27/05/2016 BBC Business Live


27/05/2016

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This is Business Live from BBC News with Alice Baxer

:00:11.:00:12.

Gripped by labour pains - but after years of weak growth,

:00:13.:00:18.

and a jobless rate more than double that of Germany, is France getting

:00:19.:00:21.

Live from London, that's our top story on Friday the 27th of May.

:00:22.:00:40.

French unions urge workers to set up their action as pressure mounts

:00:41.:00:43.

The French President says he will not budge.

:00:44.:00:53.

Also in the programme: Walking their own paths -

:00:54.:00:55.

G7 leaders call the world economy an urgent priority, but fail

:00:56.:00:58.

to agree on co-ordinated steps to head off a crisis.

:00:59.:01:04.

We will keep a close eye on the markets at the end of the trading

:01:05.:01:12.

week. Asian stocks ahead on Friday after US data continues to cast a

:01:13.:01:16.

positive light on the economy. Europe stocks also higher.

:01:17.:01:21.

And tough words between the International monetary fund and the

:01:22.:01:25.

European Union over Greece's debt deal. Oil flutters above $50 a

:01:26.:01:31.

barrel and the G7 in Japan, we will look at the week in business with

:01:32.:01:34.

our economic strip corresponded Andrew Walker. And today, we want to

:01:35.:01:39.

know what you think about Apple possibly buying Time Warner, is this

:01:40.:01:45.

them jumping onto the bandwagon of failing to come up with another

:01:46.:01:50.

cracking product and it needs to do something about its future growth?

:01:51.:01:54.

Let us know what you think. It is simple.

:01:55.:02:00.

We start in France, where pressure is mounting on the government

:02:01.:02:03.

as a wave of strikes hits oil refineries, ports and nuclear power

:02:04.:02:05.

stations, causing fuel shortages and panic buying at petrol stations.

:02:06.:02:17.

The cause - a controversial shake-up of labour rules aimed at making it

:02:18.:02:20.

easier and cheaper to hire and fire workers.

:02:21.:02:25.

Labour unions are fiercely opposed to it.

:02:26.:02:27.

But its supporters say it is vital to make French business more

:02:28.:02:30.

competitive - and energise the country's stagnant economy.

:02:31.:02:35.

Let me give you some background to this.

:02:36.:02:37.

France's unemployment rate is over 10%, well over double

:02:38.:02:40.

Among young people, it's much higher.

:02:41.:02:49.

Proof - say critics - that the system needs reform.

:02:50.:02:52.

Then there is France's economic growth.

:02:53.:02:57.

This graph shows how persistently weak it has been

:02:58.:02:59.

The IMF says growth will improve a bit this year.

:03:00.:03:06.

But it warns that the government's reforms don't go far enough

:03:07.:03:09.

Our business correspondent Jonty Bloom has been to Toulouse

:03:10.:03:19.

to find out why these reforms are so controversial.

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We will get more of that later. Managing director of financial

:03:24.:03:36.

services joins ours now. And our correspondent Hugh Schofield is in

:03:37.:03:40.

Paris. In Alaska but of hours, have we been hearing the unions have been

:03:41.:03:46.

calling upon the workers and urging them to continue the strike action?

:03:47.:03:51.

-- the last couple of hours. Ramping things up? Yes, no surprise, they

:03:52.:03:58.

have issued a statement saying after yesterday's action, their conclusion

:03:59.:04:01.

is the action must continue so they have called for an intensification

:04:02.:04:06.

of the groups and activities and protests going on. It does not mean

:04:07.:04:11.

today will be like yesterday. It means they will plan more actions in

:04:12.:04:15.

the future and the next big one is not until June 14. Next week, we can

:04:16.:04:20.

expect some action on the railways and maybe at the airports. Protests

:04:21.:04:25.

which do not mean they are connected with the label or protest, they

:04:26.:04:29.

could be for other reasons, but it is combining into a big

:04:30.:04:32.

anti-government movement across the country. It will not be sold on. I

:04:33.:04:36.

predict in the next couple of weeks, there will be a role and it will be

:04:37.:04:41.

quiet and it will pick up again with more sporadic days like yesterday

:04:42.:04:46.

which might be quite nicely. Indeed. We will leave it there. But you

:04:47.:04:50.

soon, it you will keep across everything, I know. That was from

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Paris. -- we will talk to you soon. Just

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talk us through wide these Labour reforms are so controversial, why is

:05:01.:05:04.

everybody up in arms, Virginie? There is an historical component.

:05:05.:05:10.

The system in France is generous in terms of benefits and there is a

:05:11.:05:14.

lack of flexibility that when economies are quite strong, it can

:05:15.:05:20.

work. In a low growth economy, it makes it difficult for companies to

:05:21.:05:25.

hire and so it is sticky in unemployment especially among young

:05:26.:05:30.

people. The reforms are about giving more flexibility to companies. You

:05:31.:05:35.

have heard about the 35 hour week and after that, you have to pay

:05:36.:05:41.

overtime. They want more flexibility among that. Firing people, hiring

:05:42.:05:46.

people. And I think it is a very good reform not only for business,

:05:47.:05:50.

but also for young people. A lot of young people in France is stuck in

:05:51.:05:55.

very short-term friends because -- short-term jobs because there is no

:05:56.:05:59.

room in the market to get contracts for long-term jobs. We took about

:06:00.:06:04.

the stagnant economic growth. -- we talk about. This is the graph that

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shows that stagnant growth since the financial crisis, the deep recession

:06:10.:06:16.

in 2008. We talk about structural and Labour reforms. If the Labour

:06:17.:06:19.

reforms go through, do they change that picture? Is it a reality? I

:06:20.:06:28.

think there is a lack. Think about the reforms we had in the UK under

:06:29.:06:33.

the Thatcher years, it takes time but it is fundamental in terms of

:06:34.:06:39.

the unemployment rate compared to Germany and the UK, Germany is 4.3%.

:06:40.:06:45.

Growth has picked up a little bit in France on a quarterly basis but on

:06:46.:06:50.

an annual basis compared to last year, we are down. So we need to

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unlock this paralysis. Economic league, they are part of the strikes

:06:57.:07:01.

is very hard to say at this point, probably not much. But politically,

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it is very important. We have elections a 2017 and Manuel Valls

:07:06.:07:12.

does not want to budge. But the Finance Minister is much more... Is

:07:13.:07:19.

softening of his time. So from a government standpoint and employees

:07:20.:07:25.

and is now employer, the law has been quite diluted. People were not

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partnering and this was the problem. We really appreciate your input and

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have a great weekend! Thank you! The leaders of the world's top seven

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economies have closed the G7 summit with a pledge more. Policies to

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boost global growth. In a final meeting in Japan, they warned of

:07:53.:07:55.

threats to the global economy including a British vote to leave

:07:56.:08:01.

the EU and Chinese steel, we will talk more about that. Listen to

:08:02.:08:03.

this. Google has won a major legal victory

:08:04.:08:04.

in its multi-billion dollar copyright battle with software firm

:08:05.:08:07.

Oracle. A US jury has unanimously upheld

:08:08.:08:09.

Google's claim it had the right to use Oracle's Java programming

:08:10.:08:11.

language to develop Android - the operating system used by 80%

:08:12.:08:14.

of the world's smartphones. Oracle has been claiming

:08:15.:08:21.

$9 billion in damages Microsoft and Facebook have

:08:22.:08:38.

announced plans to build the Atlantic's highest capacity datalink

:08:39.:08:41.

to run between the US and Europe. The cable will run underneath the

:08:42.:08:47.

Ocean, between Virginia in the US and Bilbao in Spain. The tech

:08:48.:08:51.

companies have to pay external firms to use their cables and this could

:08:52.:08:56.

be costly and the large amount of traffic across these lines could

:08:57.:09:01.

make connections much slower. What is on the business news? We

:09:02.:09:09.

have talked about the G7 a what and we will talk to Andrew but the

:09:10.:09:13.

interesting thing is how the Japanese Prime Minister Ise-Shima

:09:14.:09:16.

was urging the other leaders to print more money and splash it out,

:09:17.:09:20.

get it out into the economy. They have been doing this for years.

:09:21.:09:26.

But the other thing is some critics will say that he was like, if you

:09:27.:09:33.

can't put more dollars into the US and European pocket, what will you

:09:34.:09:39.

do, they will buy stuff? And hopefully Japanese stuff! I am not

:09:40.:09:42.

saying that, some critics have said that. He is drawing parallels with

:09:43.:09:48.

2008 and the Riemann crisis, others do not believe it is that severe.

:09:49.:09:57.

And more cars have been recalled over that airbag problem. Another

:09:58.:10:03.

extra 7 million cars. Let's talk about the world's biggest PC maker.

:10:04.:10:13.

It has made a loss of $120 million for the first opera, verse three

:10:14.:10:16.

months of the year. Thank you very much!

:10:17.:10:27.

The first net loss in six years. What has gone so wrong? They are

:10:28.:10:32.

disappointing numbers and shares in Hong Kong have gone down nearly 4%

:10:33.:10:35.

and the reason they are doing badly is because of losses in the

:10:36.:10:39.

smartphone division. This is because shipments to China, one of their

:10:40.:10:45.

biggest markets, have plunged by about 85%. Lenovo is facing stiff

:10:46.:10:51.

competition from rivals and as we know, it is other -- its other

:10:52.:10:58.

business has been fizzling out, of personal computers, the trend across

:10:59.:11:02.

the globe. Lenovo talks about how their smartphone division is

:11:03.:11:08.

struggling from the cost of buying over the motor rally unit in 2014

:11:09.:11:10.

and its chairman said the purchase has not met expectations of fixing

:11:11.:11:18.

the business. Analysts believe the smartphone unit will keep making

:11:19.:11:24.

losses. Tough times for Lenovo. And Asian stocks have pulled ahead

:11:25.:11:28.

on Friday after US data continue to the gas the economy in a positive

:11:29.:11:32.

light and the dollar went on the offensive. Japan sought its indexed

:11:33.:11:42.

boys by Tokyo delaying a tax hike to about 0.5%. And crude oil after

:11:43.:11:50.

nudging through the $50 barrel mark yesterday, psychologically

:11:51.:11:53.

important, it has slumped back. In Europe's, stocks have opened flat at

:11:54.:11:58.

the moment flat. We have the details of what is ahead on Wall Street

:11:59.:12:00.

today. On Friday, we will see how the US

:12:01.:12:04.

economy fared in the first three months of this year. We initially

:12:05.:12:11.

heard the economy grew by only 0.5%. In this revision, it is likely the

:12:12.:12:17.

economy grew a bit faster than that. About 0.9% because of decent gains

:12:18.:12:22.

in consumer spending and presidential construction. Also

:12:23.:12:24.

happening on Friday, the share of the US Central Bank -- the chair of

:12:25.:12:30.

the US Central Bank Janet yelling will take part in a central

:12:31.:12:34.

discussion and what she says will be met with great interest as we move

:12:35.:12:38.

closer to the mid June meeting of the US Federal reserve. There has

:12:39.:12:41.

been a rise in interest rates since December but if you look at the

:12:42.:12:46.

minutes of the last meeting of the Federal reserve, it was suggested

:12:47.:12:51.

that a tune or July, a rate rise Ben is firmly on the cards.

:12:52.:12:57.

There you go. Let's stay with that. Our business economist is joining

:12:58.:13:05.

us. We will give you the credit, a bout a month ago when experts were

:13:06.:13:11.

saying they would push the rate rise until September. But the big boss

:13:12.:13:17.

said no, June. And you said June and we had numbers yesterday, Americans

:13:18.:13:24.

buying more durable goods and jobs down, it is looking good for June.

:13:25.:13:29.

It is looking good for June. I think the message from the minutes, back

:13:30.:13:36.

in April, they were saying that if the economy does not deteriorate, we

:13:37.:13:39.

will keep raising rates. A little bit at a time. 14 -- the 14th and

:13:40.:13:48.

15th of June is a good time and next week we have the big data. It is

:13:49.:13:57.

payroll rolls on Friday. If that is good and Janet yelling is speaking

:13:58.:14:01.

on the following evening and what she says could make a difference.

:14:02.:14:05.

Those minutes did cause a bit of a stir. Everybody massively ringing

:14:06.:14:09.

for these predictions from September but what does this mean if there is

:14:10.:14:14.

a rate hike in June and how many more could we see over the year?

:14:15.:14:23.

I think the dollar will go up, the problem with that is, the dollar

:14:24.:14:31.

goes up and countries in emerging markets have problems. That is

:14:32.:14:35.

always an issue. When the dollar moves up, the rest of the world

:14:36.:14:39.

suffers. Really good to talk to you. You're going to go through the

:14:40.:14:44.

papers soon. Great papers stories coming up. Still to come, tough

:14:45.:14:49.

words between the IMF and the EU over the Greek debt deal. Oil is

:14:50.:14:56.

about 50 bucks, which we haven't seen for about seven months. And big

:14:57.:15:00.

stories in Japan. Andrew Walker is right in the wings. Stay with us.

:15:01.:15:07.

We have heard plenty about dipping into the bank of mum and dad. My

:15:08.:15:13.

favourite bank! But what about living

:15:14.:15:18.

in the house of Mum and Dad? High property costs means the trend

:15:19.:15:20.

of people living with their parents A report by Aviva has put some

:15:21.:15:23.

figures on what it calls the growing number of multi-generational

:15:24.:15:28.

households. Rob Young is on our

:15:29.:15:29.

Business newsroom. Are you still in the

:15:30.:15:36.

house of Mum and Dad? Kind, it is so hard for young people

:15:37.:15:47.

to save money for a deposit for a house, because house prices have

:15:48.:15:49.

been rising rapidly in London and the south-east. Rent has been going

:15:50.:15:55.

up by so much in recent years as well, they say it is impossible to

:15:56.:16:00.

save for a deposit. This study has put a number on the amount of young

:16:01.:16:06.

people in their 20s and early 30s living with their parents. It is 3

:16:07.:16:10.

million of them. This study says that has gone up by 500,000 over the

:16:11.:16:15.

past ten years. It is forecasting that over the next decade it will go

:16:16.:16:21.

up by yet another 1 million. We are not just talking about a single

:16:22.:16:24.

young men and women living with their parents. The report has also

:16:25.:16:27.

identified what they are calling a big rise in multifamily households,

:16:28.:16:33.

young couples, often married, living with one set of parents. Does this

:16:34.:16:40.

trend show any sign of abating? It seems like we here for the long

:16:41.:16:45.

haul, the prices don't seem to be coming down? And what about economy?

:16:46.:16:51.

It says if house prices continue to rise faster than wages, there will

:16:52.:16:54.

be more and more people that dream of owning their own home, but it is

:16:55.:16:57.

increasingly out of reach. You are right, there might be an economic

:16:58.:17:01.

impact. People might have a bit more disposable income because they are

:17:02.:17:04.

letting rent-free at home, so they can spend a bit more. Or maybe they

:17:05.:17:09.

are saving a lot of money. If potentially means they are delaying

:17:10.:17:12.

having children, which potentially also has an economic impact. Good on

:17:13.:17:18.

you, mate, have a great weekend. Say hello to mum and dad. We will have a

:17:19.:17:28.

quick look at this live page. VHS, what will happen in terms of the

:17:29.:17:31.

pension deficit, in terms of trying to find a new buyer? The deadlines

:17:32.:17:39.

are fast approaching. Interesting, news coming in about the Mothercare

:17:40.:17:42.

boss Greg Tufnell. You're watching Business Live -

:17:43.:17:47.

our top story: France's President Francois Hollande says he won't back

:17:48.:17:50.

down on labour reforms as unions urge workers

:17:51.:17:52.

to step up strike action. No sign of an end in the misery for

:17:53.:17:54.

French commuters. And now let's get the inside track

:17:55.:17:59.

on some of the big stories of the week including Greece's debt

:18:00.:18:02.

deal, the G7 meeting in Japan With us is Andrew Walker,

:18:03.:18:05.

Economics Correspondent. Were usually drag him in on Friday.

:18:06.:18:24.

A pleasure! Say it with a smile, next time. Talking about smiling or

:18:25.:18:28.

not smiling, the G7, as some were expecting. Here is what is hard for

:18:29.:18:36.

Lehman, the leaders agree that, globally, things are getting worse,

:18:37.:18:40.

not getting better. The IMF has revised downwards its global

:18:41.:18:47.

economic forecast. They still can't come to a unified agreement. They

:18:48.:18:56.

agree things have got worse. But how much worse? It is a difference of

:18:57.:18:59.

emphasis. The Japanese Prime Minister gave a presentation to the

:19:00.:19:05.

other leaders, drawing some slightly alarming parallels with 2008, the

:19:06.:19:11.

aftermath of the collapse of Lehman Brothers in the United States, in

:19:12.:19:15.

particular looking at commodity prices, suggesting the fall has been

:19:16.:19:19.

of a similar magnitude, looking at investments that are particularly

:19:20.:19:25.

relevant in the emerging economies. They agreed that the emerging

:19:26.:19:28.

economies are in a difficult situation. But he was giving a more

:19:29.:19:35.

alarming view of the outlook for that part of the world and,

:19:36.:19:38.

potentially, with knock-on effects to the rest of the world. In

:19:39.:19:45.

particular, David Cameron, the British Prime Minister, and

:19:46.:19:47.

Chancellor Angela Merkel of Germany, they would have been much less

:19:48.:19:51.

convinced about just how bleak the outlook is. They're in mind those

:19:52.:19:55.

are two leaders that are more resistant to the idea of more

:19:56.:19:58.

stimulus coming from government spending and tax cuts. A lot of the

:19:59.:20:04.

other leaders take the view that Germany has got more scope to do

:20:05.:20:07.

that, because government finances are in relatively robust shape. But

:20:08.:20:11.

Angela Merkel is not so keen. Another big story of the week, where

:20:12.:20:15.

Germany found itself in a different come to everyone else, that was

:20:16.:20:19.

Greece. They kind of lost, because Greece did get debt relief? Well, a

:20:20.:20:25.

commitment in principle to debt relief. They went far enough to

:20:26.:20:30.

persuade the IMF, who have long been arguing that Greece must have debt

:20:31.:20:36.

relief, they have gone far enough to get the IMF to start cranking itself

:20:37.:20:41.

up, to come in principle, getting financially involved in the

:20:42.:20:45.

programme. The third Greek bailout, they have made no financial

:20:46.:20:48.

contribution. They did contribute to the first two. They have refused,

:20:49.:20:52.

hitherto, on number three, because of concerns about whether the debt

:20:53.:20:56.

burden is sustainable. They are not quite ready to write a check, but

:20:57.:21:00.

they are getting a lot closer. We have about 20 seconds. The oil

:21:01.:21:09.

price, about $50, is it going to continue? A lot of people think

:21:10.:21:13.

American shale oil production might start cranking back-up. That would

:21:14.:21:20.

mean more supply, and that could be enough to catch the upward momentum,

:21:21.:21:25.

bearing in mind that Iran is also coming back into the market as

:21:26.:21:28.

rapidly as it can. There is always the possibility that some of the

:21:29.:21:32.

supply disruptions we have seen in Nigeria, Canada, one of the reasons

:21:33.:21:35.

for the price rises, there was might come to an end. I don't think

:21:36.:21:40.

anybody would be betting on a big further upward movement. Goldman

:21:41.:21:51.

Sachs has been saying that. Goldman Sachs, just get back in there! They

:21:52.:21:57.

have! The US Republican candidate

:21:58.:21:59.

Donald Trump has officially reached the number of delegates needed

:22:00.:22:01.

to secure the party's If he's successful in his bid

:22:02.:22:03.

for the Whitehouse, the billionaire politician could anger overseas

:22:04.:22:07.

businesses by placing import restrictions

:22:08.:22:09.

on foreign-produced goods. But for one Asian manufacturer,

:22:10.:22:10.

it seems that every cloud Donald Trump says Chinese factories

:22:11.:22:13.

are stealing American jobs. Well, this one has

:22:14.:22:23.

pinched something else, And they have rendered it artfully

:22:24.:22:25.

in novelty rubber and The production process, though,

:22:26.:22:30.

offers no clues to those It is a questionable proposition,

:22:31.:22:34.

of course, but if rubber mask sales are a reliable gauge of US

:22:35.:22:45.

electoral sentiment, the coming months could be looking

:22:46.:22:47.

bright for the controversial TRANSLATION: To be frank,

:22:48.:22:49.

I prefer Trump to Hillary. Even though the sales

:22:50.:22:55.

are more or less the same, I think in 2016 this mask

:22:56.:22:58.

will completely sell out If he is right, though,

:22:59.:23:00.

he might want to get in before the election, in case

:23:01.:23:10.

Mr Trump slaps an import Of course, both sides of politics

:23:11.:23:12.

get the rubber treatment here. And if rubber Donald Trump looks

:23:13.:23:18.

a little stern, rubber Recent polls show the presidential

:23:19.:23:21.

race narrowing. Orders for Clinton and Trump rubber

:23:22.:23:28.

masks are also neck and neck, I wanted to get one of those! All

:23:29.:23:45.

three of us. We are going to go through the papers. Can we start

:23:46.:23:50.

with this? I'm really fascinated, Apple, there are rumours and talk

:23:51.:23:54.

about buying Time Warner. One would think that is because of the

:23:55.:23:58.

content. Is that because iPhone sales are sort of peaking? It is

:23:59.:24:03.

also competing against Netflix, and Amazon Prime, who make their own

:24:04.:24:08.

content? It's really interesting. What would Steve Jobs have done? He

:24:09.:24:13.

would be rolling in his grave. I think so. What was Apple about when

:24:14.:24:19.

he was in charge? New things, technology, hardware, but new ways

:24:20.:24:24.

of doing things. You know, all of this pointing on screens, moving

:24:25.:24:27.

stuff around you have been doing on your iPad. This seems like it is

:24:28.:24:34.

like a child with money in their pocket and it is burning a hole in

:24:35.:24:37.

their pocket. They are looking at other people and saying, this is an

:24:38.:24:43.

area where there is growth, so let's go into there. They do have a huge

:24:44.:24:49.

stockpile, they recently bought that rival to Uber in China. But neither

:24:50.:24:55.

Apple Time Warner have confirmed anything. Are they behind the curve

:24:56.:25:00.

in terms of providing content? Ever since the passing of Steve Jobs, we

:25:01.:25:07.

have not had a whizbang product, have we? Do you want to talk about

:25:08.:25:12.

this one? This is the Huffington Post. Is the writing on the wall for

:25:13.:25:21.

e-mail, even in a work situation? We get so much spam that people are

:25:22.:25:26.

using social media apps to communicate even in the workplace.

:25:27.:25:30.

Would you allow that? Most companies find it difficult, they want to

:25:31.:25:43.

control it. Things like WhatsApp, it is outside of the company. There are

:25:44.:25:47.

things where you can do messaging, but it is all controlled, encrypted

:25:48.:25:51.

and controlled centrally. So it will not be the companies like iMessage

:25:52.:25:59.

that will do well out of this if it is a trend. But it is a trend, I use

:26:00.:26:04.

WhatsApp all the time. Thank you for joining

:26:05.:26:06.

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