. Deliveries
will include everything
from 600 basketballs to 356 pairs of
boxing gloves to 99 training dolls for Judo.
There will be well over 40 events, each
requiring custom equipment, including all
the necessary supplies for the media.
Without logistics, putting on the Games
would be impossible. Fortunately, UPS
has the global reach to help organisations
perform at a world-class level, whether
it’s athletics or business. We have the
knowledge, expertise and resources to
help your company succeed. Since
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UPS can handle the logistics for London
2012, just think what we can do for you.
WE TRAINED FOR THIS EVENT
FOR OVER 105 YEARS.
For the details, go to
ups.com/london2012
UPS is delivering over 30 million items.
UPS logistics will help London set the stage for the Olympic Games.
Copyright © 2012 United Parcel Service of America, Inc.
MAJOR BUSINESSES and political
figures will meet tomorrow to
discuss plans to rejuvenate London’s
Midtown, an area wedged between
the City and the West End, and drive
investment over the next five years.
Inmidtown, the business
improvement district with authority
over the area, will showcase a new
framework aimed at restoring it as a
commercial destination at an event
attended by property firms
including Land Securities, GVA as
well as officials from Transport for
London and Camden council.
The area, which includes Holborn,
St Giles and Bloomsbury, has often
been overlooked as a district in its
own right, as it sits next to the
financial district of the City and the
more creative West End.
Tass Mavrogordato, chief
executive of Inmidtown, said the
investment will help the area “put
itself firmly on the map,” especially
ahead of the area’s two Crossrail
stations, in Tottenham Court Road
and Farringdon, launching in 2015.
The plans, developed by architect
Sir Terry Farrell, include improving
public areas and phasing out one-
way systems to ease traffic and to
cater for the 200,000 people already
travelling into the district every day.
Plans unveiled
for revival of
Midtown area
BY KASMIRA JEFFORD
B
EING a business journalist for
CNBC has upsides and
downsides. Every day we get to
speak to the biggest players in
the global markets. The access we get
to the likes of George Soros,
Mohamed El Erian and Warren
Buffett is amazing – yet being
surrounded by millionaire, nay
billionaire, guests can make you feel
a bit miniscule in the big picture.
That said, at least we don’t have to
run the kind of risk those guys do. I
can sit down for my dinner at home
not having to check my Crackberry
every three minutes worrying if Ben
Bernanke or someone has let slip
something that has sent the Dow
Jones down three hundred points or
whether Spain has admitted that it
has marked down its bank property
loans by 50 per cent (leaving them
only 25 per cent overvalued, I hear
you say). There’s a lot to be said for
going home with no position on.
So my stress levels are reduced, but
so is my potential upside. And that’s
how it should be. If you play the mar-
kets well you deserve to clean up in
the remuneration stakes.
CNBC presenters, quite rightly, are
not allowed to play the market via
individual stocks or derivatives. In
fact, there are so many things we
can’t trade I rarely bother to look for
the stuff I can. That’s fine, but I now
live my market trading ideas via vir-
tual trades, which funnily enough
are much easier to make money in
due to the fact that you can always
double up on the trade when it goes
wrong without fear of consequence
or margin call. Trust me it always
works – eventually.
The other way I play the markets is
by taking a look at my pension fund.
Unfortunately I now have an online
portal to my pension, which updates
daily. Talk about “a watched pot
never boils”. But my portfolio is so
boring I think I’m going to go and
buy a tin of emulsion and watch that
dry on the walls instead. It’s mirror-
ing the broader equity market beauti-
fully. So beautifully, in fact, that I do
wonder why the manager gets paid.
Of course, I have a home bias so it’s
mostly full of UK equity with some
Europe, US and Japan thrown in for
good measure. I’m not going to name
the top 10 holdings but I bet you
could name most of them without
breaking sweat – a couple of oil
majors, a pair of miners, one pharma,
one bank, some tobacco and a telco
or two. Yawn.
So am I lazy not spending hours
poring over the potential investments
I am allowed to allocate my money,
pension and otherwise, to?
Absolutely I am, but given that we
are all so exposed to this multi-year
crisis via our jobs, our mortgages, our
tax bills, our utility costs and so on, I,
like a lot of people, want a bit of bore-
dom in some part of my life.
And the markets are just the same.
After more than four years of the
debt crisis and over a decade of equi-
ties failing to reach previous highs,
people like me just want a bit of sta-
bility somewhere in their lives – bor-
ing is good for the soul or at least
your sanity.
Steve Sedgwick is an anchor for
Squawkbox Europe on CNBC
MONDAY 11 JUNE 2012
cityam.com
18
NEWS
CNBC
COLUMN
STEVE SEDGWICK
Why a bit of risk-free investing can soothe the soul
FINANCIAL services firms are making
more effort than ever before to pro-
mote gender diversity, yet two thirds
of women working in financial servic-
es still say their gender makes it hard-
er for them to succeed, new research
reveals.
The annual Women in Finance sur-
vey from Financial News, published
today, shows that of the 650 women
questioned, 66 per cent said their gen-
der had a bearing on the likelihood of
them having a successful career.
Some 61 per cent said they needed to
work harder than their male counter-
parts in order to be viewed at the same
level of achievement by their man-
agers, and more than half (52 per cent)
said they felt they had suffered gender
discrimination in their workplace.
Lord Davies of Abersoch, who
launched a review in February last
year to promote greater gender diversi-
ty in the boardroom, said companies
should aim for their boards to be at
least 25 per cent female by 2015.
At the time, 12.5 per cent of board-
level positions at FTSE 100 companies
were held by females. A recent report
by Cranfield school of management
found that women now occupy 16 per
cent – still significantly below the tar-
get – while 11 FTSE 100 firm still do
not have any women on their boards.
Financial News’ survey – which also
encompasses women at firms across
Europe and the US – said there is evi-
dence that financial services compa-
nies are working harder to address
gender diversity at board level.
More than half (56 per cent) of
respondents said their company had
women on their board, up from 44 per
cent last year, while 17 per cent said
their firm had launched initiatives to
increase female representation at
board level, up from 14 per cent last
year.
“While top-level management is
largely convinced that change is neces-
sary, more work needs to be done to
ensure the message is reaching down
through all levels of management”,
said Yasmine Chinwala, executive of
special reports for Financial News.
“Companies and managers have to
work out why gender diversity is bene-
ficial for their business, rather than it
simply being the right thing to do
politically.”
Nearly two-thirds of women sur-
veyed were not in favour of legislated
quotas when it came to pay, but 87 per
cent overwhelmingly said govern-
ments should compel companies to
conduct equal pay audits.
Gender is still a
barrier to jobs
BY KASMIRA JEFFORD
An example of what the junction at High Holborn would look like after construction,
with the island removed and replaced with a new direct pedestrian crossing
Sir Terry Farrell’s plans focus on reducing congestion and making pedestrian crossings
easier, for example at the junction of High Holborn and New Oxford Street
A SHIPMENT of magazines hits the
virtual shelves of Britain today as
French newsstand app Lekiosk
crosses the Channel.
The digital magazine app allows
users to browse titles on a rotating
3D-rendered newsstand and buy
either individual publications or
subscribe to a monthly bundle.
The highest grossing iPad app in
France enters the UK with around
100 titles from publishing giants
the BBC and Conde Nast – the
group behind Vogue, GQ and
Vanity Fair – as well Maxim and
The Week publisher Dennis, and
IPC Media, the company behind
Nuts and Marie Claire.
Lekiosk co-founder Michael
Philippe said: “The magazine indus-
try is undergoing the same shift we
saw in the music industry a few
years ago – tomorrow’s magazine
consumers are going to be doing
their reading on tablet screens.”
Philippe, 25, who launched the
app with three friends while at uni-
versity, told City A.M., “We are really
excited to launch in the UK – it’s
the perfect market for us because
the iPad penetration is so high.
There are only 1.5m iPads in
France, but 5m in the UK.”
Already gracing the screens of
one in four iPads in France, Lekiosk
is set for success on British shores if
it can capitalise on a declining
print magazine market.
YouGov research commissioned
by Lekiosk shows that 38 per cent
of Brits read fewer magazines today
than they did at the start of the
recession – 70 per cent of which
cite the cost of magazines.
So Lekiosk’s app, which sells digi-
tal versions of the printed maga-
zines at a lower cost, is well placed
to fill the gap.
Launching in iOS format in the
UK today, the newsstand app –
dubbed by Philippe as the “Netflix
of magazines” – is preparing for a
UK release on Android later this
year, before expanding to Italy in
the autumn.
Top French app opens
a newsstand in Britain
BY LAUREN DAVIDSON
Ari Assuied, Robin Sabban, Michael Philippe and Nathaniel Philippe founded digital magazine app Lekiosk in 2007
Subway heats up fight to toast the pasty tax
MONDAY 11 JUNE 2012
19
NEWS
cityam.com
THEFORUM
cityam.com/forum
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JOIN THE DEBATE PAGES 26-27
SANDWICH chain Subway has
launched a campaign to fight the
chancellor’s decision to leave a
new tax on hot sandwiches even
after he scrapped it on pasties and
hot pies.
The company, which franchises
outlets, thinks the new tax is
unfair and will harm its business.
Trevor Haynes, area development
manager for Subway UK & Ireland,
said: “Franchisees have the full
backing of the Subway brand and
we’re committed to helping them
make their case. It’s time to toast
the tax!”
As part of the campaign more
than 1,400 Subway franchisees are
encouraging people on Twitter and
Facebook to sign an e-petition to
keep their food VAT free.
Steve Marinker, a Subway
spokesperson, said: “We are willing
to keep on with the campaign until
we get heard by the government.”
Chancellor George Osborne aban-
doned the pasty tax at the end of
last month because, he said, it
would be too complex and too cost-
ly to introduce. He faced opposition
from Greggs, the bakery chain.
BY LISA MORAVEC
MONDAY 11 JUNE 2012
20
NEWS
cityam.com
BUSINESS HAS SUFFERED A SERIOUS BLOW.
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of the solution, take the first step by earning your FRM certification. Visit the
Global Association of Risk Professionals (GARP) at garp.org/frm.
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CATEGORY
2
3
IN ASSOCIATION with Repskan.com,
City A.M. is measuring the relative Olympic
media buzz around the London 2012 Olympic
and Paralympic Games partners, week by
week. The leaderboard, right, reflects their
ranking over the past week, in this case from
Wednesday 24 May to Wednesday 7 June.
Omega, the official timekeeper of London
2012, aired its TV advert on YouTube last
week. It was well received, with over 55,000
views since its launch and a positive
response on social media channels. Using the
Rolling Stones track Start Me Up as its
inspiration, the firm is encouraging Twitter
users to use the hashtag #startmeup. This
was initially successful, but interest has
steadily dropped off. While rarely in the top
five of our rankings, Omega performs well
considering the size of the companies it is
competing against.
DASHBOARD CITY
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
Vestra Wealth Management
David Campbell (right) has
been appointed managing
partner at the London and
Jersey-based wealth
management firm. He was
most recently at Deutsche
Bank, where he ran its UK
private wealth management
division. Campbell also served
as managing director and head
of fixed income at both JP
Morgan and Deutsche Bank.
M&G Investments
Michelle Scrimgeour has been
appointed group risk director at
M&G Investments, sponsor of the
Chelsea Flower Show. Scrimgeour
has 25 years of experience in fund
management, gained at the
group now known as BlackRock.
She was most recently co-head of
fixed income business
management, and has also
served as chief operating officer
for international fixed income.
DKLM
The boutique City law firm has
appointed Philip Henson as a partner
and joint head of its employment law
team. He was previously partner at
Bargate Murray. Henson covers all areas
of contentious and non-contentious
employment law and is a regular
media commentator on employment
matters. He is a fellow of the Royal
Society for the Encouragement
of Arts, Manufactures and
Commerce.
Marlin
Ken Stannard has been made chief
executive of the consumer debt
purchase and management firm. He
joins from Lloyds Banking Group,
where he was director of credit cards.
Stannard also spent seven years with
Capital One, reaching the position of
managing director of its UK credit card
business, and has served in senior
positions at American Express, and
Mercer Management Consulting, based
in London and Munich.
BlackRock
Mark Howard-Johnson has been
appointed global head of real estate
securities management at BlackRock.
He was most recently chief investment
officer at Building & Land Technology,
where he launched its real estate
securities management effort. Howard-
Johnson has also served in senior roles
at Goldman Sachs Asset Management.
Michelmores
The London-based firm of solicitors
has elevated two to its partnership.
Annelie Carver is head of its leisure and
tourism group. She specialises in
business sales and purchases. Philip
Ryley heads Michelmores’s financial
services and markets practice. His
focus is on troubleshooting FSA
regulatory issues.
WHO’S SWITCHING JOBS Edited by Tom Welsh
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Shore Capital rates the retailer “hold”
with a target price of 288p ahead of the
firm’s first quarter trading statement on
Wednesday. The update will provide the
first glimpse of how the big supermarkets
fared during the Diamond Jubilee, and the
broker suggests that the wet weather
could have dampened the expected sales
boost. Shore expects like-for-like sales
growth to slide to one to 1.5 per cent,
excluding fuel.
LONDONREPORT
T
HE week starts with a quarterly
trading statement from grocer
Tesco, which is expected to
report a fall in earnings
because of tough economic
conditions and fierce competition.
Tomorrow will see the release of
the UK’s latest industrial production
and manufacturing data, plus a
speech from Paul Tucker, deputy gov-
ernor of the Bank of England.
Economists expect the Office for
National Statistics to announce man-
ufacturing output has grown by 0.1
per cent in April, following a 0.9 per
cent rise in March. They predict a 0.2
per cent rise for broader industrial
production, following a 0.3 per cent
fall in March.
On Wednesday, advertising giant
WPP will give a trading update and
hold its annual general meeting. The
pay of chief executive Sir Martin
Sorrell is likely to prove a fiery topic,
with shareholders opposing his
£13m pay deal.
Also on Wednesday, supermarket J
Sainsbury will give its first quarter
update, with figures for the period
to 9 June revealing whether sales of
Jubilee-inspired bunting and paper
plates compensated for April’s dis-
mal weather.
On Thursday Carphone
Warehouse will post its annual
results. Analysts forecast its pre-tax
profits to have slipped slightly to
£53m for the year ending March
FTSE
5,500
5,450
5,400
5,350
5,250
5,300
31May 1Jun 6Jun 7Jun 8Jun
5,435.08
8 Jun
2012 from £54m last year.
Haulage company Wincanton will
also release annual figures, with ana-
lysts forecasting revenue to fall from
£2.18bn to £1.26bn for the year to 31
March.
In the evening, Bank of England
governor Sir Mervyn King and chan-
cellor George Osborne will speak at
the annual Mansion House dinner.
So far, no policy announcements
have been trailed.
Thursday is also a busy day for
AGMs, with WM Morrison,
Kingfisher and M&C Saatchi among
the meetings.
The Eurozone’s debt dilemma has
been heated up by the €100bn
(£80bn) loan given to Spanish
banks – and European markets are
likely to see at least a temporary
boost this week.
Tesco and Sainsbury’s update as
WPP faces a shareholder spring
LLOYDS BANKING GROUP
Liberum Capital has started covering the
bank with a speculative “buy” rating and
a target price of 29p. The broker has
initiated coverage of a number of UK
banks, pointing out that due to the
instability in the Eurozone the likes of
Lloyds, Barclays and RBS are currently un-
investable. These banks’ exposures to the
struggle PIIGS nations are beyond their
entire market caps, Liberum warns.
CHIME COMMUNICATIONS
Canaccord Genuity rates the media group
“buy” but has cut its target price to 205p
following the sale of Bell Pottinger for a
bigger-than-expected price tag of
£19.6m. The broker has lowered its
forecasts for earnings before tax and
interest by £3m to reflect the disposal, but
expects the firm to use the proceeds of
the sale to snap up other companies to
bump up its earnings beyond these
forecasts.
US stocks set
to be lifted by
Spain’s bailout
U
S stocks will get a lift today
after Eurozone finance
ministers agreed to lend
Spain up to €100bn (£80.8bn)
to help its battered banks.
The surprisingly large amount of
aid removes a huge cloud that has
been hanging over financial mar-
kets, with investors fearing that a
banking crisis in the Eurozone’s
fourth-largest economy could have
compounded the currency bloc’s
troubles with Greece.
Though the exact amount to be
lent will be decided in just over a
week, striking a deal now means
Spain has added support in case
Greece’s June 17 elections throw
financial markets into a tailspin.
US stocks are coming off their best
week of 2012, in large part due to
expectations that something would
be done for Spain’s banks.
For Wall Street, anything that
diminishes fears over Europe is wel-
come news. The broad S&P 500
index fell 6.3 per cent in May, its
largest percentage drop since
September, as the Eurozone debt
crisis worsened.
THE
WEEK AHEAD
T
HE blond haired, middle-
aged PR guru slouched back
in his armchair and
confidently announced his
“stunning” idea to me. The
little girl, Madeleine, had recently
disappeared in Portugal and there
was massive public sympathy and
frenzied press coverage. To my
sensitive agent, struggling to justify
his hefty monthly fees, this
represented a fantastic
opportunity. “A major newspaper is
looking for 10 wealthy people to
each contribute equally towards a
£1m reward for information
leading to Madeleine’s recovery. I
think you, Richard, should just
offer the whole £1m. You’ll be a
national hero and it will cost you
nothing, of course. They’re not
going to find her anyway”. Like any
normal human being, I was
repulsed at the idea of benefitting
from others’ misery. My response
was to politely terminate his
services.
Why had I hired him anyway?
From experiences like this, I’ve
become sceptical of these expensive
experts and found that, like many
business skills, you learn most by
watching others in action.
Marketing is all around us, it’s very
hit and miss, and it’s fascinating.
Sometimes, simple ideas are
clever, such as Apple’s choice of
white, Nike’s swish of a logo,
or even a name: “Nikki Beach”
(which is a restaurant/bar
venue in the south of France
that has a pool but no beach).
Sometimes there’s controversy.
French Connection scored a
coup in the UK with the
inspired branding “FCUK”,
making us all think for a
moment that we’re dyslexic.
On the other hand, a pest
control company in
Australia, Flick, shied
away from a similar
opportunity when it
advertised on motorway billboards.
For a while they had their name
spelt in big capitals before they
realised what the word looked like
approached from a distance.
They quickly changed it to
inoffensive lower case lettering.
Sometimes though, it is best to
let things be as they may. A
while back, a mate of mine,
Peter, started a chess shop in
central Sydney selling sets and
books. He is incredibly untidy and
there was stuff everywhere. “This
will be a disaster if you don’t tidy
it up Pete” we all said, with no
impact. To our surprise,
people loved his shop and
business boomed. I can only
think that customers
assumed a shop that messy
must be the cheapest. They also
liked spending time rummaging
around the disorganised books,
with the joy of discovery being a bit
like a garage sale. “Brilliant
branding Pete.”
To top it all though, the best
marketing stunt I have heard of
was a few years back when a
clairvoyant made worldwide news.
She was suing someone. Nothing
unusual about that, except that the
alleged infringement hadn’t
happened yet: she had “seen” it in
the future.
Since the mid-1990s Richard Farleigh has
operated as a business angel, backing more
early-stage companies than anyone else in
the United Kingdom.
www.farleigh.com
Philip Salter speaks with the man behind an innovative baby and toddler food company
A
NY parent fighting against
the near-impossible battle to
keep their toddler’s diet
healthy will have heard of
Ella’s Kitchen. Gracing the
shelves of the nation’s supermarkets,
Paul Lindley’s gastronomic creations
are a contemporary take on uniform
baby food and a healthy alternative
to sweets for snacking kids.
Lindley claims the success of Ella’s
Kitchen is built upon three pillars.
Firstly, as a former deputy managing
director of Nickelodeon, he is able to
take a child’s perspective: “Although
the parents buy the food, it’s the chil-
dren that spit it out,” he says. Ella’s
Kitchen – named after his daughter,
through whom he saw a gap in the
market – tries to make healthy food
fun. The second pillar is the compa-
ny’s challenging and innovative
approach, exemplified in the original
pouch packaging (which was swiftly
copied by rivals). Despite the copying,
the third pillar gives his business legs
on the competition. Because Ella’s
Kitchen is built around a real fami-
ly – Ella’s face adorns the market-
ing – the brand is trusted. He
explains that in the past baby food
was packaged and marketed in a
unvarying style to exemplify safety.
He noticed that the world had moved
on and there was a gap in the market
for a premium-brand children’s food
that broke the mould.
Lindley’s first career was as a KPMG
accountant. As such, when starting
out he could get to grips with the
financial side of running a business
with relative ease. He knew that
“growing too fast can be dangerous
because you can easily run out of
cash.” He says besides having a really
bad idea, the greatest cause of failure
is being unable to manage the cash
cycle. Ella’s Kitchen has grown at
breakneck speed, so Lindley has used
invoice financing to keep it cash rich.
The big break for Lindley came in
getting his products into supermar-
kets, but he admits “it’s very difficult
to meet the right person and getting
your foot in the door requires tenaci-
ty.” Once you get that meeting, he
advises that in the hour you have to
pitch your idea “make sure they
remember you”. He ponders on the
fact that if he hadn’t been successful
Ella’s Kitchen has been
cooking on all cylinders
W
HILE the Eurozone crumbles
around us, businesses and
entrepreneurs are working hard
to build upon the shifting rubble.
Here is snapshot of their latest activities:
n
The 2012 Smarta 100 competition
launches today. It’s a celebration of the
most exciting and disruptive small
businesses, with a cash prize of £10,000
for the overall winner. The awards are
designed to be a pulse-check of the 100
businesses that are growing, innovating
and disrupting their respective
industries. www.smarta.com/100
n
Also today, Axa Business Insurance
launches Business Guardian Angel, a
website designed to help support,
protect and nurture start-ups. Partnered
with Business Link and Start Up Britain,
it offers practical advice and free
business tools. A competition to win free
one-day business consultations is up for
grabs.
www.businessguardianangel.com
n
Innotribe is holding the European leg of
its annual financial technology Startup
Challenge in Belfast on 14 June. Semi-
finalists of the Belfast Innotribe Startup
Challenge will pitch their innovative
business ideas to a panel of the financial
industry’s leading angels, VCs and
decision makers. The winners will go on
to compete against the winners from
New York and Singapore for the
$50,000 prize at Sibos in October.
www.innotribestartup.com
n
StartUp Britain, the national campaign
set up by entrepreneurs for
entrepreneurs to stimulate start-up
growth in the UK, has appointed serial
entrepreneur Luke Johnson as chairman.
StartUp Britain has recently launched
StartUp Spaces – an online tool that
matches empty spaces with start-ups
looking for hot desks.
www.startupbritain.org/spaces
Twitter: @Philip_Salter
Companyname: Ella’s Kitchen
Companyturnover: £44m
Jobtitle: Founder, CEO and Ella’s Dad
Age: 45
Born: Sheffield
Lives: Reading, Berkshire
Studied: Economics and Politics,
University of Bristol
Drinking: Can’t beat a good red wine
Motto: “Learn from the past, plan for
the future, but always live for
today.”
Heroes: Robert Kennedy and Nelson
Mandela
Awards: 2011 Entrepreneur of the
Year, National Business Awards.
2011 Business Person of the Year,
Oxfordshire Business Awards.
Entrepreneur of the Year for the
South, EY Entrepreneur of the Year
Awards, 2010 Food & Drink
Brand of the Year,
Grocer Gold Awards, 2011
International Business of the Year,
Growing Business Awards. And on
Wednesday, finalist for the Exporter
of the Year, Grocer Gold Award (fin-
gers crossed).
First ambition: To farm coffee in Africa
Paul Lindley knows the sweet taste of success
ENTREPRENEURS
24
Good marketing can be as impossible as trying to read minds
PAUL LINDLEY
at this, Ella’s Kitchen would not be
here today.
As well as taking UK supermarkets
by storm, Ella’s Kitchen has an inter-
national presence: Sweden; Norway;
the Baltic region; the US; Australia;
the Middle East. Lindley thinks “peo-
ple around the world are more simi-
lar than they are different”, so sees
no reason this international growth
needs to slow. His aim is for Ella’s
Kitchen to become “the first global
premium-brand children’s food.”
Ella’s Kitchen wasn’t Lindley’s first
idea for a business, but he certainly
chose the right one in which to invest
his time and money. Plenty of people
are tempted to start a business based
on experiences in their daily lives; few
remortgage their home, as Lindley
did, and actually do it. He was driven
by the thought of his future self look-
ing back and regretting the decision
not to take the risk. For Lindley there
was no choice: failure appeared better
than not trying. Now that’s certainly
food for thought.
CV
Smarta businesses
could win £10,000
MONDAY 11 JUNE 2012
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RICHARD FARLEIGH
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D
URING my travels as Lord
Mayor, I have sampled many
cocktails at home and
abroad. During my recent
business mission to the Far
East, I had a particularly fine one –
a bright concoction known as the
Singapore Sling, offered to me in
the place where it was first mixed.
It represents globalisation in a
glass: London Dry Gin meets
pineapple from Brazil, lime from
the Middle East, bitters from
Trinidad and Tobago and cherry
liqueur from Denmark, all shaken
with a touch of Cointreau and
Benedictine from France.
The Sling shows the international
character of Singapore. It is a
remarkable concoction. But I see
T
HE EUROZONE crisis is like a
tragic opera: a torturous tale
in which half the cast will be
dead by the intermission. Of
the Eurozone’s 17 characters,
12 are in recession, while all are
banking on Germany to play the
hero and keep the whole racket
going. Monetarists and Keynesians
disagree on how to return to
prosperity, as the average European
citizen becomes separated from a
performance with seemingly no
beginning, middle or end – only
endless noise.
The show must not go on. It’s time
to stop the madness and face up to
the fact that the “men from the gov-
ernment” can’t help Europe. It’s
going to come down to the business
people, the entrepreneurs, to
take back their countries. Civic soci-
ety must not just be an extension of
the state.
Look at the situation in Britain.
We’ve plunged into the first double-
dip recession since 1975 and we’re
enduring our longest economic
slump for a century. If we keep
LONDON CITY TO A
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cityam.com/forum
Government must
start by cutting the red
tape that is tying 4.8m
small firms in knots
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26
MONDAY 11 JUNE 2012
JULIE MEYER
Get out the way: Small firms must
be allowed to return UK to growth
doing what we’ve done, we’ll get
more of what we’ve got – sluggish
growth and high youth unemploy-
ment.
If the chancellor is really serious
about creating growth and kick-
starting the economy, then he needs
to be transparent about the num-
bers and create the right conditions
for growth.
Creating the conditions for growth
means freeing up people to create
their own jobs. Notice how industri-
ous people are in the developing
world. People in low-income fami-
lies in countries outside of the G7
typically hold down several jobs – a
mix of informal roles, trading rela-
tionships and running small busi-
nesses that they have set up. I’m
continually impressed with people
from Eastern European countries
who know how to work hard. They
outperform their Western European
counterparts in their drive to get
ahead.
Britain’s government needs to put
power in the hands of entrepre-
neurs and individual capitalists. It
can start by cutting the oppressive
red tape that is tying the country’s
4.8m small to medium-sized enter-
prises in knots. It could remove
statutory PAYE and National
Insurance contributions for compa-
nies under three years old. And it
could abolish IR35, the punitive and
complicated tax code that is
designed to catch “disguised
employees”.
Until a microfirm (cake-baking,
cleaning, sewing, child-minding) is
making more than £100,000, we
should release them from 75 per
cent of regulation to help them get
their business going. We should cre-
ate no-fault dismissals in companies
so that, when a new hire just does-
n’t work out, both parties can shake
hands and part without spending
time (or money) in an employment
tribunal.
In my new book, Welcome to
Entrepreneur Country, I argue that
the government needs to lift the tax
burden from the “Davids” – the vital
six per cent of small but high-
growth businesses currently creat-
ing 54 per cent of all new jobs – and
enforce the tax code on the
“Goliaths”, the large corporates.
Companies like Goldman Sachs and
Vodafone cut deals with HMRC, but
small to medium-sized enterprises
don’t have that kind of clout.
Google, which uses a complicated
structure to send most of its over-
seas profits to tax havens, paid just
£8m of corporation tax in Britain,
despite making more than £6bn in
revenues in this country in the six
years to 2010. If that was really the
legal minimum that Google had to
pay, then someone is not thinking
through the tax framework very
well. I’m not playing Robin Hood,
I’m trying to align incentives and to
look at the facts: small business
indirectly subsidises big business.
The role of government is not to
dither and bicker about the
Eurozone. It’s not to act as a kind of
feudal landlord that takes our
money, no questions asked. It’s not
to infantalise us. The role of govern-
ment is to shape an environment
that fosters and speeds innovation,
enabling new industries and mar-
kets to emerge. Economics must be
in the driver seat, not politics.
When power devolves, progress
soars. It’s time to trust the people.
Julie Meyer is chief executive of Ariadne
Capital and author of Welcome To
Entrepreneur Country (Constable, £12.99).
the City of London as shaken not
stirred.
I have seen great goodwill
towards the City and UK business
across the world: we still have a
strong reputation for reliability and
quality. I am optimistic about the
potential for the City and the UK,
and optimistic about the strength
of the financial services industry
and its role in supporting the wider
economy.
I promote the City in my travels
around the world. But I’m also
spending much more time than I
expected on our expertise in
infrastructure – design,
engineering, project management,
construction, as well as financing –
and on UK manufacturing. We are
still, after all, the sixth largest
manufacturing country by value in
the world. Throughout the UK, I
have seen very high quality, world-
beating, innovative businesses,
some big, some small, but all doing
well, with good products, good
staff, good penetration and no
difficulty in getting funding.
But my sense is also that the
world is becoming more global and
less global at the same time. We are
seeing new and newly powerful
groupings: the Association of
Southeast Asian Nations (ASEAN),
the Arc of the Pacific, the
TransPacific Partnership, countries
in East Africa, North Africa and
Turkey. The challenge, and the
opportunity, for British business is
to pursue these new channels to do
business either bilaterally – for
instance between the UK and
Singapore – or to team up with
smaller countries to do business in
a bigger one. The UK might team up
with Singapore to do business in
China.
So we must maximise these
opportunities, not least by working
closely with the government to
guarantee the stability,
predictability and clarity that
business needs and that will
continue to attract international
business to London.
Next week, I will host the
chancellor and the governor of the
Bank of England at Mansion House
for the annual dinner for the
bankers and merchants of the City
of London. I will commit to work
closely with government to deliver
a stable and secure banking system,
one that retains our international
competitiveness and supports the
wider economy in creating jobs and
growth.
David Wootton is Lord Mayor of the
City of London.
CITY
MATTERS
DAVID WOOTTON
The City’s success needs a cocktail of local stability and global enterprise
AMSTERDAM
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27
Generation gap
[Re: We have no obligations to future
generations: They’ll be better-off than us,
Wednesday]
This is the first Jamie Whyte column with
which I disagree. Just because a distant
ancestor has performed some task that
benefits me, centuries on, I owe nothing to
him or her. If, for my own benefit, I
resurfaced the street where Whyte now
lives, years before he moved in, could I now
go round to his house and demand money
for it? A libertarian should reject any
economic relationship that is not based on
free agreement between parties. Further, if
we borrow any amount and bill future
generations, assuming they could pay, it’s
possible our assumption will be wrong.
EdwardHarris
Intelligent product
[Re: Should we trust social networking
companies to protect online privacy, Friday]
Nick Pickles should worry less about
company intrusion and more about
interference by the government. Private
companies appeal to us through the value
they offer us – social interaction in this case
– but governments coerce us through fear
of force. In exchange for the value of their
products, I’m happy that my bank knows
my address and date of birth, that Facebook
knows my relationship status, and that my
mobile phone provider can work out where I
am. This information allows them to make
their products better for me. Pickles should
stop telling us we’re not informed enough
to decide this for ourselves.
AndrewBates
TOP TWEETS
Politicians and central bankers have no cure
to the Eurozone crisis – only painkillers.
@lexvandam
QE is useful as an emergency measure in
deep crisis, as in 2009, but not for routine
monetary management.
@asentance
Every atrocity in Syria is another reminder of
how the UN Security Council has failed so
systemically.
@rezaaslan
David Cameron: “I’ll protect the UK from an
EU superstate.” Like he promised a
referendum on the Lisbon Treaty?
@RogerHelmerMEP
As Syria nears civil war, has the Arab Spring
proven a general success across the region?
YES
The idea that the Arab Spring has become an Arab Winter
reveals more about Western prejudices than about reality in the
Middle East. Many say the upheaval was more akin to Iran 1979
than France 1789, with Islamists rising. Yet if Islamists are doing
well, it is by default a result of the fact that the Arab world
doesn’t yet have serious political parties people can support.
Communities who loudly refused to be ruled by political
authoritarians are highly unlikely to now accept being repressed
by Islamists. As we’ve seen in Egypt, protesters are as willing to
defy mullahs as they are Mubarak. Great gains have been made
in the Arab world: political prisoners freed, parties unbanned,
rights for women. Most importantly, Arabs have tasted their
own power. Let them now wield it against anyone crazy enough
to try to repress them again.
Brendan O’Neill is editor of spiked.
Brendan O’Neill
NO
Michael Stephens
The Arab Spring has been a moderate success. Perhaps of greatest
import was the shattering of long-standing myths concerning
incapable, lethargic Arabs, unfit for anything other than autocratic
rule and domination by dictatorship. Ideas, spread principally via
the internet have taken root, and these can never be extinguished.
Fighting for karama (dignity) was the driver of the revolutions, but
the influence of external powers has determined the course of the
Arab Spring. The removal of Western support from Tunisia’s Ben Ali,
Egypt’s Mubarak and NATO operations in Libya ensured the fall of
those men. But in Syria and Bahrain, where external powers have
backed regimes, both Assad and Al Khalifa still govern over deeply
fractured populations. The Arab world will never go back to the old
order, but it will not be a uniform change. While some countries will
obtain freedom, others may become more oppressive.
Michael Stephens is a Qatar-based researcher for the RUSI.
RAPIDresponses
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S
HAREHOLDER activism is
one of this year’s biggest
business stories, as the
recent public disputes over
executive pay attest. But this
is just the beginning. The
conditions are ripe for the
shareholder spring to turn into an
activist autumn.
Where does shareholder activism
go from here? The debate on execu-
tive pay will now focus on new legis-
lation proposed in the Queen’s
Speech, which will give sharehold-
ers greater powers in the “say on
pay”. Social and governance activists
have led the debate so far. Notching
up significant minority votes
against executive pay packages has
been a successful way of expressing
disquiet, but it has failed to deliver a
constructive engagement with man-
agement. Those companies that
have suffered at the hands of share-
holder activists have changed very
little – only the identity of their
chief executive.
A more interesting consequence of
the shareholder spring is if it leads
to an acceptance of the kind of
investor who takes stakes in compa-
nies to agitate for change (in order
to increase share prices). These
activists are often been referred to as
being short-termist, self-serving or
even asset strippers – yet is this the
type of investor that many firms
need?
One could argue public relation-
ships between management and
institutional investors have not been
critical enough. Large institutions
have been pressuring directors to
curb excessive pay, in private, for a
long time, but it has only had an
impact once that pressure has been
made public.
Shareholders must consider
becoming more adversarial, emulat-
ing parliament and the law courts.
Where relationships are conducted
outside public scrutiny, there is a
greater risk of private influence suf-
focating public accountability.
The foundations laid in the share-
holder spring create a unique oppor-
tunity for activists to force
engagement and achieve their goals.
UK company legislation provides the
mechanics for relatively small
groups of shareholders to requisi-
tion shareholder resolutions and
require companies to present such
resolutions to a meeting of share-
holders. Activists can now also use
the media – and social media – to
promote their agenda.
I also expect that the use of proxy
solicitation techniques by activist
shareholders will become a more
common feature of public company
life in the UK (as it has done in the
US). The shareholder base of US com-
panies may contain a greater num-
ber of non-institutional
shareholders than in the UK, but
recent figures from the Office for
National Statistics suggest that own-
ership of shares in UK-listed compa-
nies by retail investors has increased
since 2008. Retail investors still face
difficulties in exercising votes held
through a broker account but, if this
trend continues, it could provide fer-
tile ground for activists to appeal
directly to ultimate shareholders.
Hold onto your hats. The share-
holder spring could soon make way
for an autumn of activism.
Saul Sender is corporate partner at
Mishcon de Reya.
SAUL SENDER
UK shareholders
are set to rise in
activist autumn
T
O MANY, a report on “treasure”
might not sound intrinsically
financial, conjuring images of
pirates, shipwrecks and chests
stuffed with gold doubloons.
However, owning items that are
financially valuable, emotionally
pleasing and culturally significant is
a timeless tradition that shows no
sign of abating. Treasure assets –
items such as precious jewellery, fine
art, wine, antique furniture, classic
automobiles and precious metals –
make up a sizeable portion of many
investors’ total wealth.
Earlier this year, a version of Edvard
Munch’s The Scream sold for a record
$120m (£78m) at Sotheby’s in New
York, after an auction lasting just 12
minutes. 2011 was the biggest year
ever for sales at art auctions. A paint-
ing by Roy Lichtenstein sold for
almost $40m, after its owner had pur-
chased it 13 years previously for just
$2m. Clearly, the current market for
treasure assets can be a lucrative. But
these are isolated headline-grabbing
examples and achieving genuine
returns from treasure can be very dif-
ficult. The complex rationales behind
owning art, jewellery, wine, or
indeed any such commodity, are
worth scrutinising.
Barclays’ latest Wealth Insights
report, published today, explores the
financial and emotional motivations
for holding treasure assets. A survey
of wealthy individuals worldwide,
coupled with the knowledge of a
number of industry experts, suggests
that despite the appeal of tangible
assets at a time of widespread finan-
cial uncertainty, treasure should pri-
marily be held for the pleasure it
brings.
The report reveals that currently,
wealthy individuals hold an average
of 9.6 per cent of their total net worth
in treasure assets, although in some
countries this share is as high as 18
per cent. Precious jewellery, fine art
and antiques are the most popular
types of treasure held.
ANIMAL HIGH SPIRITS
Is this commitment to the practice of
investing in collectibles driven more
by emotional than financial motiva-
tions? The report reveals that only 18
per cent of treasure assets are held
purely for the financial benefits they
bring, and just 21 per cent are
believed by their owners to provide
security in the event of the failure of
more conventional investments.
Emotional ties to the assets them-
selves are thus shown to be significant
in driving individuals to build col-
lectibles into their portfolios.
These emotional ties that benefit
collectors come in many forms; over
60 per cent of treasure owners said
that they choose to build portfolios of
such assets primarily because they
enjoy owning them. Over a third (37
per cent) collect treasure assets to be
enjoyed by future generations, and 35
per cent say that they are motivated
T
HE rare coin market
encompasses over 2,500 years
of history. It’s dominated by a
backbone of collectors who
offer stability as long-term holders
with a passion for collecting.
Growth is currently coming from
both collectors and investors. It is a
result of a combination of very low
interest rates, extreme volatility
within traditional investment mar-
kets and the desire to physically hold
a tangible asset. Some investors pre-
fer to have a 1,000 year-old rare coin
to owning euros.
In the rare coin market, demand
from wealthy collectors and
investors appears to have exceeded
supply. While there are millions of
collectors globally, it is still a
relatively small market when
compared with the more
traditional forms of investment,
such as equities, property or even
the art market. A small shift by
investors away from traditional
investments to collectibles can give
rise to strong price movements.
One significant advantage that
coins have is that the market is
relatively financially
unsophisticated. There is virtually
no gearing or buying on margin.
Coins are not a short-term
investment; English coins, for
example, are considered a serious
investment, as statistics over the
past 15 years show top quality
English rarities rose on average by
11 per cent per year. Rare coins are
a valid part of a portfolio for an
investor looking for some form of
diversification, they are not for an
investor looking for a position in
gold, silver, copper or bronze.
Although a rise in the underlying
commodity price can do no harm
towards sentiment.
Prospective investors should
consider where the economy is
English Coin Performance by category
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
2
2
0
1
1
500
600
700 %
300
400
100
200
%
Silver
Copper / Bronze / Tin
All coins
Gold
MONDAY 11 JUNE 2012
28
cityam.com
PERSONAL FINANCE MANAGEMENT WEALTH
strong and has potential for further
growth. As wealth increases citizens
tend to look to collectibles, which
leads to a repatriation of their
heritage – a phenomenon seen in
Russia, China and India recently.
Collectible coins are under-
promoted, under-researched and
under the radar. Consequently, they
appear to be decades behind the art
market, where one evening of
contemporary art sales at a large
auction house is more than the UK
coin market turns over in a year.
But things are certainly beginning
to change. Coins are starting to be
considered as another form of art.
And those that have held in their
hand a gold Stater struck during
the reign of Alexander the Great, or
a gold Aureus with the portrait of
Hadrian, know that these coins are
not only a rare piece of history but
also a work of art.
Ian Goldbart is managing director of
Noble Investments.
INVESTMENT
COMMENT
IAN GOLDBART
by collecting artefacts which are part
of their heritage or culture. Other
emotional factors motivating the pur-
chase of treasure assets include an
enjoyment of sharing them with
friends and a desire to show off.
LONDON LOVES
In London, the motivations behind
owning treasure are particularly
strongly based on emotion. Treasure
holders here say 72 per cent of their
treasure is held purely for enjoyment,
with the highest percentage of any UK
region (31 per cent) citing a desire to
share treasure with friends as a moti-
vating factor. 39 per cent of treasure is
held for cultural reasons in the capi-
tal, with just 13 per cent of treasure
asset holdings motivated by purely
financial considerations.
When significant emotional motiva-
tions exist for holding treasure assets,
the utility derived from owning the
piece may outweigh any financial per-
ils. For individuals who invest in col-
lectibles for primarily financial
reasons, the reasoning rarely stacks
up. Investing in treasure is highly
risky, with assets often laborious and
expensive to sell. Transaction costs at
auction houses tend to be high, espe-
cially when buying. Insurance and
storage of assets can also be expensive,
and authenticity must be constantly
and vigilantly considered.
Cognitive biases can cloud decision-
making in all investment situations,
and this risk is heightened in the case
of treasure, due to the emotional
allure of the assets. Treasure assets
may give you a financial return, but
buy something you enjoy and it will
always give you an emotional return.
Dr Greg B. Davies is head of behavioural
finance at the Wealth and Investment
Management division of Barclays.
To read more about the latest Barclays
Wealth Insights report, visit
www.barclays.com/insights
INVESTMENT
COMMENT
GREG B. DAVIES
Hunt for treasure you enjoy – at
least you’ll get emotional returns
The case for investing in the artistry of rare gold coins
MOTIVATIONS FOR OWNING TREASURE Percentage of treasure held for enjoyment
38% Qatar
TOP MOTIVATIONS
Financial security / Heirloom/ Enjoyment
75% U.A.E
TOP MOTIVATIONS
Enjoyment / Heirloom/ Culture
36% Saudi Arabi
TOP MOTIVATIONS
Pure investment / Showoff / Sharing
53% Japan
TOP MOTIVATIONS
Enjoyment / Heirloom/ Culture
52% China
TOP MOTIVATIONS
Enjoyment / Heirloom/ Culture
68% India
TOP MOTIVATIONS
Showoff / Pure investment / Earn respect
67% Hong Kong
TOP MOTIVATIONS
Enjoyment / Sharing / Rareness
63% Singapore
TOP MOTIVATIONS
Enjoyment / Showoff / Heirloom
57% Ireland
TOP MOTIVATIONS
Enjoyment / Culture / Heirloom
69% U.K.
TOP MOTIVATIONS
Enjoyment / Culture / Heirloom
60% SWITZERLAND
TOP MOTIVATIONS
Enjoyment / Culture / Heirloom
79% Monaco
TOP MOTIVATIONS
Enjoyment / Heirloom/ Monopolisation
53% Spain
TOP MOTIVATIONS
Enjoyment / Culture / Heirloom
39% Brazil
TOP MOTIVATIONS
Enjoyment / Culture / Sharing
69% South Africa
TOP MOTIVATIONS
Enjoyment / Heirloom/ Showoff
63% U.S.
TOP MOTIVATIONS
Enjoyment / Heirloom/ Culture
54% Mexico
TOP MOTIVATIONS
Culture / Enjoyment / Heirloom
Source: Noble Investments
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LIFE&STYLE
MONDAY 11 JUNE 2012
30
cityam.com
TRAVEL
L
EAVINGthe glamorous glitzy Big
Apple on a big glitzy ship felt
right. Berthed in the Brooklyn
Cruise Terminal, the sharp-
prowed Queen Mary 2 looked both
huge and majestic. On our taxi ride to
the terminal our driver bypassed the
anti-capitalist demonstrators in Wall
Street, so named for the barrier the
Dutch built in the 17th century to
keep the British out. It didn’t. They
came by sea and made the Dutch an
offer they couldn’t refuse – they could
stay to trade so long as they
surrendered sovereignty. The British
navy departed long ago but, towering
200 feet above the dock, the QM2
doesn’t look a ship to be trifled with
either.
As dusk descended and Manhattan
lit up, the QM2 nosed out to begin her
voyage of over 3,000 nautical miles to
Southampton. Standing on the upper
deck, champagne in hand and necks
craning skywards, we passed beneath
the Verrazano-Narrows Bridge –
named after the Italian explorer who
in 1524 became the first European to
sight Manhattan and admire the bay’s
“commodiousness and beauty”. The
clearance between the bridge and the
ship’s giant red and black funnel is a
mere nine feet and for a few moments
the passage looks physically impossi-
ble. So we gave a collective gasp of
relief as, to a blast of the ship’s whistle
that must have startled drivers on the
bridge above, we glided safely under-
neath.
From the moment of boarding, you
sense that the QM2 is about tradition.
The pillared, double-tiered, candle-lit
Britannia Restaurant deliberately
recalls the great liners of a century ago.
I wouldn’t have been surprised to see
Leonardo di Caprio and Kate Winslet
canoodling beneath its barrel vaulted
stained glass ceiling. So it was apt that
on our second night we passed 80 nau-
tical miles south of the Titanic’s rest-
ing place in the chilly waters near the
Grand Banks.
The QM2 is definitely for those who
enjoy putting on the Ritz. Four of the
seven evenings aboard were “formal”
when those who wished – and nearly
everyone did – put on evening dress.
There were also two themed grand
balls – a Black and White ball and an
Ascot ball. Daytime classes help hone
your waltzing and fox-trotting skills. I
preferred to loll in one of the outdoor
hot tubs and watch the clouds scud
overhead. Even though it was
November and mid-Atlantic, the air
was warm and the seas calm.
Shipboard exhibits trace Cunard’s
history from 1840 when Samuel
Cunard established the first scheduled
Atlantic steamship service. The early
Cunarders took 13 days to cross and
were far from luxurious. Charles
Dickens who travelled aboard the
Britannia in 1842 called his cabin “an
utterly impracticable, throughly hope-
less, and profoundly preposterous
box”, moaning that only a coffin
would be a smaller place to sleep and
that he was “not ill, but going to be”.
The display also conjures later more
luxurious vessels like the original
Queen Mary, which made her maiden
voyage in 1936, a year which, I discov-
ered, also saw the launch of Dom
Perignon Champagne, Life Magazine
and Mars Bars.
There’s plenty of information too for
techies, such as the fact that building
the QM2 took nearly 1,000 miles of
welding. The most intriguing weld is of
the two coins secured to the mast – a
tradition dating from Roman times.
The ship’s four pods – like enormous
outboard motors – both propel and
steer the ship and are the most power-
ful yet built. Two of them can turn
through 360 degrees allowing the ship
to manoeuvre into port without a
flotilla of tugs. But I was most
impressed to read that in a single year
the QM2 gets through enough loo
paper to wrap five times around the
earth.
Other aspects of life board are high-
tech too – like the delectable “molecu-
lar martini”, a concept developed by
the ship’s mixologists. I watched mine
being shaken and then iced with alco-
holic foam. So is watching a film of the
Royal Opera House performing
Carmen in high-definition 3D in the
cinema or lying back in the planetari-
um – the only one at sea – as planets
roll above your head and narrator
Harrison Ford huskily debates the pos-
sibility of life on Mars.
After the freneticism of New York,
whether you’ve been rushing from
shop to shop or from museum to art
gallery, the planetarium is a great
place to relax. So is the Royal Court
Theatre where RADA graduates staged
“Much Ado About Nothing” and
scenes from the Canterbury Tales. For
uber-chilling, the spa staff will cocoon
you in organic seaweed or give you a
“black olive and coffee firming polish”
if you like such things. Other spa exoti-
ca include the Rasul Ceremony during
which you and your partner smear
each other with an array of nutrient
muds from the geysers of Ephesus to
the floodplains of the Indus. I just
enjoyed lazing in the large bubbling
aqua therapy pool.
Out on deck one morning, barking
led me to the kennels where dogs were
going walkies in a special enclosure. I
was told it costs less for your pet to sail
across the Atlantic than to fly. Cunard
has always carried animals, though
some worked their passage. On
Dickens’s ship, guests were requested
not to feed the vessel’s three cats lest
they lost their taste for rats.
Food is a problem – it’s everywhere,
all the time. No amount of hours
pounding treadmills in the gym, walk-
ing the deck – three circuits equal 1.1
miles – or going to pilates classes is
going to help the weak-willed. I decid-
ed not to worry on the basis that seven
nights is only seven nights and I was at
least getting some exercise walking to
and from my stateroom. The long cor-
ridors seem to narrow into infinity and
if you forget something you don’t
return to your stateroom lightly.
Everything is big-scale. Visit the
gleaming stainless steel world of the
ship’s galleys and you’ll never com-
plain about clearing up after a dinner
party again. When the Britannia
Restaurant, the ship’s biggest, is in full
swing, staff handle up to 80,000 items
of crockery, glass and silverware. Even
servicing the smaller venues providing
such grill rooms classics as Dover sole,
lobster, duck a l’orange and crepes
Suzette is an awesome logistical task.
British law forbids weddings in “non-
fixed” locations but before long the
chefs may be coping with wedding
receptions. Among the reasons for the
QM2 soon re-registering from
Southampton to Bermuda is to be able
to hold such ceremonies.
Despite the comfort and luxury, the
greatest magic is simply being at sea.
There’s something quite emotional
about the transatlantic crossing. I felt a
lump in my throat when at around
4pm on the final day we sighted a
green smudge of land – the Lizard –
while the sinking sun glowed golden
in our wake. As the first stars appeared,
the aircraft carrier HMS Illustrious
emerged from the gathering darkness
to sail alongside for a while and the
two vessels saluted one another. QM2
definitely had the greater lung power –
her whistle can be heard ten miles
away. It was an atmospheric way to end
what is still an iconic voyage.
Fares for a seven-night crossing on the
Queen Mary 2 in 2012 start from £949 per
person, including a flight to or from the ship.
Various air/land/sea packages are also avail-
able. Details from www.cunard.co.uk or on
0845 356 5555.
All aboard: the
QM2 does the
Atlantic in style
Champagne, sunbathing and ballroom dancing on the high seas suited Diana Preston down to the ground
The Champagne bar of the QM2
MONDAY 11 JUNE 2012
31
Using the 26 letters of the alphabet, the hotel’s
26 rooms and suites pay homage to a
different star of French and international literature

TRAVEL NOTES
WHAT YOU NEED TO KNOW
The app to take the pain out of holiday planning
A new holiday app promises to take the pain out of planning your trip abroad.
The free Travelex Trip Planner app will work out what you need to book, order
or take in your luggage depending where you decide to visit. As well as advis-
ing on whether you should bother packing an umbrella or a case of sun-block,
require a visa or need vaccinations for your selected destination, the app will
also give information on exchange rates. It will even let you create a list of
things you need to remember to pack to help prevent last-minute panick at the
airport. The Travelex app is currently available on the Apple App store.
Extreme dining, Belgian style
Join the trend for “extreme dining” with a meal at a table suspended 50
metres above the ground. The Brussels version of Dinner in the Sky is running
throughout June, giving 22 diners at a time the chance to enjoy gourmet food
and champagne while suspended near sites such as the Royal Palace, the
famed Atomium or the Cambre forest. Diners are carefully strapped into seats
similar to those on a rollercoaster and hoisted by crane to the dining altitude,
which depends on wind and other weather conditions.
www.dinnerinthesky.com.
Paris’s first literary hotel appeals
to visitors with a taste for letters
T
HE Rue du Faubourg Saint-
Honore is terribly smart. It’s
not showy like the Champs
Elysees or Rue de Rivoli; it’s a
quietly luxurious stretch that’s
home to the Hermes and Lanvin
flagships, Lancome’s headquarters,
the Elysee Paris (the President of
France’s home) and more of this
ilk.
Just off this most iconic and
opulent of Parisian streets sits the
Pavillons des Lettres, on the quiet
Rue des Saussaies. It’s a small but
nearly perfectly formed little five-
star hotel. The owners seem to have
felt it needed a thrusting theme in
order to appeal and they settled on
a nice one: letters and literature.
Using each of the 26 letters of the
alphabet, the 26 rooms and suites
of the hotel pay homage to a
different star of French and
international literature – from
poets to novelists. Decorator Didier
Benderli was brought in to give the
hotel its literary edge without
allowing it to descend into
tackiness – and this he does well.
My room was dedicated to
Cervantes; and there were his
works within, as well as quotes on
the wallpaper.
The lettering of the walls and the
books in the rooms were the main
examples of the “lettres” element
the hotel so prides itself on.
Certainly, there are other reasons
to stay here – though if
spaciousness is what you’re after,
you’re better off with the grander
hotels. No: this is a boutique
writers’ garret, where rooms are
tiny but come with a wonderful
view. In mine, a small desk nudged
against the window with a view of
the Eiffel Tower beyond the roof
tops. A tiny balcony would have
been a wonderful addition had the
weather not been arctic.
The smallness of the place is
particularly evident when you step
out of the lift a few floors up. You
must negotiate single and double
steps in a dark hall before getting
to your room (it could be
dangerous if you were drunk). The
original dimensions give a higgledy
piggledy feeling to the building
that makes the moment you walk
into your room all the more
satisfying.
Breakfast, served in a tiny but
light-filled lounge to the right of
reception, is simple and chic:
pastry, eggs, cold meats, cheese and
coffee. The hotel does not do lunch
or dinner but they were happy for
us to sit with our laptops in the
breakfast area and order coffee
after coffee for hours while using
the hotel’s wifi. It was most
appreciated.
There are amazingly few bells
and whistles here: no spa, no
dinner, no bar. But for a quiet,
comfortable and richly furnished
retreat just off the world’s most
fashionable street, you could do
much worse than opt for this
literary spot.
From €300 per room per night,
based on two sharing. 12 rue des
Saussaies. Tel +33 (0)1 49 24 26 26,
pavillonsdeslettres.com
Zoe Strimpel One of the warmly lit rooms in the boutique Pavillons des Lettres
Relax in sunny luxury in Florence
Escape form the British summer to Florence’s luxury Hotel Brunelleschi, which
has just earned a place on the Great Hotels of the World list. Located in the
centre of Florence's historic district and overlooking Brunelleschi's Cathedral,
Hotel Brunelleschi claims to be the perfect place from which to explore the
city’s culture and history. It boasts rooms overlooking the picturesque
Piazzetta del Gigliosquare square and has two restaurants serving traditional
Italian cuisine. For more information and to book visit www.ghotw.com/Hotel-
Brunelleschi.
32
MONDAY 11 JUNE 2012
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33
TV & GAMES
cityam.com
T
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S
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BBC1
SKY SPORTS 1
7pmEuro 2012 Report 7.30pm
Live Super League 10pmYou’re on
Sky Sports! 11.30pmFootball’s
Greatest 12amTest Cricket 2am
Football’s Greatest 2.30am
NASCAR 3.30amWatersports
World 4.30amMax Power
5.30am-6amFootball’s Greatest
SKY SPORTS 2
7pmVolvo Ocean Race 7.30pm
Live Elite League Speedway
9.30pmNASCAR 10.30pmBritish
Miler 11pmVolvo Ocean Race
11.30pmElite League Speedway
1.30amEuropean Tour Golf
2.30amPGA Tour Golf 3.30am
Wonderful World of Golf
5am-6amPGA Tour Classic
SKY SPORTS 3
6pmWWE: Raw8pmTest Cricket
10pmWWE: Late Night – Bottom
Line 11pmWWE: Late Night –
Afterburn 12amWWE: NXT
1am-4.15amLive WWE: Raw
BRITISH EUROSPORT
7pmUEFA Euro 2012 Show
7.30pmCycling 8.30pmWorld
Superbikes 9.30pmLe Mans 24
Minutes 10pmEuro 2012 12am
Le Mans 24 Minutes
12.30am-2.30amEuro 2012
ESPN
7pmAustralian Rules Football
9.30pm30 for 30 11pmEric
Cantona and the Football Rebels
11.30pmPress Pass 2012 12am
Live Major League Baseball 3am
MMA Live 3.30amPress Pass
2012 4am-6amFIM X-Trial World
Championship
SKY LIVING
7pmCriminal Minds 8pmPushy &
Proud: Botox Mum9pmStep Kids
in Love 10pmLadyboys 11pm
Katie 12amBones 1amLadyboys
1.50amCriminal Minds 2.40am
Medium3.30amAmerica’s Next
Top Model 4.20amBones
5.10am-6amJerry Springer
BBC THREE
7pmDon’t Tell the Bride USA
7.50pmDon’t Tell the Bride:
Greatest Moments 8pmDon’t Tell
the Bride 9pmKicked Out Kids
10pmRussell Howard’s Good
News 10.30pmSnog, Marry,
Avoid? 11pmFamily Guy 11.45pm
American Dad! 12.30amKicked
Out Kids 1.25amSnog, Marry,
Avoid? 1.55amEngland’s Worst
Ever Football Team3.25amRussell
Howard’s Good News 3.55am
Don’t Tell the Bride
4.50am-5.20amSnog, Marry,
Avoid?
E4
7pmHollyoaks 7.30pmLove Shaft
8pmThe Big Bang Theory 9pm
Revenge 10pmMade in Chelsea:
End of Season Party 11pmThe
Inbetweeners 11.35pmThe IT
Crowd 12.05amThe Big Bang
Theory 1amScrubs 1.30amLove
Shaft 2amImportant Things with
Demetri Martin 2.50amRules of
Engagement 3.10amDesperate
Housewives 3.55am90210
4.40amGreek 5.20am-6am
Switched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 9.30pmAmerican
Restoration 10pmAmerican
Pickers 11pmStorage Wars
11.30pmPawn Stars 12am
American Pickers 1amPawn Stars
1.30amAmerican Restoration
2amPawn Stars 3amIce Road
Truckers 4amHeir Hunters 5am
Pawn Stars 5.30am-6am
American Restoration
DISCOVERY
7pmBear Grylls: Born Survivor
8pmAuction Hunters 9pmBear
Grylls: Born Survivor 10pmSons
of Guns 11pmFinding Bigfoot
12amBear Grylls: Born Survivor
1amSons of Guns 2amAuction
Kings 3amAmerican Chopper:
Senior Versus Junior 3.50am
Flying Wild Alaska 4.40amBear
Grylls: Born Survivor 5.30am-6am
Destroyed in Seconds
DISCOVERY HOME &
HEALTH
7pmA Wedding Story 8pmI
Didn’t Know I Was Pregnant 9pm
Untold Stories of the ER 10pm
Hospital Sydney 11pmFat Hospital
12amUntold Stories of the ER
1amHospital Sydney 2amFat
Hospital 3amA Wedding Story
4amA Baby Story 5am-6am
Birth Stories
SKY1
7pmThe Simpsons 8pmRoad
Wars 9pmA League of Their Own
10pmSpartacus: Blood and Sand
11.10pmRoss Kemp: Extreme
World 12.10amRoad Wars
1.10amBrit Cops: Rapid Response
2amGadget Geeks 2.50amRoss
Kemp: Extreme World 3.45am
Medical Emergency 4.35amReal
Filth Fighters 5.05am-6amDon’t
Forget the Lyrics
BBC2 ITV1 CHANNEL4 CHANNEL5
S
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&
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6pmBBC News
6.30pmBBC London News
7pmMatch of the Day Live:
Euro 2012
10pmBBC News
10.25pmRegional News
10.35pmHave I Got a Bit More
News for You 11.20pmThe Graham
Norton Show12.05amFILMSpy
Hard. 1996. 1.20amWeatherview
1.25amSign Zone: Divine Women
2.25amSign Zone: The Little Paris
Kitchen: Cooking with Rachel Khoo
2.55amSign Zone: Chaplains:
Angels of Mersey 3.25amSign
Zone: Great British Menu 3.55am
Sign Zone: Great British Railway
Journeys 4.25am-6amBBC News
6pmEggheads
6.30pmGreat British Railway
Journeys
7pmAntiques Road Trip: Paul
Laidlaw and Thomas Plant
travel from Skipton to
Sheffield.
8pmSpringwatch 2012
9pmCHOICE Britain in a Day:
Insight into modern Britain,
compiled from YouTube clips.
10.30pmNewsnight: Weather
11.20pmLouis Theroux:
Twilight of the Porn Stars
12.20amBBC News
3.15amThe Super League Show
4am-6amBBC Learning Zone
4pmEuro 2012 Live: France v
England (Kick-off 5.00pm).
7.30pmLondon Tonight
7.45pmITV News
8pmCoronation Street
9pmBenidorm
10pmITV News at Ten
10.30pmLondon News
10.35pmEuro 2012 Highlights
11.35pmIn Plain Sight: A
security breach causes trouble.
12.30amJackpot247; ITV
News Headlines
3amThe Jeremy Kyle Show
3.55amITV Nightscreen
4.35am-5.30amThe Jeremy Kyle
Show
6pmThe Simpsons
6.30pmHollyoaks
7pmChannel 4 News
7.55pm4thought.tv
8pmCHOICE Murdoch,
Cameron & the £8 Billion Deal:
Channel 4 Dispatches
8.30pmGok Cooks Chinese
9pmThe Secret Millionaire
10pm8 Out of 10 Cats Jubilee
Special
10.50pmThe Hoarder Next Door
11.50pmRandom Acts 11.55pm
Embarrassing Bodies: Live from the
Clinic 1amRandom2.05amFILM
Candy 2006. 3.50amSt Elsewhere
4.35amDeal or No Deal
5.30am-6.15amCountdown
6pmHome and Away
6.30pm5 News at 6.30
7pmCricket on 5: England v
West Indies; 5 News Update
8pmCHOICE The Restaurant
Inspector: 5 News at 9
9pmBig Brother
10pmThe Walking Dead
11pmBig Brother’s Bit on the
Side
12amSons of Anarchy
1amSuperCasino 3.55amHouse
Doctor: A property in
Hammersmith, west London.
4.20amHouseBusters 4.45am
HouseBusters 5.10amMichaela’s
Wild Challenge 5.35am-6am
Michaela’s Wild Challenge
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits 1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to find as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUE’S
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5
6
7 8
9 10 11 12
13 14
15 16 17 18
19 20
21
22
23
11 24 3
8 22
10 15
34 17
26 5
45
11 12
20 16
18 29
21 11
10 11 8
13
6
7
28
39
27
12
37
23
9
15
3
10
41
9
12
32
15
6
13
30
ACROSS
1 Fruit with yellow
flesh (6)
6 Astonished (6)
7 Item of dried fruit (6)
9 Goddess of
retribution (7)
13 Giants who like to eat
human beings (5)
14 Give a speech (5)
15 Gusset (5)
18 Finnish steam
bath (5)
19 Dress (7)
21 Compound
capable of turning
litmus blue (6)
22 Brigand (6)
23 Protein which acts
as a catalyst (6)
DOWN
1 Occasional (8)
2 Serving woman (8)
3 Become smaller (4)
4 Heavy wooden pole
tossed as a test
of strength (5)
5 Send (payment) (5)
8 Being in the original
position (2,4)
10 Bit of food (6)
11 Beneficial (8)
12 Calming or sleep-
inducing drug (8)
16 Person with no
fixed residence (5)
17 Short composition for
a solo instrument (5)
20 Pal, chum (4)
N
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P
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4

4

T R U N K M A C A W
E E C O L A O
S L U S H P L U M B
T T O N T B
M U E S L I M I L L
A X E G G O E
T A P E H O B N O B
C A T A R O
H E N R Y L A U R A
E S E E N V R
S E E D S B O R E D
6 3 9 7 3 5
6 7 1 5 3 4 2 9 8
2 3 9 8 6 4
9 8 7 2 1 8
9 2 2 1 3 2
8 5 1 9 7 3 2 4 6
9 1 8 9 6 9
4 9 6 1 5 9
6 3 2 1 7 6
9 4 8 7 5 6 3 2 1
4 2 5 1 6 1
4
4
4
4
4
4
4
4
4
The nine-letter word was
COURTSHIP
T
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S
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
MONDAY 11 JUNE 2012
BRITAIN IN A DAY
BBC2, 9PM
An insight into the lives of people
living in the UK today, compiled from
clips submitted to YouTube as part of
Ridley Scott’s Britain in a Day project.
MURDOCH, CAMERON & THE £8
BILLION DEAL: CHANNEL 4
DISPATCHES CHANNEL4, 8PM
Peter Oborne investigates the
relationship between David Cameron
and the Murdoch empire.
THE RESTAURANT INSPECTOR
CHANNEL5, 8PM
Fernando Peire tries to turn round the
fortunes of Tarragon, a fine-dining
French restaurant in East Sussex that
is failing fast. Postponed from May 24.
TVPICK
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ALL this talk of the low expecta-
tions at the Euros being a boost to
England’s chances; I just don’t buy
it – they are heading for a fall.
How the boffins that devise the
FIFA rankings can say England are
the sixth best in the world, and
France the 14th, I have no idea.
More strange is that that places
the Three Lions fourth and France
10th of the teams at Euro 2012.
Don’t get me wrong, England
aren’t atrocious. Their misfortune
with injuries and suspensions has
been well documented, but the
bottom line is that there is just
nothing exciting about England.
Even their fiercest cheerleaders
will have found the victories over
Norway and Belgium tedious. That
is, though, what can be expected
under Roy Hodgson, and it will
surely be another belts and braces
approach against the French.
Laurent Blanc’s side are pretty
much the opposite to England:
shaky at the back and lively
up top.
This was perfectly demonstrated
against Estonia in their final
warm-up game. Les Bleus won 4-0,
but would have conceded against
Expect France
to give Three
Lions Les Bleus
better opponents. At the other end,
however, Karim Benzema (2) and
Franck Ribery were among the
goals as they, and Manchester
City’s Samir Nasri, ran riot.
And Blanc has plenty of options
– as illustrated by the fact that
Newcastle schemer Hatem Ben
Arfa is likely to spend most of Euro
2012 watching from the bench.
France should have most of the
possession this evening and, while
they will find it hard to breakdown
one of the competition’s strongest
backlines and arguably its best
goalkeeper, they have too much
talent not to get there in the end.
The 10/1 I put up on France each-
way to win the tournament last
week has gone as support gathers
behind the Euro 2000 winners. A
victory here will see their current
odds of 8/1 contract further and
they look a good bet at 6/4 with
Coral to achieve it.
That said, for all France’s creativ-
ity, I doubt it will be a game of
many chances and would advise
selling goals with Sporting Index,
even at 1.95. The right call in the
correct score market looks like
being 1-0, available at 11/2 with
Coral.
EVEN with home advantage, it’s
hard to see Ukraine performing
well at Euro 2012. The co-hosts
open up with a tricky game
against Sweden and their run of
results in recent friendlies sug-
gests it could be a short-lived
tournament.
Over the past year, Ukraine
have been beaten by France,
Sweden, Uruguay, Czech
Republic, Austria and Turkey.
The recent result that offers
the most encouragement is a
3-3 draw with 2008 runners-
up Germany.
There are concerns at the
back for Oleh Blokhin’s side as
they’ve only kept one clean
sheet in their past six interna-
tionals, during which time
they’ve conceded 11 goals. It
doesn’t get much better up
front given an aging Andriy
Shevchenko has every chance of
starting. The 35-year-old is no
longer the star man, but a lack
of options could thrust him
back into the first XI.
Sweden have no such prob-
lems in attack, with the mercu-
rial Zlatan Ibrahimovic up
front. The AC Milan striker had
an excellent domestic campaign
in Italy and bagged 28 goals en
route to landing the Serie A top
goalscorer award. Ibrahimovic
scored five times from eight
appearances in a qualifying
campaign that saw the Swedes
finish narrow runners-up to
Netherlands in Group E, but
still qualify as the best perform-
ing second-placed side.
Kim Kallstrom and Sebastian
Larsson will be pulling the
strings from midfield and that’s
another area that they can dom-
inate. The creative pair made 13
assists between them in the
qualifiers, with Kallstrom’s
seven the joint-most, alongside
Germany’s Mesut Ozil.
Sweden head into their open-
ing fixture on the back of four
straight wins and the under-
dogs for this game are a good
shout at 7/4 with Coral to kick
off with three points.
It took a 90th minute winner
from Tobias Hysen to give
Sweden the win when these two
sides last met, in Ukraine in
August 2011, and a similar
scoreline looks on the cards
with both teams looking to
keep it tight. Spread bettors
should look to sell their
supremacy at 0.1.
Samir Nasri can help inspire France to victory against England
MONDAY 11 JUNE 2012
35
THEPUNTER
FOOTBALL TRADER
BEN CLEMINSON PREVIEWS FRANCE V ENGLAND AND THE BEST OF THE UPCOMING EURO 2012 GAMES
FRANCE..........................................
ENGLAND.......................................
Today, 5.00pm, ITV
UKRAINE.................................
SWEDEN.................................
Today, 7.45pm, BBC
nPointers…
Sweden to beat Ukraine at 7/4 with Coral
Sell Ukraine supremacy at 0.1 with Sporting
Index
DENMARK’S shock win against
Netherlands on Saturday has
blown Group B apart and left
the Dutch with it all to do if
they are going to reach the sec-
ond round.
Beating Germany on
Wednesday evening would get
their campaign back on track,
but Joachim Loew’s men line-up
as 13/10 favourites with Coral,
buoyed by their efficient 1-0 vic-
tory over Portugal in the pool’s
other game so far.
Netherlands will be wounded
and that could spell danger for
Germany – if they bring their
shooting boots this time. The
Oranje squandered many
opportunities, with Robin van
Persie not looking like the play-
er who has been so deadly for
Arsenal. In contrast, Germany
struggled to create chances and
the game looked destined for a
goalless draw until Mario
Gomez’s strike in the 72nd-
minute delivered the points.
Expect Bert van Marwijk’s
side to come at Germany – they
have little other choice – and it
could be a lively contest.
However, I didn’t anticipate
Netherlands getting through
the group and my position has
only been strengthened.
Germany will be happy with a
point from this contest and
Loew’s charges have the ability
to frustrate the Dutch again.
The stalemate can be backed
at 23/10 with Coral and the 1-1
correct score stands out at 6/1
with William Hill.
NETHERLANDS .......................
GERMANY...............................
Wednesday, 7.45pm, BBC
nPointers…
Back the draw at 23/10 with Coral
Back the 1-1 correct score at 6/1 with
William Hill
Text MOBILE
to 65559
coral.co.uk
1700+ Shops
nationwide
0800 242 232
Mon-Sat from8.30am
£20 FREE BET!
FOR NEW CUSTOMERS
HEAD
FIRST
TODAY'S MATCHES
6/4 France 21/10 Draw England 19/10
Group D, Kick-off 5pm, Live on ITV1
8/5 Ukraine 11/5 Draw Sweden 7/4
Group D, Kick-off 7.45pm, Live on BBC1
First Goalscorer
9/2 K. Benzema (F)
7/1 O. Giroud (F)
7/1 A. Young (E)
7/1 A. Carroll (E)
8/1 D. Welbeck (E)
8/1 F. Ribery (F)
8/1 S. Gerrard (E)
10/1 T. Walcott (E)
First Goalscorer
11/2 Z. Ibrahimovic (S)
13/2 A. Milevskiy (U)
7/1 M. Devic (U)
7/1 A. Voronin (U)
8/1 M. Rosenberg (S)
8/1 Y. Seleznyov (U)
8/1 J. Elmander (S)
8/1 O. Toivonen (S)
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G
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England confident of bouncing back
despite injuries to Barritt and Brown
ENGLAND coach Stuart
Lancaster expects his squad to
be ready to take revenge on
South Africa after losing
Saturday’s Test 22-17 in Durban,
citing their performance as
sufficient cause for optimism.
After an even first-half in
which England looked capable
of victory, the Springboks’
forwards began to dominate to
inspire victory in the first of a
three-Test series.
Lancaster, however, whose
squad had had more time
together than the Springboks
and must now prepare for a
second Test at altitude in
Johannesburg on Saturday
without injured centre
Brad Barritt,
remains
confident of
success, even if
his task now
appears
significantly
harder.
“The boys
are
disappointed
because they lost,”
said Lancaster.
“They want to win,
that is the primary emotion at
the moment.
“But when we look back on it,
at half-time we were definitely
in a positive mindset and we felt
we had the better of the first
half, even though it was 6-6.
“The boys are certainly very
positive and the good thing
is we have already seen one
or two areas we can fix up.
“The players are talking
about it already and that is
good. They are not
downcast and they are
feeling there is no chance of
turning up next week and
not winning.
“If anything, this will be their
motivation to right the wrongs
we did in this game.”
Barritt suffered a lacerated
eyeball and is consequently
unavailable to play any part on
Saturday, even though the
injury has been successfully
operated on and will make a
return for the third.
Fullback Mike Brown,
conversely, sustained a fracture
and ligament damage to his
thumb and has been replaced
by Nick Abendanon.
Spain’s world No2 Rafael Nadal, pictured, has lost only once at the French Open since 2005, to Robin Soderling
MONDAY 11 JUNE 2012
36
RAFAEL Nadal and Novak Djokovic
will today resume their battle to win
both the French Open and a place in
history after the Serb’s fight back
was suspended by heavy rainfall.
Clay-court expert Nadal led 6-4, 6-
3, 2-6, 1-2 when play was temporarily
suspended for the evening but, with
Djokovic again in the ascendancy
and ultimately in such consistently
ruthless form, any potential victory
now looks increasingly challenging
to achieve.
If the key to overcoming the
Spaniard has often been to take
advantage of his occasional slow
starts then Djokovic had begun in
the worst-possible way but the steely
determination with which his
greatest victories have been inspired
was once again crucial.
Djokovic had won eight
consecutive games and would not
have welcomed the chance to rest.
Even with Nadal so much closer to
victory it would have suited the Serb
to maintain the momentum which,
at that crucial point, was entirely his
and making his bid to become the
first man to hold all four Majors
since Rod Laver in 1969 looking
increasingly stronger.
The pair have already contested
two epic finals, at the 2011
Australian and US Opens, but the
drama that only rainfall can provide
already appears to have contributed
to another with the world’s two
highest-ranked players exchanging
both composure and control.
Nadal, who with victory will
become the first to win seven French
Open titles, had taken an early 3-0
lead before world No1 Djokovic
negated the feat as clinically as he
had fallen behind and though the
Spaniard then performed irresistibly
in his bid to scale a familiar Parisian
peak, Djokovic again began to
overcome him by taking the third set
and looking ready for the fourth
before heavy rain finally forced play
to conclude for the day.
Any potential win for Djokovic will
be only the second Nadal has
experienced at Roland Garros since
2005, but with rain again expected
today there may be further delays.
BY DECLAN WARRINGTON
Stuart Lancaster must prepare his
England team to play at altitude
In cssociction uith
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Open un uccounL by cuIIIng o8ooo ¸z1 ¸z1
or vIsIL www.sLursporLsbeL.co.uk.
Present u
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Preview Ivening
Tuesduy 1±th June, ,pm kick-oII
Ieuturing:
Immu Spencer
{Chunnel q Rucing Presenter)
Churlie Hills
{Truiner)
Richurd Hunnon Jnr
{Assistunt Truiner)
Mick Iitzgeruld
{TV Pundit und Iormer Jockey)
Bill Isduile
{City AM Rucing Iditor)
cityam.com
SPORT
BY DECLAN WARRINGTON
AN ELATED Maria Sharapova
said that winning this year’s
French Open was more
special than when she won
Wimbledon as a teenager,
after cruising to victory in the
final at Roland Garros.
The new world No1 beat
Sara Errani 6-3, 6-2 in Paris on
Saturday to become the 10th
woman to win all four Grand
Slams having won
Wimbledon in 2004, the US
Open in 2006 and the
Australian Open in 2008.
“When I won Wimbledon
at seventeen, I thought that
would be the most cherished
moment of my career, but
when I fell to my knees today
on the court I realised that
winning here was extremely
special, even more so,”
Sharapova said.
The 25-year-old Russian
battled back from career
threatening shoulder surgery
in 2008 to return to the top of
the world rankings after
reaching the final in Paris.
She is the only player, male or
female, to have won a grand
slam after undergoing
shoulder surgery.
Sharapova dropped only
one set in the tournament
and, after the shock first
round exit of Serena
Williams, the only player to
beat Sharapova on clay this
season, the expectation was
shifted onto her before she
delivered in her usual
powerful style. Sharapova is
now the firm favourite to
succeed at Wimbledon, the
year’s next Major.
Sharapova hails her most special victory
BY WILL SEROCOLD
Rain delays Djokovic bid
to overcome Rafa’s rule
37
BRITAIN’S Lewis Hamilton stormed
to the top of the Formula One
drivers’ championship last night,
with an entertaining victory in the
Canadian Grand Prix.
At the Circuit Gilles Villeneuve,
where Hamilton secured his first
ever F1 win five years ago, the
McLaren driver became the seventh
different man to win the opening
seven races of this campaign.
“This for me feels like one of the
best races I’ve had for a very long
time,” Hamilton enthused. “What a
great feelings this is.”
Despite a sluggish second pit-stop,
McLaren’s two-stop strategy paid
dividends as Hamilton flew past
Ferrari’s Fernando Alonso and Red
Bull’s Sebastian Vettel in a thrilling
series of final laps. Both Alonso and
Vettel were then knocked off the
podium entirely after being
overtaken by Lotus’s Romain
Grosjean and Sauber’s Sergio Perez.
Alonso’s attempt to finish the race
with only one pit stop ended badly,
with fading tyres rendering the car
uncompetitive in the closing laps.
Hamilton’s victory (completed in
one hour, 32 minutes, 29 seconds)
saw him leap-frog the Spaniard in
the drivers’ rankings, which he now
leads with 88 points. Alonso and
Vettel are narrowly behind, on 86
and 85 points respectively.
Paddy Lowe, technical director at
McLaren, paid tribute to the team’s
leading driver. “We feel really bad for
letting him down in Spain,” Lowe
admitted, hoping that yesterday’s
win made up for the team’s recent
errors that have plagued Hamilton.
McLaren team-mate Jenson Button
endured another difficult race,
finishing 16th having started 10th
on the grid.
Fellow British driver Paul di Resta,
of the team Force India, also slipped
down the places, starting 8th but
finishing 11th.
Hamilton takes
top spot after
win in Canada
G
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G
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BOXING promoter Bob Arum will
look to make a November rematch
between Manny Pacquiao and new
WBO welterweight champion
Timothy Bradley after admitting
the latter’s split-decision win
was “unbelievable”.
Two judges gave Bradley a 115-
113 points victory despite many
observers, Arum included,
believing Pacquiao to be the clear
winner, making a potential
superfight with Floyd Mayweather
even more unlikely and earning
the promoter’s scathing criticism.
“Can you believe that?
Unbelievable,” said Arum. “I’m
going to make a lot of money on
the rematch, but this [decision]
was outrageous.”
MONDAY 11 JUNE 2012
BY JULIAN HARRIS
Ramdin stunt marrs Best record
WEST Indies fast bowler Tino Best
smashed his way to the highest
score by a No11 batsman in the
history of Test cricket yesterday, yet
the visitors’ strong performance
was marred by a public dispute
sparked by his batting partner
Denesh Ramdin at Edgbaston.
England were left trailing 221-5
in the first innings, after West
Indies took several late wickets on
a fourth day of the final Test that
was often stopped for bad light.
They are 205 behind after Ramdin
and Best helped the visitors to 426
all out in their first innings.
Ramdin’s antics, however,
threatened to overshadow the
score. Upon reaching his century,
Ramdin held up a note hitting out
at legendary batsman Sir Viv
Richards. Richards, now a media
pundit, had recently commented
that the wicketkeeper’s game has
“deteriorated in a big way”.
Michael Holding, a colleague of
Richards’ from West Indies’ glory
era in the 1970s and 1980s, was left
unimpressed by Ramdin’s note,
which read: “Yea Viv talk nah”.
“If I was the manager of the team
I would be having a word with that
player, and he would be getting a
fine,” Holden argued.
Richards responded by urging
Ramdin to be more humble and to
“set standards a bit higher”.
Ramdin and Best had put on a
stand of 143 runs to frustrate
England, with Best hitting 95 runs.
BY JULIAN HARRIS
BY DECLAN WARRINGTON
Pacquiao and Bradley rematch
a must, says outraged Arum
SPRINT superstar Usain Bolt
suffered a huge scare just weeks
before the defence of his Olympic
100m and 200m titles when he was
involved in a car crash in the early
hours of yesterday morning.
The world’s fastest man, 25,
escaped unhurt from the accident
in his native Jamaica, which was
also said to have involved
compatriot and rival Asafa Powell.
“Usain was in a minor accident in
the Half Way Tree Area on Sunday
morning after 5am and
sustained no injuries,” his
spokesperson confirmed.
It is the second crash Bolt has
recently experienced; in 2009 he
flipped his BMW but only injured
his foot climbing out of the car.
BY FRANK DALLERES
Bolt escapes unscathed from
early morning car accident
SPORT
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Hamilton won for the first time this season
The form of Denesh Ramdin, pictured, had come under criticism from Sir Viv Richards
CHELSEA are today expected to end
weeks of speculation by finally
handing Champions League-winning
interim manager Roberto di Matteo
the job on a permanent basis.
But the Italian is only likely to get
a one-year contract, despite arresting
the team’s slump and leading them
to an historic first triumph in
Europe’s top club competition.
Chelsea owner Roman
Abramovich has agonised over
whether to entrust former Stamford
Bridge midfielder Di Matteo with the
position long-term since he took the
helm following the sacking of Andre
Villas-Boas in March.
The Russian was thought to want
a big-name European coach, such as
former Barcelona boss Pep
Guardiola, to mastermind the
reinvention of an ageing side.
However, Guardiola has insisted
on taking a sabbatical after stepping
down from the Camp Nou hot-seat
having transformed the Catalans
into a team widely regarded as the
world’s best. France coach Laurent
Blanc, former England boss Fabio
Capello and ex-Blues manager Jose
Mourinho have all been linked with
replacing Di Matteo.
Di Matteo set
for one-year
deal at Chelsea
G
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Makeshift England not scared of
in-form France, insists Hodgson
MONDAY 11 JUNE 2012
38
SPORT
cityam.com/sport
BY FRANK DALLERES
ENGLAND manager Roy Hodgson
insists his embryonic and injury-hit
side is not daunted by the challenge
of facing a France team unbeaten in
their last 21 games in their Euro 2012
opener today.
Hodgson also played down fears
that scorching temperatures forecast
for this afternoon in Donetsk,
Ukraine, would make it even harder
to avoid defeat in his first competi-
tive match in charge.
England are missing a host of
stars, with striker and star man
Wayne Rooney suspended and expe-
rienced midfielders Frank Lampard
and Gareth Barry, as well as defender
Gary Cahill, absent through injury.
“It is a stern challenge,” said
Hodgson, whose England outfit is
the least hyped at a major tourna-
ment in recent memory.
“We are facing a team in excellent
form and 21 matches unbeaten at
any level is a fine achievement. But
when you come to European
Championships or World Cups, hav-
ing good or bad form isn’t the factor
that’s decisive.
“It’s how your team plays on the
night; how people adjust to the cir-
cumstances. They’ll be slightly differ-
ent here in Donetsk, and it’s about
what you can do as a team. We have
full respect for the French, but the
players are confident in their own
ability.”
England’s squad travelled from
their base in Krakow, Poland, yester-
day to Donetsk, where temperatures
were markedly warmer and are
expected to soar to 34C by today’s
5pm kick-off.
But Hodgson added: “We’ll deal
with the heat as best we can. It does
get hot in England from time to
time. The heat is a factor for all the
teams playing in the Ukraine. It plays
a slightly bigger role in the earlier
BY FRANK DALLERES
Di Matteo led Chelsea to European glory
Hodgson has had only a month to mould the England squad, which is missing several stars through injury and suspension
game, but the bottom line is that it’s
the same for both teams.”
Former Switzerland boss Hodgson
is mulling who to pick on either
flank and whether Andy Carroll or
Danny Welbeck should partner
Ashley Young, but insists whichever
team he picks will be his own despite
only being parachuted into the role
last month.
“Is this my England team? It’s got
to be,” he said. “No one expects, after
three weeks, someone to have totally
stamped his mark on the team. But
I’ve worked with Steven Gerrard
before, Glen Johnson before. It’s the
team I pick, and the team I take
responsibility for.”
Gerrard, who worked with
Hodgson at Liverpool, will captain the
side, and said: “We’re itching to get
started. The squad is really happy. The
spirit in the camp is fantastic. The
preparation has gone really well.”
France coach Laurent Blanc has
attempted to play down his side’s fan-
cied status as he prepares for his first
major championship in charge, insist-
ing they do not expect to lift the tro-
phy on 2 July.
“The French team don’t have the
same ambitions as Spain or Germany
at the start of this European
Championship,” said the former
Manchester United defender.
“France, in terms of their results
over the last few years, have not
allowed us to retain our place in
European or world football. People
say we’re favourites in the group, but
I don’t agree with that. We are at the
same level as the other sides.”
39
ENGLAND’S OPENING
GAMES SINCE 1966
n2010 World Cup: drew 1-1 v USA (right)
- Knocked out in last 16
n 2006 World Cup: won 1-0 v Paraguay
- Knocked out in
quarter-finals
(penalties v
Portugal)
n Euro 2004: Lost
2-1 v France
- Knocked out in
quarter-finals
(penalties v
Portugal)
n 2002 World Cup: drew 1-1 v Sweden
- Knocked out in quarter-finals
n Euro 2000: Lost 3-2 v Portugal
- Knocked out in group stage
n 1998 World Cup – won 2-0 v Tunisia
- Knocked out on last 16
(penalties vs Argentina)
n Euro 1996 – drew 1-1 v
Switzerland (left)
- Knocked out in semi-
finals (penalties vs
Germany)
n Euro 1996: drew 0-0 v
Denmark
- Knocked out in group
stage
n 1990 World Cup: drew 1-1 v Republic of Ireland
- Knocked out in semi-finals (penalties v West
Germany; lost third place play-off to Italy)
n Euro 1988: lost 1-0 v Republic of Ireland
- Knocked out in group stage
n 1986 World Cup: lost 1-0 v Portugal
- Knocked out in quarter-final
n 1982 World Cup: won 3-1 v France (below)
- Knocked out second round
n Euro 1980: drew 1-1 v Belgium
- Knocked out in group stages
n Euro 1972: lost 3-1 v West Germany
- Knocked out in quarter-finals
n 1970 World Cup: Won 1-0 v Romania
- Knocked out quarter-finals
n Euro 1968: Won 1-0 v Spain
- Knocked out
in semi-finals
n 1966
World Cup: drew
0-0 v Uruguay
- Winners
Overall
record
Won 5, Drawn
7, Lost 5
IN BRIEF
Wiggins defends Criterium title
nCYCLING: Britain’s Bradley Wiggins underlined
his status as one of the favourites for this summer’s
Tour de France by successfully defending his
Criterium de Dauphine title yesterday. In a great
race for Team Sky, the 32-year-old’s colleagues
Michael Rogers and Chris Froome finished second
and fourth overall.
Czech defender confirms racial abuse
nFOOTBALL: Czech Republic defender Theodor
Gebre Selassie has confirmed he suffered racist
abuse during his team’s Euro 2012 defeat to Russia
on Friday. The full-back, who is of Ethiopian
descent, said his treatment from Russian fans was
“nothing extreme”, while the Czechs said they
would not submit an official complaint.
Faletau blow for Wales forward
n RUGBY UNION: Wales' No. 8 Toby Faletau has
been ruled out of the rest of their tour of Australia
after breaking a bone in his hand during the 27-19
defeat in the first test.
G
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Rain halts Djokovic fightback as French
Open final postponed with Nadal leading
cityam.com
MONDAY 11 JUNE 2012
REPUBLIC of Ireland manager Giovanni
Trapattoni insists his side will continue to
believe that advancing to the European
Championship quarter-final is possible,
even if last night’s defeat to Croatia
makes doing so exceptionally difficult
to achieve.
Two headers from Mario Mandzukic
and a masterful finish from Everton’s
Nikica Jelavic ultimately undermined
Trapattoni’s traditionally defensive tac-
tics to inspire a Croatian victory from
which they may fail to recover.
Ireland meet reigning World and
European champions Spain before an
equally difficult, and probably final,
fixture against Italy, but Trapattoni still
believes that they could yet do
the unexpected.
“We have to believe,” said Trapattoni.
“This evening we met a strong team, tech-
nical – we knew that before. But every
game in this Euro can be a surprise. We
have to believe this.”
The game began in the worst-possible
way for Ireland when Mandzukic’s third-
minute floating header evaded the
despairing dive of goalkeeper Shay Given
and nestled into the corner of the net.
An ability to fashion a lead to be defi-
antly defended may have come to charac-
terise them under the rigid organisation
of Trapattoni’s reign and raised the possi-
bility that victory could already be
beyond them, even though Sean St
Ledger’s imminent equaliser briefly
suggested otherwise.
The defender crept beyond
Tottenham’s Vedran Corluka in the 18th
minute to head an equaliser from Aiden
McGeady’s free-kick and present Ireland
with the chance to approach the game as
they more routinely would, though the
reality remains that that instant alone
could prove to be the climax of an
otherwise desperately disappointing
Irish campaign.
It is against two such decorated oppo-
nents that they must accumulate suffi-
cient points to proceed but if last night’s
fixture shows Ireland’s true ability to deal
with a quality attack then it is difficult to
make a case for their future success.
The game remained open and without
apparent shape and it was Croatia’s supe-
rior quality that benefited. Ireland looked
unlikely to score but their opponents
always threatened and just before half-
time scored to take a lead that would not
be relinquished.
Jelavic, capitalising upon a static Irish
defence, delicately stroked the ball past
Given before Croatia added another with-
in five minutes when Mandzukic’s head-
er struck the post before hitting Given
and bouncing in. The own goal was as
decisive as it was cruel, and may yet be so
towards Ireland’s tournament as a whole.
Croatia 1 1 0 0 3 1 3
Spain 1 0 1 0 1 1 1
Italy 1 0 1 0 1 1 1
Ireland 1 0 0 1 1 3 0
GROUP C
TEAM PLD W D L F A PTS
Trapp defiant despite
torrid Ireland opener
Robbie Keane’s Ireland face Spain next
SPANISH coach Vicente del Bosque last night stuck up
for his eyebrow-raising decision to name a starting line-
up without a recognised centre forward after his team
narrowly avoided defeat to Italy during their opening
game of the European Championship.
The defending champions grabbed a second half
equaliser through Barcelona’s Cesc Fabregas, who had
been named in an unconventional centre forward role.
“We wanted to look for superiority in the midfield
and we know that Fabregas and [David] Silva have the
ability to get into scoring positions. It didn’t work out
too badly and Fabregas did some great work,” Del
Bosque said after the match.
Fabregas admitted that he was “surprised” to be
named as a centre forward, yet was pleased to be back
among the goals.
Spain dominated possession in the opening half, but
were stifled by a well-drilled Italian defence. Unfazed
by the Spanish passing game, a confident Italy fired in
four first half shots on goal – twice as many as Spain.
And on the hour mark the Italians took the lead
after a brilliant run and through-ball by Andrea Pirlo
set up Antonio Di Natale to side-foot past Iker Casillas.
Just four minutes later a trademark Spanish passing
move involving Andres Iniesta and Silva cut open the
Italian defence for Fabregas to drill a first-time left foot
shot past the oncoming Gianluigi Buffon.
Fernando Torres replaced Fabregas on 74 minutes
but spurned several chances to give his team the win.
Spain boss Del Bosque:
Playing Fabregas up
front was no mistake
REPUBLIC OF IRELAND ...............1
CROATIA.....................................3
BY DECLAN WARRINGTON
EURO 2012
SPAIN..........................................1
ITALY...........................................1
BY JULIAN HARRIS
EURO 2012
Tennis: Page 36
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