27/06/2013 World Business Report

Those are the latest headlines. The After marathon overnight talks, EU

finance chiefs agree on rules for future bank bailout. They insure

that it is investors and non- taxpayers who bear the brunt.

Give us more immigrants! US farmers pin their hopes on reforms on the

way through the Senate to give more Welcome up to World Business Report.

Also in the programme: Loyal to Gillard it - Wayne Swan quits as

Australia's finance minister and deputy Prime Minister. We assess

the outlook for the Australian economy.

First - when a bank goes bust who should pay? That is the big

question facing EU finance ministers and after marathon

overnight negotiations, a deal was struck in the early hours or that

the morning. EU leaders say that they have agreed on rules for

future bank bail-outs in order to avoid the massive cost to taxpayers

that was seen following the 2008 crisis. According to news agencies,

the deal is expected be signed off at the summit beginning in a few

hours. It will form one of the pillars of the planned Europe-wide

banking union. What do we know so far? According to a draft proposal,

if a bank runs into trouble in future, shareholders and credit

tours would be the first to shoulder any losses. If that is not

enough to prop up the lender, small companies and savers with deposits

of more than 100,000 euros would also take a hit. Only then would

many be released from the Europe's $500 billion bailout fund, the

European Stability Mechanism. These rules would apply equally to all

countries despite requests from Under the planned banking union,

the European Central Bank would act as a supervisor and safety net for

all EU banks. The problem is on who pays when one fails? France is

adamant that governments decide on a case-by-case basis. In Germany,

as the biggest contribution to the bailout fund, has been concerned

that if the rules are watered down, it will end up footing the bill for

other countries. It is determined that private investors must

shoulder some of the burden. TRANSLATION: It was long, it was

difficult and intensive. This was to be expected. It is clear that in

principle, when base get into difficulties in the future, the

taxpayer should not be first in line to pay. -- when banks.

banking union is seen as a vital seen to rebuilding confidence in

the eurozone and encouraging banks to start lending again. It has

already been one year in the making. Financial markets now need to see

evidence that that EU leaders can make this latest step towards

I am joined by Michael Hewson is Senior Market Analyst at CMC

Markets. Nice to see you. The Dutch Finance Minister is saying that

this marks a big change in the way that banks will be bailed out in

the future. What do you make of the deal? I think that if it holds, it

is a good deal. One thing we have lacked in this crisis is clarity

with respect to how each country's individual banks are bailed out.

This must be ratified by each individual government. In their

parliament. That does cut across sovereign boundaries. I think also

there is a concern or there was a concern that the Cyprus model could

actually caused bank runs in vulnerable countries. There is a

problem there which may need to be addressed, going forward. One of

the key issues is that the taxpayer is last to shoulder losses when a

bank needs to be bailed out in the future. That was always a political

hot potato, wasn't it? They had to do something to arrange a system

that made the taxpayer did not bear the brunt. Even more so in the

light of the tapes which came out earlier this week. It is a

heartland issue. There was little appetite, especially with Germany,

for further taxpayer bail-outs for errant banks. Thank you for your

analysis. Michael will return because he will talk through the

newspaper stories of which there are a lot of money muses. Moving on

to other stories. There is a debate in the US over a

reform bill in the US Senate. It will be millions of illegal

immigrants the right to earn citizenship. Despite high

unemployment in the US, the agricultural sector continues to

grapple with a shortage of labour. Many farmers pin their hopes on an

Immigration Reform Bill working its way through the Senate to help

solve the problem. We report from North Carolina are, the number one

state in America to issue temporary visas to foreign farm workers --

North Carolina. From Mexico to North Carolina. Two

chartered buses filled with Mexicans ball into the parking lot

of the North Carolina are growers Association. All of them are here

legally. -- North Carolina Growers Association. There are about 80

people from Mexico here, all waiting to receive their permits.

Next week, four times as many are expected. The North Carolina issues

visas which allows foreign migrant workers to farm American soil. For

17 years, this man has been coming to North Carolina. He can earn more

money here for his family. He told me that you can have a better life,

that a car, a better television. You can live better. Back inside,

workers wait anxiously for their names to be called. This is where

we process the workers when they arrive. We complete the online form.

It is courtesy of some been known as an age to a programme. Most

farmers do not have time for all the paperwork. -- H2A. It is a

minefield. There are many regulations. The penalties are very

severe forepaw paperwork. You would like to see that changed with the

legislation? We would. We would like to see a workable guest worker

programme. The journey ends here for this guest worker. At the farm.

Over the coming months, this will be home. You need to get all of

these plants into the field? Right. It will be you and how many guys?

Me and around eight guys. Without the help of legal migrant workers,

he would not be able to plant of the week -- plant the wheat,

tobacco and soybeans that he has planted for a generation. There is

a lot of expense. To get these workers but like I said, if we

didn't have them, I would not be able to survive. Lawmakers are

considering increasing the number of illegal migrant workers as part

of the larger Immigration Reform Bill. Something like farmers --

something that farmers like this As you have been hearing, a bitter

political battle has led to a change in leadership in Australia.

What will this mean for the economy? We speak to our Asia

business hub. Nice to see you. Musical chairs in Australia?

indeed. Right now you have Mr Kevin Rudd facing key challenges to jump-

start a weakening economy which expanded by just 2.5% in the first

quarter of this year compared to last year's levels. Business groups

and investors and economists are on the case, asking the new Prime

Minister to bring forward the schedule SEP- 14 election to boost

business and consumer sentiment. A former diplomat, he pledged to to

work closely with business and improve the economy which saw the

central bank cut interest rates to a record low. The key challenges it

faces include a slowdown in China which is the closest a buyer and

also minerals price changing and also an economy which is becoming

less dependent on the mineral sector. For now, investors are

relieved that the issue circus is over. The Australian dollar is

steady. These gains could be short- lived if Mr Kevin Rudd delays his

policies and the contented election date. Interesting. Thank you. A

looking at the markets, we will see looking at the markets, we will see

how these stories are interpreted by investors around the world. Asia

has opened a trading. Look at that! A strong day in Japan. Hong Kong is

also strong. We have not got the Australian markets that they are

riding high. 1.5% higher. The reasons why are interesting. The

Federal Reserve could perhaps hold back on tapering stimulus measures

for the US public because the news about growth in the US was a slower