Cyprus – Problem Plays

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Last year Cyprus’ legal market appeared enviously impervious to the financial crisis. Twelve months later and the Mediterranean financial hub has been hit hard by heavy exposure to the Greek debt crisis and its successive write downs.

In scenes that have been played out repeatedly across Europe – and which are deeply reminiscent of the early stages of the banking collapse in low corporate tax rival Ireland – the island’s sovereign rating has been downgraded to junk status, amid fears that the Cypriot government will be forced to prop up its toxic debt-laden banks, curtailing its access to the international debt markets. Continue reading “Cyprus – Problem Plays”

CEE – Generating Growth

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Oil and gas? Renewables? Nuclear? Whichever energy source you’re selling, there’s no doubt that the appetite for power in Central and Eastern Europe (CEE) seems almost insatiable. That demand, coupled with the urgent need for infrastructure, is ensuring that even those CEE economies facing the imminent threat of recession are viewing the fulfilment of their relevant construction programmes as a number one priority.

‘National authorities are seeking to improve capacities in conventional energy sources, increasing energy independence and phasing out or upgrading older polluting generation capacities,’ says Bryan Jardine, partner in the Bucharest office of Austrian-headquartered Wolf Theiss. ‘The CEE is a region that has tremendous need. Growing energy demands, coupled with ageing, inadequate and inefficient energy supply infrastructure (a legacy inherited from 45 years of Soviet-era planning and investment) is driving the need for this increased sector work and investment in the CEE.’ Continue reading “CEE – Generating Growth”

Switzerland – Climb every mountain

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UK law firm Speechly Bircham opened a Zürich office in June 2011, marking the firm’s first venture overseas. Private client partner Mark Summers was relocated to Switzerland to head the new operation alongside two associates, with fellow partner William Hancock joining him at the start of 2012.

Speechly’s Zürich offering is further bolstered by international private client head Charles Gothard, who spends one week each month in the city, and financial services partners Jonathan Bayliss and Kate Troup, who are both in Zürich for two or three days each month. Continue reading “Switzerland – Climb every mountain”

Switzerland – Splendid isolation

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As an exporting country, Switzerland is not immune to the general crisis and slow down of growth in the rest of Europe. Add to this a tough financing environment, and it is no surprise that the country’s transactional lawyers are reporting a dwindling deal flow.

A key issue for international M&A deals in Switzerland is the strong Swiss franc. In 2011, because prices kept increasing for dollar or euro-based buyers, some inbound acquisitions of Swiss businesses by foreign acquirers failed after following due diligence. However, it’s not just a robust currency that is affecting Switzerland’s M&A transactions. ‘Because the Swiss economy has resisted the global meltdown fairly well in comparative terms,’ says André Gruber, one of the Geneva-based founding partners at Swiss legal practice DGE, ‘Swiss assets are also comparatively expensive.’ Continue reading “Switzerland – Splendid isolation”

The Balkans – Holding up

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The signs had been positive for the Balkan states until very recently. Not only have countries in the region shown great commitment in pushing through reforms to bring domestic legislation in line with the rest of Europe, but many have also shown exemplary discipline in complying with International Monetary Fund (IMF) austerity measures. All this contributed to the IMF’s forecast last year that growth in the Balkans by 2013 would be three times that of western Europe.

However, the knock-on effect from the rest of the continent has been severe. With the eurozone crisis showing no signs of abating, forecasts for growth in the region have suffered amid fears that, as western Europe further tightens its belt and its major banks shrink outside of their home markets to help beef up capital levels, already low levels of liquidity within the region will drop even further. Continue reading “The Balkans – Holding up”

Austria part 1 – staying out of trouble

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Austria has proven to be an economic safe haven in the past few years, but the troublesome CEE countries are still playing on lawyers’ minds.

A favourite topic of conversation around the dinner table for wealthy Viennese is the astronomical price of apartments in the centre of town. They bemoan how rich Russians are coming in and snapping up the grand, high-ceilinged apartments on the imposing avenue that circles the centre of town, the Ringstraße. The Russians, they say, like the climate and the genteel lifestyle that Vienna offers, and will pay almost anything to get these apartments.

Continue reading “Austria part 1 – staying out of trouble”

Eurozone debt: Keeping it together

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As the sovereign debt crisis threatens to bring the euro to its knees, a group of lawyers has been working behind the scenes to keep the cogs turning. LB finds out what happened backstage.

Lee Buchheit has faced a frantic few months. He has been advising the Greek government on how to sort out its massive debt problem. This has seen him shuttle between meetings across Europe for the past five months and spend more time in hotel rooms in Paris, Brussels, Berlin and London than in his hometown of New York.

Continue reading “Eurozone debt: Keeping it together”

Eastern Rivals

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The financial crisis has done more than stall investment in Central and Eastern Europe. It has caused a remarkable sea change in the respective legal markets, where the international elite have their work cut out

The crystal balls of Romania’s gypsies would be a valuable tool for many a law firm partner operating in Central and Eastern Europe. Almost precisely to the day of Lehman Brothers’ collapse, the investment appeal of these emerging markets all but extinguished. Continue reading “Eastern Rivals”

Portugal – Shifting sands

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With Portugal’s recession expected to continue for at least another two years, the country’s law firms have no option but to go abroad. LB assesses whether their international strategies are paying dividends

As any schoolboy will tell you, Portugal has a proud tradition as one of Europe’s foremost explorers. The era of Henry the Navigator and Vasco da Gama was a golden age of European discovery, in which a tiny nation spread its tentacles throughout the world and, for a period, became one of its greatest powers. Continue reading “Portugal – Shifting sands”