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the home of Paula Broadwell. Those are the latest headlines. Now | :00:03. | :00:13. | |
:00:13. | :00:17. | ||
it is time for World Business Report. | :00:18. | :00:22. | |
The headlines: Greece is being made to wait by its creditors. Vital | :00:22. | :00:28. | |
bail out funds will be delayed by another week. As Italy's biggest | :00:28. | :00:34. | |
bank, UniCredit, recovered from last year's shocking losses? | :00:34. | :00:39. | |
Japanese consumers are tightening their purse-strings among gloomy | :00:39. | :00:49. | |
:00:49. | :00:51. | ||
economic conditions. The weight for vital new funds | :00:51. | :00:55. | |
continues for the great government. It had hoped that part -- passing a | :00:55. | :01:00. | |
new budget would persuade its international lenders to hand over | :01:00. | :01:07. | |
30 billion euros. Late on Monday, eurozone finance ministers say they | :01:07. | :01:12. | |
will meet again on November 20th and take a final decision then. | :01:12. | :01:17. | |
Greece urgently needs the money to pay its bills. User Rome ministers | :01:17. | :01:22. | |
want Greece to implement promised reforms. -- eurozone. On the plus | :01:22. | :01:32. | |
:01:32. | :01:34. | ||
side, they will be given an extra two years to meet the budget goals. | :01:34. | :01:40. | |
Give us more detail on what was established yesterday. I think the | :01:40. | :01:43. | |
two-year extension was something that was widely expected and it is | :01:43. | :01:47. | |
good news. It means the pain will be eased over the short-term. It | :01:47. | :01:51. | |
means it would take a bit more effort to get to where you are at | :01:51. | :01:58. | |
the end of the day, because there will be more money needed ahead at | :01:58. | :02:03. | |
some point in order to achieve the targets at a later date. And we | :02:03. | :02:10. | |
need to keep Greece financed for slightly longer. That means | :02:10. | :02:18. | |
slightly more expensive overall. It will have to raise some money. More | :02:18. | :02:22. | |
importantly, it will have to look at the whole debt restructuring, | :02:22. | :02:27. | |
which is an issue. But there have been some positive developments. | :02:27. | :02:33. | |
There is a very immediate issue, in what the government is going to be | :02:33. | :02:36. | |
doing with some of the debt repayments that will be due this | :02:36. | :02:45. | |
week. They will now be able to breed -- rollover some of the | :02:45. | :02:53. | |
Treasury bills. So they established how to meet the payment. The next | :02:53. | :03:00. | |
summit is the 20th. What will be established then? Will they get to | :03:00. | :03:07. | |
the point where they can say we can release the next tranche of money? | :03:07. | :03:11. | |
There should be some agreement on that. It will not be released | :03:11. | :03:15. | |
immediately. If they do not have to look at the bail out package and | :03:15. | :03:19. | |
add extra money, if Greece is allowed to raise the money in a | :03:19. | :03:28. | |
different way, it may not have to go through all the things that | :03:28. | :03:33. | |
would delay the process. Nevertheless, it looks like the | :03:33. | :03:37. | |
payment itself is not going to come immediately. That is crucial for | :03:37. | :03:44. | |
Greece. There was a 31 billion euros, which should have been paid | :03:44. | :03:53. | |
in February. The banks cannot land and the contractor is in Greece | :03:53. | :03:57. | |
have not been paid, the government owes them a lot of money. -- the | :03:57. | :04:02. | |
contract does. The head of the IMF was speaking and she has raised | :04:02. | :04:06. | |
concerns about how they fit a rout of the restructuring of debt for | :04:06. | :04:16. | |
Greece in the long-term. -- how they figured out. The real question, | :04:16. | :04:20. | |
if it is not growing, it is going to see a fall in GDP. The debt | :04:20. | :04:25. | |
repayments are going to be very significant. The deficit is still a | :04:25. | :04:31. | |
big problem. What the IMF is saying, the debts which are going to be | :04:31. | :04:35. | |
rising, is unsustainable. There is nothing there to underpin an | :04:35. | :04:40. | |
improvement. It has been delayed in terms of a decision and that will | :04:40. | :04:50. | |
be a problem. Let's take you to Italy, because | :04:50. | :04:54. | |
the biggest bank there, UniCredit, is releasing its latest set of | :04:54. | :04:59. | |
results. The markets will be very interested. Has this bank managed | :04:59. | :05:05. | |
to recover from its crisis this time last year, when it reported a | :05:05. | :05:08. | |
staggering $10.5 billion loss. It provoked a panic over whether it | :05:08. | :05:12. | |
and other Italian banks will ask for a bail out, as Spanish banks | :05:12. | :05:18. | |
have already done so. When the bid is baked in Italy, the | :05:18. | :05:23. | |
reserve's third largest economy, reported a billion dollar last, it | :05:23. | :05:33. | |
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cent fear down the spines of the financial markets. One neuron, | :05:34. | :05:39. | |
UniCredit has pegged its costs and its losses. It managed to raise | :05:39. | :05:44. | |
$9.5 billion of new capital. It may have escaped a one storm, only to | :05:44. | :05:51. | |
be sailing into a fresh one, caused by the lack of Braughing. -- | :05:51. | :05:57. | |
borrowing. Revenues are coming down. They need to convince people that | :05:57. | :06:07. | |
it has changed. It would eat up all of their profits and throw them | :06:07. | :06:13. | |
back into a loss. A key problem for the entire banking sector is the | :06:13. | :06:23. | |
:06:23. | :06:24. | ||
sharp raised in bad loans. They rose 6%. -- the sharp rise. The | :06:24. | :06:29. | |
worry is that rising losses caused by back but it may overwhelm | :06:29. | :06:36. | |
Italy's smaller banks, causing them to seek a bail out. -- caused by | :06:36. | :06:46. | |
bad loans. They are left looking at the Italian state, saying, help us. | :06:46. | :06:50. | |
The European Central Bank may be alarmed at the prospect of a cash | :06:50. | :06:54. | |
crisis, but it is having to fight so many other financial fires in | :06:54. | :07:01. | |
Greece, Portugal, Ireland and Spain, that the smouldering problems of | :07:01. | :07:06. | |
Italy's banking have been let into the home government. | :07:06. | :07:16. | |
:07:16. | :07:26. | ||
suffering from weakness. It is not surprising to hear that Japanese | :07:26. | :07:34. | |
people are feeling quite worried about their finances. That is right. | :07:34. | :07:38. | |
Consumers are tightening their purse-strings. Households are | :07:38. | :07:43. | |
holding the most cash since 2005, amid the grim economic conditions | :07:43. | :07:48. | |
in the world's third-biggest economy. Data shows sliding | :07:48. | :07:52. | |
consumption which makes up nearly two-thirds of the economy, | :07:52. | :07:56. | |
contributing to the contraction in the past quarter. Private | :07:56. | :08:03. | |
consumption is down by 1.4%. It has now dropped for two consecutive | :08:03. | :08:06. | |
quarters, the first back-to-back decline since the global financial | :08:06. | :08:14. | |
crisis. People have no incentive to spend. They are not sure about | :08:14. | :08:18. | |
future job security. Many big firms are cutting jobs and training | :08:18. | :08:26. | |
salaries. Renaissance electronics is planning to cut thousands of | :08:26. | :08:31. | |
jobs. A maker of electronic components is shedding 1,000 | :08:31. | :08:35. | |
domestic positions. Sharp and Sony posted record losses and they are | :08:36. | :08:41. | |
cutting jobs and production lines. Large businesses have also cut | :08:41. | :08:49. | |
worker bonuses. One economist who I spoke to, the end of subsidies and | :08:49. | :08:53. | |
the looming sales tax increase, it is also making people more | :08:53. | :08:57. | |
pessimistic. They are putting their money in savings accounts with low | :08:57. | :09:07. | |
:09:07. | :09:08. | ||
rates. One of Microsoft's most powerful | :09:08. | :09:12. | |
executives, Steven Sinofsky, is leaving the company with immediate | :09:12. | :09:19. | |
effect. He was head of the Windows software unit, and worse head of | :09:19. | :09:26. | |
Windows 8. Microsoft did not say why he left. -- was the head. | :09:26. | :09:32. | |
Staying with Microsoft, its Halo 4 Videogram launched up sales of $220 | :09:32. | :09:38. | |
million. -- video game. It took Microsoft Game Studios more than | :09:38. | :09:43. | |
three years to develop the game. A markets are not happy about the | :09:43. | :09:49. |