Angela Merkel has already abandoned plans to pursue billions of euros in tax cuts next year — the central policy pledge of her 2009 election campaign and main plank of her 7-month-old coalition agreement with the Free Democrats.

    But now her uneasy government looks ready to go one step further and raise value-added tax on certain products which benefit from a reduced rate to help it consolidate the budget.

    This is what Merkel had to say about such a move in an interview with N24 television in June 2009, in the midst of the election campaign: “There is absolutely no need to worry about that, it won’t happen. In the midst of an economic crisis it is absurd to even discuss these questions.”

    She told top-selling daily Bild that same week: “With me, there will be no increase in the next legislative period, neither of the full, nor of the reduced rate of value-added tax.”

    If her government does decide to raise VAT rates — it will meet this weekend to try to forge a consensus on fiscal plans — Merkel can and will claim that underlying economic conditions have changed since she uttered those seemingly definitive words nearly a year ago.

    The Greek crisis has spooked leaders across the euro zone, and many are scrambling to consolidate their budgets to avoid suffering the same fate as Athens, which was forced to go cap in hand to the EU and IMF.

    But Merkel’s about-face is different and more serious, especially for a leader who came into office in 2005 vowing to put an end to the “false promises” of previous German governments.

    For one, Germany’s own economic outlook has not changed much since Merkel argued forcefully for tax cuts last year and repeatedly dismissed her political opponents for suggesting Berlin lacked the money to pay for them.

    Last October, when she began her second term, the government was forecasting a budget deficit at 3.7 perent of GDP for 2009 and GDP growth of 1.2 percent for 2010.

    In the end, the 2009 deficit came in better than anticipated — at 3.3 percent of GDP — and the government has since revised up its growth estimate for this year to 1.4 percent.

    The excuse that some members of Merkel’s government are using for Berlin’s policy U-turn — that debt-brake legislation enshrined in the constitution has forced their hand — also doesn’t fly.

    The debt-brake rule was in place even before Merkel was actively advocating tax relief.

    The real reasons for the shift are twofold. First, Merkel has realised belatedly that there is very little public support for tax cuts.

    Pushing tax relief was good politics last year when an election was looming and Merkel was searching around for policy ideas that would differentiate her party from the centre-left SPD. But that is no longer the case.

    Second, officials in Merkel’s Chancellery have concluded that Germany must set an example for the fiscal laggards in the euro zone.

    It would be more difficult for Berlin to lecture its partners on budget responsibility and push through the radical tightening of EU fiscal rules that Merkel wants if it were not blazing the trail with spending cuts and tax hikes of its own.

    But the new course carries big risks for the chancellor and Germany’s partners.

    President George Bush the elder saw his political career curtailed after breaking his “read my lips” promise to U.S. voters on taxes.

    Likewise, Merkel could see her image as an honest, straight-talker irreversibly damaged by a blatant about-face on taxes. Relations with her coalition partner the Free Democrats (FDP), who remain advocates of tax relief, would probably deteriorate further.

    And speculation would increase that her government might not last the full four years. A nascent rapprochement between the FDP, SPD and Greens in the large western state of North Rhine-Westphalia carries major risks for Merkel at the federal level.

    More serious are the implications of Germany’s newfound fiscal stance on the euro zone itself. Spending cuts and tax rises will further hit private consumption, which already subtracted half a percentage point from German GDP in the first quarter of 2010.

    That will make it more difficult for German consumers to help struggling countries across Europe recover. Ultimately, that could deepen the woes of the euro zone economy at a time when it is scrambling to restore its credibility. That too could come back to haunt Merkel.

View full post on Global News Journal

It’s becoming abundantly clear that Apple needs to improve MobileMe. Obviously, Android is now Apple’s biggest threat in the mobile space and Google’s innovation wheel isn’t slowing down. To fully understand just how bad Apple is at running Internet services, let’s take a trip back in time.

At the Macworld keynote on January 5, 2000, Steve Jobs released iTools which was built for Mac OS 9. Features included:

• An @Mac.com email address
• 20 megabytes of iDisk web storage
• An easy to use web page builder called Homepage
• A KidSafe product that ensured a safe Internet experience for the little ones

If you’re dying to know more, here’s the press release. What made the offering such a breakthrough is that it was an absolutely free service, back when Google was still just a search engine. Because of the seamless integration with Mac OS and the fact it was free, millions of Mac users signed up for iTools. This was the highlight of Apple’s Online Services product and, ever since, Apple has struggled to keep up.

In 2002, iTools was rebranded as .Mac and the price shot up to $99.95 a year. Apple dropped KidSafe, upped the iDisk storage too and introduced “Backup” which was an OS X app to backup files and folders to the online iDisk.

It was pretty clear that Apple didn’t truly put a lot of thought into .Mac because, while Apple.com was touting, “Macs don’t get viruses”, .Mac touted that you get a McAfee’s Virex Antivirus software for free just for joining and Apple stores across the U.S. were required to maintain a 60 percent attach rate for .Mac on all new Macs sold.

Apple still had a better service than any other web service, mostly because the cloud services that were existent saw Macintosh as too small of a market (remember this is 2002) and Apple seamlessly integrated .Mac into the system to the point where a power user may be nagged to just buy it already as Quicktime and iMovie had a “Send to .Mac” feature and Apple Mail placed .Mac as the first choice when adding a new e-mail account.

Apple lost thousands of subscribers in the shift to a paid model but many stayed until Google and other competitors began strengthening their cloud offerings. In 2008, Apple finally upgraded the aging online subscription model with real features that power users were aching for.

MobileMe, released in June of 2008 at WWDC, still included e-mail, iDisk and your own personal homepage (via iWeb ’09) but the new killer feature was sync. You could now keep multiple PCs, Macs, iPhones and now iPads in sync instantly via the web with calendars, contacts and email talking to each other to ensure the latest info is always on the device you have with you.

Apple’s foray into cloud syncing was a failure at first. Steve sent out this letter shortly after MobileMe’s launch admitting the MobileMe launch was a failure saying, “The launch of MobileMe was not our finest hour.” Apple gave out free months of service to people who purchased the new service and improvements were made. Since then, Apple has done little to add to the service and MobileMe is now completely overshadowed by every other competitor in the market. Even startups like Box.net started by a couple of guys with some angel financing were able to top Apple’s iDisk that was introduced back with iTools in 2000.

Apple added features like “Find my iPhone” in 2009 and continued to make slight improvements, but Google offers e-mail, sync, storage, calendars, contacts and more for free. Sure, Google has advertising but no one seems to care, because $99 for an email address and some syncing between devices is completely ludicrous now that we’re half-way in to 2010. We featured a post in February, “10 Ways to Make MobileMe Perfect” which detailed exactly what Apple needs to do to find relevance again among a slew of superior products from competitors.

Another great example of Apple completely missing an opportunity with MobileMe is the iPad. Why must you sync with iTunes and deal with a difficult-to-use interface to get documents on and off of the iPad? Why isn’t MobileMe the key that makes iPad a true on the go device? In his review, John Gruber writes:

Apple has MobileMe, but because it’s a paid service, they can’t (or at least won’t) assume that all iPad owners are going to use it. But then even those of us who do u

se MobileMe get stuck with a first-run iPad experience that involves a tethered USB connection to a computer. The Apple Way is to assume that your primary data stores for these things are locally stored on your Mac or PC — Address Book, iCal.

I think most of the Mac community has accepted that iTools, .Mac and now MobileMe is a product for new users and not a service for power users and my personal motto became, “those who know, don’t use MobileMe.” It wasn’t until Google’s I/O conference last week in San Francisco that I realized how poorly Apple is positioned in the fight for mobile dominance.

Google released Android version 2.2 with over the air everything. You can purchase music in your web browser and it’s on your Android phone instantly. The same goes for Google Maps links, which you can click “send to phone” and the maps app opens automatically. The real power of Android is entering your Google ID and all of your data comes down from the cloud and stays in sync without ever plugging into a computer. Apple has completely failed at this.

I’m not writing the death of MobileMe just yet. Apple’s recent beta release of a new and improved MobileMe webmail is a step in the right direction, but it still has a long way to go.

Apple purchased Lala.com which is an incredible startup that allows you to stream music that you’ve purchased from anywhere and Apple has announced the closure of Lala on May 31 (only a few days ahead of WWDC). One can only imagine that Google’s ultra-cool over the air music purchase technology demoed last week will soon be old news as iTunes in The Cloud becomes a reality where your entire music library travels with you anywhere as long as you have an Internet connection.

The ultimate task for Apple is to bite the bullet and make MobileMe free again. It’s easy to compare Google to Apple’s products when one is free and the other is $99, but when comparing two free services and accounting that MobileMe is built into every Apple device you own, it’s a much easier consideration for users. Doing the math is easy when you consider that Apple might make $99 per user per year but losing an iPhone sale to Google’s Android platform is a far greater loss and Apple needs to free MobileMe from a subscription model to compete head on with Google.

Of course, there’s a lot more Apple can do beyond simply offering up MobileMe for free. Remember iWork.com? This collaboration tool goes head to head with Google Docs in many ways but it’s still in beta over a year after being previewed at Macworld 2009 and Apple lead us to believe it would actually be charging for this when iWork left public beta.

I could go on and on comparing Apple to Google in every way, but it’s clear that Google is the winner and that wouldn’t change even if Apple dropped the price of their suite of tools to $0. That boat has set sail and Apple is still offering a miniscule 20GB iDisk storage and iDisk is just as reliable as it was 10 years ago. Let’s hope Google’s kick in the butt with Android 2.2 will encourage Apple to step it up and bring MobileMe up to speed very soon.

For those interested in cloud computing or data centers, check out our Structure conference in June.

View full post on TheAppleBlog

When the World Cup comes around, as a football fan, I want to see the best players on the planet on show. Managers of national teams can pick 23 names for their respective squads, so you would think they would have enough chances to get it right. However, glancing at the squad lists of some of the contenders, there are many stars missing and I am not happy about it. Furthermore, some omissions will be the reason why some of these teams will fail in South Africa.

Pato was one of AC Milan's star players despite an injury-hit season/Getty Images.

Let´s start with Brazil. The five-time champions have probably the best defensive unit in their history heading into a World Cup, featuring a stellar goalkeeper in Julio Cesar and players like Maicon, Lucio and Daniel Alves. However, in attack, there is a shortage of creativity, speed and flair, and coach Dunga is to blame. The omission of Alexandre Pato is baffling to me. Sure, the young forward was injured for a large part of the season and just now returned to full fitness. However, even with all the time he spent on the sidelines, the AC Milan standout still scored 14 goals in 30 games. If I was picking Brazil´s squad he would be one of the first names on the teamsheet. He offers something no one else on the team has and, make no mistake about it, he will be missed.

Brazil´s fierce South American rivals Argentina also left behind some notable names. It´s always easy to pick on Diego Maradona, isn´t it? However there is no question that Champions League winners Javier Zanetti and Esteban Cambiasso should both be traveling to South Africa. Maradona´s team has plenty of talent, but would have benefited from some extra experience and class. Zanetti and Cambiasso were everpresent for Jose Mourinho´s Internazionale this season and would have been invaluable assets at the World Cup.

Zanetti can play anywhere across defense and midfield, while Cambiasso is one of the best midfielders on the planet. Even if he would be playing second fiddle to captain Javier Mascherano, Cambiasso would still have been an important player for Los Albicelestes. Plus, there is no reason why he couldn´t play alongside Mascherano. Especially considering Juan Sebastian Veron may be the other starting central midfielder.

Let´s dissect the picks of another controversial manager, Raymond Domenech. As if the French public didn´t dislike him enough, the coach of Les Bleus decided to leave out the nation´s most exciting forward, Karim Benzema. Is he overweight? Yes. Did he have a great season with Real Madrid? No. However, some of the other strikers going to South Africa didn´t set the world alight either and Benzema still has the talent that can change the game at any time, even coming on as a late substitute. Domenech definitely missed a trick here and will pay the price. Up front, France will rely too much on a man who doesn´t have either the work rate nor motivation to lead the line, Thierry Henry.

Defending World Cup champions Italy also left behind a couple of potential game winners. Antonio Cassano is the obvious example of this. I understand Marcello Lippi believes the Sampdoria forward can be a disruptive influence on the team, and up until this season, I would have agreed with him. However, Cassano is a changed man. His serious relationship with an Italian swimmer has made him more content and mature and there is no doubt he would have been a key player for a side that relies too much on older legs and established names. Cassano would have been a breath of fresh air that could have inspired the Azzuri to an extended stay in South Africa. Without him, I don´t see them making it past the round of 16.

So those are my views concerning a quartet of traditional World Cup contenders, that this time around will be coming back from FIFA´s showpiece event empty-handed. For a competition like this, you have to take your best men. And in my opinion, none of these teams are doing that.

One final thought… I really hope Fabio Capello takes Joe Cole to South Africa. He is an extremely talented player and would add a dimension that England certainly don´t have – someone who can dribble and play between the lines. Someone who can beat a defender one-on-one. And every team needs that.

View full post on CNN World Sport

The fate of the Toyota FT-86 Sports Car hangs in the balance as Toyota has decided to postpone the production and launch of the vehicle for another two years. The exact reason is not yet known but the speculation is that Toyota is not happy with the concept designs.

Also, if Toyota goes ahead with the production and unveils the car by next year, the financial scenario will not be ideal and hence it cold result in poor sales.

Toyota had plans to team up with Subaru a couple of years back but then again, the economic situations made Toyota put the project on hold. Toyota still went ahead with the production in 2009 and even unveiled a concept at the Toyota Motor Show in the same year. Now again, the design has been rejected and the hopefuls will probably have to hang around for a couple of years.

We want Toyota .. we want!

View full post on Car Blog | The Automotive news blog

So much for it being a niche product! Apple says it has sold two million iPads in 60 days since the launch of the tablet device. It sold the first million iPads in 28 days. It is hard to find some of the 3G enabled iPads in their retail stores. The pace of iPad sales is way ahead of the early results for iPhone, which took 74 days to sell the first million. According to some estimates, iPad is outselling the Mac itself.

According to GigaOM Pro, our research service, “the web tablet app market will be a significant one in just a few short years, going from $183 million in revenue in 2010 to $8.2 billion by 2015″ and the “overall momentum for this market will be driven early on by the iPad and Apple’s app store.”

Apple began shipping iPad in Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the UK this past weekend. iPad will be available in nine more countries in July and additional countries later this year. There are about 5,000 special apps for iPad.

Click to enlarge

Related GigaOM Pro Research Report (sub req’d): Forecast: Tablet App Sales to Hit $8B by 2015

Infographic by Column Five Media

View full post on TheAppleBlog

This week I made the trip between Abu Dhabi and Dubai four times in as many days, shuttling between our regional hub in Abu Dhabi and hotels, conferences and interviews in Dubai.

On one occasion, I hitched a ride with a colleague, who goes back and forth every day, who bore witness to the challenges of Emirati high-speed travel. Drivers frequently flash their high-beam headlights to intimidate those not going “fast enough” in the fast lane and sometimes use the inside shoulder of the motorway to leave them behind.

The traffic between the two emirates is intense during morning and early evening rush hours, with the draw of the capital’s wealth creating more jobs in tourism, exhibitions, construction and development. But, it is not the road traffic that is most striking, but instead the shuttle diplomacy. The $3 billion Emirates Palace –- as seen in the new "Sex in the City" movie or earlier in action film "The Kingdom" – serves as a hotel, a meeting venue for the Abu Dhabi government and, lately, as a hub for world leaders.

In the morning, I saw the Prime Minister of Kazakhstan who was in town to meet with the Crown Prince of Abu Dhabi and his influential half-brother who is also owner of the Manchester City football club. By sunset, German Chancellor Angela Merkel and a much larger delegation arrived on the scene. The Central Asian leader stopped in Abu Dhabi for 24 hours to advance investments in his vast country, the latter was on the first leg of a four-state visit including Saudi Arabia, Qatar and Bahrain.

Both of these leaders were preceded by one who can be defined as a man with a more urgent matter: the Greek Prime Minister George Papandreou. With two "Ds" on his report card – a record budget deficit and debt – he invited attendees of the Arab Economic Forum to consider Greece when sizing up opportunities. Papandreou pointed to the tourism and technology sectors as obvious places to start.

These are the visits we know about. Equally intriguing are the others that are intentionally off the radar, which fit into the category as discreet but necessary.

The Gulf States are a magnet for attention as the UAE is home to the largest sovereign wealth fund, the Abu Dhabi Investment Authority. There are another seven funds that are helping broaden the economic base of the Emirate beyond hydrocarbons with investments in industrial groups that include trade offsets and/or technology transfers. In sum, it is an “I will invest in you if you, in turn, will invest in us” type of situation.

In light of the Greek debt tragedy and Angela Merkel’s five-month resistance to an EU led bailout, it is not surprising Merkel needed to pay a visit to these high-powered investors. Let’s not forget, sovereign wealth funds, with the Middle East members representing $1.5 trillion dollars, have been hedging their bets against the dollar in the past few years. They want to know if we are going back to where this process started a decade ago, at nearly one-to-one with the U.S. currency.

Merkel cannot overlook the interest these funds have in German industry. Daimler lists the Abu Dhabi-based fund, Aabar, as its largest single investor and the Kuwait Investment Authority as another. Seventeen percent of Volkswagen is in the hands of the Qataris and Deutsche Bank has its own share of Gulf investment. Strategic plays like these by the SWFs make the announcement of a $150 million deal for the German industrial giant Siemens this week look like small fry.

A few years ago, the leadership in Abu Dhabi put in place a multi-pronged branding strategy. This now includes hosting F1 racing, a flag carrier Ethiad with global ambitions, top-flight exhibitions, conferences and eventually a branch of the Louvre and Guggenheim museums.

One cannot contend with the style and touch in which they have been or are being developed. A whole eco-system (as in economic) has been built to support such activity. Room rates are finally coming down with the introduction of more four and five-star hotels and on that road trip from Dubai one can see development after development on the way.

A decade ago when the iconic, Burj al Arab opened in Dubai global celebrities made the sail shaped hotel a must stop visit on their itinerary. Fast forward to the year 2020 and we will recall time when different members of the global elite put the Gulf and specifically Abu Dhabi on their schedule. Despite the vast expanse inside the Emirates Palace hotel, the traffic these days is nearly bumper-to-bumper.

View full post on Business 360

We are so accustomed to talk about Land Rovers as typical all-wheel driven commuters that a Land Rover running on a front-wheel drivetrain sounds like a real novelty. It has never happened before for the brand but under the new owner, we will soon see an LRX Compact SUV coupe which is slated to debut at the Paris Motor Show in September.

Hitting the production floor early next year, Land Rover will first unveil an AWD version of the LRX while the novelty (FWD) shall hit markets sometime later. Land Rover is keen to reduce fleet CO2 emissions and the front-wheel driven LRX will look to do that for the brand. As far as the AWD version is concerned, it will get a 185 bhp rendering 2.2 liter diesel engine which will be mated to a 6-speed manual or an automatic transmission.

View full post on Car Blog | The Automotive news blog

We’ve seen spy images of the 2011 Ford Explorer but this is the first time we get to witness the official teaser image of the SUV.

The first images also sports chief engineer Jim Holland and that pretty much explains the reason why the upcoming model draws inspiration from the Land Rovers.

As per Holland, the 2011 model is a modern interpretation of the Explorer but the spy images rendered a different story. What is a novelty (hailing again from the Rover domain) though is a terrain management system with a total of five settings. We expect to see the 2011 explorer possibly at the LA auto show in November.

View full post on Car Blog | The Automotive news blog

Don’t just start jumping with joy, for the Audi R8 based Spyder rendering isn’t an official one but an exemplary creation from designer Jon Sibal. Audi hasn’t let a word out regarding the possibility of an R8 GT based Spyder but this creation makes us think that Audi should probably give it a shot. Automakers do not really like the idea of producing a convertible version of their most extreme sports cars and this is why we assume that the aspired Spyder my never just arrive. Even if Audi decides to give the Spyder production a nod-ahead, it will have to be a limited production model which will obviously bear a heft price-tag.

[via jonsibal]

View full post on Car Blog | The Automotive news blog

While the improving economy may have helped a few automakers around the globe to re-strengthen their workforce, it is Modena based Ferrari which is thinking about job-cuts albeit for a different reason. As per Ferrari, the reduction in engine orders from sister brand Maserati is what has forced Ferrari to take a step such as this. Where the total number of engines ordered by Maserati in 2008 was 9,000, the demand fell to about 4,500 last year and matters are expected to worsen from here. Ferrari employees are being offered bonuses in exchange of job cuts and around 120 office positions will be eliminated while 150 factory jobs will also be axed.

View full post on Car Blog | The Automotive news blog