Browse content similar to 30/12/2011. Check below for episodes and series from the same categories and more!
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after a snapper election. Time for World Business Report. | :00:20. | :00:28. | |
Europe's airlines emissions trading scheme comes into force this Sunday. | :00:28. | :00:36. | |
Data shows that China's factories are starting to slow. | :00:36. | :00:40. | |
Austerity on the agenda for Spain. The government tries to bring its | :00:41. | :00:50. | |
:00:51. | :00:52. | ||
finances under control and revive its economy. | :00:52. | :00:58. | |
This Sunday, the EU brings into force its controversial carbon tax | :00:58. | :01:04. | |
for airlines. Every airline that flies over EU airspace will have to | :01:04. | :01:09. | |
purchase carbon credits to compensate for its emissions. The | :01:09. | :01:14. | |
US and China are angry that the EU is daring to tax their airlines and | :01:14. | :01:20. | |
both are threatening reprisals. Is this the beginning of a trade war | :01:20. | :01:28. | |
in the skies? Over 20 years, the EU has been | :01:28. | :01:33. | |
looking for a solution. It is making airline's purchase credits | :01:33. | :01:37. | |
when they fly in European airspace to compensate for the carbon- | :01:37. | :01:44. | |
dioxide they in it. By 2020, they hoped to reduce carbon emissions by | :01:44. | :01:52. | |
500,000 tonnes per day. What is not universally accepted is the | :01:52. | :01:57. | |
application of the mandate. The US says that the EU is going beyond | :01:57. | :02:07. | |
:02:07. | :02:08. | ||
its powers. The judges of the European Court of | :02:08. | :02:17. | |
Justice rejected the case of American Airlines. The industry is | :02:17. | :02:23. | |
worried about the beginning of a damaging trade war. They are damned | :02:23. | :02:29. | |
if they do and damned if they don't. This is an impossible situation. | :02:29. | :02:33. | |
There is a distinct possibility that the US will take action | :02:33. | :02:38. | |
against the EU Airlines because of the action being taken against | :02:38. | :02:44. | |
their airlines by the EU. China is also weighing in against | :02:44. | :02:47. | |
the EU with trade delegates complaining that the scheme would | :02:47. | :02:52. | |
cost of their operators $100 million per year. They say that | :02:52. | :02:58. | |
there airlines could be put at a disadvantage in comparison to the | :02:58. | :03:02. | |
well established airlines of Europe on the intercontinental routes if | :03:02. | :03:07. | |
they have to pay the EU surcharge. The majority of the world's | :03:07. | :03:12. | |
airlines have condemned the EU scheme. The EU says that its scheme | :03:12. | :03:21. | |
will go ahead as planned despite for exemptions. But it says it will | :03:21. | :03:24. | |
expand the airline of any nation that comes up with a comparable | :03:24. | :03:31. | |
carbon tax of its own. Europe is facing a bleak economic | :03:31. | :03:38. | |
outlook for 2012. A recession is being widely predicted in the | :03:38. | :03:45. | |
region next year. 10% of respondents suggest that the single | :03:45. | :03:53. | |
currency will not be around in the eurozone for much longer. One of | :03:53. | :04:00. | |
the participants in this survey joins us now. Welcome to the | :04:00. | :04:07. | |
programme. Not a good picture in the eurozone next year? That is | :04:07. | :04:11. | |
correct. It is important to remember that America and Asia are | :04:11. | :04:17. | |
still growing and so the European story is not the entire picture but, | :04:17. | :04:24. | |
yes, the anticipation is that the first half of 2012 could see at the | :04:24. | :04:29. | |
least a mile the downturn in Europe. Can we therefore assume that | :04:29. | :04:33. | |
interest rates will stay low? Official interest rates are likely | :04:33. | :04:38. | |
to stay at their current emergency levels but it is worth mentioning | :04:38. | :04:46. | |
that market interest rates are already beginning to increase. If | :04:46. | :04:50. | |
banks must compete for limited funding, they will charge higher | :04:50. | :04:56. | |
rates to savers. What about the single currency? | :04:56. | :05:00. | |
There is talk about a break up but there is no mechanism to allow that | :05:00. | :05:08. | |
to happen. And that would have catastrophic consequences in any | :05:08. | :05:09. | |
case. The likelihood of a disintegration | :05:09. | :05:19. | |
:05:19. | :05:22. | ||
of the euro, that is still a very unlikely outcome. One must separate | :05:22. | :05:27. | |
the default of a government, the most likely one being Greece, from | :05:27. | :05:32. | |
the actual disintegration of the eurozone. There is an entire | :05:32. | :05:36. | |
network of contacts that connect these countries and for any one of | :05:36. | :05:43. | |
them to break those contracts would be a devastating outcome, for | :05:43. | :05:49. | |
example, for French and German banks. There is a powerful system | :05:49. | :05:53. | |
holding all of this together. They are is more evidence that | :05:53. | :06:00. | |
Europe's crisis is beginning to affect China. There are great | :06:00. | :06:05. | |
concerns about the eurozone crisis in that part of the world. | :06:05. | :06:13. | |
That is correct. China's factories are beginning to slow down possibly | :06:13. | :06:20. | |
because of what is happening in the eurozone. This is a preliminary | :06:20. | :06:26. | |
reading of the purchasing managers' index, which is compiled by HSBC, | :06:26. | :06:29. | |
and is released before the official government purchasing managers' | :06:29. | :06:39. | |
:06:39. | :06:39. | ||
index data. The report also showed that export orders are falling for | :06:39. | :06:44. | |
the first time in the three months to December mainly due to the | :06:44. | :06:49. | |
sluggish global demand for China's products particularly from Europe. | :06:49. | :06:54. | |
That is likely to lead to more monetary easing policy is by | :06:54. | :07:04. | |
:07:04. | :07:05. | ||
Chinese authorities. Last month's initiative to | :07:05. | :07:15. | |
:07:15. | :07:16. | ||
encourage more lending was the first since 2008. The reserve ratio | :07:16. | :07:22. | |
is still 21% for many of the largest banks in China. Despite the | :07:22. | :07:28. | |
dismal figures, HSBC is still forecasting strong industrial | :07:28. | :07:32. | |
growth for China between 12% and 13%. | :07:32. | :07:37. | |
2012 is set to be a year of austerity for Spain as its | :07:37. | :07:43. | |
government struggles to bring down one of Europe's largest budget | :07:43. | :07:47. | |
deficits. The Prime Minister of Spain says that his Cabinet will | :07:47. | :07:54. | |
pass legislation today in order to implement conservative fiscal | :07:54. | :08:01. | |
measures. Getting ordinary people to accept these measures will be | :08:01. | :08:06. | |
difficult. Mariano Rajoy wants to slash the | :08:06. | :08:10. | |
deficit by 16 billion euros in 2012 but he has been tight-lipped about | :08:10. | :08:16. | |
how he intends to do that. He will announce economic measures today to | :08:16. | :08:22. | |
fill in some of those blanks. One prospect is of a frieze of the | :08:22. | :08:32. | |
minimum wage. The country's main unions oppose it. TRANSLATION: This | :08:32. | :08:36. | |
will not contribute to economic recovery and will aggravate the | :08:36. | :08:43. | |
fall in consumption and investment. In cutting the deficit from over 6% | :08:43. | :08:49. | |
to a target of 4.2% next year, Mariano Rajoy must tread carefully. | :08:49. | :08:55. | |
He has promised not to touch pensions, for example. If areas | :08:55. | :09:01. | |
like education and healthcare are affected, he is likely to face | :09:01. | :09:05. | |
resistance. His Conservative Party has a majority in Congress but the | :09:05. | :09:09. | |
economic challenges are daunting. Spain has the highest unemployment | :09:09. | :09:16. | |
rate in Europe and the economy is still shrinking. The new government | :09:16. | :09:21. | |
says that creating jobs is a priority and that a labour market | :09:21. | :09:26. | |
reform is in the pipeline. His economic plans will become clearer | :09:26. | :09:31. |