Us Debt Ceiling: Why It Could Cost Europe

Continental Europe ends Seve Trophy drought

The singles went down to the final match, and as he did at the Ryder Cup in Medinah, Francesco Molinari anchored the winning side, securing a long-awaited Continental Europe victory with a 3 & 2 defeat of Chris Wood at Saint-Nom-La- Breteche. “Very emotional — it’s been a tough day,” said winning captain Jose Maria Olazabal. “Everything went to the last match. The boys really played well today and I’m very, very happy to have won the Seve Trophy this time.” GB&I struck first on Sunday when Tommy Fleetwood claimed his first point of the week with a 3 & 2 win over Joost Luiten, who was unbeaten entering the match. After Jamie Donaldson and Gonzalo Fernandez-Castano halved their match, Ryder Cup standout Nicolas Colsaerts drew Continental Europe even, draining a 5- footer for par at the last to secure a 1-up win over Paul Casey. Frenchman Gregory Bourdy then continued his stellar play and pushed Continental Europe in front with a 4 & 3 triumph over Scott Jamieson. Bourdy, who never trailed in the match, became the first player in the event’s history to win five points out of five. “I’m so happy to achieve that, and it was an amazing week for me,” said Bourdy. The jostling continued, however, as Marc Warren wrapped up a 4 & 3 ousting of Thorbjorn Olesen to again square the tournament, 12 – 12, with four matches left on the course. From there, Continental Europe took control. Jimenez put the finishing touches on his convincing win, which was aided in part by the ailing Lynn, who twice dropped his ball into the water. Matteo Manassero then increased Continental Europe’s advantage to a pair with a 3 & 2 defeat of Stephen Gallacher. Paul Lawrie showed the GB&I mettle with a 2 & 1 win over Mikko Ilonen, but Molinari was in control at that point, holding a 2-up lead over Wood through 14 holes. After the pair matched birdies at the 15th, Molinari dropped his tee shot at the par-3 17th within 12 feet and drained the birdie putt to seal the Continental Europe victory. “It was going to go down to the last three matches at least,” continued Olazabal.

India is also not yet compliant with a European data privacy directive, which limits some of the work that can be moved to the country. “Europe has been a very conservative market compared with the U.S.,” said Sharat Kumar, head of delivery for Europe at No. 5 Indian player Tech Mahindra, whose European clients include food giant Nestle SA and aerospace firm EADS . “The customers are conservative in starting the initiative, but once they do, these are the customers that don’t just go back and forth or drop it, so what we’ve seen is that there is a lot more stability in the European customer,” he said. For European companies, many of them battered by a prolonged economic slowdown, Indian IT firms offer cost advantages to using local vendors or doing the work in-house. Global rivals such as IBM and Capgemini also have big operations in India that can take advantage of lower costs. Indian vendors are also taking on increasingly complex work. “To a certain extent, the skills shortage in continental Europe is driving the growth for offshore openness,” said Katharina Grimme, a principal consultant with outsourcing advisory Pierre Audoin Consultants (PAC) in Cologne, Germany. LOCAL CHALLENGES Indian IT’s progress in Europe comes at the expense of local vendors, which according to NelsonHall are seeing flat sales. In 2009, India’s TCS ranked just 21st in IT services revenue from Europe, the Middle East and Africa, but rose to 11th at the end of 2012, according to PAC. Indian rivals Wipro and Infosys ranked 18 and 23, respectively, in 2012, after not cracking the top 25 in 2009. To address labour issues and speed growth in Europe, Indian companies have been acquiring local firms. To win client trust, they hire locally for senior client-facing roles, but most of the grunt work can be done from India.

Indian IT outsourcers want a bigger byte out of Europe

A default would be most unwelcome for Europe, says London-based Mark Wall, who co-heads European economics in Deutsche Bank. Europe has reached a position to start a recovery but its very fragile, very uneven, and expectations point to vulnerability for few years as it gets its house in order. RECOMMENDED: Think you know Europe? Take our geography quiz. After several years of economic crisis, analysts have recently begun to see signs that Europe has turned the corner into recovery. Although economic growth in the 17-member eurozone is expected to shrink 0.4 percent in 2013, after a 0.6 percent decline in 2012, the International Monetary Fund said on Tuesday that the eurozone is expected to grow 1 percent in 2014. Though such figures are modest, they are actually up from earlier expectations, and have translated into improving consumer sentiment and spending. According to IMF predictions, all three of Europe’s top economies France, Germany, and Britain will see growth. France is expected to see token improvement in 2013 and 2014; Germany should grow 0.5 percent this year; and the British economy is forecast to grow 1.4 percent in 2013 and 1.9 percent in 2014. But that would certainly change if House Republicans and the White House fail to reach an agreement by Oct. 17 on raising the debt ceiling, and the US Treasury becomes unable to raise more cash. More on world impact of US debt default: US debt ceiling: the wary view from Mexico The European economy is inherently exposed to effects from across the Atlantic, because is financial sector and that of the US are closely intertwined. The US is Europes second biggest trading partner,” says Mr. Wall, and “there is a strong degree of correlation with US financial sector.” But additionally, a US default would strike at the engine of the European recovery: European exports to the US. A weakened US dollar makes European exports more expensive, undermining the regions competitiveness, just as year of painful adjustments are starting to pay off.