02/10/2012 World Business Report

leaking documents of which appear to show better power struggles and

corruption. Now it is time for Hello and a very warm welcome. The

headlines: Spain's Prime Minister tries to convince the regions to

stick with him on the austerity bath. New plans will be set out

today and to top up on Europe's banks. -- Path. Doubts grow about

Good to have you with us. The Prime Minister of Spain is facing a

battle on all fronts from the markets, on the streets and now

from the regional leaders. He is trying to convince them to follow

his austerity regime. Catalonia's is threatening to hold a referendum

to break away from Spain. -- Catalonia. Let's get more on the

story. Catalonia's, with Barcelona as its capital, is an economic

powerhouse in Spain. The Government needs a $6.5 billion bail-out to

prevent imminent bankruptcy. Leaders are demanding that they,

not central government should have the power to raise taxes in their

region. Catalonia's wants the same regime as the Basque country. --

Catalonia. If we manage to do that, things will be better. The Prime

Minister wants to show Europe's Lulus and markets that he can

master the financial problems. -- leaders. His government unveiled a

budget but/he's spending by $50 billion. -- that slashes spending.

Things like health care and public services are under threat. The

austerity programme has not gained ground with the aid regional

leaders. If you cannot bring them in line, the Budget will overshoot

targets. This is what happened in 2011. It did so significantly, in

part because of overspending by the regions. He must meet his targets.

The problems with the regions have sat over the past few weeks.

Interest rates on government borrowing have reached danger

levels. It is likely Spain will need to request a bail-out from the

EU. The separatist want to swap Madrid's demand for cuts for cuts

imposed by Brussels. Fixing Europe's bangs is seen as the top

priority if the bid is to find a way out of the debt crisis. New

plans will be put forward today. They will no means be adopted. They

will involve separating retail banking from riskier investment

arms. It would have huge implications for companies like

Deutsche Bank. Sources say that what eurozone politicians really

want is to find a way of creating a banking union. This event -- and

many feel that this will take them in the wrong direction. That you

for being on the programme. Nicholas, what are you expecting to

be recommended today? I think the group which is chaired by the

Governor of the Central Bank of Finland has held its cards close to

its chest. I do not know what will be announced today or recommended

that conclusion is to report. As you mentioned, some form of

separation or distinction between investment in retail banking is

likely to feature as a recommendation. The big question is

what form will this separation take? Is it about legal separation?

Is it so analysts can understand the business model better? Or is it

something harsher about an entire separation between businesses? I do

not think it will go that far but we will see. The Governor of the

Bank of England has been asked to come up with recommendations. Will

they be receptive to the ideas? climate has changed since the

commissioner asked. This was first requested early in the year. The

crisis has got worse. This has led the leaders of the eurozone to

envisage the creation of a much tighter framework. People are

referring to the banking union. I think this project is important.

Perhaps some on eurozone member states will be involved. This is

going centre-stage. It is becoming a higher priority. There are more

structural, long-term financial reforms. And as you say, the

banking union is very much on the minds of those at the Union. What

is your feeling about that? There are some iffy it is a bad idea but

also some who think it is a good idea. -- some who think.

general idea has gathered a lot of momentum. I think almost all member

states now think it is a good idea to go in that direction. The

question is, how far should it go? How energy should be transition be?

Should all banks recover? -- how immediate? Some compromise must be

found. Thank you for your time and for joining us live this morning to

talk about changes to Europe's banks. American authorities

continue to clamp down on the banking industry for its behaviour

during the lead-up to the financial crisis. One bank is accused of

selling products to investors knowing that they were are

misleading them about value. The bank in question is JP Morgan. They

say they will contest the accusations. Anglo American has

ordered striking workers to attend disciplinary meetings today or face

the sack. The strike has been declared illegal.

Samsung has had its ban on selling the Galaxy Tabard in the US lifted.

The injunction, which was won by Apple, but has been reversed.

Samsung filed a motion saying the iPhone 5 had infringed some of its

patents. Executives from Kingfisher Airlines will meet to discuss

safety issue today. Doubts are growing about the future of the

company. Let's go to Rico Hizon in Singapore. This is an ongoing story

in India. It is seemingly not resolved. Tell us the latest.

Hopefully by today, we will have some resolution. The Government has

said that Kingfisher cannot fly its planes if safety rules are not

allowed. The beleaguered airline is in talks with Air India, India and

other companies to get the aircraft certified by their engineers.

Kingfisher has suspended all its flights for three days, effective

today. Engineers went on strike to protest last week. They have not

been paid a salary since March. Other employees are joining the

industrial action. Only seven aircraft are left in the fleet.

Kingfisher is dangerously close to the critical level which, under

Indian rules, an airline is to operate at least five planes in

order to maintain his licence. The career has been struggling with a

cash shortage and has made five straight annual losses. Analysts

have said this week that the disruption would definitely heard

efforts to win the investment needed to save the ailing from

collapse. Thank you. Let's show you the

markets. I want to mention the Australian market. It is not merely