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  MADRID - Spain HAS Seized control of Bankia, the country 's largest real estate lender, as a first step Toward recapitalizing the company and Before ordering Other banks to add billions of euros in provisions for bad debt.

Under the Plan Announced late Wednesday, a state-run bailout fund, Known As Frob, Will convert a previous € 4.5 billion emergency loan and equity Into thereby take full control of BFA, Bankia's Parent company, and a 45 percent stake Obtain in Bankia as well.

The Economics Ministry Bankia Described the action as "a first step to guarantee solvency icts," Suggesting That It Was Preparing the ground for a capital injection, Expected to Amount to Between € 7 billion and € 10 billion, one billion or $ 9 to $ 13 trillion.  

The response HAD beens Expected FOLLOWING the surprise resignation on Monday of Rodrigo Rato, the executive chairman of Bankia, who is finance minister to form aussi and HAD served as managing director of the International Monetary Fund.

FOLLOWING weekly cabinet meeting icts on Friday, the government is to announce further Top Measures Expected to Strengthen The Entire Banking Sector. Analysts are Anticipating That Will Be required banks to set aside at least € 30 one billion more in bad loans provisions Against, on top of the € 50 billion of provisions Already Ordered in February by Luis de Guindos, the economics minister.

Spanish banks are sitting on a € 180 combinée one billion of troubled assets, about a Third of Which has-been provisioned so far. The savings banks, or cajas, Have Been particularly hit by the downturn, much of the Funded HAVING decade-long property boom That cam to abrupt halt oz year the world Financial Crisis started.

The government is Hopping at this internship to clean up Spain's Banking Sector outside without Having to Receive Funding, Possibly by allowing banks to transfer toxic assets to Their MOST the Guaranteed state-asset management companies payday advance lender.

"The Regulatory response by Spain to the current crisis Will Be critical," Said Tony Anderson, banking partner at Pinsent Masons, a London-based law firm. "Whether the banks assets of These Will Be Transferred to different vehicles, DEPENDING on Their value, and whether the Spanish follow the UK ring-fencing in retail banking, key issues Will Be In Other banks for euro area jurisdictions. "

However, analysts Some Have Suggested That the scope of Spain's banking problem, as well as a deepening recession That Is Fast pushing up the number of mortgage defaults, Would require Eventually international lenders to step in, led by the European Union and Its European Stability Mechanism.

Spain, Meanwhile, facing rising aussi borrowing costs: Concerns about Its Own amid public finances as well as The Political turmoil in Greece.

"Right now, Spain is sliding down a very slippery slope," Said Nicholas Spiro, Spiro managing director of Sovereign Strategy, a consulting firm in London specializes in. That sovereign credit risk. "The Economy Is Now Officially back in recession, the government's plan to set up a 'bad bank' are mired in uncertainty, chômage is skyrocketing and, Perhaps MOST worryingly, it is difficulty to see what can Be done in the near term - domestically and abroad - to stop the rot. "

As for Bankia, ict shares tumbled since Mr. Rato Have quit Monday. Bankia Was The result of a merger of seven cajas in 2010 and then floated WAS last July, with Most of the Offering sold to domestic customers. This week's action has sparked HAS Debate here about whether Such year Offering Should Have gone ahead and sold to Have Been retail investors, Given the Most Recent Disclosures about how vulnerable Bankia WAS icts to non-performing portfolio of property assets.  

Spain Takes Control of Its Top Real Estate Lender

  PARIS - Faced with soaring fuel Costs and escalating competition on European routes icts, Lufthansa Said Wednesday That It Would Eliminate 3.500 administrative jobs as a share of wide-ranging efforts to Improve Profitability icts by € 1.5 billion over the next Three Years.

The move marked the first time since 2008 in the Economic Crisis That the German flag carrier HAD significant staff reductions Announced cam and have the airline Announced That icts net loss for the first Three months of 2012 narrowed by HAD Nearly 22 percent, to € 379 million, or $ 498 million, from € 507 million has Earlier year.  

"We Can SafeGuard only jobs for the long term and create new openings if we reorganize the administrative functions and Losses accept job now," Christoph Franz, Lufthansa's chief executive, in a statement Said In Which the airline added That It Would Aim To Achieve the cuts - equivalent to 3 percent of ict 117.000-strong work force - through "socially responsible measures" like attrition and voluntary early Retirements.

The reductions Announced Thursday - Significantly Less than the 5.000 HAD beens That floated in recent German media reports - Were just the latest in a wave of belt-tightening Taking up any network carriers struggle to As They compete with leaner rivals like Ryanair and Nimbler EasyJet and Air Berlin in Europe and Rapidly Expanding with Middle East carriers like Emirates and Etihad are long-distance routes.  

Air France-KLM has similar efforts Began in January, Announcing a pay freeze for ict French employed as a share of € 1 trillion package of cost cuts. The French-Dutch carrier aussi Widely Expected to announce significant job cuts later this year. Meanwhile, British Airways, Lufthansa Which Acquired last month's money-losing unit BMI, HAS Said That Many have got jobs 1.200 Could Go-as-a result of the integration of the British regional carrier icts Into Heathrow-based operations.

While recent indications There Have Been That air traffic demand in Europe HAS started to rebound, despite the area's weak economy, the International Air Transport Association in March Predicted That Were Likely European carriers to carry this year collectively Losses of at least $ 600 million, in a best-case scenario, and of as much as $ 1.9 if one billion Were Oil Prices to spike to as high as $ 150 per barrel from around $ 105 Currently no fax cash loans.  

"The interesting backdrop to all of this is That traffic growth in Europe has-been surprisingly strong, while agricultural yields" - the price paid by one passenger to fly one mile - "are still Extremely weak," Said Nick Cunningham, year analyst at Agency Partners in London.

While demand for air travel is holding up, travelers increasingly price sensitive Have Become, Mr. Cunningham said. And while network carriers are scrambling to Reduce seat capacity, strong pressure to keep ticket restes Competitive Prices With Their rivals. "In That scenario, Even with rising traffic, everybody loses money. So the only response Cdn Be aggressive cost reductions, "Mr. Cunningham said.

Mr. Franz Said Thursday That Rising Costs and recent aviation fuel tax in Germany and Austria Increases - as well as the cost of complying with the European Union's carbon-emissions trading program, Which Applies To airlines as of this year - Had Lowered Lufthansa & rsquo ; s operating profit in the first quarter, Even As revenues by 5.6 percent laundry charges, one billion from € 6.6 to € 6.3 one billion in the year-earlier extended period.

The cost-savings program "is Our Own Burdens response to additional thesis, 'he said. "It Will SafeGuard Lufthansa's position" and help the German carrier to maintain to icts global competitive position over the long term.

Meanwhile, in a fierce competition and sign That high fuel Costs are not only hitting wide carriers, has Danish budget carrier on Thursday Became the latest of the area's smaller players to Cease operations this year.  

Cimber Sterling, based in Sonderberg, Declared bankruptcy After icts owners withdrew Financial Support After Several months of Trying to turn around the company's finances. The airline, a small rival to Scandinavian airline SAS the Finnair and Norwegian Air Shuttle, Had Several Recently shut down roads to Southern Europe to focus on the domestic market.

Cimber's bankruptcy Followed the failure of Several Other small airlines this year, Connect Including Czech Airlines, based in Brno, the Italian carrier Air Alps and Cirrus Airlines of Germany. Two state-owned airlines, Spanair in Spain and in Hungary Malev, aussi Have Ceased Operations After years of losses.

Lufthansa to Cut 3.500 Jobs in Bid to Improve Profitability

  Were stocks mostly lower on Thursday, Sending the Standard & Poor's 500-stock index to icts biggest weekly loss of the Year as year of construction concern about Europe's debt crisis has Overshadowed decline in jobless claims to a four-year low.

The S. & P. 500 Fell 0.88 points, or 0.06 percent, to 1,398.08. The Dow Jones industrial average Fell 14.61 points, or 0.11 percent, to 13,060.14. The Nasdaq composite index WAS higher, Gaining 12.41 points, or 0.40 percent, to 3,080.50.

About one billion shares changed hands 5.8 on U.S. stock exchanges, 15 percent below the three-month average.

"You have, Certainly, improvement in the Labor market in the U.S. aim Every once in a while we got Reminded REMAIN There still problems in Europe," Said Greg Woodard, portfolio strategist has at Manning & Napier in Fairport, NY "The volatility is going to continue. It's Going To Be choppy. The trend Seems To Be improvement in the U.S. and outside the U.S. Continued Difficulties "

The S. & P. 500 retreated 0.7 percent this week After a reach An Almost four-year high on April 2, as Demand Fell at a Spanish bond auction and minutes from the Federal Reserve's latest policy meeting damped expectations for more Monetary stimulus.

The gauge rallied 11 percent still HAS this year have économique reports Surpassed Estimates and investors speculated the euro area's sovereign debt crisis Will Be contained.

Equities trimmed Early Losses After Labor Department jobless claims data Showed New Fell 6.000, to 357.000, in the week ended March 31, the fewest since April 2008.

Economists in a Bloomberg News survey has Decrease Estimated to 355.000. The number of people on unemployment benefit rolls Declined aussi, while extended réception Those payments laundry charges.

Stocks Fell Earlier Spanish bonds have Declined for a Third-day, pushing the Spread Between Yields on 10-year Spanish and German debt to more Than 400 BASIS Points for the first time since Dec room air conditioners. 12.

United States Treasuries advanced for a second day as speculation about Europe's debt spurred demand for safe assets.

Ten-year agricultural yields posted the biggest two-day drop since January Costs rose as borrowing at a French auction. Treasuries pared gains After higher-than-forecast growth in Canada emploi set off speculation Friday's jobs report That might Indicate a Stronger Economic Recovery.

"Europe is back on the front burner," Said Thomas Roth, senior Treasury trader in New York at Mitsubishi UFJ Securities USA. "It'sa constant battle Between the U.S. And Fears getting better in Europe. It's one of the Fears That the Fed HAS, that 'Europe Could crumble and drag us down. "

The Treasury's benchmark 10-year notes rose 12/32, 98 to 13/32, and the yield to 2.18 percent Fell from 2.22 percent late Wednesday.

Constellation Brands, the liquor company, Fell 12 percent to $ 21.61 After it Said earnings per share for the full year Might Be $ 1.93 to $ 2.03, below the $ 2.23 Expected by analysts Surveyed by Bloomberg.

Consumer discretionary stocks Had the biggest gain in the S. & P. 500, led by Bed Bath & Beyond. The retail chain operator, rose 8.5 percent to $ 71.85 as the company posted a fourth-quarter profit of $ 1.48 a share, beating the average analyst estimate of $ 1.32.  

Cabot Oil and Gas rose 2.2 percent to $ 31.94 as the price of crude oil rose 1.6 percent.

Oil Gained For The First Time in Three Days as the jobless numbers and the rebound from early Losses in equity Markets raised demand for oil Hopes That Would grow in the United States.

Crude for May delivery Gained $ 1.84 to settle at $ 103.31 a barrel on the New York Mercantile Exchange. The price rose 29 cents this week.

Stocks and Bonds: Markets Mixed on Fears About Europe

Hot News: Britons Protest Government Eavesdropping Plans

  Everyone knows how long a minute is. And your cellphone carrier Keeps close tabs on How Many You have Used this month. Now, in the smartphone era, more people are Being Forced to think about How Many megabytes of data using They Are.

What purpose, Exactly, is a megabyte?

If a sampling of pedestrians on the streets of Brooklyn Any guide is, most people only a vague idea Have. One megabyte is Said Was "the Amount of something we Have to use the Internet," Adding, "We Should Have Three or oven."

Popkey Miranda, 24, WAS Closer: "It'sa measure of how much information you store. If There are too many of 'em, I can not send my e-mail attachment. "

A megabyte is, in this context, 1,000 kilobytes - or about the size of a photo taken with a decent digital camera, gold Roughly one minute of a song, or a decent stack of e-mail.

Therein lies the problem: Counting things like minutes and text messages is Fairly easy, but There Is No intuitive way to gauge natural or data use.

The carriers say They Are Their Best doing to help keep tabs on Their Customers data diet. Aim the potential for confusion - and unexpected expenses - is Growing as people upgrade to faster devices running on faster networks.

Even The Most sophisticated of Mobile Customers Can Be tripped up - people like Paul DeBeasi, a research vice president at Gartner Specializing in wireless technology. He Said That ET oz streamed Netflix movie to a history and iPad WAS charged extra for data plan limited conduire history.

Mr. DeBeasi About did the math and found That Two Hours of watching a standard-definition Netflix video Two gigabytes consumed them - or 2.000 megabytes - of data.

"Even if you're just watching a standard-definition movie and you're only watching five movies in a month, it's costing you $ 100 just to watch movies Those five, 'he said. Mr. DeBeasi Suggested using Wi-Fi networks Whenever possible, have this Does not run up your carrier's data meter.

A VAST Majority of smartphone owners do not come near Their data limits, Many studies say. Predicted data intended use is to climb considerably over the next Few Years. Cisco, the networking company, published a study showing Recently That mobile data more Than Doubled in 2011, and by 2016 it Predicts That It Will Have grown by a factor of 18.

Faster fourth-generation or 4G networks are driving That it increase. The faster speeds Customers encouraged to use more data-intensive applications like video, so we have a smartphone 4G network is Likely to generate 50 percent more traffic Than It Would have been one Slower, Cisco says. The 4G-ready model of the latest iPad is a data hog Potentially, Given That icts big, extra-high-resolution screen Makes high-definition video streams Especially tempting.

And soon your personal data plan may not Be The Only One You Will Have to worry about. Verizon and AT & T Have Said They Are we working data plan That Can Be Among multiple shared devices, similar to family planning for cellphones. That means clustering Parents Will not Have to keep only year-eye on the number of text messages and phone calls Their Children are burning through, the goal aussi Amount of video, music and games They Are streaming over the cellular network.

Michael Weinberg, senior staff lawyer of Public Knowledge, a nonprofit group advocates more transparency in That the billing from telecommunications companies, goes to you as far as why matter smartphone Customers Even Have to pay more to use more data. He Said the quarrymen have-nots Provided Evidence That Limiting the Amount of data a person uses reduces congestion. He added That There Was a disconnect Between what the carriers' advertisements say and really do what Cdn Customers With Their data Allowances best humidifiers.  

"There'sa problem with understanding Exactly what the data means clustering in the real world, and matching up aussi Some of the advertising networks do That with the actual reality," Mr. Weinberg said. "You have people doing thesis ads with things like Facebook and watching videos, and how you Realize You Can Quickly burn-through it."

Public Knowledge hosts a Web site Called What Is My Cape? That Explains to people how much video and music THEY CAN ENJOY Before They Hit Their data limits For Each carrier. AT & T and Verizon offer different thirds of data plans. AT & T, for example, charges $ 20 for 300 megabytes of data on ict 3G network, $ 30 for Three gigabytes or $ 50 for five. Customers Who go over the limits on the costlier plan are charged $ 10 For Each extra gigabyte.  

T-Mobile USA Prices icts data, minutes and text messages as a single package, one of ict plan includes unlimited voice and text messages and Two gigabytes of high-speed data for $ 60 a month; oz Customers Exceed That, Their connections are Slowed. Similar to T-Mobile, Sprint Prices icts data, minutes and text messages as a single package, with plans, starting at $ 70 a month. It still offers unlimited data charge year end extra $ 10 a month for it as a "premium."

Some cellphone users older Still Have "unlimited" plans from carriers Other than Sprint - but AT & T and Verizon enforce throttling, gold Slowing of data speeds, for Customers Who THEY are determined using the most.  

Schwark Satyavolu, chief executive of Truaxis, That a company offers tools to manage for Consumers Their utility bills, Said It Was in the best interest of carriers like AT & T and Verizon to keep Consumers in the dark.

"They make more money if They Do not inform you of anything," Mr. Satyavolu said. "Their interest is not in HAVING Informing you and you go over."

AT & T and Verizon That argument, Saying THEY offer Several Ways for Customers to Monitor Their data. For example, EACH HAS Web site data with a calculator so people see how much data Cdn a Specific activity uses. Verizon Customers Can register with a service Called My Verizon to get Alerts When They Have Reached a number centage of Their monthly data allowance.  

"We do our best to provide statement the tools Their Customers Need to manage wireless services," Brenda Raney, a Verizon Spokeswoman, Said by email. "There is no sustainable business model based on customer confusion."

AT & T Customers aussi Cdn check how much data online THEY use. It icts Web site, AT & T says it alerts Their Customers When They approach data limit - In Some boxes goal, When They're are watching a movie, users Could Miss alert year.

"We've gone to great lengths to make it as easy as possible, for our Customers to Understand How Much They Are using data at Any Given Time," Said Emily Edmonds, an AT & T Spokeswoman. "Our Customers Can Be Notified of Their data usage via text messages, check it and THEY Cdn Themselves At Any Time Their phone via our Web site gold."

Mr. Face value of Gartner DeBeasi Doubt That Would MOST Customers check the data-monitoring tools. "Who's going to do that? No one's really going to Do That, "He Said, Adding That Were Higher cellphone bills have inevitable wear Climbs data.

"Watch your Telecom Expense, 'he said. "As more people Become Mobile, They Will use more of the cellular network. It's going to cost more Businesses and Consumers more. There's No Two Ways around it. "

How to Budget Megabytes Becomes More Urgent for Users

  MIDLAND, Mich.. (AP) - Dow Chemical Will cut 900 jobs and shutter plants on Three Continents Because Of Weakness in Europe, Which may soon tip back recession of Into It Has not done so already.

Dow WAS ravaged During The Global Economic Crisis and That struck oven years ago, cutting more positions then Than 10.000. CEO Andrew Liveris HAS Sought aggressively to keep the company, the nation s largest chemical maker, agile despite icts size.

"These actions, while difficulties, are in full alignment with our Commitment to Continually manage our portfolio to volatile and adapted to Changing Economic Conditions, as we are seeing particularly in Western Europe," Liveris said.

Europe released new figures Monday showing emploi That There are now more people unemployed Than At Any Time since the euro WAS Introduced in 1999.  

Eurostat, the European Union's statistics office, rose to 10.8 Said chômage percent in February. The number of unemployed totaled 17.1 million, Nearly 1.5 million more unemployed Than Has The Same time last year. Of the 17 Countries in the eurozone, Seven Countries HAD chômage Above rates of 10 percent.

Dow's products are Used in Nearly Every Sector in the economy, and It Is Often the first to feel Macroeconomic shifts. On Monday, Europe aussi released data indicating indication a bigger-than-Anticipated downturn in manufacturing.

The financial information company Markit Pointed particularly to Deteriorating Conditions in German and France infrared quartz heaters. Spain's level chômage, The Highest In The EU, hovers around 23 percent.

Dow is Responding to Those terms and Said Monday That icts latest maneuvers by Will Trim Costs about $ 250 million EACH year. In all, Will Dow closed oven plants, a fifth idle, consolidate and Other operations.

"Today's announcement further Top Demonstrates Ability and our resolve to take swift, strategic interventions cash flow," Liveris said.

The economic situation in Europe Will Affect Dow employed in the U.S., where 'the company employs about 25.000 people.

In addition to plants shut down That Will Be in Portugal, Hungary, and Brazil, as well as the idling of a plant in the Netherlands, Will Dow closed a factory in Charleston, Ill..

Fewer Than 375 U.S. Positions Will Be Cut, s

pokeswoman Said Rebecca Bentley, and the company plan to hire in Other Areas and Those offset job losses.

Dow HAS 52.000 employed worldwide.

In the fourth quarter, weak European and U. S. Pushed to dirty Dow has $ 20 million loss. Dow Expects sales to rebound in the U.S. this year, requirements in Europe are intended more to say.

Dow Will book a first-quarter load of $ 350 million in the first quarter for severance packages, asset impairments and Other related items.

Shares of Dow Chemical Co., based in Midland, Mich., Rose 5 cents to $ 34.69 in midday trading.

Dow Shuts Plants, Cuts Jobs as Europe Struggles

  We are Going to be really tough on the euro area. If They want more bailouts from the International Monetary Fund, They Are Going to Have to submit to strict conditionality. That Was The Message Delivered by the rest of the World When It Agreed During The Year weekend to participate in. That Will Exercise Increase the fund's resources by at least $ 430 trillion.

The Meaning of the goal post is not quite what It Seems. The fund is Actually In Some Ways Than calling for less injustement more short-term austerity in the euro area. So if the Europeans to submit I.M.F. discipline, ironically Will it mean less of a hair shirt.

It is easy to see why the rest of the world is unhappy with the Special Treatment Receives the euro area from the Monetary Fund. The managing director, Christine Lagarde Currently, HAS always beens a European. Vast resources, Way Beyond what are Normally available in MFI Programs, Channeled Have Been to Greece, Ireland and Portugal.

What is more, the rest for the world - Including Developed Countries like Britain, Canada and the United States and Emerging nations like Brazil - feel the euro area HAS not done enough to sort out problems despite Its Own Being pretty rich. Hence, the agreement to beef up the I.M.F. resources Only After long wrangle - and Only After scaling back the original request from $ 600 trillion, as well as insisting on strict conditionality Before the money is ever disbursed.

At The Same Time, the I.M.F. Three HAS recommendations, as Outlined in ict World Economic Outlook report released last week, that 'are at variance with Somewhat euro area policy. First, it wants the area not to overdo short-term fiscal austerity while Placing more emphasis on follow-term structural Measures to Improve budgets. Second, it wants the European Central Bank continues to Monetary very accommodative policies. Finally, it wants the euro area Authorities to Be Prepared to inject capital Directly Into troubled banks and to Accompany Stronger That with Europe-wide supervision of lenders. All thesis ideas help Could Reduce the pressure of the euro zone recession and ease the social crisis.

Will the I.M.F., though, get icts way? Well, Certainly not Immediately. The euro area Does not Have to listen to the fund UNLESS Another Country - say Spain or Italy - needs a bailout. Even then, the only country requiring the cash Would Technically Have to pay heed to the MFI The rest of the euro area, led by Germany, argues Could That Has No fund the business interfering with the gold Monetary Policy Banking Supervision of the Entire euro area, with ict 17 Countries, When only peripheral A Few nations are in lending programs.  

What is more, the bulk of the money from Any future bailouts Would continues to come from Other Countries euro area MFIs Rather Than the Other countries thesis argues Would THEY That Should Have a big say, Even on tax policy, Because They Will Be Most Of Any bankrolling deficit shortfall quick payday loans.

Even If the goal I.M.F. Immediately cannot get icts way, is shifting Steady Motions in favor icts. The euro area may not like interference in Monetary Policy. Purpose the European Central Bank Showed That It Was Willing to provide statement € 1 trillion, or $ 1.3 trillion, in long-term loans to banks in the area's the heat of the crisis in recent months. Some members of ict, with the notable exception of the German Bundesbank, Have Said That it is too early to plan for end-to-year Such policies.

Or take fiscal policy. Eurozone leaders may Have Agreed to a So-Called That Will require tax compact em to balance budgets and cut Their Their debts. But no sooner Had the deal signed beens Than Spain varied icts fiscal targets. Followed up by Italy HAS Saying It Will not react to a deeper-than-Expected recession by pushing-through more cuts - a policy That Would just lead to further Top recession.

Now, the Dutch government, calculated previously the high priest of austerity, HAS found it cannot push through budget cuts Its Own. Meanwhile, Francois Hollande, the Socialist candidate for the French presidency, HAS Promised to push for a more growth-orientated policy if ET wins the election, voting started in Which Sunday. The Social Democratic Party in Germany, the main opposition party Whose Support is needed to ratify the tax agreement, HAS taken a similar line. The austerity consensus is fraying.

Finally, Consider banking policy. The intertwining of lenders and Their states is unhealthy.

Banks get Into That Need To Be disorder bailed out. That Makes Their Governments less creditworthy, Which, in turn, further Top That stinking banks loaded up on Their leaps. That Occurred in Ireland and Could Be repeated in Spain.

The IMF's Proposal is to sever this incestuous relationship by getting to the euro area money could Directly Into troubled banks by lending Rather Than to Governments Which, in turn, inject capital Into Would the banks. Such a policy Would Be matched by euro area-wide supervision of banks.

The idea is rational. That, of course, Does not mean That It Will Be adopted Interpretation. Year goal with expanded war chest, the I.M.F. HAS annually laundry charges likelihood of Being Heard on this and Other issues - Especially if It Keeps reminding the euro area That the rest of the world HAS That strings are attached insisted Before Any More Countries are Given bailouts.

Hugo Dixon is the founder and editor of Reuters Breakingviews.

Political Economy: A Message for Europe in Tones

2

  PARIS - It was recent sunny morning in this city's fashionable Marais district, Marion Bayod squeezed behind a tiny table at The Cactus, a neighborhood coffee She has frequented for years. She cast a sidelong glance at a Starbucks across the street.

"I never go Into Starbucks, it's impersonal, the coffee is mediocre, and it's expensive," Ms. Bayod, a 35-year-old masseuse, Said as-a waiter greeted her by name and Quickly Brought her usual espresso. "For us, it's like another planet."

Nearly a decade After venturing into Europe, Starbucks is still laboring to lure people like her. Despite strong engineering a turnaround in the United States and Growing steadily in Asia, where 'Starbucks is still a novelty, the company HAS struggled here on the Continent That Gave birth to cafe and coffeehouse culture.  

Now, Starbucks is embarking on a multimillion-dollar campaign to win over more of Europe's coffee aficionados - with a makeover of Hundreds of upscale stores to cater to year ingrained coffee culture, and beverages and blends Adjusting to the following regional fickle palates.

France may Prove Particular challenge. Promenade was Parisian boulevard with a paper coffee cup? It does not happen! Is not it just done.

After eight years spent 'setting up French 63 Starbucks stores, the company never HAS Turned a profit in France. And Even in the share of Europe's Where the company does make money, sales and profit growth lag far behind results in the Americas and Asia.

Europe's debt crisis and sluggish economy are a factor. So are high ferent European and Labor costs: Which impinge on profits more Than in Any Other Region in Which Operates Starbucks. Aim the biggest challenge may lie in tailoring the Starbucks experience to appeal to a Variety of European Tastes.

"Europe is critically significant for our future," Said Troy Alstead, the company's chief financial officer. "We have-nots always put our best foot forward, 'he added, but" We Know We Can Have a bigger impact. "

To be sure, Starbucks HAS PLENTY of European fans. Whether in Amsterdam, Berlin or London, or Even Among subsets of Parisians, Starbucks stores are packed with urbanites Often, tourists and laptop-wielding young people embrace the coffee chain Who hast year avatar of American popular culture.

"We see stars like Kim Kardashian in magazines all the walking around with a Starbucks," Daphka Montiero, a 19-year-old Parisian and aspiring fashion designer, as she licked the cream off a five-euro ($ 6.50) Frappuccino, across from Ms. Bayod's preferred coffee. "My friends and I come Because it's hip."

That may be. Starbucks Struggles aim to make money from people like her.

While a New Yorker might grab a coffee to go - carry-out orders are one of the company's biggest money-makers - French friends tends to sit When They sip. So Starbucks is Having to invest huge Amounts to Give icts blinds additional seating space in France, along with Other renovations.

Michelle Gass, last fall Who Became the chief of operations for Starbucks Europe, the Middle East and Africa, Recently Took year anthropological tour to try to better Understand the varying wants and Needs of coffee lovers at the company's European local.  

"In Markets Where There is entrenched year coffeehouse culture, like Paris or Vienna, and II was expecting to hear more Requests To Be like them," Ms. Gass said. "But I Heard the opposite - people want the true Starbucks experience."

Because mean different things That Cdn different to Europeans, though, the company HAS Hundreds of hours Devoted to Studying the variations. The British, for example, are quite happy to drink takeaway coffee, so Starbucks is schedule Hundreds of drive-through locations in Britain.

And Britons like lattes, although Many Consider the version of Starbucks too watery. So baristas in Britain Recently Began Adding a free extra shot of espresso.  

Across the channel, however, 60 percent of French people prefer espresso, while only 20 percent Cdn stomach an "Americano outdoor fireplace." And yet, Many find That Tastes too charred Starbucks espresso, coffee Even by French standards. So Just Two weeks ago in Paris, the company has Introduced lighter "blonde" espresso roast.

And Then There is the issue of service. To humanize icts chain-store reputation, Earlier this month Starbucks baristas icts HAD THROUGHOUT Europe start wearing nametags.

In London, an experiment is Under Way to take customers' orders and With Their names then address em by name When filling it. Participating employers get a free coffee, drank Many Others Have Twitter lit up with complaints about bogus, American-style chumminess.  

Other exchanges in the way baristas operate– They Now keep milk Within Arms' Reach of the steamer, for instance - are Meant to Overcome the Continental curse of slow service.

The Most visible innovations, though, Involve "concept" stores Designed to make a Starbucks feel more like a trendy neighborhood shop. Last month in Amsterdam, the company's chief executive, Howard Schultz, the ribbon was cut when consoling space with local woods and avant-garde architecture, Including a workshop for poetry readings.

In Paris, the company has rustic Recently Gave facelift to the Starbucks near the Paris Opera. A VAST store near the Louvre got a modern makeover, featuring a sleek, wood coffee bar. And the Starbucks on the high-rent Boulevard des Capucines is a sumptuous lobby Adorned with velvet chairs, chandeliers and a gilt-leaf ceiling depicting cherubs aloft in a blue sky.  

As it adjusts, Starbucks Cdn consult the history of Two Other big American food chains. Burger King WAS Forced to shutter 39 stores icts in France in 1997 After ict ict strategy of Directly transplanting American model, without local adaptation, failed.

McDonald's, by contrast, HAS Rapidly grown in France and in Europe over the years by fine-tuning as needed, like using French cheeses, meats and Mustards; Preserving local architecture In Some icts of showcase stores, and more Recently, Creating a In Some coffee area locations to Accommodate coffee-sipping patrons.

It is too soon to know how well Starbucks's new strategy might buoy icts European Financial Results.

The company posted record earnings of $ 3.4 icts one billion worldwide in Most Recent Quarter, and Its stock rocketed to $ 53 HAS, up from $ 8 in 2008. Purpose in Europe, the weak economy continued to stunt sales.

In the quarter ended in December That, Starbucks sales in European beens That HAD open at least 13 months rose by only 2 percent. That Was well below the 9 percent growth in the Americas and 20 percent in Asia.

Starbucks's profit margins are much thinner aussi in Europe, as a result of high real estate Costs and Labor Laws That require Relatively high employee WAGES and Benefits.

Goal executive are so confidant In Their strategy That They Are Planning Hundreds of new stores in Europe, from Paris to Moscow, Beyond the 1.700 Already in place. To corral "captive audiences," Said Ms. Gass, Starbucks Plans to put Many of the new locations in airports and railway stations on the Continent.

Some analysts see a risk of overexpansion, noting the global recession That in 2008 and 2009 Mr. Forced Schultz to close more Than 900 locations worldwide and one million cut $ 580 in component costs.

In Europe, "it's possible the business more profitable and Could Become Focused-through closure of the blinds," or by leaving altogether Some Markets, Said John Ivankoe, an equity research analyst at J. P. Morgan in New York.

Ms. Gass scrap the doubters.

"In Europe, there 's no concern about us Being oversaturated - quite the opposite," she said. "It sounds like a lot. Goal when you're walking the streets of Paris, Compared with Manhattan, you Have to go find 'em. It's not like you-can turn a corner and a Starbucks Will Be Two blocks away. "

Tailors Its Starbucks Experience to Fit to European Tastes

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