INFO Magazine: Navigating the Storm by French Chamber of Commerce in Great Britain

I N F O        T   � 

...

 2010 /  2011

  :   

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A K

CEO of Alstom, addresses Chamber’s Dîner de la Rentrée

ESCP Europe comes top in FT rankings

President of CBI at the Annual Financial Lunch

What they mean for businesses

on the 1.5 Billion treasure trove

Turning the World upside down

There for when ‘if’ becomes ‘when’

At AXA we have always believed that being there for our customers when they need us most is the best way to build a strong financial business. We’re in the process of redefining every product and service we have to better serve our customers and to continue to deliver on our promises. So when the moment comes that we have to act on them, whether as a wealth management partner, an insurer, or as a healthcare provider, we’re always ready to show that actions speak louder than words.

Arnaud Vaissié

editorial

President, French Chamber of Commerce in Great Britain, and Chairman & CEO, International SOS

elations between Britain and France are as warm as they have ever been. The meeting and subsequent accord between the President of France and the British prime minister at the beginning of November was smoothly and effectively choreographed. The highlight and the most encouraging announcement was of course on defence, where the two countries are pooling resources in the interest of saving costs. That is a requirement for both countries and much will be achieved. But, ground-breaking as this is, it is far from the whole story. The defence deal is indicative of a realisation that the two countries have an over-riding interest in exploring co-operations. These may range in the future from industrial joint ventures through to even more forms of cultural and economic relationships. The pace of progress in building creative alliances between Britain and France, so long too halting, will now move up a gear. That is very welcome. The Chamber plays a role in this collaboration by bringing together leading British and French business people in friendly yet constructive forums, to enable them to understand each others’ economies, countries and companies. So the Annual Financial Lunch which took place in mid-November was hosted by a leading British captain of industry, Helen Alexander, the president of the Confederation of British Industry. Ms Alexander has an unparalleled familiarity and insight into British companies and management, and the mutual sharing of interests was beneficial to British and French managers alike. Meanwhile the focus of the address given by Patrick Kron to our “Dîner de la Rentrée” was the important contribution made by Alstom to the British market, and the opportunities he sees here for future collaboration between his company and British clients and providers. In an exciting and visionary speech, Mr Kron made clear that Alstom, while based in France, was a truly global company, with 90% of sales derived outside its home base. No review of today’s global economy can avoid reference to the recessionary pressures now facing all our companies and countries. We see from our Focus on Finance in this issue that state spending on infrastructure and on social budgets is being curtailed. This is giving rise to social tensions. But it also presents an opportunity – in admittedly difficulty circumstances – for companies to increase their share of the gross domestic product and enter markets and sectors they might not have expected. The Chamber will continue to play its role of bringing the French and British communities together in order to help our companies resume growth and improve their prospects. I

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contents

issue 192 / December 2010 - January 2011

Helen Alexander: guest speaker at Chamber’s Annual Financial Lunch

Anish Kapoor: Turning the world upside down

5 minutes with 10 Jean-Claude Perdigues

The power of business: Patrick Kron at the Dîner de la Rentrée

French banks take care with risk

Success Story 32 Lars Clausen: Zoo markets a path to success

Managing Director of GDF SUEZ E&P UK Ltd

News in the City 13 Cuts sound clarion call to the city 17 Profile: Arnaud Chupin pursues Crédit Agricole CIB’s development in the UK

News 19 Low carbon energy pioneered for the Olympics 20 VINCI and partners working on Lee Tunnel

EADS Defence & Security becomes Cassidian

Cinémoi to be launched on Virgin Media

21 International SOS awarded China’s Ministry of Foreign Affairs contract

Accor: change in executive management

23 Anglo-French Treaty may reap economic benefits 24 The Charles Péguy centre 25 ESCP comes top in FT rankings 27 UK Regional review 28 Special focus on the Alsace region

Managing Director: Florence Gomez Editor-in-chief: Nicolas Kochan Assistant Editor: Lawrence Joffe Corporate Communications Exec: Hannah Meloul Graphic Designer: Prima Hevawitharane Advertising: David Lislet - Tel: (020) 7092 6651 Publications Assistant: Pierre-Olivier Lucereau Cover picture: © Stanislav Pobytov Printed by: Headley Brothers Ltd Subscription: INFO is published every 2 months.

Navigating the Storm

36 Timeline of a crisis 37 The revenge of the real economy 39 How to raise working capital after the financial crisis 41 When man and machine collide 42 Mixed messages haunt British banking 43 Not out of the woods just yet… Borrowing still tight for SMEs 44 Lightening the load 46 Bankers of no resort? 48 Capgemini’s model of a banking future 49 The £1.5 billion treasure trove 50 Mind the gap – opportunities for financing European innovation 51 Banking on which investment banks? 52 How to shape the bank of the future 53 French banks take care with risk 54 Make hay while sun shines! It may not last 55 New automatic pension schemes: What they mean for small businesses 56 Tax - The Tide is Turning 57 Adapting in order to succeed

Editorial Commitee : Mark Beynon, Anaïs Cudi, Xavier Denecker, Olivier Jouanne, Marion Laleve, Anne Marnat, Andrew Moore, Jean Olivari, Gherardo Laffineur Petracchini, Marcus Rebuck. Contributors : Mark Beynon, Xavier Denecker, Jean-Christophe Fonfreyde, Bruno Grappin, Angela Knight, Marion Laleve, Thibault Lavergne, Andy Lees, Stephen Lewis, Christian-George Malissard, Micha Missakian, Andrew Moore, Jean Olivari, Stéphane Rambosson, Jean-François Roubaud, Prue Watson.

The revenge of the real economy

58 Going back to basics: private client investment advice after the crisis 59 New rules for Credit Rating Agencies 60 Emerging markets: the path to future growth

Culture 61 Anish Kapoor in Kensington Gardens 62 What’s on 65 Book Reviews

Wine Press

@ the Chamber... 68 Chamber news and new members 71 First ‘Dîner des Chefs’ with Hélène Darroze at the Connaught 72 The power of business: Patrick Kron at the Dîner de la Rentrée 74 Annual Financial Lunch: Helen Alexander talks about International Cooperation 76 Enterprising spirit still rules in Jersey 77 Forthcoming events

Questionnaire de Proust 78 with François Ozon Distribution : CCFGB members, Franco-British decision makers, Business Class lounges of Eurostar, Eurotunnel & Air France in London, Paris and Manchester. Editorial and Publishing Offices : French Chamber of Commerce in Great Britain Lincoln House, 300 High Holborn London WC1V 7JH Tel: (020) 7092 6600; Fax: (020) 7092 6601 www.ccfgb.co.uk

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Patron Members of the French Chamber of Commerce in Great Britain

G U I D E L I N E S

October 2009

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5 minutes with Jean- Cl au d e Perdig u es

Newly appointed in August as Managing Director of GDF SUEZ E&P UK Ltd, the UK division of GDF SUEZ dealing with oil and gas exploration and production, Jean-Claude Perdigues, 49, is responsible for developing the largest British offshore gas project in 30 years. Here he shares his hopes and ambitions with INFO…

What is the culture and structure of GDF?

GDF SUEZ is very diversified and varied. It is prominent in energy, environment, distribution of water, and providing services to municipalities and industry across the world – and it is active in all these areas in

the UK. Here the high profile element is the coming merger between International Power and the power production business of GDF SUEZ. That is what is most visible to the public eye. My own job now is to manage the E&P business in the UK. In fact it is a long and successful story – for 14 years GDF SUEZ has had E&P offices in the UK, and throught that period we have been expanding. My work entails getting involved as an operator with offshore licenses in the UK and North Sea. How would you typify the British sector?

Jean-Claude Perdigues • Managing Director of GDF Suez E&P UK

10 - info - december 2010 / january 2011

Well, the UK oil and gas business retains great potential. It is a mature province where people have been producing for decades. True, the received wisdom is that there is not much more to be done, and the UK is unlikely to be the location for giant discoveries. But overall conditions are relatively stable and the remaining potential is still very significant. The UK is important for long term investments; especially so as we fund projects that may run for decades.

5 m i n u t e s with Jean-Claude Perdigues

Could you describe any major future challenges?

One central challenge affecting long term investment decisions is the decoupling of once-connected oil and gas prices. Especially since the economic crisis, oil prices have remained relatively high while gas has dropped because supply exceeds demand. This means less predictability. On the other hand, gas becomes more attractive as prices fall, which in turn justifies new projects. Actually, when you explore, you never know exactly what you are going to find, whether it will be oil or gas, or a mixture of the two. Because of price decoupling, you have to be more selective and cautious, as you need a profitable break-even point. That said, in the UK we benefit from a large and mature existing infrastructure, including offshore transportation routes, treatment facilities and distribution networks. Access to infrastructure is key to unlocking existing potential, at tariffs that make sense. The challenge is striking the right balance. Are you saying gas is a thing of the past?

On the contrary, there is much potential. Gas could substantially help meet short term domestic UK energy needs. And in the longer term, the low CO2 emissions of gas tallies with state environmental goals. So currently we are looking at the overall political agenda. There are already tax incentives for small fields, and for high pressure, more challenging fields, where the break-even point is set higher. These are steps in the right direction, but the authorities should introduce more incentives so we get the best out of existing gas reserves. Most of all, we are excited about developing the Cygnus1 gas field, one of the most important discoveries over the last 30 years but we also have other developments to come, either as an operator e.g. Juliet2 or as a partner e.g. West Franklin3. Coupled with incentivisation from Whitehall, this could yield results that would benefit us, the Treasury and the nation as a whole. French companies are becoming familiar in the UK, and GDF SUEZ is one of the biggest. So why is it not better known in the UK?

First, unlike EDF, say, we are not really in the UK domestic retail business. Apart from energy activities and exploration, we work mostly in the power sector, as a producer. In terms of retail we service commercial customers, but we don’t distribute to domestic customers. However, the group is active in water distribution, which is more visible. There are currently already more than 10,000 people working for GDF SUEZ and affiliates in the UK, which is quite

substantial. We plan to invest in diverse areas in the UK where the group is strong worldwide, such as nuclear power production and underground gas storage. Is GDF SUEZ growing in the UK?

Oh yes. In my own field, we have more than doubled the number of UK staff over the past two years. We have about 100 staff and another 100 contractors. Nor is our merger with International Power the end of the story. It is just a milestone. Plus one of our affiliates, Cofely, is a key investor in the energy needs of the 2012 Olympics. In short we have a very diversified and ambitious UK portfolio, and we want to grow, so no doubt people will hear more about us! What is your UK turnover?

For my subsidiary, it is about £300m. We produce some 10m barrels in the UK. How would you describe GDF SUEZ’s management culture?

Our profile differs from country to country: in France and Central Europe we focus on the domestic market, less so here. First and foremost we are an energy company that covers the entire value chain from upstream oil and gas production and power production up to retail. We are now investing in many diverse UK business lines, including environment, water treatment and waste management – all utility-oriented activities. Embedded in our values is the idea of serving our customers, whether these be municipalities, governments, or domestic or retail consumers. We are very pragmatic and capitalistic. Worldwide GDF SUEZ employs some 200,000 and throughout we focus on our three main pillars, energy, environment and services. How do you run such a vast business?

We try not to get too centralised. To make this huge boat manageable, flexible and customer-oriented, we have to delegate authority and allow our affiliates appropriate autonomy. At the same time we operate within the framework of a consistent culture. We pay a lot of attention to the environment and ethics, especially in the E&P sector where health and safety are key. We have some key drivers and management principles that we apply around the world – and Britain is no exception! I Interview by Nicolas Kochan The Cygnus Gas Field is operated by GDF Suez, which also owns a 38.75% stake, Centrica has a 48.75% interest and Endeavour holds the remaining 12.5% interest. The field was discovered in 1988 and lies at water depth of 76ft. The discovery is one of the largest in the Southern North Sea. 2 Juliet is located to the south of the Amethyst gas field, about 40 km due east of the Humber Estuary. 1

West Franklin is a gas and condensate field to the west of the Franklin Field. The discovery was made in 2003 below a depth of 5,750m (vertical depth). 3

info - december 2010 / january 2011 - 11

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news in the city

by Nicolas Kochan

Cuts sound clarion call to the City

ritain’s sovereign debt is trading at lower yields than at any time in the last twenty years. It is lower than Germany’s, lower than any Western developed country. The reason: the markets and the City have given a major thumbs up to the government’s cost cutting exercise of 20 October. Why are the yields lower? There are two reasons. First, City bond traders believe the UK will be borrowing less as the British public sector shrinks. Second, because the markets believe that the chances are now remote of Britain defaulting on its obligations. Whereas Britain was once referred to in the same breath of Greece, now it is spoken of with reverence in the Square Mile. Indeed, Britain’s government has been hailed as the most radical among the G20. It seemed a remarkable claim at the time it was made, some months ago, and it was based on the Coalition government’s proposal to swing the axe among the state-based part of the economy. It was also radical because it envisaged bringing the State’s share of the economy down in a short and sharp manner. The radical solution faces inevitable criticism. But in Britain it has been mooted. It does not remotely compare with the protests on the streets of Paris against comparatively modest pension reforms. The difference between British and French ways of doing politics could not be starker. That said, the British story has hardly started and no-one can be sure that the many people taking cuts to their benefits, their services and even their jobs, will take this lying down. Already we have seen the streets of London filled with over 40,000 protesting students. Yet the statement of 20 October was every bit as savage and effective as the early claims. Some £81 billion will be cut from the state budget over the next three years. Everything from social and welfare spending,

The City of London • the world’s largest financial centre

defence, universities, Local Councils and Government departments had their budgets cut. Chancellor of the Exchequer George Osborne says there is no ‘Plan B’, that is a fallback position if Plan A does not work, or does not find favour with the people. At the time of writing, the Coalition government does not need a plan B. For it appears the people like plan A. There has been outrage in predictable quarters, but there has been just as much support for the government’s proposition that the Budget Deficit of £154 billion needs to be tackled. The number looks all the worse when you look at Britain’s national debt of £903 billion, or 62.2% of GDP, the highest since records began in 1993. The fall in yield on government debt also reflects City expectations of sluggish UK growth over the next period. This reflects the decline of the State as a catalyst for growth and private expenditure. This Spending Review sounds a clarion call to private suppliers of capital to take up the slack. The more forward looking City financiers and markets will see opportunities for equity participation in Britain’s industrial sector. I N.K.

info - december 2010 / january 2011 - 13

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news in the cit y

Bye-bye to big bonuses?

Holding Goldman to account

||| City high flyers are unusually nervous about their bonus season, this year. A total of £7 billion is thought to be on its way into bank accounts. Bonuses are in the spotlight because of the Government cuts to welfare budgets and are preparing themselves for some political flak. That means bankers getting their heads down and hoping the abuse flows over them. David Cameron gave a taste of the shock tactics in early October when he said, ‘I think the Chancellor was pretty clear when he said if these people go on paying themselves big bonuses and not lending money to the small businesses that need to get our economy going, he won’t stand idly by.’ I

Paternoster Square in London • HQ of Goldman Sachs

||| INFO was glad to receive a signed copy of ‘La Banque: Comment Goldman Sachs dirige le Monde’, through the post, signed by the book’s author Marc Roche, French correspondent for Le Monde in the UK. This is a brave attack on the world’s most powerful, (the author would say insidious and wicked) investment bank. We have heard rather less from the bank that is famous for boasting recently, suggesting they may be learning some lessons from their unhappy recent past. I

||| For all the talk of bonuses, the Chancellor’s statement on 20 October was greeted in the City with relief. He imposed an annual tax on the banks of £2.5 billion, a modest sum given the amount of profits and the hostility now felt towards institutions who British people still blame for the recession. That will not dent many of their profit and loss accounts seriously. I

Golden opportunities to slot in...

For this relief...

In sickness and in wealth © flickr/John Linwood

||| In these bleak times, City women (but not only women) were pleased that Katrin Radmacher, a wealthy German heiress, got one up on her misbehaving French husband Nicolas Granatino, when the British court (for the first time) gave her prenup agreement legal force. The result will change the outlook for canny partners in a British marriage for good. I

A traditional vending machine

||| London was amused to hear that you can now buy gold coins through a vending machine. A clever entrepreneur is installing the security-proof machines for the super-wealthy in financial centres round Europe, so you can take advantage of a rising gold price, with your Coke or Mars bar. Whatever can we expect next? I

info - december 2010 / january 2011 - 15

@ t he ch a mber...

CREATIVE ANIMALS ADVERTISING PRINT DESIGN CORPORATE IDENTITY

ZOO Communications is a truly multi-disciplinary design and marketing agency specialising in the Luxury and Travel industries and have a knowledge of promoting French brands in the UK. ZOO has over 20 yearsâ&#x20AC;&#x2122; experience and a never ending desire to create and innovate with new technology across an ever-expanding portfolio of interactive media such as iPad and iApps. We would love the opportunity to discuss what we could do for you, please call Lars Clausen on +44 (0) 20 8541 0800 or email lars.clausen@zoocomms.com

WEBSITE DESIGN & STRATEGY E-MARKETING iPAD & iAPPS SOLUTIONS 16 - info - december 2010 / january 2011

www.zoocomms.com

news in the cit y

profile

Arnaud Chupin pursues Crédit Agricole CIB’s development in the UK London is the main hub of Crédit Agricole CIB’s Fixed Income Markets activities. Now Arnaud Chupin says the bank wants to sell more of its services to big UK companies and institutional investors.

rnaud Chupin is a great fan of London. The man who heads up Crédit Agricole CIB’s UK operations says, ‘London is clearly the capital city of Europe for capital markets. It is easier to attract people, it is more flexible.’ Mr Chupin says he believes there is still a strong local demand for capital markets products and structured financing solutions and he is seeking to position Crédit Agricole CIB to meet it. He knows the capital markets areas in great depth. Having started his career in Paris, Arnaud Chupin has held a number of positions at Crédit Agricole CIB, from Commercial manager in Sri Lanka to Head of the Swaps desk in Tokyo. Early in the 90’s he took charge of the Group’s European futures operation, firstly based in Paris and then in London. He moved on to become Senior Country Officer (SCO) of Crédit Agricole CIB’s business in Italy in 1999. The country being the second retail market of Crédit Agricole Group made this a key position. Today, as SCO, he has charge of Crédit Agricole CIB’s business in the UK. Turning to the role of Crédit Agricole CIB in the UK, he says it operates as a ‘classical foreign bank in a European country. We target UK clients for what we do well, namely structured finance and capital markets. We offer these services to very large companies. We also offer access to our global network to clients.’ He also notes that the UK is a platform for many of Crédit Agricole CIB business lines, in particular Fixed Income Markets and Structured Finance.’ The bank is concentrating its structuring and

A great fan of London • Arnaud Chupin

origination capabilities in London. This gains efficiencies and enables the bank to adapt to changes in market trends more quickly. Chupin highlights that over the years Crédit Agricole CIB has built strong relationships with British Corporates and Financial Institutions and remains committed to assist them in their development. Parallel to this he underlined the leading role of Crédit Agricole CIB in supporting KKR’s acquisition of Pets at Home, a transaction which reopened the European Leveraged Finance market for underwritings in March 2010. Arnaud Chupin also illustrates Crédit Agricole CIB’s commitment to the British economy by listing many UK infrastructure projects that the bank recently financed: Southmead Hospital in Bristol, M25, Gatwick Airport and the Future Strategic Tanker Aircraft project (MOD). This demonstrates Crédit Agricole CIB’s commitment to the UK. “We are proud to finance these projects that will help the country’s economic recovery.” I N.K

info - december 2010 / january 2011 - 17

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news Compiled by Hannah Meloul

Companies

Low carbon energy pioneered for the Olympics

State of the art • The new low-carbon energy centre at the Olympic Park unveiled by Boris Johnson (inset)

||| London Mayor Boris Johnson officially unveiled the state-of-the-art low-carbon Energy Centre in the Olympic Park on 19 October. Accompanying him was Gérard Mestrallet, Chairman and CEO of GDF Suez, who will own and operate the energy-efficient new facility, and the CEO of the Olympic Delivery Authority (ODA), David Higgins. The Energy Centre will generate electricity and deliver energy across the site, well before the Games begin. The project is the largest such scheme to be built so far in the UK. Designed, financed and built by Cofely, a subsidiary of GDF Suez, the centre will channel excess heat produced during electricity generation, towards heating and cooling buildings. Besides its five cooling towers and two boilers weighing some 60 tons each, it will span approximately 16km of community energy networks for the new buildings and communities that will develop after 2012. Boris Johnson, Mayor of London said: “It is an environmental imperative that we harness the 2012 Games to raise new standards of sustainability. It is a fantastic achievement that the Olympic Park will be powered

Energy Centre Facts • An initial capacity of 46.5 MW of heating and 16 MW of cooling • 45m tall at its highest point • 5 cooling towers, and 2 hot water boilers each weighing around 60 tons locally. We want to encourage more energy centres such as this one through the London Green Fund, which will offer loans for innovative infrastructure projects.” ODA Chief Executive David Higgins said: “The opening of the Energy Centre is a significant milestone for the Olympic Park and demonstrates the sustainability features that underpin this project. The centre will deliver a lasting legacy of green power for generations to come and sets a model for future urban regeneration schemes”. The Energy Centre has a flexible modular design, tailored to blend with the design of the wider Olympic Park, so that further capacity and new technology can be added after the Games are over. I

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VINCI Construction Grands Projets and partners are breaking ground on the Lee Tunnel shaft site ||| Three of the country’s leading civil The Lee Tunnel will help prevent 40 engineering contractors − Morgan Sindall, per cent of the approximately 39 million VINCI Construction Grands Projets and tonnes of sewage which enters the River Bachy Soletanche (MVB) – are working Thames and River Lee each year from 57 together to deliver the £635m Lee Tunnel. overflow points. Construction started The joint venture partners have at the end of September and tunnelling collaborated in the past on some of the work will start in 2012, with the project UK’s highest profile projects, and on due for completion in 2014. Thursday 30 September they broke ground The tunnel will be Thames Water’s on the new four-mile sewer. As wide as biggest engineering project to date. three double-decker buses, this tunnel will Debbie Leach, CEO of enviromental be the deepest ever to be constructed in charity Thames21 said: “Currently the London. It will prevent 16 million tonnes sewage going into the River Lee kills fish of sewage overflowing into the River Lee and other aquatic life, in turn affecting Martin Baggs • each year. The tunnel will take discharges the birds. Once the sewage has gone, there CEO Thames Water from London’s largest combined sewer will be many more opportunities for the overflow at Abbey Mills in Stratford, east London, for community to get actively involved in improving, treatment at a now-expanded Beckton sewage works. enhancing and enjoying this beautiful river.” I

EADS Defence & Security changes name to Cassidian ||| EADS Defence & Security announced on the 17 September 2010 its official name change to Cassidian. The announcement was made by EADS and by Cassidian CEO Dr. Stefan Zoller. Cassidian remains a division of EADS and believes that it can market its large portfolio of security systems more effectively by establishing a clear-cut profile. “Our business is changing. So are our customers. Especially in the civil markets which we address with our security products, it is essential to be perceived as a strong brand,” says Dr. Zoller.

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20 - info - december 2010 / january 2011

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The new name comes from the Latin terms “cassida” (helmet) and “meridian” (the imaginary line running north and south). It symbolises worldwide protection and security, thus reflecting the Cassidian claim, ‘defending world security’. Cassidian has also introduced a new logo consisting of the globe with surrounding and protecting hands. The company has started to use the new name and logo immediately, although its subsidiaries are retaining their present names for the time being. I

Cinémoi to be launched on Virgin Media ||| After its first bold move in 2009, with the launch of the Cinémoi television channel on Sky (channel 343), the promoter of fine French Films on the little screen has announced they will be broadcast on Virgin Media (channel 445) from early December. To celebrate its launch, Cinémoi will be available December 2010 to January 2011 with diverse and exciting selection of the greatest French films, for 12 hours a day from 3pm to 3am, all with English subtitles. As an independent channel in the world of media, Cinémoi has dedicated itself to bringing glamour, style and quality programming to the UK audience. I

news

International SOS, the group chaired by Arnaud Vaissié, awarded China’s Ministry of Foreign Affairs contract ||| International SOS has been At the signing ceremony in awarded the contract to provide Beijing on 17 September, Yang comprehensive medical and Jiechi, Minister for Foreign security assistance services to Affairs, acknowledged that the People’s Republic of China, significant risks exist for their Ministry of Foreign Affairs (MFA). global workforce when they Under the new agreement, MFA work and live abroad. Laurent Sabourin, Group Managing Chinese diplomatic personnel stationed abroad and their Director of International SOS, families can access International said of the contract: “China’s SOS’s 24/7 assistance services foreign affairs policy is highly from their 25 global alarm centres influential as it emerges as and receive medical treatment a rising power backed by its and support at International SOS robust economy, an engine of clinics worldwide. world economic growth. We Yang Jiechi • Chinese Minister for Foreign Affairs They can also obtain preare very proud to have the travel advice, security and medical alerts and be opportunity to support the MFA, which is a testament evacuated in a serious medical or security incident. to the strength of our value proposition.” I

Accor’s Board of Directors announces a change in executive management ||| Under the leadership of Gilles Pélisson, Accor has continue to act as Chairman of the Board of Directors, undergone a radical transformation in the last five in a non-executive capacity, until January 15, 2011, on years. The demerger of the services and hotels business which date Denis Hennequin will assume the position has been successfully completed and of Chairman & CEO of Accor. the company is back on track for growth, Philippe Citerne, Vice-Chairman of with sharply improved results. Accor’s Board of Directors, said: “The Accor is now moving Board is unanimous in thanking Gilles Accor is now moving into a new phase into a new phase in its development, during which the Pélisson for his crucial contribution to definition of priorities and their execution in its development, Accor’s development. Over the last five during which will be key factors in its success. years at the head of the Group, Gilles On the occasion of the Board of the definition of has successfully led every stage in the Directors meeting on November 2, 2010, priorities and their Group’s transformation, and in this way the Board and Gilles Pélisson, Chairman execution will be key has made an enormous contribution & CEO of Accor, recognised the strategic factors in its success. to strengthening Accor’s position as divergences between them, leading a world leader and improving the them to organise the departure of Gilles Group’s financial performance against a Pélisson as of 15 January 2011. backdrop of economic recovery”. The Board of Directors has therefore terminated Gilles Pélisson said: “I am proud that Accor, now Gilles Pélisson’s appointment as Chief Executive Officer refocused and in the best of health, can take full and appointed Denis Hennequin as Executive Director advantage of the economic recovery. I have every with effect on December 1, 2010. Denis Hennequin has confidence in the successful development of Accor been a director of Accor since 2009 and Chairman & and Edenred. I would like to thank most sincerely the CEO of McDonald’s Europe since 2005. Yann Caillère women and men all over the world who worked with will retain his position as Deputy CEO. me on this vital transformation that has given the To ensure a smooth handover, Gilles Pélisson will Group a strong base on which to build its future. I

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The Caravan of Hope 2012 ||| The SSL White Horse Charity buys horses in the Camargue, ride them across France and part of England, and, at the end of the long ride, donate them to RDA Centres (Riding for the Disabled Association and similar centres in France such as the Fondation Claude Pompidou, Centre de Kerdreineg in Brittany). As part of the riding team, they take French and British young people from disadvantaged backgrounds or with social problems and help them to get their lives working by enabling them to care for and ride the horses during the six month journey. The SSL are planning and fundraising their 3rd project, The Caravan of Hope 2012. This new project has the same aims as the two previous ones, but they will be using two covered western style wagons instead of escort vehicles. 5 other Camargue horses will be ridden by the young people and team leader. Their new and third aim is to leave as small a carbon footprint on the project as possible by being completely environmentally friendly. Amongst their many and kind supporters: saddles, bridles and saddle cloths were given to them by the Cavalry Regiment of La Garde Républicaine in Paris. The

14 times champion of France in ‘driving horses’ or ‘attelage’, Mr Gérard Ste Beuve, is very kindly choosing the two draught horses for the association and training them to be both ridden and driven free of charge. They have just been ‘voted in’ by the British Community Committee and are pleased to be members of the “British in France”. The Fondation d’Entreprise France Télévisions have assured the SSL of their intention to continue to support them. France 3 covered their progress across France on their news programme I Although the Caravan of Hope project is not until 2012, we need donations NOW in the UK! If you would like further information or would like to make a donation, please contact: info@sllassoc. com, or Jakki Cunningham on 0207 482 5673/07946 098 442 - jakkipee@hotmail.com for UK enquiries and Isabelle Segura on 00 33 (0)5 61 82 55 31/00 33 (0)6 08 02 56 45 - isegura@free.fr for enquiries relating to the French side of the charity. All our literature is available in French.

hello, goodbye...

he French Chamber of Commerce would like to welcome new members who have just joined us. We would also like to express our gratitude to members who have made outstanding contributions to the Chamber, but who are now moving on to different work or to retirement.

Laurence Dubois Destrizais

||| Laurence Dubois Destrizais, new Minister Counsellor for Economic and Financial Affairs. Following Jean-Pierre Laboureix’s departure in the summer, Laurence Dubois Destrizais has taken up her post as Minister Counsellor for Economic and Financial Affairs at the French Embassy on 15 October 2010. Coming from the Treasury, she has a very strong background in international and multilateral affairs, as her previous posts include, most recently, Minister Counsellor for Economic Affairs at the French Permanent Representation to the OECD and French Delegate to the Development Assistance Committee, as well as Permanent Delegate for France at the WTO in Geneva. I

Micha Missakian appointed to the French banking desk ||| Micha Missakian, Ernst & Young France Partner, transferred to the London office last July 2010 to implement the French Banking Desk. Micha is a Commissaire aux Comptes and holds a Master in Financial Markets from Paris Dauphine. He has been serving large French Financial institutions for 17 years. In 2007, he created and then supervised during 3 years the French Banking Desk Americas in New York. This appointment in the UK is part of the Ernst & Young’s commitment to strengthen Micha Missakian through the French Business Network a close business relationship with French companies abroad in order to assist them in their growth process. I

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Bilateral

Anglo-French Treaty may reap economic benefits

||| Few can doubt that the Angloimplications before the respective French military declaration of 2 ministries of defence have decided November represents a milestone on allocations”, he commented. “Yet in bilateral strategic and diplomatic one area that arises is the future relations. Commenting on the development of unmanned aerial treaty’s centrepiece, a rapid reaction vehicles (UAVs) or drones”. “Currently Combined Joint Expeditionary Force French, Spanish and German (CJEF), UK Defence Secretary Liam companies are collaborating on UAVs, Fox said it made ‘perfect sense’ to put so with these new agreements it seems British combat troops, including the logical to open up this area to British SAS, Royal Marines and Parachute firms as well.” Regiment, under French command. Besides the 6,500-strong CJEF, The Daily Telegraph defence which will begin land and air analyst, Sean Rayment, concurred, exercises next year, the Anglo-French describing the deal as essential. “The treaty also provides for: an integrated The Parachute Regiment French and British have similar sized aircraft carrier strike group for the armed forces”, he added, “and France’s military expenditure early 2020s; a joint nuclear weapons facility at Valduc in is greater that the United Kingdom’s, but not by much. From France and another development centre at Aldermaston; a like-for-like view Britain is far closer to the French military mutual support on military transport aircraft, notably than the United States.” the Airbus A400M; spy drones to enter service after 2015 In the longer term, moreover, the deal signed by and combat drones after 2030; a ten-year strategic plan to French President Nicolas Sarkozy and British Prime cut 30% off the costs of complex weapons systems; and a Minister David Cameron could signal a sharing of cyber security framework to counter marine mines and munitions and commission of new weaponry, to the enable French use of British refuelling facilities. Given benefit of defence firms on both sides of the Channel. General Sir David Richard’s 14 November remark that the One defence industry source indicated reasons for some battle with Al Qaeda may go on indefinitely, British and caution, however. “The treaty was at the political level, so French armed forces will probably have enough on their it would be premature to comment about commercial plates for years to come. I

Expatriation – wave of the present, and future? ||| Forget Gene Kelly’s American in Paris – recent evidence suggests that French and ‘Brits’ prefer to explore life on either side of the Channel themselves. Yet while the typical French migrant settles in London and its environs the English Francophile seems more drawn to the countryside. Furthermore the French are only now coming to accept ‘expatriation’, whereas Brits have been relocating since time immemorial. These insights emerged from the Institut Français’ discussion on Expatriation, held on 7 October and moderated by Etienne Duval. Principal participants

were France’s Christian Roudaut and Britain’s Jonathan Fenby, respected authors and journalists who have lived as expats in each other’s countries.

Attitudinal sea-change Roudault vividly described how French attitudes had changed. “The cliché was that expats were exploitative nabobs, mercenaries of finance in London, traitors to their country, or madmen who chose exile because there was something wrong with them. But the general view has changed radically in the past two decades. Now new

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emigrants are normal people, just like Dordogne and now in France’s other French.” southwest for the lifestyle.” French expatriation grew during Added one contributor from the with late 1990s with European floor, a Frenchman resident in London: alignment, said Roudaut, whose latest “There is a flexible jobs market here, book surveys the 2.5m mainly young unlike in France, and the UK represents French who now live abroad. That the first step to globalisation. You can still lags behind the estimated 5m be in a very international world just British expats, for as Fenby explained, two hours train from Paris. The change “Brits have a lot of developed English- ‘An American in Paris’ • 1951 is really startling.” speaking countries to go to; the Roudault stressed the ethnic French have fewer.” and social diversity of the new French emigrants and wished that “more in France would listen to what we Should I go or should I stay? have to say”. While negative factors drove expatriation There remains an asymmetry between British and – like frustration at French red tape – Roudault also French motivations, added Fenby. “Many French in called expatration a “win-win situation where you London came to better employment opportunities”, succeed with a good experience, and with a poor one, he said, “Yet English friends in France settled in the you appreciate the good things when you return.” I

The Charles Péguy Centre, where French visitors can integrate ||| Since its creation in 1954, the Charles help in 2009, and already more than 800 Péguy Centre has welcomed French people since 1 January 2010. One fifth of them have aged between 18 and 30 years old who come no qualification, another 20% have an Ato visit or are living in London, and helps level or Certificate in Vocational Training, them to integrate in the English capital. On 30% have a second Bachelor’s degree and a 10 November 2010 the CPC celebrated its further 30 % hold a Master’s level degree. move to brand new premises in Old Street, For more than 20 years, the CPC has built in order to satisfy increasing public developed an employer network. About demand for their services. half of the jobs on offer are related to Charles Péguy Not only will the CPC be able to offer tourism, hotel business and catering, which (1873 - 1914) members better equipment, such as advanced typically suits young French people who computers and wifi, but members will also be are still developing their skills and may not able to enjoy much more spacious rooms. The CPC was necessarily be fluent in English. As regards the other taken up by the Centre d’Echanges Internationaux in proposed jobs, they are related to various sectors: 1983, and is strongly backed by the French Government’s retailing and commerce, administration and IT, and a European and Foreign Affairs Department and the good number of services. French General Consulate in London. It is far easier for students to travel abroad today Everybody can become a CPC member for a £60 fee thanks to “grandes écoles” and universities’ networks. a year. Each member can then enjoy daily job offers, However, this seems less the case for those who are and an employment consultant can help him or her no longer students. And this is the role assumed by revise his/her CV, train for job interviews, gain access the Charles Péguy Centre. Essentially it enables young to good addresses and get advice on how to improve people freshly propelled into their professional life to one’s English or find accommodation. find a job through the organisation, especially through More than a thousand members enjoyed the CPC’s use of CPC’s networks. I

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news

Schools

ESCP comes top in FT rankings This year is proving quite a bonanza for ESCP Europe Business School. The School has won a string of awards, thanks to a combination of core values, flexibility and openness to new ideas, Director Professor Patrick Gougeon told INFO’s Lawrence Joffe.

||| Patrick Gougeon, Director of ESCP Europe Business School in London, had barely got his feet under the proverbial table when the Financial Times ranked ESCP Europe as the best business school to study a Master in Management degree. The Financial Times announced its 2010 league table on 20th September, and with it the School moved into first place in the world for its innovative, cross-border management programme. To celebrate the news, the alumni of the School hosted a champagne evening and charity auction at the Sofitel Saint James Hotel on Friday 19th November. The Patrick Gougeon event was attended by His Excellency Maurice GourdaultMontagne, the French Ambassador to the UK. Only weeks later ESCP Europe notched up another success, when the Financial Times positioned its European Executive MBA programme into the fifteenth place worldwide and first for the career progression opportunities offered to its graduates. So what makes ESCP Europe Business School, with a campus in London sited on a former seminary, such a goldmine? The European dimension of the School is one factor, suggests Gougeon, and the London campus is an essential asset: “We enjoy the unique advantages of being in London... even the food and pubs!” he jokes. London is a hub of the Anglo-Saxon business culture, of the dominant normative enterprise model” he says. Yet equally Continental students learn to see things “from a global perspective”, says Gougeon. ESCP Europe London’s challenging combination of studies means students can fit in with any business environment, whether in Asia, Latin America or Africa. ESCP Europe runs numerous programmes and is cosmopolitan in character, too. Gougeon himself is French and in his previous assignment he headed the School of Management at the Asian Institute of Technology in Bangkok; his predecessor as London director, Davide Sola, was Italian.

Some 3,500 students from 90 different nationalities populate ESCP Europe’s five campuses – Paris, Berlin, London, Madrid and Turin. Often they spend each year of their three-year courses on a different campus. “We are reaping the rewards of the efforts that others made”, says Gougeon. A long and proud heritage helps too. Founded in 1819, the École Supérieure de Commerce de Paris was the first French school to teach business studies. Recently it merged with management pioneers, EAP, Ecole Européenne des Affaires, founded in 1973. Following the success of a new master programme in “Marketing and Creativity”, Gougeon is now keen to roll out a joint programme between London and Madrid ESCP Europe campuses on Energy Management. Such innovation is typical of ESCP Europe London. “We offer a truly pan-European business environment and see ourselves as part of a European edifice”, comments Gougeon. “Firms welcome our graduates’ flexible attitude and their ability to speak so many languages, especially so, it seems, at a time of recession”, he adds. ESCP Europe is accredited by the 1AACSB, 2EQUIS and 3 AMBA. Past alumni include Jean Pierre Raffarin, former French Prime Minister, Christian Porta (who graduated in 1984), Chairman and CEO of Chivas Brothers, and Nicolas Petrovic (1991) CEO of Eurostar. Others include Arnaud de Puyfontaine (1988) of Merrill Lynch Wealth Management, Catherine Petitgas (1983) Trustee of the Whitechapel Gallery, Sylvie Freund-Pickavance (1988) Business Director at Value Retail Management and Louie Beatty (1989) Managing Director of Piggyback. A roll-call, which itself seems worth celebrating. I www.escpeurope.eu 1 AACSB International − The Association to Advance Collegiate Schools of Business is an association of educational institutions, businesses, and other organisations devoted to the advancement of management education. 2 EQUIS is the leading international system of quality assessment, improvement and accreditation of higher education institutions in management and business administration. 3 The Association of MBAs (AMBA) is the international impartial authority on postgraduate business education.

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With free ofďŹ ce space and consultancy support, technology businesses canâ&#x20AC;&#x2122;t wait to move to Wales.

To apply for Access Wales T. +44 (0)1443 845 500 ibwales.com/accesswales 26 - info - december 2010 / january 2011

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uk regional review

The first A400M, surrounded by EADS employees Their cheery mood followed Prime Minister David Cameron’s announcement that they would help build 22 of Airbus Military’s A400M aircraft. The airlifter, nicknamed the Grizzly, is a four-turboprop beast that will ferry Britain’s armed forces around the world. North Wales Assembly member, Mark Isherwood, said this news confirmed the skill of workers in Broughton, who he predicted would “make great strides in securing the defence of the nation”. He also welcomed the economic boost that investment in North East Wales would bring. The A400M programme entered its industrial phase in 2006, and now the pan-European Airbus Military is eyeing opportunities for A400M exports to India. Broughton manufactures wings for the Grizzly’s aerial refueling sister aircraft, the Airbus 330 MRTT, also called the

Ulster firms hunt opportunities at Paris food show ||| Every two years Paris hosts the world’s biggest food and drink exhibition, and this October SIAL 2010 was honoured by a particularly strong Northern Irish contingent. Twenty companies from all over Ulster attended the four-day event. Together they represent over 60 per cent of the province’s food and drink industry, a sector that generates more than £3bn annually. Invest Northern Ireland assisted 17 of these firms and put them in touch with European supermarkets and foodservice organisations. Invest NI also ran a stand to promote red meat and organised a business mission to bolster ties with existing customers and seek new buyers.

Parisian Demonstrations at SIAL Alastair Hamilton, Invest NI Chief Executive, was “immensely encouraged to see such a strong representation of local companies from virtually every sector taking

part.” He predicted significant openings for Ulster exports to European markets, and noted that SIAL 2010 helped provincial firms keep abreast of global trends. Some 150,000 trade visitors from around 200 countries could sample the wares of up to 6,000 exhibitors I

Scottish firm teams with Total in Shetland gas bonanza ||| An Aberdeen-based offshore engineering company has won a £158m contract with Total E&P UK, British subsidiary of energy giant Total France. From 2012, it was announced in October, Subsea 7 will start installing the first of 141km of pipelines in the Laggan and Tormore gas fields, located in challenging 600m-deep waters 125km west of the Shetland Isles.

||| Few were celebrating after hearing the UK g o v e r n m e n t ’s long awaited spending review in late October. Yet workers at the Broughton Airbus plant in Flintshire, North East Wales, were exceptions.

Future Transport Strategic Aircraft (FTSA). The first of 14 FTSAs will enter service with the RAF late next year. Wings for the A400M itself are made in Filton, Bristol, across the Severn from Wales. I

Spending cuts? The news is less grizzly in North Wales!

Shetland Isles Some analysts predict a second North Sea bonanza that could generate thousands of local jobs. Subsea 7 currently employs 5,000 people worldwide and it has collaborated with Total on past North Sea projects. This lucrative FrancoScottish deal comes 40 years after the building of Shetland’s massive Sullom Voe oil and gas terminal. I

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regional feature : alsace

Alsace: your European business catalyst Alsace, the north-eastern region of France bordering Germany and Swiss, has on many accounts been a long-time favorite choice for foreign companies seeking a location for their activities on the European continent. Among the many assets attracting companies into the region:

An Outstanding Market Access Located along the Rhine, the long-time major commercial waterway of the continent, it is central to Europe’s main concentration of population, industry, investment, education and research. Most western European markets lie within driving distance, giving local companies an easy reach to a large share of Europe’s purchasing power. A Thriving and International Economy The cradle of flagships such as Alcatel, Alstom or Schlumberger, its early industrial vocation was only to be hindered by 3 successive wars, after which the region successfully diversified into new technologies with a substantial input from foreign companies’ investment. With its historic multi-cultural and bilingual assets, Alsace is the first international region in France. Strasbourg, seat of the European Parliament, is a vibrant cosmopolitan city with a large foreign community of professionals and students. The regional economy, one of the wealthiest in Europe, has both the highest foreign investment and exports rates in the country. Human Resources & Unparalleled Quality of Life With their dual culture, Alsatians take the best of both worlds, with German discipline and work ethics

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combined to French flair and creativity. Being naturally bilingual, their command of English is much better than the French average. Quality of the workforce has continuously come as N°1 satisfaction item in surveys conducted with foreign investors.

Internationally recognised research Alsace belongs to the Upper-Rhine FrenchGerman-Swiss area known as the “Golden Triangle of Research and Education.” This area combines 167,000 students and 20,000 researchers. Alsace boaststwouniversities about 250 research laboratories, and three national research establishments(CNRS, INRA, INSERM). Attractive financial tools - such as R&D Tax Credit and Cluster collaborative research financing - make it particularly interesting for companies located in Alsace to carry out their research in this unique environment. 5 high-tech clusters put Alsace at the forefront of progress • “Alsace BioValley”, a world-class cluster focused on pharma, biotech and medical devices. www.alsacebiovalley.com • “Vehicle of the Future” deals with technologies linked to car manufacturing, in association with the

regional feature : alsace

Fast Facts • 1st region for export per capita • 1st for employment generated by foreign investments • 2nd diplomatic center in France • 3rd scientific cluster in France

Franche-Comté region. www.vehiculedufutur.com • “Fibers Innovative Cluster” focuses on the development of fibers (wood, paper, textiles, composites) through innovative projects, together with the Lorraine region. www.polefibres.fr • “Alsace énergivie” works on the development of

energy-plus solutions in the building sector. cluster. www.energivie.eu • “Hydreos” deals with continental water issues: pollution management, quality of water systems and water protection, in collaboration with the Lorraine region. www.hydreos.fr.

More than 1,200 international companies have chosen Alsace Novartis – Ricoh – PSA – Columbia Sportswear – Georgia Pacific – Behr – Liebherr – DS Smith Kaysersberg – Osram – Hartmann – Gripple – Mercedes Benz – HJC – Mars – DuPont de Nemours – Sharp – Timken- Johnson Controls – Dow – Kraft – Wrigley – Hager – THK – Mitsubishi – Lilly…

Services Alsace International Alsace International is the organisation for the economic promotion of Alsace. It is the one-stop-shop for international companies seeking to develop their European business from an Alsatian base. AI supports you all along your project: • help in your location search, advice on public funding programs • organisation of your “look & see” trip • introduction to strategic regional partners • support for your expats to make their move easy… Our services are confidential and free of charge. I

Tourism Alsace, a highly touristic region, welcomes around 11 million visitors yearly. Alsace boasts an exceptional concentration of historic and cultural sites, diversity of lively cities and quaint villages, beautiful mountains allowing multiple outdoor activities, the best white wine in the world and the highest concentration of Michelinstarred restaurants! The region is also well known for the celebration of Christmas time, for more information please visit: http://noel.tourisme-alsace.com/en/

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Fournisseur dâ&#x20AC;&#x2122;Ã©nergie Ã Londres Pour plus dâ&#x20AC;&#x2122;information visitez edfenergy.com

30 - info - december 2010 / january 2011 %$& %NERGY IS A TRADING NAME USED BY %$& %NERGY #USTOMERS PLC 2EG .O WHOSE REGISTERED OFlCE IS AT 'ROSVENOR 0LACE ,ONDON 37 8 %. INCORPORATED IN %NGLAND AND 7ALES %$& %NERGY #USTOMERS PLC IS A WHOLLY OWNED SUBSIDIARY OF EDF Energy plc. The responsibility for performance of the supply obligations for all EDF Energy supply contracts rests with EDF Energy Customers plc.

regional feature : alsace

A UK Success Story in Alsace ALSACE: THE CONTINENTAL ‘CRADLE’ OF GRIPPLE UK’S INNOVATIVE WIRE SUSPENSION SYSTEM COMPANY

eveloped within two years, the original Gripple was launched in the UK in 1988. Throughout the 1990s the name Gripple became synonymous with fencing and trellising. In 1998, Gripple entered the world of construction. The wide ranging, ground-breaking, ready-to-use solutions have revolutionised services ranging from electrical, heating, plumbing and ventilation to air conditioning, ceilings and signage. Energised by the rapid and exceptional British development of the company’s innovative wire suspension system, Gripple Ltd decided to expand in Europe. In September 1999, the European industrial sales operation of Gripple was established in Obernai, France. Apart from its strategic location at the crossroads of major European markets, Alsace was selected for its conscientious, multilingual and highly qualified workforce as well as for the quality of life the region offers. Setting up in Alsace was facilitated by a strong professional support from the local economic development agency. Ten years on, the Alsace office has expanded: it boasts 55 well trained staff, 4 regional offices in Germany, Italy, Portugal and Spain, and has opened a marketing department as well as an integrated design department. Innovation has always been central to the Gripple ethos, as has significant financial investment which will continue to support the development of further revolutionary awardwinning products in more markets in the field of construction. I Denis Anthoni, Director, Gripple Europe www.gripple.com

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success s t or y

Zoo markets a path to success Lars Clausen’s French and Danish influences have already made an impact on marketing in England. Now with its embrace of the brave new world of iApp technology, his firm Zoo Communications promises an even more exciting future.

implicity and style – those are the two winning ingredients of any successful marketing group. So says Lars Clausen, managing director of Zoo Communications. And Lars, now 42, feels genetically blessed with both ingredients as he is half French and half Danish! In the genes?

As he explains, ‘My mother’s French side had a definite influence, because I do appreciate good elegant design. Yet there is a modern-looking simplicity to the way Danes do things, and that also translates into Zoo’s no-frills, no-nonsense service.’ Another inherited head-start was a good grounding in business principles from his Danish father, the marketing director for American Express Europe. In fact it was his father’s job that brought Lars – who was born in Aarhus, Denmark’s second city – to London as a child. Creative genes clearly run deep in the Clausen family tree. Lars’s Danish grandfather was an architect, and the young Lars promised him one day that he would become an architect like him. ‘But while I never really managed it, I was always interested in advertising and marketing. So when I was offered a position in a small design agency after graduating in 1990, it seemed a good step onto the ladder. I have stayed in design and communication ever since.’

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Empowering people

Another key to success is an open managerial style, Lars insists. Zoo now handles clients from the Monaco Tourism Board, the software firm Cognizant and the prestigious Oetker European hotel chain, to the retail chain Tchibo, the brewing conglomerate Inbev UK, a prestigious marketing group called The Luxury Network, and the elite London Capital Club. Studying the market

Lars graduated in 1990 and spent a year working for a small design agency at Kingston upon Thames. Then on 1 January 1992 Lars set up his own company, Direct Communication Group (DCG), the predecessor to today’s Zoo Communications. He admits that good luck played a role in attracting initial clients. Purely by chance he called the Institute of Direct Marketing (IDM), discovered that the marketing director was an old Kingston boy, and spent ten years working with them. Playing the French card

His fluent French helped him land a second client, a French company called Travel Voyages, for whom Lars’s firm did everything from newsletters to letterheads and business cards. ‘From early on I noticed I was getting easy wins when I approached French companies who were setting up in the UK’, he explains. One breakthrough came with the British Tourism Authority. The BTA remembered a piece Lars had

success story

Simplicity and style • Lars Clausen once emailed them, and called him in to help with a problem. BTA’s slightly rebellious French branch wanted to use edgy images of punks on London’s King’s Road, but this was not what the English BTA wanted to portray of England. It was a test: if he could solve this issue, BTA would employ his services fulltime. So Lars visited the Paris office, spoke to them in French, and changed their minds. All were happy and Lars continued working fruitfully with BTA. A taste for tourism and luxury

The BTA contract opened the door for others in the tourism field, first with Maison de la France and then with Le Méridien. When Forte Hotels bought Le Méridien they moved their offices to England. One day the Le Méridien manager called Lars, remembering an earlier contact, and said ‘I want to work with a French-speaking agency’. Lars continued with them even after Le Méridien’s owners changed, from Forte to Granada to Starward Hotels. Work included drafting brochures and corporate communications, directors’ and investors’ presentations, and creating collateral at a hotel level. In short, the firm transformed their visual marketing. To the point websites

Zoo never touches product design, yet it greatly influences packaging and advertising. Lars moved into the digital arena in 2000, and soon branched out into e-marketing, multimedia presentations and

web designs, such as a multilingual website for the Monaco Tourism Board. Yet Lars warns: ‘A website has to be clean, simple and straight to the point. The end-user is looking for something visually exciting. People no longer have time to read, and strong visuals tell a story far better than any words.’ A supposedly dynamic website full of Flash-based technology can appear cluttered, he says, and even static; whereas a simpler site loads quicker ‘and has information where you want it.’ If you lose people on the home page, says Lars, they switch off and move elsewhere. Mind-blowing possibilities

Lars particularly welcomes iPad technology, especially iApp programmes, which ‘open up mind-blowing possibilities for both sales and exhibitions’. He calls it ‘a whole new avenue for companies, a revolutionary way to communicate with end-users and staff alike’. Furthermore, apps will drive design because they enable you to do things you couldn’t do before. Data capture provides a perfect example. ‘You can get clients’ information onto their iPad, ready for use in a targeted email campaign’, he says. Zoo produced looping videos on ambilight plasma screens, and kiosks with options to download information onto memory sticks. Moreover iApps can duplicate on a client’s iPad what is shown on big screens at exhibitions. ‘The important thing is being in control of the technology’ I N.K. www.zoocomms.com/frenchchamber

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focus

Navigating the Storm Introduction

f the end of a recession may be found in its origins, this one is hardest call. This is because of its instability and the depth of neglect now exposed. The economic and financial world is in greater flux than ever before. In every department of finance, including currencies, stocks, national economies, banking and local business, managers are having to make guesses about the future look of their markets and their costs based on very little information. We are in a brave new world, where instability is a key factor in decision making. What are the risks in this environment, and what are the most visible key strategies? What will the financial world look like if one stares into the future? How do you succeed in this environment? The following pages will look at the origins of the instability in the economic crisis of the last two years. We will also look at the development of the crisis, from credit crunch to industrial recession. Having covered the macro-economic environment, we will go on to global conditions in the banking system, in particular the pressures for structural and capital change. We will focus here on the differing impact on French and British banks. We will also investigate the wider impact of the Basel Three changes on banks across the world. Companies have been forced to address the economic crisis, as banks have reduced their lending and imposed more conservative terms on borrowing. How has this impacted the running of their businesses? We will ask if British and French companies have reacted in different ways to a crisis in consumer confidence and spending power. Should managers make better or different use of their financial advisers and suppliers of financial products like insurance, bank loans or investment? Companies have also had to struggle with currency crises, ranging from the decline of the Euro/sterling rate,

through to pressures on the Eurozone and the decline in the dollar. This additional instability makes company planning and selling harder than ever. Finally, stock and bond markets have become especially volatile over the last two years, in reaction to the $64 billion question, when will recession end and sustainable growth resume. This forms the final part of the Focus and we hope to examine for an equation whose answer has yet to be established. But it is also the answer we are all seeking for better management, wiser planning and greater profitability. I

Focus contents 36 Timeline of a crisis How we got to where we are now

37 The revenge of the real economy 39 How to raise working capital after the financial crisis 41 When man and machine collide What role for banking?

42 Mixed messages haunt British banking 43 Not out of the woods just yet… Borrowing still tight for SMEs 44 Lightening the load 46 Bankers of no resort 48 Capgemini’s model of a banking future 49 The £1.5 billion treasure trove 50 Mind the gap – opportunities for Financing European innovation

51 Banking on which investment banks? 52 How to shape the bank of the future 53 French banks take care with risk After the crisis

54 Make hay while sun shines! It may not last 55 New automatic pension schemes: What they mean for small businesses 56 Tax - The Tide is Turning 57 Adapting in order to succeed 58 Going back to basics: private client investment advice after the crisis 59 New rules for Credit Rating Agencies 60 Emerging markets: the path to future growth

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Black Monday, the largest global one-day percentage decline in stock market history – the LSE fell by 26.45%

Aug 2007 Paribas announces two hedge funds frozen due to “complete evaporation of liquidity” in asset backed security market. European Central Bank injects €170bn into banking market, US Fed lowers interest rates, Bank of England refuses to intervene in credit markets

Oct 1987

Timeline of a crisis May 1997 Tony Blair and the triumph of New Labour – continuing in different guise the free market policies of Thatcher

Sept 2007 Northern Rock, one of the top five UK lenders, becomes the first British bank in 150 years to suffer a bank run

Sept 2008

Feb 2009

UK is officially in recession after two consecutive quarterly declines in GDP, the last by 1.5%

At President Obama’s insistence US Congress passes record $787bn stimulation package to prevent job lay-offs and further recession due to the worsening credit crunch

Jan 2009

Apr 2009

Sept 2010

UK Chancellor Alistair Darling reveals £175bn budget deficit, largest in UK financial history, with total government debt set to double to £1 trillion by the year 2014

Interest rates cut to 0.5%, the lowest rate in 315 years of the Bank of England’s existence; analysts speak of a new policy of ‘quantitative easing’

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One week after US government intervenes to save two vast mortgage lenders, Fannie Mae and Freddie Mac, to stop a run on the dollar, Lehman Brothers, 150-year-old giant of global corporate finance, files for Chapter 11 bankruptcy. These events are cited as major factors in the election of Barack Obama two months later. Meanwhile in Britain Lloyds takes over Halifax Bank of Scotland after the latter’s shares plummet. Within a month Lloyds itself is in big trouble as financial markets collapse.

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Part one : How we got to where we are now

The revenge of the real economy After outlining the recent history of financial and systemic crises, Xavier Denecker, MD of Coface UK and Ireland, locates the causes of the global economic downturn - and proposes solutions based on reform, restraint and a return to economic sanity.

housands of reports, books and articles have been dedicated to the financial crisis between 2007 and 2009. Most explain that it came out of a growing separation between the real economy and the financial economy. This link will have to be restored. The access to credit for the financing of companies’ working capital will be more difficult in the future.

The subprime crisis First of all, let’s go back to the story of the crisis. In short, how did we get here? Emerging Asia has for years been selling its products to the West at low prices which limited inflation; it accumulated receivables in dollars and euros which allowed interest rates to be maintained at a low level. Moreover, millions of households gained access to mortgages for the first time. This combination of phenomena was increased by securitisation. Banks generated securities representing mortgages that were produced in different regions and for different borrowers’ profiles. Rating agencies put their mark on those financial vehicles, which banks or private individuals bought on the mere financial rating of the vehicle, without considering the underlying risk. The possibility of getting rid of risk prompted banks to grant loans to insolvent borrowers: the subprime crisis was now close at hand. Before it burst, everyone had their reasons to be satisfied. Regulatory authorities were convinced that once the risk had been divided up, it would dilute until it became insignificant. Thanks to the ‘mark to market’ accounting technique – the valuation of assets at their current value on the market – bank directors were seeing the value of their companies soar on the stock market. As for traders, their bonuses were exclusively related to short term results.

The systemic crisis From 2007 banks, such as Northern Rock in the United Kingdom, started to experience serious difficulties. Financial commitments had grown out of proportion to their capital stock. Markets got feverish. Panic extended as traders, using very similar software, moved in the same direction. It was a classic herd effect, all upward, all downward, all at the same time. Most of the banks were convinced that they were too big for states to let them go bankrupt. So they had not integrated the lack of liquidity on the markets into their crisis scenarios. The massive intervention by central banks, governments and, behind them, taxpayers, then became their only resort. The financial crisis resulted essentially from the disjunctions between the financial economy and the real economy. The leverage, that is the proportion between the proper wealth of banks and their financial commitments, had increased to considerable proportions. Now, as public finances recover, the main challenge for governments consists in preventing this happening again. The G20, the IMF, the United States, the European Union, and the Bank for International Settlements in Basel are gradually setting up a new framework for financial activities. It will take months and years to implement, but this will happen. Avoiding a repeat of the financial crisis We can see the main thrusts of this development, even though the timing and details vary from one country to another. The Dodd Frank law, adopted in the United States reveals a few of them. A regulatory authority was set up in charge of detecting systemic risks and provided with the power to constrain or dismantle financial institutions in difficulty. The protection

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The revenge of the real economy • pictures of those evicted from their homes colour the windows of a council estate of consumers of financial products, in particular mortgages, is reinforced. Trading in derivatives will have to be conducted in organised markets and in structures separated from other banking activities. It will be more difficult for deposit banks to conduct operations for themselves. The dismantling of major banks in a critical situation will become easier. Other reforms are in progress. They deal with levelling off bonuses, and forcing a split in their payment to take account of mid-term results. Rating agencies’ activity is regulated and opened to competition. Establishing a tax on transactions aiming to curb them does not seem very likely, but taxation on the banks’ profits is on the agenda. Uncovered transactions will be prohibited on some securities such as Credit Default Swaps on sovereign debts. Limits to leverage will be imposed by subjecting transactions currently out of the balance sheet towards building reserves. And finally, the level of the required reserves will be increased according to the norms of Basel II.

The revenge of the real economy What will be the consequences for companies, in particular the financing of their working capital? A contradictory dialogue has emerged between

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companies who complain that credit has become rare, and banks who pretend that it is credit demand which has reduced. In the short term, companies will probably give priority to debt-clearing, cutting expenditure, and balance sheet consolidation. Banks are probably right to say that there are fewer candidates for credit, even if the increase in their risk premiums and of their margins has a role to play in the loss of interest they say they are suffering. But in the longer term, the establishment of control over leveraged finance and the increase in capital needs will make access to credit more difficult and more costly. The real economy will take its revenge on the financial economy. We will certainly not return to the time before derivatives and securitisation; financial innovation will go on. But all the ways of financing that are directly linked to real transactions will get privileged treatment. We can expect a significant development of receivables finance. On the whole, this change will clearly benefit companies whose real financing needs will be taken into account better; banks, who will avoid undertaking disproportionate risks; and citizens, who now know what financial crises cost in terms of unemployment and human dramas. I Xavier Denecker, Managing Director of Coface UK and Ireland

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How to raise working capital after the financial crisis Blamed for abandoning clients when times were hard, credit insurers, says Xavier Denecker, actually protected companies from bankruptcy. Now a new openness promises brighter futures.

Learning from the crisis However it is necessary to learn from the crisis. The first lesson, which applies to credit insurers as well

he sudden reduction in credit by banks has hastened the bankruptcy of many companies in 2008 and 2009. Credit insurers have also been blamed for having reduced or cancelled cover when their clients needed insurance most. What has happened? And what solutions are available to companies to finance their working capital now that the financial crisis is behind us? And why did banks in the United Kingdom reduce credit to companies so suddenly in 2008 and 2009? Three factors may answer this last point: first, the fragility of prominent financial institutions; second, their reluctance to take risks in an unstable environment; and third, the lower need for working capital by clients whose sales were decreasing. At the height of the turmoil credit insurers were confronted with a fast deterioration in the quality of their risk portfolios. Unable to adjust their premium rates quickly enough compared to the increasing cost of those risks, they reduced their credit limits. Yet they played their ‘cut-out’ role in the economy perfectly. By paying a level of claims never seen before, they enabled many companies to survive the bankruptcy of large clients. And by removing their guarantee on risky buyers, they revealed to their policyholders the customers with whom they could trade safely in troubled times.

Credit • hard to come by as to banks, is the need for transparency. Financial institutions’ clients have the right to know on which criteria they base their risk scores. The transparency requirement is not unilateral. It also applies to companies. When they release their annual accounts, and make management accounts available in a standardised and computerised way, they allow lenders and insurers to make decisions on risk which are better documented and therefore more accurate. The second lesson is that there will probably be renewed interest in forms of financing that are directly linked to commercial transactions, such as letters of credit, invoice discounting and factoring. Banks will have to put more capital behind their commitments, but resorting to secured forms of financing reduces the intensity of the risk and the need for capital. I

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When man and machine collide Corporations are vulnerable to destruction or destabilisation as a result of many factors. These include human duplicity, computational failure and inadequate oversight. Here, Bruno Grappin, Head of Research and Development at Arrow Financial Consulting France, explains the importance of operational risk in anticipating and protecting a company from disasters.

f the latest newspaper headlines are anything to go by, regulatory mechanisms. The impact of these crises has in particular compelled regulatory bodies to demand it appears very difficult to determine whether man or machine is most at fault for these troubled economic that financial institutions put in place a genuine times. Although programmed by humans, trading operational risk management system. Trust is vital to financial trading, as has recently computers can sometimes go completely out of control, with dire consequences: take the Accenture flash crash been proven by the liquidity crisis from which we have of 6 May 2010, for instance, where the share price just emerged. However, recent crises have shown that temporarily plummeted to just 1 cent following a human the control procedures currently in place are still far error that was subsequently proliferated by trading from satisfactory, and that the practices of enterprises, automatons. Or the Black Monday crash of 19 October their staff and their computer systems must all be regulated further. 1987, when a computer glitch brought about the collapse of many of the world’s stock markets – including Hong We have to recognise that only the concerted efforts Kong (down 45%), Australia (down 42%) and Spain (down of the regulatory watchdogs will prevent the mistakes made in the past from recurring. However, beyond the 31%) – and led to the biggest fall in prices ever seen. These events were both short-lived crises caused by machines, operational risk so widely reported by the media, is it which seem to have faded from public memory due to not time for us to question the validity of the models that are used to assign value to financial contracts? there being no human agency to castigate. On the other side of the coin, however, just think After all, were these very models and their questionable of all the editorial inches devoted to some presumptions not to blame for the recent subprime mortgage crisis, which of the more recent crises that we’ve gone through, reporting the misdemeanours of arose due to buyers not being able to such fraudsters as Nick Leeson, who was foresee the risks that they were placing themselves under? responsible for the collapse of Barings Bank in 1995, Jérôme Kerviel, whose actions led to The Basel Committee on Banking Société Générale losing €5 billion in 2008, Supervision is well aware of this problem, and Bernard Madoff, who swindled over $50 and is today demanding that banks billion from his investors. take model risks into consideration. By In the past, colossal losses generated transforming local crises into full-scale by machines in a matter of milliseconds international crises, market globalisation have shaken financial markets to their very has forced the financial world to recore, yet in the general mindset, the blame examine its practices and ensure that its for any misadventure whatsoever still risks – which go far beyond misdeeds lies solely at the feet of people. The crises committed by individuals – are kept under control. I Bruno Grappin, Head of caused by man and machine alike have forced financial institutions to reassess Research and Development – Arrow Financial their own practices and strengthen their Taking the blame • Bankers Consulting France

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Part two : What role for banking? Banks have taken much of the blame for the crisis. But most finance is provided by them, and most businesses depend on them for working capital. Here we look at the responsibility of the banks for what went wrong, but perhaps more importantly, look forward to assess the banks’ role in the future and other providers can offer finance for businesses.

Mixed messages haunt British banking British companies are still paying for the credit crunch that devastated the world financial system. Banks will not lend until they have a sounder footing, whatever the government might require, or the banks themselves claim, says Nicolas Kochan.

ank lending to British legacies. One of these is of course companies is at record low the massive budget deficit, which levels. This is a subject of great government is seeking fill with a aggravation to the companies and programme of harsh cuts to public perplexity to many who argue that services. The second, is the pressure only by investing and lending to on the banks to prepare themselves British companies will the scourge for sale to the market. This will of rising unemployment be enable the Government to earn averted. This looks sensible at one back its £76 billion support for the level, but at another it is fraught two big banks, together with some with complications. of the other funds the banks used St. Andrews Square in Edinburgh • Former To understand the problem RBS HQ to remain afloat. in stimulating bank lending, one Here comes the rub for small must go back to the low point in British banking history companies, completely removed from this world of in 2008 when the British government became owners high finance, yet dependent on the banks for borrowing of the country’s two largest financial institutions, Royal and long term investment. Government wants banks Bank of Scotland and Lloyds Banking Group. Both to lend to companies because they have a duty to the institutions had invested in American subprime and wider economy. Banks are also being asked to build up other so-called ‘triple-A’ instruments only to find them their capital reserves, to ensure they meet the solvency close to worthless as liquidity exited the market due to requirements (a function of the Basel Three accords). lack of trust in basic economic fundamentals. These are aimed at guarding them against a repeat of the The British government was required to spend some crisis. Finally, maximising bank profitability is a priority £850 billion in support of the banking system. This was to help government reap back its investment. made up of the following elements. The government The messages are mixed and unhelpful. Government spent £76 billion to buy controlling stakes in the two waves the big stick at the banks for poor lending to banks (58% in the larger bank RBS and 43% in Lloyds). smaller companies, on the one hand, yet they privately This was combined with the provision of £200bn pressurise them to do everything possible to set aside for liquidity support; guarantees of up to £250bn of risk capital and produce profits and performance that wholesale borrowing by banks to strengthen liquidity; shareholders will pay for at some future date. £40bn of loans and other funding to Bradford & Bingley Bank lending is likely to remain very short, so long and the Financial Services Compensation Scheme; and as British institutions are required to face in so many insurance cover of over £280bn for bank assets. ways, whatever the public posturing and bank directors’ The terrifying bill to the British taxpayer has left many statements of good intent. I N.K.

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Not out of the woods just yet… Borrowing still tight for SMEs ‘Credit crunch’ is no empty cliché for firms across the UK. Here Prue Watson,Press Officer of the Federation of Small Businesses answers questions from INFO, and explains that while banks are cautiously offering loans again, these often come with strings attached.

ow far has the credit crunch affected the ability of small and medium-sized businesses to borrow from banks?

At the beginning of the downturn, small businesses consistently received a ‘no’ from their bank when they applied for an overdraft or a loan. As we moved through the recession, banks began to say ‘yes’ but attached huge interest rates when businesses were at an all-time low. In some cases applying firms were and still are asked for collateral, such as listing their house as security. Now, small businesses in need of finance are dipping into their savings or borrowing money from friends and family. Could you give us some statistics to show how much SMEs were borrowing every year before the recession, say in 2007, and how much they are able to borrow now?

It was around £500 million per month before the

recession. However, for fuller statistics we advise readers to consult the British Bankers Association (BBA) whose figures are recorded here: www.bba.org.uk/statistics/ article/small-business-support-september-figures. Have banks attached new and tougher conditions to borrowing. What are those conditions?

Banks have got tougher on security for finance and have increased charges for banking services, such as cash and cheques. We are also hearing that chip and pin card terminals are being made more expensive and that monthly charges for these machines are being increased. Have you seen an improvement in borrowing conditions for SMEs?

Yes, however there have been fewer small businesses asking for finance. It is almost impossible to explain why this is happening, but reduced demand and fear of the banks have both been mentioned. Do you give any particular pieces of advice to SMEs wanting to borrow from banks?

Small businesses should always go to the bank with a solid and concise business plan. For without it the bank is more than likely to refuse the request for credit.

What other sources of finance can SMEs use, if banks reject them?

Money money money! • The beginning of the downturn saw many businesses refused a bank loan

We know from our members that many small businesses are dipping into their savings or going to friends and family for finance. But small businesses can also access finance from small credit unions and equity funds; and some loans and grants are available through local authorities. I

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Lightening the load The French Confederation of Small and medium sized businesses (CGPME) finds the worst of the loan famine for SMEs has passed. But the strains continue to show, says Jean-François Roubaud, CGPME president.

ow far has the credit crunch affected the ability of small and medium-sized businesses to borrow from banks?

Could you give us some statistics to show how much SMEs were borrowing every year before the recession, say in 2007, and how much they are able to borrow now?

The worst credit squeeze as far as businesses were concerned was in The CGPME uses the Banque de France’s statistics on non-financial the second half of 2008, particularly after Lehman Brothers failed. The companies [SNF]. These show crisis of confidence spread, and loans to businesses and SMEs have not recovered to where they SMEs found themselves starved of credit. Some sectors, and industry were in September 2008, when in particular, found their credit the crisis hit France. Then they had borrowed over €582 bn; today, dried up almost completely. What this meant in practice the figure is €539.5 bn. Not only for many SMEs was that banks that, but the level of loans granted to SMEs has also been going down became more demanding, took longer to process applications since August 2009. and granted less facilities. The crisis of confidence spread after Lehman The main problems appeared Brothers failed in September 2008 Have banks attached new and with short-term credit and tougher conditions to borrowing. cashflow facilities. Many SMEs found themselves in What are those conditions? serious difficulty. More businesses were becoming When it comes to accessing credit, the banks have insolvent, drastically so since July 2008 according to tightened up. The main criticisms by CGPME members are that the banks are more timid: during the crisis, they Altares. Insolvencies increased relatively modestly in the first six months, up 5%, but three times that rate in refused to take any risks, took longer to approve loans and the second half of 2008 (up 15 %). demanded more documents and, above all, guarantees. Today, if the cost of credit has fallen (except for This led to 48% of directors of SMEs saying they were reining in their investments in March 2009. short-term facilities, which are still high), the issue of What has stood out about this crisis is that it was not collateral required is becoming a hot topic. We also suspect the reforms the Basel Committee has instigated SMEs having problems which led to them finding it hard to access credit, but the credit squeeze by the banks. will just make the banks demand even more.

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ÂŠ sxu/kipcurry/Pierre Amerlynck

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The French Confederation of small and medium sized businesses says the loan famine has passed

What business sectors are banks favouring with loans? Which sectors are they less happy to lend to?

The CGPME does not have any accurate figures on this. One thing we have found, though, since the crisis, is that the banks have tended to lump all businesses together by the sectors they are involved in, not as a function of how able they are to repay their loans individually. When it comes to lending, the banks are tending to favour safe or financially most promising sectors. Have you seen an improvement in borrowing conditions for SMEs?

Accessing credit has become easier for SMEs in 2009-2010. Loan rates are down, and the banks have committed themselves to provide more finance for SMEs, improving their lending terms and acceptance times. The authorities have also implemented policies to encourage loans to SMEs. So things have improved: but there are still problems, especially in terms of short-term credit. Would you give SMEs wanting to borrow from banks any particular advice?

The main advice the CGPME can give its members is to be as straight as possible with their banks. They must not hesitate to think ahead, while trying to find solutions with their banks if need be. It is essential to establish a constructive dialogue with your banks

anyway. If that fails, the CGPME would encourage its members to get in touch with their third party credit ombudsman at their local CGPME or bring the credit ombudsman in if it falls within their remit. What other sources of finance can SMEs use if banks reject them?

While the banks are still businessesâ&#x20AC;&#x2122; main financial partners, alternative or complementary approaches are also growing. In France, primarily, there is OSEO, which was set up specially to facilitate credit to SMEs. It loans directly and in partnership with the banks, or it provides guarantees. OSEO proved to be particularly welcomed by businesses concerned by the crisis. Businesses can also use mutual guarantee companies, factoring companies and credit insurance to find financial solutions. And, finally, businesses can turn to venture capital. It is worth noting here that the authorities are trying to help SMEs access the regulated markets. Which banks are most willing to lend to SMEs?

Itâ&#x20AC;&#x2122;s hard to say which banks are most liable to lend to SMEs; but some networks are more oriented to the SME markets historically speaking than others. The Banques Populaires have a long record of investing in this market. Because of the crisis, most networks have also set up SME management operations. I

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Bankers of no resort? As Britain climbs out of recession, banks still seem cautious about helping small business startups. Lawrence Joffe explores the cases of some Federation of Small Businesses members who feel mistreated and who insist that banks could do more.

teve Kaczmarek of Lincolnshire sought a £50k loan from Natwest Bank to bolster his enterprise, Poyntons Trading. Surely, he felt, offering his mortgagefree property worth £250k as surety would clinch the deal. But Natwest declined and gave no reason. Now three staff have lost their jobs and Steve has had to cease trading.

Nor is Steve’s case unique – many SMEs wonder why banks make genuine entrepreneurs jump through hoops, banks who only three years ago were offering toxic loans to far less scrupulous applicants. Greater leeway in lending would benefit not only small firms, they say, but also a national economy that could do with an injection of commercial vigour. Here are three case studies.

||| James Winnister set up J-Tech Systems, a security and fire installation business in Croydon. By all accounts it was a successful enterprise, doubling turnover in the past twelve months, with much money going in and out every month. So why did Barclays refuse him credit or even a small overdraft? Frustrated with normal banking channels, James turned to ‘factor invoicing’ through another company. This is a way of getting immediate access to cash, rather than having to wait for invoices to be paid. Finance companies will pay out on unpaid invoices for a fee. Unfortunately there is a price to pay, as James explains. “We’ve had to factor out some of our larger invoices, which is costing the company between £500 and £1,000 a month – money we really could do with keeping in the business,” he says. The government should do more to pressurise banks into lending

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James Winnister: J-Tech Systems, Croydon

J-Tech Systems • provided security & fire installation to small businesses. After all, he says, “They’re the lifeblood of the economy.” I

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||| With loans from friends and family Chris Brown set up Froodoo, a business that provides advertising via mobile phones. But he needed extra capital, so he approached venture capitalists, only to be rebuffed on the grounds that Froodoo was too small and new. Next he sought out government grants, but found nothing suitable. So he considered an Enterprise Finance Guarantee, which aims to release working capital through term loans and the consolidation of overdrafts. The government has allocated £700m until the end of March 2011 for Enterprise Finance Guarantees (EFGs) to help banks lend to potential clients. EFGs can be claimed for business growth and development too, where a sound proposition may otherwise be declined due to a lack of security. However, while the banks liked his proposition, says Chris, they were not interested until Froodoo proved it could generate returns. In short Chris suffered from that familiar old Catch 22 dilemma – no loan without revenue, no

Chris Brown: Froodoo, South East

Froodoo • provides advertising via mobile phones

revenue without a loan. Currently he is approaching investment angels in the hope of some heavenly assistance! I

||| Earlier this year Vonnie Sandlan and her husband were made redundant. Far from seeing this as a disaster, however, the Glasgow couple immediately began setting up The Life Craft, a tea room, arts and crafts workshop, online products retailer, and creative skills college, teaching knitting, sewing, crocheting, jewellery making, even designing your own tattoo. “We were thinking of doing this for ages”, Vonnie explains. “I had been a civil servant and knew it would be hard to find another job in the current climate. So it was an opportunity to do something I really enjoyed”. Launched in August, the business soon attracted a following; all classes were sold out in four weeks. To cope with costs of anticipated expansion, the couple invested £30,000 of their own money and drafted a detailed business plan. Yet when they approached the Royal Bank of Scotland for a business loan of £16,500 they found obstacles flung in their way. “Formally RBS says it is not refusing; they just need more information”, says Vonnie. “I have already given them everything I can. I had to pay an accountant to help me answer complex forms. I understand the banks’ position after being bailed out, but I cannot fathom their attitude. My background is not in banking – so

Vonnie Sandlan: The Life Craft, Glasgow

The Life Craft • a tea room and arts & crafts centre

why are they asking me all these bankish questions!” Meanwhile the couple have an expensive 10-year lease to pay; they had to lay off one of two fulltime staff; and funds have dried up for essential equipment. Vonnie thinks banks are being short-sighted. “They have to listen up a bit. If they don’t help small, motivated enterprises who may have temporary cashflow needs, many will go under. And that won’t help anybody, including the banks.” I

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Capgemini’s model of a banking future With banks under pressure to start lending more freely to SMEs, Andy Lees, Vice President and UK Head of Capgemini Financial Services, explores what the winning bank model looks like.

s the UK government looks to retail banks due to factors such as the private sector to grow and low capitalisation, absence of credit drive the economy, it is imperative ratings and high bankruptcy rates that SMEs – which account for 51 in comparison to larger enterprises. per cent of private sector output Indeed the global financial and – have secure access to finance and economic crisis, characterised the confidence to use it. by the increasing cost of risk, a Considering their importance to shrinking demand in the markets, the economy, the UK government and rising pressure on banks to has a strong interest in supporting support the economy, highlighted the specific needs of this market, the significant challenge faced by and as such, banks have the added the small business banking market pressure of making lending a top to accelerate business development priority. Despite this, the latest whilst at the same time managing Bank of England figures show that the risk. small business lending remains in Capgemini recently produced crisis with many SMEs struggling to Andy Lees • helping SMEs a report “Small Business Banking get loans and having to self-finance and the Crisis ” with UniCredit or use savings to grow and develop their businesses, and the European Financial Marketing Association instead of taking on debt. (EFMA) which identified that the small business Business Secretary, Vince Cable, has spoken out market requires strong risk management from retail against limited lending by banks as without finance banks and that they must strengthen the role of the businesses are not able to create jobs and contribute relationship manager and improve their credit risk to the economic recovery. Identifying a niche in the management system. market, the British Enterprise Bank is set to launch in the second half of 2011, to offer a new source of funds Achieving the “winning bank” model to SMEs. If the bank gets a banking license from the Key to the report’s findings is the emergence of the FSA, it will be an entire business model designed to “winning bank” model, which prescribes methods for retail serve SMEs that have been unable to access adequate banks to outperform competitors on both managing risk funds from mainstream UK banks. and development of the small business market. To date, a key factor in the constraint of small To help outperform their competitors on both business finance is the restrictive risk management development and risk management the winning bank processes within British banks. Despite its development model prescribes that banks must ensure strong client potential, the small business market remains risky and relationships through a deep understanding of each complex, and requires strong risk management from client’s line of business, needs and expectations. I

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The £1.5 billion treasure trove Banks are the target of many unfair claims and criticisms, yet Angela Knight Chief Executive of the British Bankers Association says that their Business Growth Fund offers a way out of the loan famine.

ince the onset of the global financial crisis, the subject of bank finance for small businesses has become a topic of national importance in the UK. We are told the banks are not lending enough; or that they are lending enough but the terms are too onerous; or that they are turning down loan requests from viable businesses. On the other hand, over this same period, the banks have seen a steady decline in demand for loans – businesses are, quite reasonably, paying down their overheads, including loans and overdrafts – while there has been a steep increase in the cost of wholesale funding, upon which much bank lending depends. Securitisation markets remain subdued, with knockon consequences for the flow of bank credit into the wider economy. Past downturns show us that a pick-up in lending demand usually lags behind the pace of economic recovery. The normal pattern would be for the pick-up to start with larger businesses and then work through to the smaller ones. This time however the smaller businesses may be in a better position than their larger counterparts. The banks carry special responsibilities here, both in the wake of the economic crisis and as engines of the economy. They are currently approving four out of every five business loan applications, and are registering some 40,000 new business banking relationships every month - predominantly start-ups. It is however also true that the application process is likely to be more rigorous than it was in the easy credit era which ended with the credit crunch. Therefore the chief executives of the six largest UK banks decided in July to take a close look at how they could do more to help the UK return to sustainable

The Gladstone Budget Box • Iconic symbol of the Treasury

growth. The Business Finance Taskforce was set-up to analyse the facts, to create momentum: to ensure money is lent prudently to viable small to medium companies; and to support the economic recovery without initiating another credit surge. The Taskforce banks committed to 17 actions across three broad areas. At one end there are things like creating a national network of mentors to help guide customers through the process of securing credit. At the other end the banks are looking to build over a number of years a new £1.5 billion Business Growth Fund that will fill a gap in the market, providing capital for viable businesses wanting to invest and grow. This was not a document to be put on the shelf to gather dust. It is a promise to government, to business organisations and to customers, and we hope it will begin to bring real results for the small and medium business sectors very soon. I Angela Knight, Chief Executive of the British Bankers Association

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Mind the gap – opportunities for Financing European innovation Creative solutions are being attempted by investors in companies as they seek to assist the entrepreneurs, while protecting themselves from today’s enhanced risk climate, says Marion Laleve, managing director of Sum Up Consultancy.

hile venture capital business firms crucially fostered innovation, recession has made it difficult for them to raise funds. So how can innovative new companies find financial support? In the past, venture capital (VC) firms backed the early stages of such icons as Google, Apple and Facebook in the US and Skype in Europe. VCs turned start-up businesses into market leaders in such technological sectors as IT, life sciences and ‘clean tech’.

Disproportionate impact Venture capital represents only 2% of the US GDP, yet venture-backed companies accounted for 11% of jobs in the private sector and 21% in revenue in 2008. The UK, followed by France, is the largest venture capital market after the US. Private equity and venture-backed companies employed close to 6m people in Europe in 2004, equivalent to 3% of the continent’s 200m economically active people. Typically VC firms take on part of the ownership risk and help manage the company, provide expertise, offer contacts, assist in hiring management, and in difficult times use a heavy hand when trimming costs. Since the recession, VC firms have shifted from seeking high growth companies to managing existing clients, while cautiously stressing capital efficiency.

Recession and recovery Access to financing now worries innovative technology start-ups. When the recession hit the capital pool shrunk dramatically. Andrew Romans, CEO of the Founders Club says “many VCs could only raise a fund half the size of their previous one. Management fees were reduced and they had to let go of partners and team

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members. Most VCs shifted to companies that were already generating revenues and carrying lower risk. This created a funding gap in early stage companies”. Yet while predicting that 40% of VCs may close, Romans predicted that entrepreneurs could plug the funding shortfall. “Today is a great time to invest in an early stage VC fund because they have almost no competition in Europe. The trick is making sure that fund managers have the skills and networks to navigate the dangers of early stage investing”. Pension funds, family offices, university endowments and banks will then all seek to invest, generating a positive cycle that will boost the innovation economy.

Legal impediments? Obstacles to this recovery, though, may actually come from EU policy makers. The European Parliament and Council agreed to the controversial Alternative Investment Fund Managers’ (AIFM) Directive, which demands disclosure requirements of fund managers, as well as lower remuneration and an expensive new registration regime. AIFM also restricts non-EU investors doing business in Europe. All of this could prompt an exodus of VC firms investing in Europe. According to European Private Equity and Venture Capital Association chairwoman Uli Fricke, the measures will harm the EU’s already struggling SME sector. “Most worryingly, there is no light-touch opt-in for small funds in this directive. This will have a damaging knock-on impact for financing of innovative SMEs. The European Commission should urgently address this burden that jeopardises a recovery based on knowledge”. I Marion Laleve, managing director of Sum Up Consultancy

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Banking on which investment banks? Investment banks are responsible for the financial crisis alongside politicians, regulators and investors. Where and who are they, how are they surviving , how will they evolve? By Stéphane Rambosson, Managing Partner of Veni Partners LLP.

ost investment banks are part of large integrated banking conglomerates which can also house retail banking and consumer finance, asset management and private banking, commercial and corporate banking. These conglomerates have come under scrutiny in the wake of recent events and there has been discussion that they should be broken up, into smaller operations. So the key question, as we look at the future of investment banks, is whether they will remain part of integrated banking conglomerates. The answer is likely to be yes. The best evidence for this is that the US has not imposed a new “Glass-Steagall act1”. This had separated traditional banking and investment banking in the US. Its regulators have acted to minimise proprietary trading and alternative investments (private equity and hedge funds) which can only represent 3% of banks’ capital under the new “Dodd-Frank Act”. The UK has nominated an independent committee, composed of relevant senior professionals, including Bill Winter who headed JP Morgan’s European operations, to prepare recommendations. Its results will be fascinating, as the UK’s integrated financial institutions with large investment banks, namely Barclays and HSBC, have already threatened to move their headquarters from the UK to the US or Asia should a split be required or enforced. A key consideration will be the sort of capital and financing required of investment banks. Basel III standards require banks to increase Tier 1 and assimilated capital from 7% to 9%, which despite the long term deadline (by 2019) is triggering flurries of rights issues, some also acquisitionrelated (e.g. Deutsche Bank, Standard Chartered and BBVA). Access to increased capital will be sought by investment banks in order to commit capital to clients and underwrite transactions - e.g. as was the case for Morgan Stanley with Mitsubishi, expected by Nomura to access more capital. Regulatory capital funds are also being set up to this effect.

TheIMFstatedinitsrecentinterimreport,theimportance of continued support to banks from governments and central banks as some have not fully “cleaned up” their balance sheet and are still weak. Refinancing will continue to be a key theme as Eurozone banks still have to refinance $4,000 billion of debt over the next two years. Compensation strategy is a key element of the future of investment banks. Compensation to revenue ratios were generally between 50 to 60% in the current environment. Political and regulatory pressure on bankers’ pay, in some instances means these have been taken down to around 40%.

Tax problems for bonus earners New EU banking pay rules have been published by the Committee of European Banking Supervisors– and up to 60% of bonuses will have to be deferred for up to 5 years; half of the whole amount (upfront plus deferred) must be paid in shares, and there will be a minimal detention period post deferral. This causes significant potential tax issues. MRTs2 or bankers with “significant influence function” will be subject to a bonus cap based on a maximum multiple of base salary. EU regulators propose that the cash bonus element be limited to 20% whilst the FSA3 has suggested 50%. There is a consultation process currently underway and rules will be effective in January 2011. These will apply to EU banks globally and to EU arms of international banks, which should create considerable distortion globally and could boost non EU venues (US, Asia and Switzerland). Structural constraints are likely to lead to another increase of salaries, notably by US banks, which will affect business models; with more capital and more fixed costs, banks will have to be creative to generate adequate returns for other stakeholders. I Glass-Steagall Act − US banking law of 1933 largely designed to prevent speculation. MRT − Material Risk Taker FSA − Financial Services Authority

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How to shape the bank of the future A crisis entails both danger and opportunity, runs the Chinese saying. In that spirit Christian-George Malissard, CEO of Eagle Performance and senior business advisor to large multinational firms, believes the current downturn offers a chance to abandon the tired notion, “the boss is the expert”, and promote instead collegial banks with less clone-like staff…

ow are banks responding to the crisis in terms of how they handle other people’s talents?

Some missed opportunities; others will have done the right things. Banks should reconsider how their management is designed. Currently staff are valued for their expertise and their ability to manage formulas and models. Investment banking is a lot about technology and execution, yet few reward employees for what they are. People are promoted up the silo because of their competences, not their behaviours. This risks promoting clones of themselves, who in turn hire yet more clones.

How exposed are banks as a result of this strategy?

Banks could reflect greater diversity. They are too inward looking and appoint their own people. Some bankers do recruit from other industries, but when Apple needed a top gun they turned to Coca-Cola, not a banker! What does the post crisis situation mean for the senior people in the bank?

The crisis provides a chance to reshape the powerbase, to bring people into the boardroom who can lead as opposed to command. These are different skills. Commanding is the traditional way of managing and it often requires obedience. Although leadership and managing skills are complementary, people would prefer to work for leaders with vision rather than just expertise. What are the key skills for management and how should they develop?

Banks need to hire or upgrade people who can see, explain and convey the firm’s global mission. Employees no longer know if they are working for the right banks. Recently banks have been blamed for the crisis and key talents felt exposed to criticism. Some are at a major turn in their working life and banks should not lose them. They need direction and guidance.

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What is management’s challenge in many banks?

Banks now encourage managers to apply commonsense, energy and conviction. Many people have been fired or end up burned out. Banks ought to revive confidence, and managers must clarify objectives and ensure that everyone in the chain of command gets it 100% clear. How can this be best achieved?

Banks can maximise synergy through introducing collegiality. In matrix management people work together, rather than compete. This will benefit the bottom line. People need to hold back their egos and review their preconceived ideas. New reward policies recognise behaviour and collaboration, which is great. Yet who is the best asset: a person lacking relationship skills but achieving targets, or a person with great rapport? The boardroom must provide an example. The boss needs to communicate values. Too many top executives ignore staff and seem disconnected from the reality of the trade. How many of them are still unknown by their workforce, or are eroding commitment through unachieved decisions? Why is your particular role as a trainer and coach?

My role is to challenge management behaviour and expectations. I emphasise the importance of human and personal values as well as specific skills in the appointment and promotion of staff. I also encourage managers to work in teams. I accept that banks still need to get the best people from the best university or from top competitors. But employees also need personality and temperament. Without this complex formula you will be in a tier two bank. To reach the top you need to hire the best people, but also find the best way of handling and developing them. It is often said that “people” are company’ best assets but I would rather say only the “right people” are the best assets! I

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French banks take care with risk French banks have come well out of the crisis, as a result of native caution, strong competence and prudent financial management. But Micha Missakian of Ernst & Young warns there may be pitfalls ahead.

lthough it may appear obsolete to compare banks on nationality criteria, local specificities remain strong. In this respect, French banks seem to emerge from the crisis in quite good shape. The reasons for this are many. They include: their business model, the local regulatory environment and as usual when it comes to France, a pinch of tradition. The recent crisis has highlighted the resilience of the universal banking model. Now it is generally accepted that such model has become as French as Champagne (at least for a few decades as some predict that global warming might force producers to harvest the grapes in the Hampshire). Thus, besides their strong retail banking networks, French banks have built international size asset management, investment banking and even insurance businesses. Crédit Agricole and Société Générale for example have created one of the top 10 worldwide Asset Management companies, while BNP Paribas is the number one consumer credit firm in Continental Europe. The French banks also owe their solidity to the French regulators and public opinion. French banks paid a heavy toll during the crisis of the early 1990’s. While this delivered a great blow to many countries’ banks, few had to deal with issues on the scale of those hitting Crédit Lyonnais. French tax payers have in a way been asked for contribution to prop up their banking system

The universal banking model has become French like the Eiffel Tower

before their European peers. Once bitten twice shy. Finally, traditional French caution is evident in the attitude to assuming risk. Savings ratios in France are among the highest in the world and this has positive consequences both for household solvency and for banks’ balance sheets. French education also plays a part. France offers top-of-the-range degrees in Mathematics: more than 20% of the Fields Medals have been awarded to French researchers. These medals are awarded for outstanding achievements in mathematics. Mathematical ability is as useful for building nuclear plants as it is for the risk management departments of banks. It is also reflected in the conservative approach often taken by French banks. As an illustration, at the time of the move to IFRS (International Financial Reporting Standards), when it became easier to compare financial statements, we noticed that French banks had very high reserve-to-loans ratios. These proved well equipped to face the financial hurricane which started to blow barely two years afterwards. However some would argue that such a banking model is less efficient in times of economic growth as an obvious consequence of the risk/profitability couple. It is probably true, however does it still make complete sense for an industry which will have to get used to lower return on equity because of new prudential regulatory and tax burdens? Still, it is fair to say that unlike some of their European peers, a lower proportion of the revenue of French banks is driven by their Asian operations, which could be viewed as a restraint on their development. Schematically, French banks were probably not heavily active where it was not safe, but they may not be strong enough where it could be good to operate in the future. We should also bear in mind that France did not experience a real estate crisis. Some predict a quite significant decrease in real estate values in France over the next 5 to 8 years. If that happens, the situation may turn out quite differently. I

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Part three: After the crisis

Make hay while sun shines! It may not last The economic system is in need of a complete restructuring to ensure recovery from recession, especially as VAT is set to leap to 20% next year. Here Stephen Lewis talks to Nicolas Kochan.

hat lessons should companies draw from where we are now? Many Chamber members are French companies who are in the UK, some small, some big. How do you expect the economic environment will look for the near future?

They should be making hay while the sun shines! We will have some relatively favourable demand conditions over the next two to three months. So that will be a favourable market for those who wish to sell goods and services. But it will become tough thereafter. The important thing will be to make sure that inventories do not move in the wrong direction, because it may be that some companies will be lulled into a sense that the economy is in a sustainable upswing, because of their own experience of above-forecast sales in this period. So they may over-order and then find that demand falls away very quickly. Then they will face a very serious financing problem. The key unknown will be the rise in VAT to 20% in January next year. It will be very difficult for companies to regulate the level of inventories to ensure that they do not get short or caught long in an embarrassing way. This is quite different from the situation last year, when the temporary cut in VAT was restored. It went to 15% and then up again. Most prices didn’t fall when the rate was cut; instead it boosted retailers to keep them going through what was a very difficult time for them. Do you see any improvement in bank lending to companies?

Banks claim that for large companies who don’t need credit, the credit is available. For small companies who have uncertain business plans, they may feel the need for credit to tide them over – but it is not going to be available. The banks don’t want to lose money on the assets that they take onto their books. The government would prefer if companies could find sources of finance outside the banking sector. If other channels

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could develop for funnelling money into SMEs, which bypassed the traditional banking sector, they would be very happy. Do you see the euro weakening, say, against sterling?

The level the euro has reached in the past month or so is the level at which it was trading roughly this time last year. Then it created significant tensions in the euro zone. For German exporters, they could live with it; it was fine having 1.40/ 1.50 against the dollar. But the French exporters could not live with it. They need the euro to be around 1.25 to be comfortable. Do you have a prognosis on how long the recession will last?

I have maintained that we haven’t been in a recession but [rather] a depression! I define a depression as a situation where the level of activity is widely recognised to be suboptimal. But nothing the authorities can do to push up activity is effective. That is the situation we are in. It is most obvious in the USA where they are really trying everything they can think of to get activity up, and it hasn’t worked. The effects to boost activity here have been less energetic, but one suspects that even if they were more energetic, they still wouldn’t have worked. This includes quantitative easing. So we should expect a very patchy lot of performance from these economies going forward from here. We are not really going to get out of this depression phase until we have thorough-going structural reform. That will require a shift in the balance of the US and UK economies towards exporting and away from consumption. It is difficult to achieve a rise in savings levels when saving attracts a rate of just 0.5%! So we don’t have a coherent policy mix here – it won’t get us out of the depression. I Stephen Lewis is the chief economist at Monument Securities in London.

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New automatic pension schemes: What they mean for small businesses The Government’s October pension reforms seem part good and part bad, benefitting millions of individuals but arguably penalising SMEs. Here Mark Beynon of Blueprint Financial Services stresses the positives!

or businesses, still feeling the strain from the economic downturn, the government’s confirmation last month that every company ‘no matter how small’ will have to provide a pension scheme to its staff was met with dismay. The Federation of Small Businesses warned of the ‘extortionate costs’ and was ‘extremely disappointed’ that the Government was not exempting so-called micro firms – those with five employees or fewer. The government says it will mean millions of people will start saving into a pension scheme for the first time. That way an additional 4m to 8m people start to provide for their old age and put the brakes on the ever increasing savings gap in UK retirement planning.

Sweetening the pill Government officials say small firms will have additional time to adjust. Auto-enrolment will be forced on large firms in 2012, but small firms will not have to comply with the rules until August 2014. Under the scheme rules, employers will pay in 3% of a member’s salary, the government 1% and the member himself will pay 4%. However, these contribution levels will be rolled out over a five year period with initial employer contribution levels set at 1%. Let’s remember the benefits rather than the costs of the new requirements. Provision of a pension scheme motivates and keeps staff. It’s the second most valued benefit – after pay of course – and, with personal pension scandals still within memory, it is especially valued. The myriad choices can be confusing and complex. This choice is only likely to increase as demand for services rises with the proposed changes. Now smaller companies may face the major cost of having to hire consultants to set up retirement schemes, since they

Preparing for later life

do not have such expertise themselves. However, businesses who take action sooner rather than later can minimise the burden, and ensure that their staff have the most appropriate benefits package when auto-enrolment comes into effect. For small and medium sized companies, the easiest option is a Group Personal Pension – simple to set up and operate, with most admin carried out by the nominated insurance company. Effectively, all the employer needs to worry about is getting the funds to the insurance party. If you are already set up with BACS1, this is easy. Group Personal Pensions can take a matter of weeks to set up through an independent financial adviser (IFA). Finding the right adviser could save companies considerable sums of money. The message is clear - act now, save later. I The Department for Business, Innovation and Skills (BIS) offers free advice and tools online to help you manage your employment obligations. (See company website www. businesslink.gov.uk/employing people). Bankers Automated Clearing System

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Tax − The Tide is Turning Government has to set tax rates that maximise returns, generate growth and don’t harm the vulnerable. Andrew Moore, director of Leprêtre and Partners, describes what it takes to get the balance right.

he purpose of taxation is to match the cost of provision for the public good to the tax revenue – a simple job of balancing the books. There should also be some flexibility to allow for the varying tides of trade. It sounds easy enough, but in reality the flow of money takes a torrid and turbulent route over boulders, down ravines and through hidden channels. Is it leading to an all consuming whirlpool, or are there calmer waters ahead? We may be able to make some sense of it all by considering the direction of the current, and the obstacles ahead for taxation.

Regulators are ‘toothless sharks’ It is tempting to blame the bank for the current economic predicament. The banks, in their turn may point the finger of blame at regulators, who in turn, blame governments for making them toothless sharks. In the meantime, anyone who has sunk because they either lent or borrowed too much is accused of greed. Individual responsibility is lost in a sea of acrimony. There is no shortage of hands waving for help, and there are no hands being held up in responsibility. Governments cannot coast through such waters completely rudderless. The ship has to be brought under control. A country with unrestrained borrowing is bad for business. Bad business cannot sustain employment, which is bad for tax revenues. So can such a listing ship be righted? It has to re-float the public coffers, maintain the economic status of the nation, hold the currency within a reasonable parameter, but also avoid drowning consumers and businesses in tax. When money is tight it is impossible for governments to achieve all these objectives. So they must prioritise,

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balancing short term needs for cash against sound long term planning. In the long term, it is the economic status of the nation that underpins business, which underpins tax revenues and thus maintains public provision. If economic strength can be restored, then perhaps some short term pain is tolerable, like bathing wounds in salt water. Tax is a means of distributing wealth, but it can also distribute pain to some and provide welcome relief to others. So where to begin? The windfall tax levied on banks in the UK and France could be interpreted as a punishment levy, a way of taking from those who appear to have profited most during the crisis. Is this a popularity tax? Or something of genuine value to the State producing significant revenue? Or is it a mechanism to discourage excessive profit making? That is without stifling an important aspect of the economy – money lending.

Plugging the high earners’ leak The bank windfall tax is a drop in the ocean compared to most public deficits, and so the net widens to catch higher earners. Indeed, income taxes are a great source of revenue for governments. The UK and the French tax systems levy higher taxes on those who earn more. We now see top rates of income tax reaching 50% for the small percentage of the population in the UK who earn more than £150,000. Capital gains taxes have seen reduced tax free allowances in France and increased top rates in the UK. In the UK and France income tax relief can be claimed for contributions into a pension plan. As usual, where there is tax relief it is the higher earners who are most able to take advantage of the concession. For governments the biggest leak in the dam is through higher earners, which is now being plugged as pension savings reliefs are capped for the better off. I

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Adapting in order to succeed The middle of recession is the time to start looking forward. That enables management to raise morale. It also puts the spotlight on todayâ&#x20AC;&#x2122;s deficiencies that will hamper recovery. When the recovery arrives, the business that learns these lessons is best positioned to take advantage of the upturn, says Jean-Christophe Fonfreyde, of Papillon Consulting.

ecessions present strong opportunities for companies with the willingness to transform themselves, enabling them to emerge as industry leaders over competitors that reacted passively or defensively and stuck to pre-crisis modi operandi. Benefiting from the economic downturn requires organisations to develop a sense of urgency, to focus unwaveringly on action and on the future and to concentrate resources on innovation, customers and staff engagement and operational excellence. Transformation follows several logical phases. Firstly, a company must thoroughly identify its existing areas of strength and unique defensible capabilities that set it apart from the competition. It must use open feedback from staff, suppliers and customers to have a complete view. Secondly, it must identify the most significant challenges it will face over the next 10 to 20 years and develop an understanding of the driving forces of change. This broad scan must combine crisis-related trends, such as consumer frugality, with on-going fundamental shifts such as globalisation, environmental sustainability, demographic evolutions or new technologies. Scenarios can tremendously support this foresight phase and provide senior executives with a common toolkit and language with which to take decisions and carefully weighted risks. Thirdly, by combining the capabilities of audit with the foresight work, the organisation will be able to decide which strategy to follow and where resources should be allocated or developed. Existing capabilities may be boosted by increasing dominance in certain markets. New capabilities may be required to gain critical size in emerging niches and may necessitate

the acquisition of talent or assets or new partnerships in research, manufacturing or supply chains. Resources should be quickly and systematically focused to targeted areas. Other areas should either be divested if persistently underperforming or be given resources directly proportional to their contribution to future growth. Channelling resources in that way can provide a strong advantage over competitors who may be involved in indiscriminate cost-cutting programmes. The fourth phase requires actively engaging with staff and customers. The new strategy must be communicated in an open, simple, unequivocal way across the whole organisation. A commercially-driven HR function should ensure that its core areas, such as talent management or reward, are totally aligned with the transformation programme. Staff given responsibility for implementing the new strategy should be promptly given sufficient resources and autonomy, with clear accountability.

Rethinking business models Corporate distrust increased during the recession so earning customersâ&#x20AC;&#x2122; loyalty will require true transparency from organisations, with the provision of details about products, services, prices or environmental policies. Customers must feel that they are truly at the heart of the organisationâ&#x20AC;&#x2122;s vision. In addition, companies must rethink their business models to offer cash-strapped consumers more for less. Lessons can be taken from companies in emerging economies like India that have successfully innovated to offer value-for-money products and services to customers with limited incomes but growing aspirations I

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Going back to basics: private client investment advice after the crisis Diversification is pivotal to every successful private investors portfolio, explains Jean Olivari, Private Banker, Coutts International Banking – yet much depends on whether you are young or old and if you chase risk or run away from it!

lot of private investors have been badly hurt by the downturn in the markets. Some sold their investments at the wrong time and are now wondering whether they should remain in cash and other low risk investments, or switch out of them and into higher risk assets. Despite the increased complexity of products available to investors in recent years (private equity and hedge funds to name just two) certain basic financial principles still stand the test of time. In particular, diversification remains the key to successful personal wealth planning and is a cornerstone of modern portfolio management theory. At Coutts we initially do a fact-find exercise and this tells us whether a person’s wealth is too concentrated in a specific area. We coin these areas “wealth preservation”, “wealth enhancement” and “wealth generation”. A person with too much exposure to the “wealth preservation” area (through exposure to cash or government bonds for example) might not be taking enough risk to generate future wealth. Similarly someone who holds the majority of his assets in the “wealth generation” area (via private equity or other illiquid products for example), might be taking far too much risk that person might need a deposit to buy a house or cash to buy an art painting, precipitating an investment decision in what could thus be unfavourable market conditions. The art of good private investment advice is establishing what purpose each of the areas cited above play in someone’s life. In doing so, consideration for “lifestyle investing” should apply to that part of the wealth that is available for investment. “Lifestyle investing” tells us that a young investor should have more exposure to risky assets as he will have the time

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to ride a few economic cycles. Risky assets such as shares tend to be more volatile but this averages out over the time invested. What this means is simply that the longer the investment time horizon the more likely the positive return outcome. There is sadly no short cut. The more risk you are willing to take, the greater the potential return. The greater the margin by which you wish to beat inflation, the greater the risk you need to take. An older investor, on the other hand, will have less time and will prefer income-yielding assets to complement his pension income. Of course that person might also look for some capital growth in regard to his cash and advice here should take into account appetite for risk, total wealth available and disposable income. Being able to ascertain risk is tricky with most people and should be done at the outset. On that point most retail advisers develop questionnaires to assess risk tolerance. Yet I often find them to be too impersonal, and think that asking “what if” questions with someone face to face is best. Investment advice is, after all, about people and a meeting will show personality, which is something that determines the willingness to take risk. The concept is critical to diversification. It is based on the fundamental idea that a person should invest in assets that deliver low correlated returns (for example, equities and commodities). If we invest in this way we can generate a higher return with lower risk. This is still true today and most asset classes should be included in a portfolio – including equities and bonds but also alternative assets such as hedge funds, commodities and property. I

f o c us

New rules for Credit Rating Agencies The guardians of stability were in bed with the banks, creating unsustainable and ultimately dangerous conflicts of interest. Now the hunt is on for a better regulatory system, says Nicolas Kochan.

f all the dogs that failed to bark when the financial crisis loomed, credit rating agencies (CRAs) were the most notorious. Their capacity to lavish AAA status on securities that were quickly shown to be near valueless would be laughable, if it were not so serious for the many investors who trusted their judgement, only to find it was based on straw. It is no wonder financial centres around the world are wrestling with a means to lift their reliability and boost their transparency. The CRA’s key role is to produce a rating or mark, to indicate the quality of a financial instrument or entity. This is used by investors as an assurance of its quality. Key CRAs are Moody’s, Standard and Poor’s and Fitch. Regulators’ efforts are targeted at conflicts of interest endemic in the ratings system. Under the current system the company pays the agency. Critics say this puts irresistible pressure on the agency to deliver a higher rather than lower score because it wants to ensure it receives the company’s future business. And critics say CRAs operate in an inefficient ‘oligopolistic’ market where competition is restricted. Potential conflicts of interest often arise where a leading agency is providing several services to one client, effectively hampering its ability to provide independent ratings for each separate arm of the business. Peter Hahn, professor of finance at the Cass Business School and an adviser to the Financial Services Authority, says ‘The market for ratings would be more transparent if there were more established agencies. Instead we have a very few CRAs of any repute and those few are immensely powerful.’ Financial institutions have connived in building this oligarchy by limiting their investing to instruments rated by one of the top three CRAs. That’s hardly a recipe for neutrality. The clampdown on credit rating agencies started in December 2009 when the Obama administration

European Union Parliament • Strasbourg proposed what ultimately became the Wall Street Reform and Consumer Protection Act (dubbed the DoddFrank Act after the parliamentarians who promoted it). The legislation seeks to tackle conflicts of interests and create openness. It subjects an analyst’s past work to increased scrutiny when they are hired by a customer. It requires CRAs to disclose their fees, ratings history and provide detailed methodologies. Finally, it bans CRAs from offering consultancy work for ratings’ clients. The EU has approached legislative reform faster and arguably with more decisiveness than the US. On 17 November 2009 the European Parliament and Council approved the Credit Rating Agencies Regulation. This legislation became immediately effective in all EU member states. Under UK regulations passed at the same time, the Financial Services Authority was given charge of CRA regulation in the UK, although the power is expected to be transferred in 2011 to a common European Securities and Market Authority. European CRA Regulations establish a registration and certification system for CRAs; EU issuers may only use CRAs established in the EU and registered under CRA Regulation or certain specially approved non-EU CRAs. I N.K

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f o c us

Emerging markets: the path to future growth The world knows that China and India are growing fast and supporting struggling developed economies. But there are yet more markets which have yet to emerge and which offer investors opportunities, says Nicolas Kochan.

he riseoftheemergingmarkets is one of the phenomena of today’s business world. This is reflected in the amount of foreign investment moving from developed to developing countries. As a result of these inflows, the currencies of the emerging markets are strengthening against the dollar and euro. These flows are proving the catalyst for the creation of Pudong • Shanghai a new middle class, and a new market for Western commodities and consumer goods. These flows have most dramatically impacted on China and India, the so-called BRIC economies. The other two are Brazil and Russia. Large accumulations of dollars have essentially made these countries the lenders to the US, a reversal of the traditional role. To that extent, the emerging markets are now calling the tune to which wealthy countries must dance. The Chinese, for example, maintain a currency at a low rate versus the dollar, which gives Chinese-produced exports a competitive strength in the United States and elsewhere. This reality sparked a debate that has consumed the G20 meeting recently held in Korea. No doubt it will also feed into the French presidency of the G20, which is about to begin. There are signs that the Chinese may be going some way towards accepting the position. In October, for instance, China amazed many when it raised its interest rates by a small amount, in an apparent concession to the US. Chinese growth has moved at such a pace that it seems hard to imagine anything but the country’s continual modernisation at a hectic rate. Yet while China and India take the financial world

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by storm, some experts are looking forward, beyond the BRICs to the next set of markets that are likely to modernise at a pace. These have been given the acronym of CIVETS, standing for Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa. Each of these countries has crossed some of the hurdles required to fund their economy’s faster growth. For example, each has a banking system, capital markets of some kind, cheap and plentiful labour and a middle class eager to acquire the goods that are available as their countries root themselves more firmly in the global economy. These countries do not of course offer the sort of impact on global investment created by China and India. Their size is modest in comparison with those leviathans and in political terms their strategic position is modest too. Yet smart investors may find that they boast talented and educated labour forces, as well as political stability. The universe of emerging markets is, in short, more complex and more dynamic than might appear at first glance. The supply of free capital will search out those countries where returns will be greatest and the risk least. Political fluidity and insecurity — a consequence of their shortfall in economic development — are only one side of the emerging market issue. The other is growth potential that outpaces that of developed economies and populations eager to make the leap into the global economy, and work hard to attain it. I © flickr/bahtiar1070’s

ex hibit ions

Anish Kapoor: Turning the World Upside Down in Kensington Gardens 28 September 2010 - 13 March 2011 | An exhibition organised by The Royal Parks and the Serpentine Gallery | Nearest Tube: Queensway or Lancaster Gate | Open daily 6am - dusk. Admission free. ||| The Royal Parks and the Serpentine Gallery are currently presenting a major exhibition of large scale outdoor sculptures by acclaimed London-based artist Anish Kapoor in Kensington Gardens. The free exhibition showcases a series of major recent works never before shown together in London. Constructed from highly reflective stainless steel, the giant curved mirror surfaces create illusory distortions of the surroundings and are visible across large distances, creating new vistas in this famous and much- loved setting. The sculptures are sited to contrast and reflect the changing colours, foliage and weather in Kensington Gardens. Despite their monumental scale, the works appear as pure reflection of their surroundings: the sky, trees, water, wildlife and changing seasons. The distortions in the works’ mirror-like surfaces call into question the viewers relationship to both the work itself and the surrounding environment. Kapoor was born in Bombay in 1954 and has lived in London since the early 1970s when he studied at Hornsey College of Art and Chelsea School of Art and Design. Over the past twenty years he has exhibited extensively in London and worldwide. I

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a ge n da

What’s on? Poussin to Seurat: French Drawings from the National Gallery of Scotland precipice of abstraction. The show includes work by Antoine Watteau, Eugène Delacroix, his contemporary and chief rival, Jean Auguste Dominique Ingres, and the Rococo master, François Boucher. Etchings by Jean-Baptiste-Camille Corot, a leading light in the Barbizon School, mark a fascinating transition between the Neo-Classical style and Impressionism. Fittingly, Corot’s contributions are counterpoised by sketches from the Caribbean-born Impressionist, Camille Pissarro, whose genius in depicting light comes through as clearly in his drawings as in his better known paintings. Finally there is Georges Seurat himself, the Claude Lorrain • Roman Landscape with a Gatehouse, courtesy of National Gallery of Scotland great pioneer of pointillism. In fact ||| If the pen is mightier than the sword, the humble his displayed sketch of a boy dripping with water, a pencil clearly has some resources of its own. So it seems draft towards his oil masterpiece, ‘Bathing at Asnieres’, from the current exhibition Poussin to Seurat: French provides fascinating insight into the metamorphosis of Drawings from the National Gallery of Scotland, now on Seurat’s unique vision. show at the Wallace Collection, a rare oasis of tranquillity There are also many beautiful examples by lesserlocated not far from the hubbub of Oxford Street. known artists, such as Joseph-Ferdinand Lancrenon, Speaking of tranquillity, what image can be more Nicolas Alphonse and Michel Mandevare. One other soothing than one featured work, the preliminary sketches is Louis Roguin, whose striking portrait of an Algerian by Nicolas Poussin to his oil masterpiece, ‘Dance to the Jewish woman wearing a cone-shaped hat is used in Music of Time’ – itself on display upstairs in the museum. the exhibition’s publicity material. And to provide yet more variety, visitors can admire drawings by writerThe exhibition is free, open to the public, and runs till 3 January next year. What strikes the viewer is the artists, Eugène Fromentin and George Sand. extraordinary range of styles on display, the varied All works are on loan from the National Gallery of effects achieved by the use of different materials – quill, Scotland, where over the past 30 years canny curators lead pencil, gouache, crayon and chalk – and the unique have built up a collection of French drawings to rival imprint of the individual artistic eye. And while some their French paintings. Apart from being a triumph works are means to a supposedly grander end (as with of trilateral cultural co-operation between Scotland, the Poussin sketches), others are clearly little gems in England and France, the etchings also provide the their own right. perfect bait to lure visitors to the other French The period covered spans the baroque elegance of treasures displayed in the Wallace Collection. Well 18th century draftsmen, through the wistful etchings of worth visiting! I L.R.J Thursday 23rd September, 2010 - Monday 3rd January, the Romantic period and the everyday realism of socially 2011 | Wallace Collection, Hertford House, Manchester aware mid-19th century artists, to the compellingly Square, London W1U 3BN subjective gaze of the Impressionists, standing on the

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a ge n da

Wake Up To London’s New French Voice: ||| Ecoutez-here! Since November start of FRL which I am sure is going to pick up many regular listeners. They 17, French Radio London (FRL) has taken to the airwaves can look forward to a lively mix of the London’s first French language very best of French music from the past and present and aimed to appeal terrestrial broadcast station. It will broadcast on London II DAB primarily to French music tastes.” digital radio multiplex but it is Also envisaged in the menu mix are lifestyle programmes, cultural expected to find listeners way beyond London via the internet. news and interviews to make up a Aimed primarily at London’s unique blend of entertaining and 400,000 native French speakers informative output. and the countless Francophiles The London II DAB network - second home owners, holiday covers the Greater London area makers, gourmands, linguists and has the best coverage of any - FRL looks set to be popular of the three London multiplexes, amongst addicts of all types of reaching 4.5 million households French music, wherever they are. (approximately 11 million people). Pascal Grierson • CEO of French Radio FRL’s CEO, Pascal Grierson, Pascal Grierson adds “This makes FRL comments “The preliminary research indicates that a really exciting development not only for listeners, France’s “Fifth City” has a huge appetite for this station. but also for commercial partners and sponsors who We are delighted that the French Ambassador to the will benefit from a unique platform to reach FrenchUK, H.E Mr Maurice Gourdault-Montagne, has hosted speaking London residents and the wider Francophile an event at the French Residence to mark FRL’s début.” community.” Olivier Jauffrit has signed up to host the weekday Some of the enterprises which have already breakfast show between 06.00 and 10.00. taken up the invitation to be partners of FRL include After a successful broadcasting career spanning Champagne specialists, French Bubbles and special over 20 years in France, which included stints at Rire event organisers, Evensus. I Find the very latest news about French Radio London at et Chansons and Europe 2, Olivier moved to the UK in www.frenchradiolondon.com 2003. Olivier comments “I am delighted to be in at the

French Film Festival: ||| Bringing a compelling selection of French cinema to UK audiences for the 18th year, the French Film Festival returns to Ciné lumière along with several other cultural hubs including Edinburgh, Manchester and Glasgow. Stirring up a storm at Cannes, Outside the Law directed by Rachid Bouchareb (London River) will open the festival. Amongst the highlights are Skirt Day, starring Cesar Award winner Isabelle Adjani, Making Plans for Lena, Christophe Honoré’s latest film and ‘The Hedgehog’, the screen adaptation of Muriel Barbery’s bestseller ‘The Elegance of the Hedgehog’. We are delighted to welcome acclaimed French director André Téchiné for an exclusive masterclass, Pierre Etaix, the former assistant to Jacques Tati who will talk about his film ‘Le Grand amour’ shown here on a new print and Christopher Thompson who will present his first feature film Bus Palladium. I www.frenchfilmfestival.org.uk

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Titanic: The Artefact Exhibition

||| On 15 April, 1912, Titanic, the world’s largest ship, sank after colliding with an iceberg claiming more than 1,500 lives and damaging the world’s confidence in modern technology. 98 years later, The O2 in London and RMS Titanic, Inc. will pay tribute to the tragedy which continues to affect us through Titanic: The Artefact Exhibition. The exhibition will showcase more than 300 legendary artefacts conserved from the Ship’s debris field, extensive room recreations as well as never before seen footage from the most ambitious expedition to Titanic in history- offering visitors a real look at this iconic ship and its passengers. RMS Titanic on its one and only voyage For visitors seeking an enhanced experience at the Exhibition, they offer two separate audio guides – one geared towards adults and the other intended for children. Each tour touches on several aspects of Titanic’s story, from her construction and launch to her ill-fated maiden voyage and the disaster’s aftermath. Audio narratives can be accessed at random, allowing you not only to enhance but also to customise your Exhibition experience. I 5 November 2010 to 1 May 2011, at O2

Dior illustrated: René Gruau and the Line of Beauty

||| A celebration of the renowned illustrator René Gruau (1909-2004), who created some of the most iconic fashion images of the 20th century. This exciting exhibition will showcase groundbreaking artworks including original illustrations for Christian Dior Parfums, vintage perfume bottles, sketches and magazines, as well as a selection of Dior Haute Couture dresses. His illustrations also tell of a special understanding Gruau had of Christian Dior himself, born of a close friendship between the two men. Gruau influenced the graphic style of a whole generation of fashion illustrators and the exhibition will feature specially commissioned pieces from six UK based illustrators, whose works will draw inspiration from the rich collaboration between Gruau and the House of Dior. I 10 Nov 2010 – 9 Jan 2011, Embankment Galleries

St John’s Wood Art School and Anglo-French Art Centre: Paintings and Works on Paper by Artists from Two Leading Art Schools in St John’s Wood

||| This exhibition commemorates the art school in London’s St. John’s Wood that enjoyed several incarnations between 1878 and its final demise as the Anglo-French Art Centre in 1951. The St John’s Wood Art School – founded in 1878 – trained as many artists of repute as any art school in London. There was an amazing exhibition program: the first showed André Lhote; another featured ‘Spanish Painters in Paris’, including Picasso, Clavé and Oscar Francis Bacon signed print Dominguez. In addition, painters came over regularly from France to teach: Léger, André Lhote and Jean Lurçat. Exploratory Francophile Modernism was much less encouraged at London’s other more renowned, long-established, mainstream yet still rather parochial art schools. Contemporary British artists also had an opportunity to display their work at the Anglo-French; one exhibition featured Francis Bacon, Yankel Adler, Robert MacBryde, Robert Colquhoun and Julian Trevelyan, which toured to Paris under a reciprocal arrangement. Yankel Adler, Francis Bacon, Jacob Epstein, Henry Moore, John Minton, Graham Sutherland acted as tutors at the sketching sessions which were held regularly. Sadly, the Anglo-French closed in 1951, unable to bear increasing financial losses. The closing down of the AngloFrench Art Centre was a great loss – it was unparalleled in providing students with the best of European culture informally and expertly. I 19 November – 23 December 2010, Boundary Gallery NW8

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bo ok r e v i e w s

Phantoms on the Bookshelves

Theory of the Subject

by Jacques Bonnet, translated by Sian Reynolds ||| This enchanting study on the art of living with books, considers how our personal libraries reveal our true nature: far more than just places, they are living labyrinths of our innermost feelings. The author, lives in a house large enough to accommodate his many thousands of books, as well as overspill from the libraries of his friends. While his musings on the habits of collectors past and present are learned, witty and instructive, his advice on cataloguing may even save the lives of those whose books are so prodigiously piled as to be a hazard. The Ghosts on the Bookshelves ranges from classical Greece to contemporary Iceland, from Balzac and Moby Dick to Google, offering up delicious anecdotes along the way. This elegantly produced volume will be a lasting delight to specialist collectors, librarians, bibliophiles and all those who treasure books. I

by Alain Badiou, translated by Bruno Bosteels ||| Theory of the Subject announces the thought of the twenty-first century. It opens up the path that Badiou followed in his two later classics, ‘Being and Event’ and ‘Logics of Worlds’, but it enforces this opening with a violent freshness which far surpasses its later developments. So beware, reader: when you open this book, you hold in your hands proof that philosophers of the status of Plato, Hegel and Heidegger are still walking around today! I

The Art of Struggle by Michel Houellebecq, translated by Delphine Grass ||| Notorious as a novelist, Michel Houellebecq was first known in France as a poet. In many ways it is through poetry that he found his novelist’s voice. “The Sense of the Struggle” is a collection of prose and verse pieces which investigate issues of alienation, individualism and disillusionment - themes that will be familiar to Houellebecq readers - while subtly adopting a variety of tones and styles, revealing facets of the author unknown until now in the English-speaking world. Deeply melancholic and despairing at the inhumanity of the present-day world, yet brimming with vitality and invention, these timely, poignant poems clear away the dross of hollow optimism and call for an end to the nightmare of modern existence. I

Hidden Lives by Sylvie Germain, translated by Mike Mitchell ||| The Barynxes are a middleclass family. Charlam, the grandfather, who wants to take control after the death of his son, Georges, in a road accident; Sabine, his daughter-in-law, who mutely but successfully wards off his encroachment. The three sons, who seem relatively unaffected by the loss of their father and who make their own way in life, sometimes to Charlam’s approval, sometimes to his disapproval. Marie, the daughter, whose leg was damaged in the accident rebels against his authority. Dith, the aunt, whose undiscovered secret is her passion for her nephew, Georges; and Pierre, whom Sabine chances to encounter; Mr Loyalty, the man she can rely on in her business and who becomes a kind of honorary uncle to the children, much to the disgust of Charlam complete the family group.. But that is merely the surface. What gives this novel its special flavour are the things unseen, the magma of hopes, desires, fantasies, memories, humiliations, passions and hatreds bubbling beneath the surface of all their lives. I

These books, written in french and recently translated into english, were selected by the bureau du livre de Londres, translators and publishers

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w i n e p r ess

A Lebanese journey into my wines Lebanon has a long, rich and often tempestuous history – and one of the oldest wine-growing traditions on the planet. Now Thibault Lavergne reveals how Western connoisseurs are waking up to Lebanese viticultural delights.

hen 11 wineries from Lebanon showed off their latest products at a special trade and media tasting in London on 4 November, many buyers and journalists started asking: How come Lebanon has so many producers, and why didn’t we know about them before? For most people, Lebanese wines consist of only three or four domains, led by the iconic Château Musar. But Lebanese viticulture is much richer than the cliché of dedicated men who kept making wine under the rigours of civil war during 1975-1990. In fact the presence of 11 ‘Union Vinicole du Liban’ producers in London testifies to a tradition of some depth. Situated at the eastern end of the Mediterranean, Lebanon is bordered by Syria to the north and east and Israel to the south. Just half the size of Wales, the country boasts two majestic mountain ranges that run in parallel vertical lines down its middle. And nestling between these peaks sits the Bekaa valley, where most of the vineyards are located. What is now Lebanon was home to some of the earliest winemaking anywhere, dating back to 7000 BC. Four millennia later the Phoenicians, the original Lebanese, were exporting wine from Byblos, Sidon and Tyre. Between 900-300 BC Lebanese wine spread to Egypt and Carthage in North Africa, to Cyprus, Greece, Ancient Rome, Sardinia, Spain and even to France. Still today tourists visiting Baalbek in the Bekaa valley can marvel at the spectacular 2nd century Temple of Bacchus (god of viticulture), proof of a distinctly Lebanese role in the genesis of wine. Of course the Levant is also the birthplace of Judaism and Christianity, and wine production increased to meet their sacramental needs. In the 8th century when Muslims conquered the land, and after the Crusades

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Wines from the famous Château Musar

ended in the 13th century, the only entities that cared for viticulture till the 19th century were monasteries, such as the remote Hamatoura in the Koura valley. In 2003 the Maronite Church hired a French oenologist to oversee wine making at all of its 75 monasteries. Château Ksara, today Lebanon’s biggest wine producer (2.2m bottles) began life in 1857, founded by Jesuits. But Lebanese typically drink arak, a grapebased aniseed liqueur, and many local winemakers began life distilling this brew. Meanwhile the French were returning to old haunts, as when François-Eugène Brun founded Domaine des Tourelles in 1868. In 1920 France was awarded the League of Nations mandate for Lebanon and Syria, and French soldiers and civil servants were keen customers for pioneering labels, such as Château Musar (founded in 1930) and Vin Nakad (1923). After the French left in 1946, Lebanese producers began exporting their bottles to Diaspora populations in France, London, North and South America, Australia and Africa; and then to non-

w i n e p r e ss

Lebanese tipplers. Serge Hochar from Château Musar once declared: “This is how we established ourselves in the UK and how our 95% local market became 5%”. (It is 15% today). Although the 1975-1990 civil war devastated the national wine market, one wartime politician, Walid Jumblatt, started to invest in Château Kefraya (founded 1951). Now Massaya, a joint venture between two Lebanese brothers and three famous French winemakers, provides a perfect example of a post-war boom in new vineyards. Most ventures are led by wine lovers of Lebanese origin returning home, such as Akram Kassatly of Château Ka, Naji Boutros of Château BelleVue, and the CEO of Nissan-Renault, Carlos Ghosn (born in Brazil to Lebanese parents), who recently invested in a new winery called Ixsir. Between 2005 and 2009 Lebanese wine sales rose by

1m bottles to reach 7m – not bad considering that the total Lebanese vineland is around 2,500 hectares. Red grapes include Bordeaux and Rhône Valley, blended together as Cabernet Sauvignon, Merlot, Grenache, Syrah and Cinsault; and Sauvignon and Chardonnay in white. One particularly impressive current project is Château Marsyas in the southern Bekaa. The Syrian Saadé brothers own and run this high altitude estate; they also founded Domaine de Bargylus, the first modern vineyard in Lattakia in Syria, assisted by the famous French wine-maker Stéphane Derenoncourt at both domains. Early tasting suggests that bottles from both sides of this very symbolic border may be ones to watch in the next few years. I Thibault Lavergne is the managing director of Wine Story Ltd Sources: Journey into the Mind’s Eye by Lesley Blanch, travel book writer and first wife of Romain Gary. Wines of Lebanon by Michael Karam, Le Liban contemporain by Georges Corm

The Cheese of the Month by La Cave à Fromage: Vacherin

||| Who would think that French rivalry was only confined to our British friends? It would be selfish not to count on our neighbours on the eastern front, Switzerland. Of course subjects of envy include Voltaire and William Tell, but let’s not forget one more, a unique cheese called Vacherin Mont D’or. Produced on both sides of the border along the Jura range, this very seasonal product is made from 15 August till 15 March; when milk is in short supply in mountains during winter months. Making large cheeses such as Comte and Gruyère is problematic, as each cheese requires 400 litres of milk. 30 Farmers decided to produce a much smaller cheese, the Vacherin. Solely made at a minimum altitude of 700m, circled with a thin Vacherin • brings a smile to one’s face layer of epicea wood, it is then finished to mature in a wooden box, using local pine woods. Pick it when lightly beige and wrinkly on the top, eat it either cold or warm it up in the oven, it will always bring a smile to one’s face.

||| How do you like your Vacherin? At room temperature, gently warmed by the heat of the oven, or perhaps you prefer it toasty from the flames of a fireplace on a cold winter’s day? Whatever the thermometer says there is a wine to suit. For those who like their cheese slightly chilled or at room temperature, I propose a light bodied red like a Beaujolais from Claude Bernardin, or a Fleurie from Patrice Barraud, or in white an Alsace Riesling like Les Hospices from Gerard Neumeyer. But if you prefer your slice creamy, runny and warm, remember that heat brings out a fruitier taste. So you could try an aromatic Gewurztraminer Alsace as a complement; or, by way of daring contrast, why not a dry Arbois or a white from Roussillon, such as Cuvée Alexis from Domaine Seguela?

Wines to accompany the Vacherin

Gewurztraminer grapes on the vine

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t h e ch a m be r . . .

chamber news : introduction

he French Chamber has had an exceptionally active autumn. Three of our trophy annual events were held in October and November. Each was greeted with great acclaim and entertained the many Chamber members and their guests. The Dîner des Chefs, held under the auspices of the Chamber’s Luxury Club, offered an opportunity for us to taste and appreciate the work of distinguished French Chef, Hélène Darroze. The Dîner de la Rentrée, sponsored by Alstom, was addressed by Alstom CEO Patrick Kron. The event was important both for the quality and relaxed nature of Mr Kron’s speech as for the food and delightful atmosphere. Finally, the Chamber’s Annual Financial Lunch, sponsored by Société Générale, enabled us to get a perspective on economic and regulatory events. Our guest speaker, Helen Alexander, the President of the CBI, spoke with authority and aplomb. The Business Club Cocktail, held on 9 November, and sponsored by Jersey Enterprise provided an opportunity for Senator Maclean, Jersey’s Economic Development Minister to address the Chamber on the island’s industry and financial opportunities. The Franco British Business Awards, held while this issue of INFO was in production, provides a showcase of the best and most innovative French and British companies. This year’s awards is our tenth, and thus has added significance. It will of course be covered in depth in our next issue.

While the events have been proceeding apace, our membership team have been busy recruiting new members. Over the last two months, we have gained 31 new members to our ranks. Let us now look forward to the forthcoming Ambassador’s Brief, on December 2. Here we will be addressed by the Ambassador about the French government’s plans for its tenure of the Presidency of the G20, at a time when today’s European economic environment is so uncertain. This will indeed be a most important event.

Changes in the Forums Meantime, there has been some changing of seats at two of our leading Forums. We are pleased to say that the Luxury Club has a new chairman. This is Thierry Outin, the Managing Director of Hermès. He replaces Antoine Pin, the CEO of LVMH watch and Jewellery UK who is now general manager of LVMH watch and Jewellery in Japan and Korea. The Human Resources Forum has also changed chairman with Karan Hutchinson, the group human resources director at AXA UK taking over from Nicolas Moreau. He has returned to France, having taken the new role of CEO of AXA France. We thank both departing chairmen, Antoine and Nicolas, for their excellent efforts and welcome our new ‘chairpeople’. We wish them luck in their new posts. I

1 new Patron member:

De Beers Diamond Jewellers represented by François Delage, CEO www.debeers.com De Beers Diamond Jewellers was established in 2001 as an independently managed and operated company by De Beers SA, the world’s premier diamond mining and marketing company, and LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group. De Beers Diamond Jewellers is the ultimate destination for diamond jewellery. With over 120 years of diamond experience to draw on, De Beers Diamond Jewellers go well beyond the 4C’s to capture Fire, Life, and Brilliance in diamonds, providing the very best diamonds in the world set in the most magnificent designs to create the sublime. The creation of timelessly elegant diamond jewellery – from selecting the world’s finest diamonds to impeccable craftsmanship and sophisticated designs – is the De Beers Difference, an absolute expression of the Art of Diamond Jewellery. Each De Beers diamond is certified with a De Beers passport and those above. 20 carats is microscopically

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@ t he ch a mber...

branded with the De Beers Marque. The De Beers Passport documents the specifications of a diamond jewellery and is the guarantee that every single De Beers diamond is natural, untreated, conflict free and responsibly sourced and manufactured. The De Beers Marque uses technology patented by the De Beers Group invisible to the naked eye and ensures that each stone is individually catalogued in the De Beers diamond registry where it will retain its identity as a De Beers official diamond, to provide each customer with total peace of mind.

7 New Corporate members:

Bridor UK www.groupeleduff.com We assure daily delivery of bread and pastry, selecting recipes that respect the French traditions. Hotels, coffee shops and contract caterers appreciate our know how. We are committed to respond to your expectations of quality, freshness and reliability of service. Represented by Marco Lindic, Managing Director

Chaumet www.chaumet.com Chaumet, founded in 1780 and Napoleon’s appointed jeweller, has created the most sumptuous jewels destined to embellish a political reign or to appeal to Empresses ever since. The Emperor made Chaumet the number one jeweller. Power and Feeling are the buzz words shaping the incredible destiny of the Parisian jewellery house located at 12, Place Vendôme. Today Chaumet continues to develop internationally with more than 70 boutiques situated in the world’s major capitals including two boutiques in London (Harrods and New Bond Street). Represented by Emmanuelle Landes, Boutique Manager

Edenred www.edenred.co.uk Helping organisations engage and motivate people to achieve enhanced performance. In the UK, Edenred offers a unique and unrivalled total reward solution, encompassing: Employee Benefits, Incentives and Rewards, Expense Management, Communication Services. Represented by Patrick Langlois, Managing Director Edenred - UK Group

Knight Frank www.knightfrank.com Knight Frank estate agents are widely regarded as the market leader for high quality commercial and residential property in London and throughout the UK. We have over 200 offices worlwide across 43 countries, including 20 network offices in France. We’re passionate about property and are professional in everything we do, which is why we are the world’s largest privately owned global property agency and consultancy. Represented by Jemma Scott, Head of Residential Corporate Services

The Dorchester www.thedorchester.com The Dorchester in the heart of Mayfair overlooking Hyde Park embodies the highest service values whilst its design and character exude 1930s glamour with a contemporary edge. Prized for its spacious and beautifully designed rooms and suites, The Dorchester’s restaurants and bars – Alain Ducasse, China Tang, The Grill and The Promenade – also attract Londoners and the glitterati alike. The Dorchester Spa was recently transformed to create the most desirable and indulgent pampering destination in London. Represented by Céline Saffray, Senior Sales Manager

Deltalyo & Valmy Ltd www.valmy.eu | www.deltalyo.com With both our factories in France we supply Respiratory Masks, Personal Protective Equipment, hygiene consumables and Anesthesia devices. Also involved in spraying equipment we deliver our ranges to car body distributors. Represented by Sandrine Grange, Export Manager

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Saffery Champness www.saffery.com Saffery Champness is one of the UK top 20 firms of chartered accountants and has over 150 years experience providing tailored financial, tax and business advice to private-wealth clients and to owner-managed entrepreneurial businesses. We have particular experience in the Media & Entertainment, Professional & Consultancy (recruitment, travel), and Property sectors. Saffery Champness is a member of Nexia International, a leading worldwide network of independent, high quality and innovative accounting and consulting firms that operate from 105 countries, comprising 590 offices and over 20,600 personnel. Represented by Frédéric Larquetoux

23 new Active members: Anthony & Co UK Ltd Financial Advice

Formulas4life

Consulting - Educational and Professional Training

London UP! Accommodation Accommodation

Represented by Rafael Dos Santos, Director www.londonup.com

Represented by Bérangère Hassenforder, Managing Director www.antcouk.com

Represented by Keenan Kate, Business Psychologist www.formulas4life.com

AS24 Fuel Card Ltd

Howard Kennedy

Fuel/Transport

Legal

Represented by Xavier Bourat, Managing Director www.as24.com

Represented by Sharokh Koussari, Partner www.howardkennedy.com

Represented by Masako Hiraki, Manager, CEO Office www.panasonic-europe.com

I-D Media

Digital Communications Agency

Les Petites étoiles

Beavis Morgan

Represented by Patrick O’Donovan, Managing Director www.i-dmedialondon.co.uk

Represented by Philippe Fraser, Director www.lespetitesetoiles.co.uk

IMG

Hospitality Industry

Audit/Accounting

Represented by François Debertrand, Head of International Development www.beavismorgan.com

CdeC by Cordelia de Castellane Retail

Represented by Cordelia de Castellane, Director www.cordeliadecastellane.com

Currency Change Ltd Foreign Exchange Provider

Represented by Laurent Guilbaud, Managing Director www.currencychange.eu

The East India Company Retail/Luxury

Represented by Arjan Overwater, CEO www.eicfinefoods.com

French Radio London Radio Broadcasting

Represented by Pascal Grierson, CEO www.frenchradiolondon.com

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Panasonic Europe Ltd Electronics

Education

Radisson Blu Portman Hotel

Represented by James Dale, Account Manager www.imgworld.com

Represented by Hubert Losguardi, Sales Executive www.radissonblu.co.uk

In1 solutions

ResFamiliaris LLP

Represented by Richard Toms, UK Business Development Manager www.in1solutions.com

Represented by Jérôme Lazare, Managing Partner www.resfamiliaris.com

ING Europ

Showroomprive.com

Sports

Hospitality / Technology

Industrial engineering

Represented by Pierre Coudour, Administrator www.ing-europ.com

JSD Event

Event production & branding marketing

Represented by Bastien Dupuy, Director & Project Manager www.jsdevent.com

Khindria & Co Law firm

Represented by Tony Khindria, Solicitor-Partner-Avocat à la Cour www.khindria.com

Banking & Finance

e-commerce

Represented by Thierry Petit, Founder and CEO www.showroomprive.com

Tenesol SA Photovoltaics

Represented by Benoît Rolland, General Manager www.tenesol.com

Vranken estates Champagne

Represented by Thomas Lambert-Laurent, Managing Director www.vrankenpommery.com

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Recent Events

27th October: ‘Dîner des Chefs’ hosted by

Hélène Darroze and the Connaught host the Chamber’s first ‘Dîner des chefs’ ||| The French Chamber’s her to pursue a career in Luxury Club held a highly high-class cooking and successful ‘Dîner des Chefs’ at insisted that there was certainly a place for a the Connaught Hotel Mayfair woman therein. on 27 October 2010. Some 100 members and guests attended In 2008, Hélène took over the restaurant at The a glittering affair in a splendid West End location. Connaught Hotel. Her The Michelin-starred cuisine combines a subtle blend of tradition, modernity, Chef who provided a unique signature menu audacity and refinement. was Hélène Darroze. She Nathalie Seiler-Hayez, Hélène Darroze, Thierry Outin, Florence Gomez It was only fitting that the very first ‘Dîner des spoke at the dinner about her enthusiasm for the quality of British produce Chefs’ was held at the exclusive Connaught Hotel. From and indeed cuisine, about her aspirations for the the opening cocktail kindly sponsored by Pommery, or the exquisite after dinner vintage cognac sponsored by Connaught and about her vision for cooking and taste. She delivered a fantastic speech sharing with the Pernod-Ricard, to the great gifts generously offered by audience her passion, savoir faire and her exceptional The East India Company and Ladurée, the evening was entrepreneurial spirit. The Chamber was honoured to a total success and has indeed set the bar high for all enjoy the catering of this hugely talented Chef who has future ‘dîners’ in this series as we look forward to the next a distinguished pedigree performing in a masculine installment taking place at Raymond Blanc’s Manoir aux culinary world. Quat’Saisons in March 2011. The chamber wishes to thank Hélène Darroze, the Connaught as well as all sponsors Who is Hélène Darroze? and participants I This exquisite evening was an opportunity to celebrate the work and career of Hélène Darroze, one of France’s What is the Luxury Club? foremost Chefs. She proudly belongs to a longstanding The Chamber’s Luxury Club brings together CEOs and gastronomic heritage, representing the fourth generation directors operating within luxury markets, including of a family of cooks, hôteliers, and restaurateurs from fashion labels, gastronomic restaurants, five star hotels, the Landes. Her great grandfather had opened the inn luxury food and beverage brands. All these companies « Le Relais » at Villeneuve-de-Marsan in 1895 which was face similar challenges of a changing marketplace and carried on by her grandparents, and then by her father. consumer base. As a child she was greatly influenced by the markets of The Club provides not only an opportunity for the Basque country where her father bought products of networking, but useful sharing of experience and the Landes soil: cepes, foie gras, etc. expertise. Many of its meetings are held exclusively After graduating in 1990, she spent three years at the for senior directors within the luxury sector. The club gastronomic restaurant Louis XV in the Hôtel de Paris holds three breakfast meetings per year in luxury in Monte Carlo. The restaurant was run by celebrated hotels, as well as three ‘Dîner des Chefs’which allows Monégasque Chef Alain Ducasse, who had just gained the Club to be accessible to other Chamber members. his prestigious third Michelin star. Ducasse encouraged

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Recent Events

8th November: ‘Dîner de la Rentrée’ sponsored by

The power of business: Patrick Kron at the Chamber’s ‘Dîner de la Rentrée’ National differences can be overcome by companies working together, across borders and across cultures. Alstom is one such bridge builder says Patrick Kron, speaking at the ‘Dîner de la Rentrée’.

||| ‘Business has done much to bring our two countries much closer’, said Patrick Kron, addressing this year’s ‘Dîner de la Rentrée’. He went on to outline the role of Alstom in building British transport, power and energy infrastructure. Mr Kron was speaking to the French Chamber on 8 November, at an event sponsored by Alstom, which took place at Renaissance London Chancery Court Hotel and brought together more than 200 participants. He paid tribute to the French Chamber of Commerce in Great Britain saying it has done so much to foster this special relationship. ‘It has been doing this good work since 1883 promoting trade and investments between France and Britain and providing both business communities with specialised services and a forum – like tonight – where we can come together to share our knowledge and discuss our interests.’

Guests at the Dîner de la Rentrée

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Mr Kron went on to discuss the three elements of the Alstom empire. They are power generation, power transmission and rail infrastructure. ‘We’re key to the construction of power plants for a wide range of energy sources – hydro, nuclear, gas, coal and wind. Around one third of all nuclear power plants across the world are equipped with Alstom turbines and we are today building four of the six new gas fired power stations here in the UK. We are in the forefront of new developments in power transmission, with a focus on smart grids. We build the fastest train and the highest capacity automated metro in the world.’ Mr Kron said the company was ‘accelerating work and investment in carbon efficient solutions including leading the world in carbon capture for the power generation industries.’

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(Left to right) Ian Fisher • Stephen Burgin • Arnaud Vaissié • Florence Gomez • Patrick Kron • Vincent de Rivaz

Looking more specifically at the UK’s energy supply, Mr Kron said ‘more electricity can be produced using less fuel, which means lower pollutant and carbon dioxide emissions. Our solutions keep 90 per cent of thermal power plant emissions out of the atmosphere. We are a world leader in hydropower and a growing presence in the geothermal and wind power industries. In wind, we are developing a high capacity offshore turbine and are currently building major onshore projects in Wales and Scotland at Europe’s largest wind farm, Whitelee.’ Mr Kron observed that the company had just completed the conversion of the Drax coal station to be able to use biomass as fuel, making it the largest co-firing plant in the world. ‘With so much knowledge in so many areas, we are a major player in the UK energy sector - whichever technologies are in the energy mix.’ The company has been praised for its work with Virgin Trains and the Alstom Pendolino fleet on the West Coast Mainline, as well as for the Alstom trains on London Underground’s Northern and Jubilee Lines. ‘Both projects are today considered as benchmarks in fleet performance and management.’ Alstom is heavily involved in discussions about the UK’s high speed rail programme. ‘We would expect to play a most active role in the supply of both trains and infrastructure, thanks to our established position as world leader in high speed rail technology most notably with the TGV in France and the AGV soon to be in service in Italy. Combined with rolling stock replacements, upgraded signalling and new infrastructures, the high speed option represents an incredible challenge and a major

opportunity for the UK.’ The Chamber wishes to thank Alstom for its very loyal support and particularly Patrick Kron and Stephen Burgin, Country President of Alstom, as well as all the participants and the Renaissance London Chancery Court hotel staff. I

Bouygues: Winner of the INTERCULTURAL TROPHY FOR BUSINESS EXCELLENCE For the 13th year running, our Trophy – designed by Cartier – was presented to the member of the Chamber elected by other fellow members as having made particular efforts to develop stronger ties between our two countries or to promote Franco-British cross-cultural relations.

Last year winner, Julien Planté, Operations Director & Head of Programmes at Cinémoi, handing over the Trophy to this year winner: Arnaud Bekaert, Deputy Managing Director of Bouygues UK

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Recent Events

12th November: Annual Financial Lunch sponsored by

International Cooperation: Key to success of reforms Helen Alexander, guest speaker at the Chamber’s Annual Financial Lunch, said that if guests took one message from her speech, it should be the importance of international cooperation.

(Left to right) HE Maurice Gourdault-Montagne • Ian Fisher • Helen Alexander • Arnaud Vaissié

||| The key point to the reform of the international financial system is the importance of international cooperation. ‘If you remember nothing else about my speech, that should stay in your minds.’ So exhorted Helen Alexander, in addressing the Annual Financial Lunch, held on 12 November. This was sponsored by Société Générale and Helen Alexander, President of the Confederation of British Industry (CBI), was the guest of honour.

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The lunch, held at the Sofitel St James, was attended by some 150 guests from the French and British financial community. The Chief Country Officer of Société Générale, Ian Fisher introduced the speaker. Mr Fisher began by introducing the guests to a recent project of SocGen called Ambition 2015. This was launched in June 2009 and involves a total of 50 projects. It focuses on four pillars: clients, employees, strengthening operating model

@ t he ch a mber... AGS FW_London_h221mmXw76mm_hires.pdf 2010/11/17 09:29:54 AM

and building the bank’s image and communication. ‘The goal is to be the relationship focused bank for our clients and know the commitment of our teams. The universal banking model has proved its resilience through the crisis.’ Mr Fisher said they would not need to raise new capital to meet Basel criteria. The London operation is a key platform for the bank, in leasing, private banking and corporate banking. Mr Fisher also said ‘banks provide an important role in supporting the real economy.’ The bank provided over 4 billion Euros for social and ecological projects, in hospital and universities and these helped to provide jobs. ‘We see ourselves as an integral part of the wider economy.’ After Ian Fisher, the lunch was addressed by Helen Alexander. She said that ‘delivering stability to our industries without causing long-term damage to competitiveness is not going to be easy. Some reform will be necessary if we are to avoid repetition of the last crisis. The cost of that to the international economy, to individual countries’ fiscal positions and to business has been immense. Some of the figures have been breathtaking. EU government’s commitment to aid amounts to 30% of EU GDP.’ Helen Alexander went on to say that ‘we can’t put a figure on the cost to reputation to institutions, regulators and to banks. ‘ Reforms need to prevent a repetition of the crisis and help restore trust. This can’t be achieved just through regulatory change. The CBI has three tests for financial sector reform. She asked if the proposed reforms first, delivered better management of systemic risk, therefore reducing the economic impact and exposure of the public purse in the event of a future failure. Second, will they enable financial service firms to play an efficient role in the economy and finance the recovery?, and third, are they internationally coordinated and effective to avoid undermining the competitive advantage of any single country, or indeed harming their economy. She acknowledged the importance of Basel and the changes to capital requirements. ‘These have been endorsed by the G20. She said that the Financial Stability Board had made recommendations about supervising Systemically Important Financial Institutions (SIFIs). The Chamber wishes to thank Société Générale who have sponsored the Annual Financial Lunch since its very first edition in 1998, Ian Fisher, Helen Alexander as well as all the participants and the Sofitel. I C

CMY

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Recent Events

9th November: Chamber’s Business Club Cocktail sponsored by

Enterprising spirit still rules in Jersey says Senator Maclean

Senator Alan Maclean, Peter Alfandary, Clive Boothman

||| Despite what the map might suggest, Jersey is not an island – at least not in economic terms. So said Senator Alan Maclean, Jersey’s Economic Development Minister, in a well received speech at a Business Club Cocktail hosted by the Chamber on Tuesday, 9 November. Amplifying his argument, the Senator described how from fishing, wool making and agriculture to trading and popular tourist locations, Jersey has long punched above its weight in relations with its larger mainland neighbours. More recently, of course, it has built a “world renowned financial services centre that now acts as our economic powerhouse”.

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Addressing an enthusiastic gathering of nearly 80 Chamber members at the Radisson Edwardian Bloomsbury Hotel in central London, Senator Maclean spoke affectionately and informatively about the British Crown Dependency that is actually much nearer Normandy than it is to England. In fact the Senator devoted many words to the island’s thriving links with France, as evidenced by regular meetings with the governments of Brittany and Normandy, a new sea route linking Jersey with Cherbourg, and the holding of Tour de Bretagne cycle race partly on the island. Another tie he stressed was with the Chamber itself. The idea for the Jersey Cocktail arose out of a successful debut visit by Chamber Patron members to the island in May this year. The Patron trip was sponsored by Mazars, BNP and Jersey Enterprise. Senator Maclean also said that Jersey was “still open for business” and that its “spirit of enterprise, innovation and opportunities” was in no way diminished. “We were fortunate to have been in such a strong position at the beginning of the downturn”, he added. “We had no debt, considerable cash reserves and a stabilisation fund, set up from savings during the boom years”. While not minimising financial challenges, the Senator assured listeners that his government strove for economic growth, based on five pillars or principles, with “diversification high on the agenda”. To illustrate these points he cited the many enterprises that had relocated to Jersey, and island laws that presciently targeted markets in Middle East and Asia. Alan Maclean worked extensively in marketing, public relations and property management, before being elected to the island’s parliament in 2005. He took up his ministerial post in 2008. Also addressing the event was Clive Boothman of Jersey Finance. His experience working in the City for the likes of Schroders, Gerrards, Cofunds, Arthur Young and Ernst & Young showed through in a talk that elicited many lively questions. The Chamber wishes to thank Jersey Enterprise, Senator Maclean and Clive Boothman as well as all participants and the Radisson Edwardian Bloomsbury Hotel I

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forthcoming events 2nd december 2010

Ambassador’s Brief

Ambassador’s Brief 18.00 - 19.30

At the Residence of the French Ambassador

Maurice Gourdault-Montagne French Ambassador to the UK

||| His Excellency Mr Maurice Gourdault-Montagne, French Ambassador to the United Kingdom will address Patron and Corporate Chamber Members on the theme “France-UK Summit 2010/ Declaration on Defence and Security Co-operation/ French presidency of the G20”. The speech will be followed by a Q&A session. For more details, please contact Jonathan Rosen on jrosen@ccfgb.co.uk or on 020 7092 6638

27th January 2011

‘Retail Industry Event with Special Guest Speaker Michael Ward 18.00 - 20.00 VENUE TBC

Michael ward managing director of harrods

||| Michael joined Harrods as Managing Director in March 2006 from Apax, a leading private equity company specializing in retail investments. Prior to Apax Michael was a member of the Board of Celesio AG running Europe’s largest pharmacy chain with leading position in six European countries. Michael is a fellow of the Institute of Chartered Accountants in England and Wales, holds a Masters degree in Business Administration and is a member of the Institute of Corporate Treasurers. For more details, please contact Cécilia Gonzalez on cgonzalez@ccfgb.co.uk or on 020 7092 6643

www.delahayemoving.com

London • 020 8687 0400

info@delahayemoving.com

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Questionnaire De Proust François Ozon

ne of the most important young directors and screenwriters in the “New Wave” in French cinema, François Ozon was born in 1967 in Paris. After taking a master’s degree in Cinema (Paris I), he entered the famous French school of cinema La FEMIS, in 1990, specialising in the craft of directing. Since then, he has achieved international acclaim for his films ‘8 femmes’ (2002) – starring such icons of French cinema as Catherine Deneuve, Fanny Ardant, Isabelle Huppert and Emmanuelle Béart – and ‘Swimming Pool’ (2003) starring Charlotte Rampling and Ludivine Sagnier. Ozon is an “enfant terrible” who is never afraid to tackle taboos. Already a veteran of 12 features and many more shorts, he uses both satirical and serious modes to provoke strong reactions on a range of sensitive social, sexual and political issues. One of his most recent works, ‘Le Refuge’, has been released as a DVD on 8 November in the UK. It stars some of France’s finest talents including Isabelle Carré, Melvil Poupaud and Louis-Ronan Choisy.

My favourite colour Black

The flower I like A white rose

My favourite animal The penguin

My favourite prose author Virginia Woolf

My favourite poets Arthur Rimbaud

My hero in fiction No God, no master, no heroes

My favourite composers Ravel, Debussy, Mozart, Bach

My favourite painters Egon Shiele, Balthus

What I hate the most of all Waking up at night to go to the toilet

My favourite food and drink The principal aspect of my personality To know how to bounce back

The quality that I desire in a woman Her hair

What I appreciate most about my friends The way they indulge me

My main fault To test the limits and keep on pushing

My favourite occupation Making movies

My dream of happiness I don’t have one, because I enjoy being unsatisfied

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Chocolate and red wine

The military event that I admire the most I don’t like military events, but I think the uniforms can look quite sexy…

The gift of nature I would like to have To eat without getting fat

My present state of mind Confused and excited

Faults for which I have the most indulgence: My own faults

My motto think at least twice before opening your mouth

ÂŠ Photo credits: tim Shaw, VINCI and subsidiaries photo libraries.

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www.cinemoi.tv

Gaspard Ulliel, Photo ÂŠ Ki Price, Cannes Film Festival 2010

Now available on Virgin Media, channel 445