Biz Watch

Santa's Mixed Bag of Reforms
When Gerhard Schröder's government reached agreement with the opposition Christian Democrats on a package of long-awaited economic reforms in mid-December, you might have expected German businesses to leap with Christmas joy. But despite lowered nonwage costs for employers, they're not all happy. Why?

To help pay for a €7.8 billion tax cut, the compromise reduced federal subsidies to new home buyers (by 30%) and commuters who drive to work. "Business will go down, but we're not sure by how much," said Mario Wanke, who owns a home-construction company in Neubrandenburg . The shrinking of the

INDICATORS A New Great Leap Forward Wall Street jumped at China's booming economy and made the IPO of China Life, the country's largest life insurer, the year's biggest debut at $3 billion. The Milk Turns Sour Italian dairy giant Parmalat teetered on the brink of insolvency as prosecutors opened an investigation into a €4 billion hole in its accounts. Authorities seeking evidence of fraud raided the office of a Parmalat subsidiary's auditors. Don't Stand So Close To Me Royal Bank of Scotland and NatWest have designated "defensible personal spaces" around automated tellers in Manchester, England . The no-go zone is not to be entered while a machine is in use.

commuter deduction — from 40¢ per km to 30¢ — has big carmakers seething. "It's definitely not positive for the car industry," said Thomas Mickeleit, spokesman for Volkswagen.

On the plus side, Harald Grunert, who owns three restaurants, said he thinks the Chancellor's plan to cut long-term jobless benefits — and force the unemployed to take any offered job — will make it easier for him to find staff. Now comes the hard part: convincing Germans worried about losing their jobs to open their wallets.

Through The 3-G Looking Glass
The emergence of third-generation (3-G) mobile-phone services in Europe got curiouser and curiouser in December, as O2 Ireland fired up its 3-G network and CEO Danuta Gray declared that "a limited number of customers" are already using it. It's limited, all right: 25 to be exact, or six phones for every million people on the Emerald Isle — and there won't be any more anytime soon. O2 flipped on its 3-G switch now because Irish regulators require it do so by the end of the year. After all the phone talk, an O2 spokesman said the first significant commercial use of 3-G will be as an add-in card that provides wireless Internet to laptops. That had a familiar ring: a week earlier, Vodafone said it is to offer 3-G for laptops in Germany and Italy . But wait — wasn't 3-G all about leaving the computer at home? Isn't that why companies spent €100 billion on licenses? Apparently 3-G means, as Humpty Dumpty advised Alice , just what 3-G firms choose it to mean. — By Mark Halper

Is Guinness Good For You?
Global drinks company Diageo bowed to consumer pressure by announcing that starting in 2004 it will make public in the U.S. details of the nutrient, carbohydrate and caloric content of all its beer, wine and spirits products — details that will ultimately find their way onto the packaging too.

The Bottom Line
	It is clear that the perception of the European shopper is that he feels poorer than he did last year.
		SILVANO CASSANO, chief executive of Benetton Group, on reports of sluggish Christmas sales from retailers around Europe