28/06/2012 World Business Report

each other. Now for World Business Report. Europe's economic slump set

to deepen over the next six months, warn consultants Ernst and Young,

as the region's leaders prepare for Shares rise on economic data from

the US. BlackBerry maker Research in Motion to reveal another

disastrous quarter. Can it turn the business around before it runs out

As you've been hearing - European leaders are in Brussels once again

today to try and put a lid on the region's debt crisis. It's the 19th

summit since the crisis blew up more than two years ago - and

expectations on financial markets are low. With Spain and Italy

making increasingly desperate pleas for action to reduce their soaring

borrowing costs as investor confidence in them wanes - all eyes

are on German chancellor Angela Merkel. She has made it clear once

again that Germany is not prepared to guarantee the debts of other

countries without deep reforms to the way Europe is run. Adding to

the debate this morning - an influential forecast by consultants

Ernst and Young warns the Euro area's economy is likely to get

worse for the rest of the year - contracting by some 0.6%. Next year

only an anaemic return to growth can be expected. They also warn

this is the best case scenario, assuming Spain and Italy don't run

into serious financial trouble. And we have the senior economic adviser

from Burneston young. It does not sound optimistic at all. Tell us

about your prognosis? It's a fairly bleak outlook. We think in the

third quarter we may see a contraction in activity. We have

fiscal austerity biting strongly and we have high doubts about the

eurozone. It's difficult for households to invest will spend it

for higher. Economic activity is likely to go down. Why were we see

anaemic growth next year. Many believe that next year baby another

recession if not worse? We assume it and hope that action will be

taken. Action by the governments that the sum it like today and

tomorrow and subsequently following on that to bring stability and

visibility. We don't expect all of the details to be agreed upon today

and tomorrow that at least there is a road map and some direction for

the eurozone. Then we hope that they will stabilise the economy by

next week. Made in purchasing more government bonds. He believed they

hold all the cards to help the eurozone? E the ECB holds the cards

for the short-term. They can act very quickly. The Government needs

time to agree upon things. There are political hurdles. They have

the tools at their disposal to stem this crisis not for long-term. They

cannot solve the problems but it is they can stem at the short-term.

will keep you posted on that summit in Brussels. There are pre-summit

nerves Wayne on the Asian markets. But some good news is helping

investors. We don't out to Singapore. Tell us about the

trading sessions there? It's been going relatively well. Most Asian

stocks are high out extending the gains from yesterday. That's mainly

due to be at encouraging news from the USA with durable goods orders

higher and the business spending rising alongside home sales giving

investors here more confidence. The US remains that Asian largest

trading partner. Relatively good news within Asia. Japanese retail

sales beat the expectations by rising over 3%. Private consumption

is one of the main contributions to the Japanese economy. The south

Korean surplus has widened to a six-month high. In Malaysia we saw

a successful debut of a palm oil company, Felda, rising 20%. It

raised over $3 billion, second only to Facebook. That has offset the

worries you spoke about at the summit. And they may not yield any

results. Investors are still watching that with concerns at

these against may evaporate. We see Australia in negative territory

today. Possibly because of that, have an impact in Asia and we may

see a different picture of trading tomorrow. Research in Motion, the

maker of the BlackBerry, is going through the toughest period in its

history. Its share price has slumped to a nine-year low as the

company flounders against competition from rival smart phones

- a far cry - a far cry business executives and their

BlackBerries were inseparable. It has already warned investors to

expect another grim quarter when it reports earnings later today. Now

some fear a turnaround plan may come too late - as Michelle Fleury

It may be losing its command in the business section. It's the latest

corporate customer to defect. It has 3,000 BlackBerry toting

employees but is switching to the Apple iPhone. There are more things

moving towards applications to the iPhone. We had to make this

transition. The functionality the side, it saves us money. He is

there anything he will miss? raised keys are something I will

miss. It's not the only business customers switching over. In the

big US market, BlackBerry is losing its share. It is dwindling under

pressure from Google and Apple as well as fresh competition from

Nokia devices. It's not the only disappointment. The playbook failed

to catch on. Executives have left adding to the impression they were

fleeing the exit. The last year it suffered its worst surface passage

in history. A lot now rests on the new BlackBerry software due out

later this year. It may not be enough to turn them around.

BlackBerry will continue. They will have a tough time to turn around.

Unless they have a really innovative product will provide

services you cannot get anywhere else, people need to decide whether

they really need it and it will be hard to fight off the other Android

products and they will take over. After BlackBerry's share price hit

an all-time low, investors appear to be running out of patience. The

global financial industry is waiting to see who else might be

caught up in a massive investigation into market

manipulation. On Wednesday Barclays was handed fines of almost half a

billion dollars by UK and US regulators for trying to rig the

key inter-bank lending rate - or Libor - on which trillions of

dollars of transactions are based. Global investigations now span

nearly a dozen regulators and more than 20 banks. The board of News

Corporation has approved to split the media conglomerate in half

according to the Wall Street Journal which is owned by News

Corporation. An announcement is due later today. It will separate

businesses from the newspaper operations which face declining

sales and mounting costs due to the phone hacking scandal. Google has

launched its own branded tablet computer in a development we

previewed here yesterday. The Nexus 7, which runs Google's own Android

software, is being made by Taiwanese company Asus. It will be

sold from mid July at $199 - that's half the price of the cheapest

Apple iPad - and pitched directly The market is hotting up.