By Alex Plough January 30, 2015
Portrait of Alexis Tsipras, leader of Syriza, on the cover of Greek magazine MONO. © Charis Tsevis
Syriza Greece Poses EU Challenge
The Greek anti-austerity party Syriza swept to power in Monday’s general election, putting the country on a collision course with the EU over the conditions of its massive bailout.
Syriza’s leader Alexis Tsipras, who at age 40 is Greece’s youngest Prime Minister in 150 years, promised voters to end the austerity measures imposed on the country and renegotiate its crippling debt burden.
While pre-election polls showed a Syriza win was likely, observers were surprised by the scale of the landslide victory, which gave the party 149 out of the 300 available seats, two short of an absolute majority. Tsipras quickly secured a governing coalition with the right-wing ANEL party and kick-started Syriza’s legislative agenda by announcing plans to freeze the privatization of state assets.
The historic victory represents the largest popular rejection of the EU’s core policy for dealing with the eurozone crisis. European finance ministers are now faced with the task of negotiating with Tsipras’ government without inspiring other anti-austerity movements across the continent.
Syriza’s biggest leverage comes from the threat of a unilateral Greek default on its outstanding debts to the rest of the eurozone, an event that would likely trigger its expulsion from the single currency regime. Its leaders rightly argue that Greece’s program of austerity, imposed by the EU in return for pledges of 240 billion euros ($270 billion) in aid since May 2010, is economically unsustainable. In October 2014, Greece’s national unemployment rate was about 26%, while more than half of young Greeks were jobless.
Even without this bargaining chip, Syriza’s overwhelming popular mandate cannot be ignored and some concessions are likely. Finance chiefs from the 19-nation euro area signalled their willingness to do a deal with Tsipras—so long as the new Greek prime minister drops his demand for a debt writedown. With the European Union facing the most serious threat to its integrity in its history, the future of the currency union hangs on the next few months of negotiations.
Neither side wants a ‘Grexit’ from the eurozone and Syriza’s new finance minister Yanis Varoufakis has reassured policymakers that it was not in the cards.
McDonald’s, Las Vegas. © Allen
McDonald’s Brand Deflation
Fast-food purveyor McDonald’s is an American icon that boasts cult-like fans and one of the most recognized brands in the world. But it seems young Americans are no longer loving it. The 66-year-old company has struggled to keep up with changing tastes of millennial consumers, who are increasingly abandoning their Big Macs in favour of higher-quality fast-food joints like Chipotle and Shake Shake.
Mcdonald’s same-store sales in the US fell 4.6 percent in November 2014 compared with a year ago, while net income last year tumbled nearly 15%, to $4.76 billion. McDonald’s stock has been flat since July 2012, a period when the Dow Jones Industrial Average rose 36%.
On Wednesday CEO Don Thompson admitted defeat and announced his resignation, ending a rocky tenure that lasted less than three years. His replacement is the UK-born Steve Easterbrook, a 48-year-old who started with McDonald’s in 1993 and is currently chief global brand officer. Shareholders have pinned their hopes on Easterbrook’s ability to turn around the firm’s image problem in its home territory, just as he was able to do in Europe.
Easterbrook is known for engaging the chain’s critics. He participated in a televised debate with Eric Schlosser, author of the bestselling “Fast Food Nation,” and set up a website called makeupyourownmind.co.uk for customers to post questions.
Taking on the big job in the hamburger’s home country comes with plenty of challenges, such as uncooperative franchise owners, potential regulatory changes to labor laws and public pressure for McDonald’s to upgrade its ingredients.
iPhone 5S © John Karakatsanis
A is for Apple
Apple Inc. investors are popping the champagne corks after the firm revealed astounding holiday sales results. The company surpassed even the most bullish expectations for the holiday quarter, selling 74.5 million iPhones in the last three months of 2014, a year on year increase of 46% and a rate of 34,000 phones an hour.
An achievement made even more spectacular by the fact that it had raised average selling price of the devices by $50 from the prior year and increased its gross margin on each phone.
The results took Wall Street by surprise and were the most out of line with analyst estimates since April 2012. Chinese demand for Apple’s larger-display phones, the iPhone 6 and iPhone 6 Plus, was a major factor in the earnings boost, and researcher Canalys estimates Apple was the top smartphone seller in the region during the quarter.
This marks a reversal for Apple, who had been yielding smartphone market share to rivals such as the Taiwanese firm Samsung. For years Apple CEO Tim Cook said that the firm is even luring customers from smartphone manufacturers that use Google’s Android operating system.
ATMs in the U.K. © Garry Knight
ATMs Go Boom
This week’s interactive is a long-form investigation into the British criminal gangs who are blowing up ATM machines across the country. Nick Summers, a staff writer at Bloomberg Businessweek, describes a group of enterprising bank robbers who pump explosive gas into ATM machines before detonating them and escaping with the loot. In 2013 alone the gang carried out more than 90 raids across the UK Midlands, netting almost £800,000 ($1.2 million). The story makes the most of Bloomberg’s revamped website to deliver a gripping heist tale, rich with video and interactive
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Alex Plough is a freelance business journalist based in New York. Originally from London, England, he has a background in data-driven investigative reporting and has worked on a number of agenda-setting projects such as the award winning Iraq War Logs for the Bureau of Investigative Journalism. More recently he graduated from Columbia Journalism School’s masters program, business and economics reporting concentration, as well as Columbia’s Lede Program – a three month course designed to apply the tools of computer science to journalism. He is particularly interested in the overlapping fields of finance, technology and how young people are shaping the new American economy.
