01/12/2011 World Business Report


01/12/2011

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multinational business. 6 central banks take action and the market's

:00:03.:00:13.
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rally. This is World Business Report. The headlines: President

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Sarkozy presents his proposals to solve the eurozone crisis including

:00:24.:00:31.

controversial plans to give more power to Brussels. In Asia a global

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market rally continues after Central Bank intervention and a

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surprise move by China. Plus, hoping for the best but prepared

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for the worst. Eight top businessman gives us his art look

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on the crisis. The markets have been surging around the world after

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co-ordinated action by central banks led by the US Federal Reserve

:01:03.:01:09.

to East the credit crunch. The Dow had its best day in almost three

:01:10.:01:13.

years on the move to make it easier for European banks to borrow

:01:13.:01:18.

dollars. This may have helped the symptoms of the eurozone crisis but

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it does not touch the cause. President Sarkozy will outline his

:01:24.:01:28.

proposals for changes to the rules of the EU today, yd expected to

:01:28.:01:35.

give more power to Brussels. More in a moment. First of all, we will

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look at things in Asia. Strong gains for the share markets. Yes,

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most Asian forces are more than 2%. The immediate market fears appear

:01:55.:02:02.

to be easing overnight. The Central Bank intervention has eased fears

:02:02.:02:06.

of another credit crunch. There was a surprise move by the central

:02:06.:02:13.

banking China. After more than a year of tightening monetary policy,

:02:13.:02:19.

it looks like it is taking a U-turn in terms of cutting the amount of

:02:19.:02:24.

money it requires commercial lenders to hold. Essentially it is

:02:24.:02:30.

a green light to start lending again. The Hang Seng is the best

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performer in Asia. Some specific news out today. The Chinese with

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poor news about manufacturing, but that did not bring down the market.

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This was the official purchasing managers' index, a snapshot of the

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manufacturing sector in China. It was a reading of 49, the first

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shrinkage in three years. It is not good news, but economists say that

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it shows inflation in the manufacturing centre is easing.

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They think that means the Central Bank will continue to ease monetary

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policy further. Thank you Paul Stout the market rally continuing

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which started in Europe and the US. First of all, your reaction to this

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rally on the markets. Obviously a good situation. It is good that the

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central bankers are acting in a co- ordinated manner. They are working

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together to alleviate the problems of dollar funding. We know that

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banks are having problems borrowing dollars, so that is important.

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Having said that, there is only so much they can do. They announced

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another move a couple of months ago and that did not have much effect.

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I will give you one statistic. The European Central Bank publishes

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daily figures about how much money banks give to the CBI overnight.

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Normally banks lend to each other, not giving it to the ECB. But there

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is so much fear out there that banks are not lending to the ECB.

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Overnight at the European banking system lent 300 billion euros to

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the European Central Bank because they are so scared to lend it to

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each other. That indicates some of the problems in the credit market.

:04:52.:05:00.

Yes, it is good, but it is not easing the crunching credit markets.

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We are looking forward to December 9th, the next EU summit. I know we

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have said many times that this or that is really the crunch point.

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But, Nicolas Sarkozy today was laying the foundations in terms of

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addressing the French people and starting to put out the idea of

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Brussels having more control. France has a AAA credit rating at

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the moment. France and Germany are the two countries with the AAA

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rating. That is regarded as under threat. He has elections next here

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and his economy is slowing down. He is in a difficult position. The

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French probably understand their needs to be greater fiscal and

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political union. But they do not think it needs to apply to them.

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Ali the irresponsible, smaller countries need to give up their

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control to Brussels. I think that will be a difficult sale. When we

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talk about treaty change, it will take years. This giving up of

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sovereignty is happening already. We got some documentation about the

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bail out front early this week. That showed clearly that if you

:06:27.:06:31.

want the European authorities to help you will be giving up

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sovereignty. It was there in black- and-white. You will be told what to

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do with taxation and spending by Brussels, and if you do not make

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good on your promises the help from the bail-out fund will stop.

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National sovereignty is a already being given up by European

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countries were stuck thank you for coming in. We will watch the speech

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from President Sarkozy very closely later today. If we look at the

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fall-out from Europe's crisis, Benetton says it is hoping to

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expand it into markets like Russia. I think we are very worried about

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that. Very worried as the Italians, but we should also be as Europeans.

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The global world is going in a direction where if you do not have

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a critical mass. And as an Italian I am part of a larger group. 90% is

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made of larger firms. If we do not find a way of making critical mass

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in Italy and in Europe I think we are in trouble. You have had a

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change of leadership in Italy recently: Mario Monti, the

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technocratic leader. In his early there is a bad habit of confusing

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roles. -- in Italy. An entrepreneur needs to be an entrepreneur. What

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has happened is that we have been living about our and ability from a

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financial point of view for too long. Now the financial markets are

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asking us to pay the price for that. Mario Monti is a good choice, in

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the right direction. Hopefully he will take us to the stage of

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getting out of trouble. In reality, Italy needs a European project. So

:08:55.:09:01.

does Germany. What will put the eurozone debt crisis right? We do

:09:01.:09:10.

not know that. There is a big question mark. That worries me a

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lot. I do not think any single state can make it by itself.

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Meanwhile, as an entrepreneur Anita BeOS do you I needed to be

:09:24.:09:29.

optimistic, so I am looking for different markets. What about the

:09:29.:09:39.

eurozone breaking up? Like any other major company, we have a

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