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European Edition
10th July 2024
 
THE HOT STORY
Dispute between French airport workers and management threatens Paris Olympics
On the eve of the Paris Olympics, a labour dispute at the capital's primary airports threatens to disrupt the arrival of athletes and spectators. The ADP Group, overseeing Charles de Gaulle and Orly airports, faces a one-day strike by unionised workers on July 17, demanding higher Olympic bonuses and additional hires. This timing is critical as athletes begin arriving on July 18, with the games commencing on July 26. Unions have criticised the ADP management for not addressing their demands, risking significant disruptions for the hundreds of thousands expected through these major travel hubs. This standoff jeopardises not just airport operations but also casts a shadow over the €50m investment made to prepare for the international influx for the Olympics, potentially diminishing the festive atmosphere expected for such a global event.
WORKFORCE
Employees bring Germany's biggest container hubs to a standstill
Employees have brought Germany's two biggest container hubs to a standstill, with workers at a third port set to join them. The union Verdi hopes to put pressure on port operators in collective bargaining over wages. Workers at the Port of Hamburg stopped work early on Tuesday, with their colleagues at Bremen-Bremerhaven taking the same action several hours later. The union wants to force employers to make further concessions in pay talks with the Central Association of German Seaport Operators (ZDS). Verdi says the employers have "so far only presented an inadequate offer." ZDS said that discussions so far had been "intense but constructive" and that it did not believe the strikes were warranted. Warning strikes also took place at ports in June. The latest strikes come ahead of talks on Thursday and Friday of this week in Bremen.
Skilled migrant workers decrease by 18% in the Netherlands
The number of skilled migrant workers moving to the Netherlands fell by 18% in 2023, marking the first decline in 15 years. A total of 21,510 knowledge migrants arrived in the country from outside the EU and associated nations, compared to 26,250 in 2022. The decline was mainly due to a reduction in skilled workers from India, Turkey, and South Africa. However, Indian migrants still formed the largest group, with 4,520 new arrivals. The UK's Brexit rules also added 1,125 skilled workers to the total. On the other hand, non-EU student migration continued to rise, with a record 22,995 students registering at Dutch universities and colleges, a rise of nearly 11%. The new right-wing cabinet plans to tighten the entry criteria for knowledge migrants as part of its efforts to address migration. Pieter Omtzigt, leader of the NSC party, has pushed for limiting the 30% tax ruling, which benefits skilled migrants. MPs have expressed regret for voting for the measure.
Samsung workers continue indefinite strike over pay rise
The National Samsung Electronics Union (NSEU) in South Korea has announced that the strike by Samsung workers will continue indefinitely. The union is demanding a 3.5% pay rise to reflect inflation, but management has shown no willingness to negotiate. The strike, which began on Monday, is the largest in Samsung's history, with over 5,000 employees involved. The NSEU has urged more workers to join the strike. Despite the action, Samsung has stated that it will ensure no disruptions occur in the production lines. The company remains committed to engaging in negotiations with the union. However, the union claims that the strike has already disrupted production on certain chip lines.
REMUNERATION
Wage disparity in Luxembourg: Cross-border workers earn less
Statec, Luxembourg's national statistics bureau, has revealed that cross-border workers, known as "frontaliers," earn significantly less than Luxembourgish residents. In 2022, frontaliers averaged €65,487 in annual income—only 71% of the €92,093 earned on average by Luxembourgish citizens residing in the country. Foreign residents in Luxembourg earned closer to the local average at €78,747. The finance and insurance sector boasted the highest average wages at €113,018, while the hospitality sector lagged behind with €40,461. Overall, the average wage in Luxembourg was €75,919, with a substantial influence of educational level on earnings. Those with a master's degree or higher averaged €115,892, starkly higher than the €43,772 for those with only primary or secondary education. 
TECHNOLOGY
Governments explore AI chatbots for efficient public service
As government chatbots evolve from basic automated tools to more sophisticated generative artificial intelligence (AI) systems, they promise more efficient public services but also raise concerns about accuracy and reliability. Initiatives like the UK's GOV.UK Chat and Portugal’s Justice Practical Guide illustrate the potential and pitfalls of these advanced systems. While they can handle simple inquiries effectively, complex questions often reveal their limitations, highlighting issues of trust and accuracy. Experts emphasise that while AI can enhance service accessibility, it should not replace human workers, but rather complement them. Accountability remains a crucial challenge, as AI cannot be responsible for its actions, necessitating human oversight in public administration. Estonia offers a contrasting model by using Natural Language Processing (NLP) rather than generative AI. This approach limits errors but also restricts the chatbots’ conversational abilities. Estonia's Bürokratt initiative demonstrates a controlled integration of chatbots, prioritising reliability over conversational depth. 
Goldman Sachs challenges productivity claims made for AI tech
Goldman Sachs has challenged the notion that artificial intelligence (AI) will provide significant productivity boosts to the economy. The bank’s paper states that AI's productivity benefits will be more limited than anticipated, while its power demands will require utility companies to spend almost 40% more in the next three years. MIT economist Daron Acemoglu, who was interviewed for the study, believes that truly transformative changes won't happen quickly and may not occur within the next 10 years. Jim Covello, head of global equity research at Goldman Sachs, believes that AI technology is exceptionally expensive and not designed to solve complex problems. If important use cases for AI don't become more apparent in the next 12-18 months, investor enthusiasm may fade. Meanwhile, the Tony Blair Institute's report on AI's potential in the public sector has already been criticised for basing its argument on answers from Chat GPT.
AI: A helpful tool or an evil master?
Artificial intelligence (AI) is being increasingly used in human resources (HR) in Slovakia and other places. It is utilised for recruiting, onboarding, and answering HR-related questions. However, experts caution that while AI can be helpful, its usage in the selection process has limitations. Mariana Turanová, managing partner at Target Executive Search in Slovakia, advises against relying solely on AI for decision-making. The incorporation of AI and machine learning is transforming recruitment, training, and HR management. Companies in Slovakia have explored the possibilities of using AI in selection processes and education. This trend is expected to continue, with automated selection procedures and video interviews conducted by avatars becoming more common.
TAX
Private equity executives considering leaving UK
Private equity executives in the UK are making plans to leave the country due to concerns over Labour's proposed tax crackdown. The party wants to close a tax loophole that allows private equity managers to pay capital gains tax instead of income tax. This move has prompted buyout experts to consider acquiring property abroad and setting up funds overseas. Experts have warned that the flight risk is real, with fund managers already asking for feasibility studies about relocating. Labour claims that closing the loophole would raise £565m by 2029, which could fund 8,500 new mental health staff. Private equity managers are now considering Italy, Spain, Portugal, and Switzerland as potential destinations. Meanwhile, the Times reports that the super-rich have spent 23% less on London property in the year to June as they head to Dubai instead.
REMOTE WORKING
Disabled people forgotten in WFH revolution
Working from home seemed like a game-changer for disabled people, writes Sir Robin Millar, Chairman of Scope, offering them the opportunity to work without the stress of commuting. However, the employment gap between disabled and non-disabled individuals has remained the same for over a decade. Many disabled people have not been offered the chance to work remotely, despite the majority feeling that it would benefit both them and their employers. The lack of flexible work options has contributed to the failure to close the employment gap, adds Sir Robin. 
STRATEGY
Volkswagen considers electric car production at Autoeuropa plant
The management of the Volkswagen Group has assured the Workers' Committee (CT) of Autoeuropa that the Palmela factory is being considered to receive an electric car. The decision is expected to be known in the coming months. The revelation from Volkswagen's management came after CT insisted on the allocation of a new model to Autoeuropa. The CT coordinator at the Volkswagen car factory in Palmela expressed pleasure at the possibility of receiving another model for production, this time electric. The Workers' Committee will continue to exert pressure to make this possibility a certainty.
LEADERSHIP
Leadership in crisis: How to navigate VUCAP times
Phil Portman, a serial entrepreneur and CEO of SMS marketing tool Textdrip, emphasises the importance of crisis leadership in navigating VUCAP (Volatility, Uncertainty, Complexity, Ambiguity, Pandemic) times. Crisis leadership involves adapting to unexpected events and protecting stakeholder trust and organisational stability. Key qualities of crisis leaders include decisiveness, empathy, transparency, and adaptability. Technology plays a pivotal role in crisis management, with tools like automated communication platforms, chatbots, virtual collaboration platforms, video conferencing solutions, and project management software enhancing communication, customer support, and productivity. Implementing crisis management practices such as resource allocation, dedicated crisis management teams, risk assessment, and effective communication channels can build resilience in organizations. By harnessing technological innovation and leveraging automated communication tools, businesses can withstand, adapt, and recover from crises.
CORPORATE
ING Luxembourg records best ever annual results, doubling profits
ING Luxembourg recorded its best ever annual results in 2023, with net profits of €263m, a 120% rise from the previous year. The increase in profits was largely driven by growth in interest income, particularly from higher interest rates on variable rate mortgages. The filing with the business register comes less than a month after ING announced the closure of its retail banking offering in Luxembourg. The decision has faced criticism, with concerns raised about the impact on retail clients and the potential job losses. ING Luxembourg is set to shrink its number of branches and focus on wholesale and private banking activities.
 


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