13/06/2013 World Business Report

BBC World News. Now, the latest financial news with World Business

Report. Pressure mounts on Google over its tax affairs after a

scathing report by the UK Parliament. The search giant says

it's doing nothing illegal. Nerves return to the Nikkei - Japan's

stock market plunges as much as 6% after a sell-off on Wall Street.

All eyes on the US Federal Reserve meeting next week. Welcome to World

Business Report. Also in the programme: we go live to Athens and

speak to an economist about the fresh turmoil there. Google is

under fire again this morning after a report by members of the UK

parliament has delivered a scathing attack on its tax affairs. The

influential Public Accounts Committee says Britain's tax

authorities should "fully investigate" the internet giant. It

says Google runs a "highly contrived" scheme to avoid paying

tax on its multi-billion dollar UK profits by running its UK business

from Ireland. The practice of making payments from advertising

through Northern Ireland has no other purpose but to avoid

corporation tax, so the committee argues. They believe the company

needs to pay tax where it earns its products. No they have a very

complex web of companies across many countries where the sole

purpose appears to be to avoid paying their fair share of tax on

the products they make from the business they do in the UK.

committee says that Google has sales of �11.5 billion between 2000

seats and 2011. It claims the property, would have been enormous

and has no real figure but it says that they paid just �10 million in

corporation tax during that period. A lot like to start by reminding

you that it's a very serious offence to mislead the

parliamentary committee. Last month the MPs said whistle-blowers told

them that Google staff were selling in the UK rather than from Ireland.

team and execute the transaction and no money changes hands. Google

said it complies with all of the tax rules and it's the politicians

to make the rules. The MPs have criticised customs are not doing

anything and they want the Government to take international

action. Shares in Japan have sunk by almost 6% today and the Japanese

yen has jumped to a two-month high against the dollar. To explain why,

we go to our Asia business hub and speak to Rico Hizon. This is a

story of daily volatility in Japan but today it's quite cute? There

seems to be no end in sight. It's a very steep last particularly the

Japanese stock market but this is not the first time it has dropped

this much. The Nikkei plunged I % for a third time in the past three

weeks and Beth yen is very strong and that is the culprit and it has

been strengthened from a year low against the US dollar two weeks ago.

The yen is appreciating and it is eroding export earnings. It hurts

competitiveness by making Japanese products more expensive such as

Toyota are down 5% today and some brokerage firms have lost 4% and

consumer lending has slumped 8%. Investors are worried about the

strength of the yen and they stress there is no good use to boost the

markets here at the moment. Other Asian markets continued to slide

down to a six-month low fuelled by this worry about the Japanese yen

and also about monetary policy in the US and in Japan and all eyes

will be on the US Federal Reserve with more stimulus measures. Hong

Kong has also retracted and others such as Australia and Singapore

also lower today. It's a very volatile market in Japan today.

Greece's government is battling with the fallout from its decision

to shut down state TV and radio as part of its spending cuts. The

decision has triggered fierce opposition from within the

coalition government and the country's two largest labour unions

have called a 24-hour general strike for today. The latest crisis

adds to a terrible week for Greece, after the planned privatisation of

the state gas company failed to attract any bidders, and the MSCI

stock market index reclassified the country as an emerging market. We

will go live to Athens. Professor Yanis Varoufakis is Professor of

Economics at the University of Athens. You have always been, after

speaking to you many times, quite negative in terms of how things are

going in Greece. Particularly, this week is another incredibly

difficult week with that decision to close the broadcaster and its

kick off more action? We have the inane handling of the inevitable

crisis. That's due to the fact that for three years now, as the

International Monetary Fund has acknowledged, we have been in

denial. They are very basic predicaments. Greece has a public

sector which is bankrupt for over four years. The banking system is

bankrupt. This has created a deflationary cycle. During this

cycle, the Government tries to ward off and privatise assets. This is

not a great wonder about this whole mess creating ripples felt

throughout the Greek economy constantly. This move to close the

public broadcaster has led to a political crisis, would you say? I

understand within the Coalition, key members are saying they're not

with the Government in its decision. It was an intentional crisis,

unintentional, and the Prime Minister knew it. Imagine in

Cameron announced the closure of the BBC, all radio and TV,

everything. Effective immediately. That would cause a crisis would it

not and it would be a very foolish Prime Minister that would cause

this crisis. This was partly to take off the agenda but major

failures I have mentioned and the privatisation of the gas company.

Also, it's about the Coalition partners to put them in a tight

position to force them to overthrow him or deny him any vote of

confidence in parliament and to make him look strong as a leader

just before an early election or they may bend towards his will and

make them except his lead in this government. Clearly, was not much

faith in how things are going but what do you think will happen next

as far as Greece is concerned? Economic, I am afraid, there is no

room for any doubt as to the culmination of this deflationary

cycle. It's very simple. Last year, investment in this country, a

country that has seen GDP collapse by over 30%, investment fell 20%

and it was the Government forecast it will fall another 13% and its

noun negative investment territory. Any economy in this cycle with

negative growth or investment can't hope for anything other than the

same old story. We will leave it there but thank you for getting up

to join us from Athens. There was a shareholder vote in the biggest

advertising advertising agency yesterday backing a $27 million pay

package for the chief executive Martin Sorrell which drew fire from

critics. 81% of the shareholders voted for the packages but 19% were

against it. The Royal Bank of Scotland is expected to announce

2000 job losses in the wake of the planned to stand down after five