28/02/2012 World Business Report

have been killed. Those are the headlines. Now for

the latest financial news with Sally.

Welcome to World Business Report. The headlines: Barclays is said to

be accused of abusive practices costing the taxpayer half-a-

million pounds. Will Portugal get the next slice of

its much needed bail-out? The inspectors will give their verdict.

Stock price plunges by 5%. The UK bank Barclays has been

accused of designing and using two schemes to enable it to avoid

paying �0.5 billion in tax. The tax avoidance schemes have been

described as highly abusive. The Government yesterday announced

draft legislation to block them and sake but payments of billions of

pounds in future taxes. All Britain's big banks have signed the

code committing them not to engage in tax avoidance. Barclays has not

been officially named yet, but the BBC has approached the bank for

comments and there has been no response from them so far. I am

joined by an the season City watcher to give us his take on this

story. Embarrassing headlines for Barclays. We must say at this point

back that tax a point since -- avoidance is not illegal in the UK

but there is a code of conduct. All of the UK banks have signed up

to that. I sense, though, that this is perhaps a story of a bank,

suggested it to be Barclays, going to Robinho and saying, what is your

view on this scheme and this game? -- revenue. It may be that the

Treasury has jumped on it and said that the bank in question is

attempting a tax avoidance scheme, which of course it has committed

not to do. We need to get to the bottom of this. We need as -- we

need statements from all of the individuals concerned. It is

interesting. The language coming from the Treasury is quite strong.

Highly abusive schemes. It just underlines the sort of difficulty

between the banks and the UK Government. Absolutely. The problem

is, you might be throwing the baby out with the bathwater. All of the

banks are important to the UK economy. The Treasury is supporting

the Government in whatever the Government is trying to do. There

is a political element as well. The Government wants to see, wants to

show that it is doing everything possible to make sure that all tax

avoidance schemes are made illegal. It is perfectly correct to do that.

We have to be very careful in accusing fingers when it is

possible that the situation is that somebody is going to the Treasury

and saying, what is your view on this scheme? We shall watch this

space. No doubt Barclays will respond later. Thank you.

Let's move on to Portugal. It will find out today whether it has

passed the latest test of its main international backers. The country

that was given back bail-out less than one year ago has made deep

spending cuts and introduced reforms. The European Union,

European Central Bank, and International Monetary Fund will

release their results on the third review of Portugal's progress this

morning. It is likely to approve the next slice of the bail-out

worth 14 billion euros. Let's go live to Brussels. We will speak to

a Portuguese Economist and former MEP for the Portuguese Socialist

Party. I presume you are with that belief, that you'll get the extra

funding today? Good morning. I think so. All of the indications

are that the troika will agree to have this second part of the loan

being available to the Portuguese authorities. But I do think that

the main issues are still in front of us. I do not see that Portugal

and the whole of the European periphery will make it is there is

not economic development in the rest of Europe, it there is not a

motor. This is the main issue. The second issue is the interest rates.

They are far too high. We are not offered nothing like the 1% that

the ECB is using in its operation. Something more like five or 6%.

This does not seem compatible with a full recovery. These two issues

really remain on the table as the main problems. How can they be

tackled specifically? As you say, they are tricky ones to do and

there is a lot of goodwill for Portugal. There has been a lot of

change there, deals done with unions, cost cutting. Those in the

public sector have taken a big hit. This is necessary, but it is not

sufficient. David Cameron had a good idea when he decided to launch

his letter. This is absolutely crucial. We need countries like

Germany. We need the motors of the European economy. If they do so,

they will help enormously. Coupled with austerity in Portugal and in

other countries they will be able to get back on their feet again.

The issue of the interest rates is also very important. The German

Chancellor did not want to discuss this issue at the last summer. I

think that sooner or later she will have to. -- the last summit. We

cannot continue in this situation with the lack of economic growth.

We cannot have a country like Portugal paying such a high

interest rates. Sepoy. The closely watched housing index

in the US is expected to show a continued slide in the value of

homes in America. Despite recent gains in the number of home sales

and in employment at the market remains depressed and for the first

time American's wealthiest are losing their hives at a faster rate

than any other group. 100 miles east of Manhattan is the swanky

seaside resort of the Hamptons. nice for you, very large. A wealthy

enclave often tied to Wall Street bonuses, there has been a quiet

surge in distressed properties here. These real-estate agent says the

owners of this house have to sell to satisfy their bank lines. It has

been on the market for about five years. We started out and $6

million. Now we're at $3.2 million. The number of unsold homes in the

Hamptons has hit a 30-year high. Prices have plummeted and there are

more than 1,000 houses were more than $1 million in distress. This

huge house in the Hamptons is worth about half what it was just five

years ago. It is one of dozens of houses in the glamorous Hamptons

location that I'm now distressed pr prIt could take many

years to work through this area's housing problems.

Japan's last remaining maker of chips the PCTs has filed for

bankruptcy protection. The news sparked profit-taking on the

markets. -- for PCs. The share price today it dropped by

24% with more sellers now on the sidelines waiting to unload. Its

supplies are also affected. Amid the sell-off investors are seizing

opportunities with competitors market share from one mess

competitor. Media reports say it is seeking an alliance with other

companies. The downfall is due to heavy spending to keep faith with

market leaders. This could be the end of the company. But bits of

pieces of it could be purchased by other chip makers around the world.