24/11/2011 World Business Report


24/11/2011

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secure a more secure future. Those at the latest headlines from BBC

:00:03.:00:13.
:00:13.:00:15.

News. We now have the latest financial news. This is World

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Business Report. The headlines: Cash is king, investors seek the

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safest of havens after Germany failed to attract enough buyers for

:00:25.:00:32.

its bombs. News from Germany affecting Asia markets as well, the

:00:32.:00:42.
:00:42.:00:44.

Nikkei hitting a 2.5 year low. The cost of the crisis. A nation

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battles with austerity. Good to have you with us. A first-class

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ticket on the Titanic, that is how one reporter characterised

:00:58.:01:02.

Germany's Position after its least successful bond sale since the

:01:02.:01:08.

launch of the euro. It failed to persuade investors to buy two-

:01:08.:01:13.

thirds of the debt on offer yesterday. Investors no longer see

:01:13.:01:17.

Germany as immune from the eurozone debt crisis. That has made a fresh

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bout of nerves on battled financial markets. In Asia we see a mixed

:01:25.:01:35.

picture emerged. The Nikkei is down by 1.6%. Let me show you what

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happened on the Dow Jones. This is mainly because of what happened in

:01:38.:01:47.

Germany. The lacklustre sale of ten-year bonds. The Dow is down by

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2%. Serious losses. Let's go to Singapore for more details on yet

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another volatile day for investors. It has been an extremely volatile

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day in Asia. The Nikkei has fallen even further. The lowest level in

:02:10.:02:17.

2.5 years in April 2009. There are a few reasons for this. You mention

:02:17.:02:22.

of Germany's bond sale, that is affecting investor sentiment in

:02:22.:02:32.
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Japan. There is weak manufacturing data. That is affecting exporters

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shares in Japan. The Japanese yen is rising against the US dollar.

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That is more bad news for exporters as well. That is the reason why

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Nikkei has hit a 2.5 kilo. -- year low. We are looking at the numbers

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on the screen. Those are the share markets. Tell us about oil. In New

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York oil prices slipped 2% because of the Bonn sale news coming out of

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Germany. It is recovering slightly in Asia trade. It has been an

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extremely volatile day. Traders are seen that bad news from China, US

:03:31.:03:41.
:03:41.:03:46.

and Europe. -- seeing. Thank you. Chancellor Angela Merkel and

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Nicolas Sarkozy will be meeting Mario Monti, who is in his new role

:03:53.:04:03.
:04:03.:04:09.

as Italian Prime Minister. That sale yesterday for Germany, it was

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a bit of a surprise? It was a shock. We are used to bad news, but that

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was quite an unexpected confidence blow. It shows two things. Europe

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is no longer - the strongest economy is no longer immune to the

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contagion of the crisis. It also indicates that this is a crisis

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that is badly in need of a remedy. Do you think that will put the

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pressure on Angela Merkel to change her stance? She has been so staunch

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that the European Central Bank will not become the lender of last

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resort. The European financial stability fund may not be enlarged

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to the agree that some are calling for. Absolutely. It is running out

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of time. Europe's strongest economy, the most credible government cannot

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raise funds in the market. What help is there for everyone else?

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This has sent off alarm signals that European leaders have got to

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change. Let's talk about this meeting between Mario Monti and

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Angela Merkel and Nicolas Sarkozy. Italy is very critical, it has yet

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to receive a bail-out, it has a new government in place. It is critical.

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What I think they will be debating is how to reunified Europe. We have

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this financial disintegration. Europe needs a political solution

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and badly. The three largest economies need to agree to a common

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way forward. That is what has been lacking so far. Do you have

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confidence in them? Are you an optimist in this scenario? I think

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we are seeing the end of the monetary union as we have known it

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for the last decade. I hope we are seeking a new stronger monetary

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:06:47.:06:52.

union. -- seeing. It can be sustainable on the basis of fiscal

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integration. Thank you for your thoughts. Let's go to Portugal. A

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general strike is getting underway there. Much of the public transport

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as well as hospitals and schools are going to be closed or hard hit.

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Portugal must meet EU conditions for a 78 billion euros bail-out.

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Workers are protesting against the tough austerity measures which they

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say are imposed on them by technocrats in Brussels. Midnight

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on Wednesday, Portugal's general strike will hit public-sector

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workplaces. The action was announced in October, giving active

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has plenty of time to ensure its impact. Officials for the largest

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union federation are bullish about this and future protests. If the

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government decides to go on with its policies, yes, Forshaw, we will

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continue to fight against them. -- for sure. We want the agreement

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that was established between the government and the strikers. This

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is only the third general stoppage in four decades of democracy. Many

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Portuguese are not convinced. Everything will remain as if.

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Greece went on to two strikes per week, it has not helped them.

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Portuguese need to work rather than strike. Holiday and Christmas

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bonuses will be suspended to most state employees. Even if it manages

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to implement its budget, a long hard road lies ahead. Portugal

:08:56.:09:01.

needs to do a lot to regain competitiveness. A lot of that is

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in terms of labour costs. The government is cutting wages and the

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private sector will have to follow. People are finding it difficult to

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get credit and refinements their mortgages. It takes a huge social

:09:14.:09:23.

toll on people and put pressure on the government. Meanwhile, as state

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spending is cut, Portugal's welfare safety net becomes full of holes.

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