The Draghi Dilemma | financial times

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This is an audio transcript of the FT news briefing Podcast episode: The Draghi Dilemma

Markus Filipino
Good morning from the Financial Times. Today is Wednesday 26th January and this is your FT News Briefing.

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Google is backing down on its controversial plan to replace advertising cookies, and convenience store chain 7-Eleven is under pressure to break up. Besides, if only there were two Mario Draghis. Italy’s prime minister is believed to be the first choice as the country’s next president, but politicians are at odds over who should follow in his footsteps as prime minister.

Amy Kasmin
It’s unclear if the same parties, who are the most unlikely of bedfellows, would ever actually be able to team up behind someone else.

Markus Filipino
The FT’s Amy Kazmin talks about the Draghi dilemma and what’s at stake. I’m Marc Filippino and here’s the news you need to start your day.

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Google has just overhauled a key technology it developed as part of its plan to replace cookies. Advertising cookies are small files placed on your browser that track your online behavior. Advertisers rely on them to make money. To find out why Google is making this move, I reached out to our West Coast editor, Richard Waters.

Richard Wasser
Well, adtech is deeply complex, but I think, you know, the way you think about it is that Google has two fundamental problems. One problem is that a lot of publishers and people in the advertising world don’t trust them, and Google wasn’t their own best friend here because they have this tendency to cook up clever technical schemes and then dump them on the industry. And then everyone kind of runs away and looks at this and decide, you know, do we really trust what Google is doing? The other problem, however, is that there is a fundamental tension between privacy and competition. So when Google scraps cookies, privacy advocates love the idea. You know, that should make life more private for you. On the other hand, all the publishers say, wait a minute, you know, we won’t be able to make any more money. And does Google really only do this to strengthen its own position? You will make a lot of money instead of us.

Markus Filipino
Yes Richard Earlier this week we reported that German publishing associations have complained to the EU that Google’s plan to discard cookies could be breaking the law. So are our publishers and advertisers happy with Google’s move?

Richard Wasser
I think, you know, we can almost guarantee they won’t be. And the reason I’m saying this is because Google is moving further towards privacy with the changes it’s making. It means we’re going to be less granular. When we sell your information to advertisers, we generally categorize you as an internet user. It’s great for privacy, but not so good for advertising.

Markus Filipino
How big do you think this move is, Richard?

Richard Wasser
Well, Google has been working on this plan for two years, more than two years. So it’s quite significant to change course at this point. You know, essentially they’re saying that our privacy protection solution didn’t really deliver what we claimed. So, you know, it’s significant. Still, they go ahead and say they’ll be discarding cookies next year. They still say they will develop a system that they believe can serve all of these diverse interests. So, you know, if they can get it going again, then maybe over time we’ll see if it’s not such a big deal.

Markus Filipino
Richard Waters is the West Coast Editor of the FT.

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Japan is famous for its convenience stores combi, as they are called. They’re everywhere, offering everything from sushi to shipping services. The biggest combi of them all is 7-Eleven. A lot of people don’t even know it’s a Japanese company. I didn’t until I read the story. And like many big companies around the world, frustrated investors want 7-Elevens’ parent company, Seven & i, to spin off some of its businesses. This is our Tokyo correspondent Anthoni Slodkowski.

Antoni Slodkowski
The shareholders are basically saying that Seven & I should essentially split up its profitable convenience store brand 7-Eleven, which is well-known around the world, and its other businesses like supermarkets and other department stores and the like, which are underperforming and with very low margins . So, basically, what investors want to see is that the company focuses on its growth area and the rest gets spun off or spun off in one way or another.

Markus Filipino
Now three of the company’s largest shareholders, including US hedge fund Third Point, are considering making restructuring proposals.

Antoni Slodkowski
You know, this isn’t the first time they’ve actually addressed calls for reform. There’s this culture of shielding these underperforming companies within Seven & i, and indeed Third Point backed the current CEO, who hails from the convenience store segment, in hopes of a more aggressive turnaround that hasn’t happened in the last five years , since the current CEO took over.

Markus Filipino
Anthony Slodkowski is the FT’s Tokyo correspondent.

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The Italian legislature elects a new president. Leading the way is the country’s popular and well-respected Prime Minister and former European Central Bank governor, Mario Draghi. But when lawmakers handed in a first round of voting earlier this week, most came back empty-handed. No name on it. Actually, this was intentional. It was part of a plan by members of Draghi’s national unity government to delay this. To find out what’s going on, I join my Rome correspondent, Amy Kazmin. Hello Amy.

Amy Kasmin
Hi.

Markus Filipino
So what about the blank ballots?

Amy Kasmin
So the reason for the blank ballots is that the parties that make up Mario Draghi’s government of national unity haven’t really decided yet whether or not he should be elected president. And as these behind-the-scenes political negotiations continue, they are all casting blank ballots to signal that talks are still ongoing and also to avoid an unintended destabilizing political outcome.

Markus Filipino
Why didn’t they go for Mario Draghi? Isn’t he incredibly popular?

Amy Kasmin
So basically, Prime Minister Mario Draghi is one of the most respected people in the country. So he would be a very strong presidential candidate. The problem is, when the politicians decide to elect Draghi as president, they are not sure if they can agree on a successor as prime minister. And as they debate who should replace Mario Draghi, the parties that make up the national unity government could end up falling apart.

Markus Filipino
So, Amy, is there no one these parties can agree on to replace Draghi if he becomes president?

Amy Kasmin
One of the reasons why it is so difficult to find the next prime minister is that the coalition that now stands behind Mario Draghi and the current government is a very, very broad, unusual political coalition, covering Italy’s political right to the political spans the left. But it’s unclear if the same parties, who are the most unlikely of bedfellows, would ever really be able to line up behind another that could actually bring them all together. The risk is that if they cannot agree, they will be pushed into snap elections.

Markus Filipino
And as you wrote in your article, no one wants that. They just want to hold onto their seats for as long as possible. Another thing at risk here is billions of euros in EU Covid recovery funds, and Italy desperately needs them as part of its plan to restart its economy.

Amy Kasmin
Italy is supposed to receive 200 billion euros of this money through grants and loans, but in order to receive this money it has to adhere to a very ambitious reform plan. But the distribution of EU funds will only happen if Italy sticks to this very ambitious and some would say challenging timeline. So the government really needs to stay on the ball. It is to receive another 40 billion euros for reforms to be completed in 2022, if they derail or lose reform momentum due to politics or government collapse or early elections then that money will not come as it should.

Markus Filipino
Amy Kazmin is the FT’s Rome correspondent.

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You can read more about all of these stories on FT.com. This was your daily FT News Briefing. Check back tomorrow for the latest business news.

This transcript was automatically generated. If by any chance an error has crept in, please send the details for correction to: [email protected]. We will do our best to make the change as soon as possible.

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