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Europe Reacts to Constitution Referendum

By The Associated Press
ASSOCIATED PRESS

Quotes from European politicians on the European Union constitution.

"The idea of Europe has lived for the politicians, but not the Dutch people. That will have to change." - Dutch Prime Minister Jan Peter Balkenende.

"Europe exists only in the minds of politicians in Brussels. This is the first time in decades we could say something and we said, 'It's gone too far.'" - Gerrie Elfrink, a Socialist Party city council member in the Netherlands.

"France is a founding nation of the Union (and) will continue to fully hold its place." - French President Jacques Chirac.

"The French dealt it a mortal blow Sunday, and yesterday the Dutch signed the death certificate." - Pierre Moscovici, a former French European affairs minister who helped write the EU constitution.

"We must acknowledge that many Europeans doubt that Europe is able to answer the urgent questions of the moment. The crisis surrounding the ratification of the European constitution must not become Europe's general crisis." - German Chancellor Gerhard Schroeder.

"Without a doubt, the result of these referendums is going to affect the entry of new members into the European Union, especially Turkey and Croatia." - Spanish Foreign Minister Miguel Angel Moratinos.

"The verdict of these referendums now raises profound questions for all of us about the future direction of Europe." - British Foreign Secretary Jack Straw.

"The constitution is dead. The British government must now give the lead and unpick the mess which Europe has become." - Liam Fox, spokesman on international issues for Britain's opposition Conservative Party.

"I think the voting in the Netherlands and France was not a vote against the Baltics or the Poles, but a vote partly in fear of Turkey." - Janis Lagzdins, chairman of the People's Party's faction in Parliament, after Latvia became the 10th EU member to approve the constitution.

"It is hard to think of any global problem that Europeans could cope with better as 25 separate states than they could by working together in shared sovereignty. That reality will reassert itself with the passage of time." - John Bruton, former Irish prime minister and the EU's ambassador to Washington.

The Irish government "remains firmly of the view that the European constitution is strongly in Ireland's interest and in that of the European Union as a whole." - Irish Prime Minister Bertie Ahern.

"The only real burial of this betrayal will be when the United Kingdom overwhelmingly hurls this political corpse out of sight and out of mind." - Ian Paisley, leader of the Democratic Unionist Party in Northern Ireland, on his party's opposition to the EU constitution.

Meanwhile:

Europe ends higher after choppy day

EUROPE MARKETS



Europe ends higher after choppy day French banks support; automakers mixed after U.S. sales

By Kabir Chibber, MarketWatch
Last Update: 12:26 PM ET June 2, 2005

LONDON (MarketWatch) -- European stocks ended higher after choppy trading, with French banks in focus after income surged at Credit Agricole SA, that country's largest bank.

Germany's DAX 30 index finally committed to gains by the close, finishing up 0.1% to 4,532, while France's CAC index (FR:1804546: news, chart, profile) gained 0.1% to 4,183.

London's benchmark FTSE 100 (UK:UKX: news, chart, profile) shed 0.1% to close at 5,005, hovering just above the key 5,000 level, which has proved a tough resistance level. See London Markets.

The euro gained 0.6% against the dollar, last at $1.2276, reversing losses that occurred after the Netherlands rejected the proposed E.U. constitution in a referendum on Wednesday. It comes days after the French voted against the constitution, sending the euro to an eight-month low and raising concerns about the future of European integration. See London Calling and Outside the Box.

The European Central Bank kept its benchmark interest rate unchanged at 2%, as was widely expected. See full story.

It last cut rates in June 2003. The ECB also cut its forecast for economic growth in the 12-member euro zone for 2005 to 1.4% from 1.6%.

French banks higher

Credit Agricole SA (FR:004507: news, chart, profile) shares closed up 2% as first-quarter net income jumped 42% to 905 million euros, helped by a strong performance from its investment banking division and a fall in provisions. The result beat analysts' expectations. See full story.

Peer BNP Paribas SA (FR:013110: news, chart, profile) gained 1% and Societe Generale SA (FR:013080: news, chart, profile) added 0.4%, both reversing losses earlier in the day.

But with Credit Agricole placing a "greater reliance on domestic France and still playing catch up in investment banking," it is least well placed of the three leading French banks, Dresdner Kleinwort Wasserstein said.

Philips Electronics NV (PHG: news, chart, profile) (NL:00953: news, chart, profile) shares inched up 0.09%. Ahead of a presentation at the Credit Suisse First Boston European Technology Conference in Barcelona the company said it's on track to meet its medium-term targets.

Sugar refiner Tate & Lyle PLC (UK:TATE: news, chart, profile) shares dropped 4% on news it won't be giving an estimate of the impact on its European sugar business after the European Union lost a World Trade Organization dispute over sugar subsidies. The refiner said it will wait until the European Commission publishes its reform proposal in July.

Profit before tax, exceptional items and goodwill amortization for the fiscal year was 255 million pounds, topping broker forecasts of around 242 million pounds. Revenue rose 5.5% to 3.34 billion pounds, led by growth for its Splenda sucarlose and other ingredients.

The luxury goods sector gained as Swiss group Richemont (ZZ:001273145: news, chart, profile) touched its highest level since July 2002. Shares ended up 3.1% to SFr40.25 following a UBS upgrade of the stock to buy from hold. UBS said Richemont's discount to the luxury sector is too high, and lifted its price target to SFr44 a share from SFr40 a share.

French peer Lvmh Moet Hennessy SA (FR:012101: news, chart, profile) shares gained 0.7% and Pinault-Printemps Redoute SA (FR:012148: news, chart, profile) , the owner of Gucci, rose 2.1% in Paris.

Automakers, airlines

Carmakers were mixed following U.S. automobile sales figures for May, and as automaker BMW AG (DE:519000: news, chart, profile) was upgraded to buy from hold at Citigroup Smith Barney.

Shares in BMW gained 1.7% as Smith Barney said underlying profits and margins at BMW are benefiting as dollar weakness abates. It also upped its price target to 44 euros from 36 euros a share. Also, the carmaker showed a 3.1% decline to 26,926 vehicles during the month.

DaimlerChrysler AG (DCX: news, chart, profile) (DE:710000: news, chart, profile) shares gained 0.2% as Mercedes sales rose by 6.5% in May. But total sales fell 2% to 232,386 vehicles, against Wall Street's expectations of a gain.

Luxury carmaker Porsche AG (DE:693773: news, chart, profile) shares added 1.4% as it posted a 25% surge in May U.S. sales to 3,291 vehicles, combining with Canada sales to notch the best month for North America in Porsche's history.

On the flip side, German carmaker Volkswagen AG (DE:766400: news, chart, profile) had what analysts at Merrill Lynch called a "disastrous" month as VW-brand sales fell 37.1%, sending shares down 0.05% at the close.

Airlines declined as crude-oil prices stayed above $54 a barrel, with German carrier (FR:003112: news, chart, profile) Lufthansa Group AG (DE:823212: news, chart, profile) closing down 0.2%.

Oil stocks gained, with BP PLC (BP: news, chart, profile) (UK:BP: news, chart, profile) and Shell Transport and Trading PLC (SC: news, chart, profile) (UK:SHEL: news, chart, profile) both closing higher.

U.K. betting in focus

The British IPO market was lifted on news online betting company PartyGaming PLC said it will list on the London Stock Exchange by the end of June and sell up to 23% of the company.

Gibraltar-based PartyGaming owns and operates PartyPoker, which it says has the leading market share by revenue and players. See full story.

Gaming stocks gained after the announcement. FTSE 100-component William Hill PLC (UK:WMH: news, chart, profile) jumped 2.8%, with smaller betting groups Stanley Leisure PLC (UK:SLY: news, chart, profile) up 1.2% and London Clubs International PLC (UK:LCI: news, chart, profile) up 1.4%.

Also in the U.K, Next PLC (UK:NXT: news, chart, profile) shares slipped 0.3% after Morgan Stanley downgraded the retailer to equal-weight from overweight, questioning the company's long-term outlook.

The broker prefers Marks & Spencer PLC (UK:MKS: news, chart, profile) , in that it has an easier base for comparisons and more room to improve efficiency.

Marks & Spencer shares still fell 0.6%. Gus PLC, the U.K.'s second-largest retailer, (UK:GUS: news, chart, profile) slipped 1.1% and Boots Group PLC (UK:BOOT: news, chart, profile) fell 0.8%.