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As Africa gets online, Europe emerges as the new global internet traffic hub

Paris-based Peugeot, Europes second-biggest carmaker, posted an 18 percent sales drop in the region in August. Varin forecast at the Frankfurt show on Sept. 10 that there will be slightly positive growth in European auto-industry deliveries next year. Registrations in the region slipped 4.9 percent at Turin, Italy-based Fiat. Renault (RNO) , which has its headquarters in the Paris suburb of Boulogne-Billancourt, outperformed other mass-market carmakers. Regional sales at Europes third-largest auto manufacturer gained 5.8 percent in August. Renault CEO Carlos Ghosn said last week that the car market may expand slightly more than 1 percent in 2014. Fords Strategy Ford Motor Co. (F) s European sales decreased 0.9 percent in August. Stephen Odell, head of the Dearborn, Michigan-based carmakers business in the region, said on Sept. 9 that it does feel like were running along the bottom of the auto-market contraction. He outlined plans for Ford, which is forecasting a loss of $1.8 billion in Europe for 2013, to expand model introductions over the next five years to 25 from an earlier projection for 10 new vehicles. Bayerische Motoren Werke AG (BMW) , the worlds biggest luxury-vehicle producer, posted 9.9 percent more registrations in Europe. Sales in the region at Daimler AG (DAI) rose 5.5 percent as the Mercedes-Benz division, the third-ranked luxury-auto maker, reported an 8.5 percent gain, versus a 24 percent plunge in demand for two-seat Smart cars.

Speaking after Azarov on Saturday, Sergei Glazyev, an aide to Putin, returned to the attack, saying that Russia might be obliged to impose duties on any goods arriving from Ukrainian territory, at a huge financial cost to Ukraine. Saying 40 percent of Ukrainians had doubts over the agreements with the EU, Glazyev, who has made hawkish comments before about Ukraine’s pro-Europe policy, urged the Kiev government to ballot its people. “Let us … ask the Ukrainian people what choice they prefer,” he said. TYMOSHENKO RELEASE Azarov had sharp words for Russia over its refusal to cut the price of its gas, which hangs heavy on Ukraine’s cash-strapped economy. Ukraine pays what it sees as an exorbitant $400 per thousand cubic meters under a 2009 contract, which Russia has refused to redraw. In a bid to break away from reliance on Russia, Ukraine hopes to find alternative energy sources through shale gas exploration and imports from other sources. Ukrainian President Viktor Yanukovich on Friday reiterated that Kiev was committed to signing the agreements with the EU at a November 28 summit in Vilnius, Lithuania, marking a pivotal shift away from Russia. But he refused to say whether he would free his jailed political rival, former prime minister Yulia Tymoshenko, who the EU says is a victim of ‘selective justice’. Tymoshenko was sentenced to seven years in jail in 2011 for abuse of office after a trial that she says was a vendetta by Yanukovich. Former Polish president Aleksander Kwasniewski, who is involved in mediation missions on behalf of the EU to get Tymoshenko released, urged Yanukovich to free her for medical treatment in Germany. “She is ill. She needs surgery.

Europe’s economic rebound to boost industrial metals demand

But European policy is unlikely to change if Merkel continues to govern with the FDP. And even if she’s forced into a grand coalition, any shift is likely to be very subtle. Related: Greece joining euro was a mistake: Merkel While the Social Democrats have taken a softer tone on austerity , they have backed Merkel on all the big European decisions during the crisis. “The power and willingness of the SPD to cause an overhaul in euro-politics from the German side is very limited,” noted BNP Paribas economist Evelyn Hermann. Merkel: Europe has lived beyond its means What about the German economy? Germany is the second most productive of the G-7 economies after the United States, based on GDP per hours worked. Its unemployment rate is the second lowest in Europe and it managed growth of 0.7% in the second quarter, having avoided the recession that gripped much of the euro zone for 18 months. German stocks are at record highs , and businesses haven’t been as upbeat about their prospects for more than three years. But some economists are warning of creeping complacency. One of the talking points in the election campaign has been the millions of working Germans barely able to cover more than their basic needs. The Social Democrats would look to raise income tax rates, introduce a national minimum wage and limit the use of temporary work contracts. “The impact on the short-term business cycle would be negligible,” noted Berenberg economists.

merkel campaign trail

Europe’s rebound, while expected to be gradual, may surprise investors used to ignoring the continent in favour of China, the world’s biggest consumer of raw materials. “Market thinking has become conditioned to take Europe as a negative for market demand,” said Duncan Hobbs, senior commodities analyst at Macquarie in London. “In a couple of markets, lead and tin, which look finely balanced at the global level today, European recovery could be the difference that tips these markets into deficit overall.” While not swinging the copper market into deficit, European recovery should help reduce the surplus in the red metal, Hobbs said. Europe is still the world’s No. 2 buyer of industrial metals but its debt crisis and recession have hammered demand for them, with double-digit declines from pre-crisis levels. Copper and steel have posted falls of about a fifth while the steepest decline came in tin, where demand sank by almost 25 percent from 2008 to 2012, Hobbs said. But the euro zone emerged from a 1-1/2-year recession in the second quarter, with growth of 0.3 percent, and German analyst and investor sentiment jumped more than expected in September. [ ID:nL5N0HD1G0 ] “Overall, Europe seems to have reached an important inflection point. The recovery in the euro zone should be sustainable, despite an unimpressive pace and the risk of fresh setbacks,” UBS economist Reinhard Cluse said in a note. PENT-UP DEMAND UBS this week raised its euro zone growth forecast for next year to 1.1 percent from 0.8 percent and expects the area’s industrial output – correlated with base metals performance – to rise 1.9 percent next year after falling 1.0 percent in 2013. Demand for metals may undergo a burst of activity as consumers and businesses become more confident about the future. “You’ll go through a period of pain where you don’t replace anything, but over time these assets depreciate so you’ll need to replace them,” said Nic Brown, head of commodities research at Natixis in London. “If you’re a household, you’ve got things like a house, car, white goods, and similarly on the corporate side, I think there will be pent-up demand to replace plants, machinery and vehicles that have gradually aged.” Europe accounts for about 15 percent of global consumption of most industrial metals, with nickel higher at 20 percent and carbon steel lower at 12 percent. Those numbers are based on the metal content of goods made in Europe, but actual demand would be higher after accounting for imports of products containing metals. Macquarie expects the lead market to be balanced next year, but a rise in European demand by 1 percent for the metal mainly used in batteries would mean 15,000 tonnes more consumption, potentially sending the market into deficit.

Russia makes new threats over Ukraine’s pro-Europe policy

The company released a study Wednesday that shows how more and more cables are connecting in Europe because of the availability of large exchanges such as the Amsterdam and Frankfurt Internet exchanges. From the story: Europe is an attractive Internet hub because it is home to many large carriers and major Internet exchanges, and IP transit prices are among the lowest in the world, said TeleGeography analyst Paul Brodsky. New cable builds in Africa and the Middle East have enabled international operators to access inexpensive IP transit directly in European cities instead of connecting much further to the U.S. Subscribe to gigaom.com Overall the growth of global bandwidth is slowing, but operators still are adding 26 Tbps of capacity this year, more than even existed in 2009. But as the growth slows, the center of the bandwidth universe is shifting. International internet capacity connected to Europe increased by 18.5 Tbps in 2013, growing most rapidly between Europe and Africa. Europe now accounts for 94 percent of international internet bandwidth connected to North Africa, up from 61 percent ten years ago, and 72 percent of bandwidth connected to Sub-Saharan Africa, up from 39 percent a decade ago. Growth in European connectivity is equally sharp for the Middle East, which has seen its bandwidth connected to Europe increase from 51 percent to 85 percent in the past ten years. So Europe is in the right place for internet growth in the rest of the world, but its prices for transit are also lower because so many providers connect at internet exchange points on the continent. That competition between IXPs tends to lead to lower pricing. Related research and analysis from GigaOM Pro: