11/04/2012 World Business Report

Obama in November. They offer the latest financial news. -- now for.

Welcome to World Business Report. Balancing the books. France braces

itself of spending cuts days before the presidential election. Italy

forced it to raise debt just as borrowing costs to return to

historic highs. Cameron's

Cameron's trip to Asia and his It is a question of credibility.

For 30 years, France has spent more than it has raised in taxes. It was

punished this year with the loss of its AAA credit rating. Now managing

their finances of the eurozone's second biggest economy has become

an election issue. The government will reveal tax and spending plans

on Wednesday, just before France goes to the polls to elect a new

president. France's economic wheels are

turning. It is the only European nation to just avoid the negative

growth since 2009. It is also nursing some of the largest public

debt. President Sarkozy promised changes, such as the end to a 35-

hour working week. The markets want a clear many of further working

measures. Both main contenders know that the traditional way of life is

threatened by a public debt of 65% GDP and rising. Its own plans

envisage getting the budget in balance by 2017. The markets know

that does depend on growth of 2.5% a year or more and they think that

does not achievable. France will watchers say the market will take

some convincing that the incumbent ministers can balance the budget a

year ahead of the Courage redden their arrivals. -- a year ahead of

their arrivals. It is difficult to say whether the plan will be OK. It

will not stick to the same measures. So far, plans to reduce the budget

deficit just one year later. Market attention has been on France as

recently as last year. Government borrowing costs are rising up to

four Prasad and that is something the French government will need to

avoid happening again. -- 4%. badly needs faster growth. With new

registrations of French cars down 1/3 in March, the road to recovery

is a slow one. Prudent finances now enshrined in

the eurozone's fiscal package. They have given the cost of borrowing

back up to historic highs in Italy. Yields on Spanish bonds hit 6% at

an auction on Tuesday. Italy faces a yield of five when 7% as it tries

to raise 11 billion euros. -- 5.7%. Why are we here? It is from a

combination of things. We just revised down our growth forecast

for Spain. Revised up Germany a little bit. Those divergences in

the European economy are becoming more stark and that is really not

what we want. We had payrolls last Friday in the US and employment

figures. It was not as good as expected. Yesterday we had trade

figures out of China. This fear that growth in the world is perhaps

a little soft and these countries need growth. The concentration of

the markets have been mostly on Spain. Italy has problems as well.

Let us concentrate on Spain. Spain has to go for a bail out. It is

going to happen. What do you think will happen to Spain? It is really

difficult to tell. They are in an incredibly difficult position. 300

% of GDP is what the private debt is. It is much bigger than the

public debt and the public debt is going up. You have got problems

there. One light, one little ray of light is they have dumped 45% of

their funding for 2012 already. That will help them. Adding

generally with Spain, it is difficult to see a way out.

Austerity is making it worse. If they have to go to the Europeans,

the IMF, are they going to get it? Have they got enough money? Long-

term funding - would that help? It would probably help a bit. As we

see coming it helped for a while but it was temporary. Is there and

of money in the bail out fund? Nobody is quite sure. -- enough

money. Spain is a big country. There has a lot of this coming up.

We have the French election coming up. Another problem. And then in

May, and the Irish are going to vote on a fiscal compact. Fear is

back in the markets. I will look at her headlines on the newspapers.

Holidaymakers face more disruption in Greece. Ferry services will be

halted for a second day of strikes. Tourists and passengers have been

left stranded in the lead-up to Orthodox Easter. They have not been

paid for months. They oppose government cuts to pension and

healthcare benefits. Money is not the issue at Apple forced of the

electronic giant confirmed its position as the world's richest

electronic company on Monday. It outlined plans to spend some of its

huge cash pile of two payments to shareholders. The world's biggest

stock market is poised to create its own security exchange. Measures

to open up the company's economy to foreign investments were discussed

meetings earlier this month. They were set up a new exchange.

Correction and they will. At the moment, the UK sells most of its

good within the European Union. Demand for British products and

services is weak. Exports and growth could boost national wealth

and generate much-needed jobs. It needs new export markets. David

Cameron is going to arrive in Indonesia on talks for trade ties

following meetings with Japan earlier this week. What do you

think Mr Cameron will get added this? I think primarily, he is

looking to come and sell British business to Indonesia. The UK has

historically been a big investor in the country but in the last few

years, it has struggled to compete with the likes of the United States

and China. It is looking to increase its presence back in South

East Asia's largest economy. Some members of the delegation include

representatives from sectors in the UK like financial-services, energy

and construction and retail. He is likely to come and press and

certainly have raised the attention of Indonesian businesses to the

expertise that the UK can provide. Interestingly, he is also going to

be bringing members from the defence sector, the defence

industry in the UK and comments coming out from the British Prime

Minister in an interview with that the Indonesian newspaper - he was

quoted as saying that Britain has a some of the best defence equipment

in the world and it is right that countries like Indonesia,

responsible democracies like Indonesia, should be able to also

avail of these goods. These comments are likely to be seen as

quite controversial certainly by human rights groups who allege that

the Indonesian military and police forces often still commit human

rights violations that go unchecked. It has escaped us much of the

problem of the Western economies. I think that is very much down to the

fact that growth in this country is largely domestic driven. You have

to remember it has a huge population. Some 245 million people

and every day, millions more are being added to this country's

middle class. There is also a significant portion of the