03/07/2013 World Business Report


03/07/2013

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Those are the latest headlines from BBC World News. Now, the latest

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financial news with World Business Portugal's Prime Minister says he

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will not sway from his austerity drive despite the resignation of

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two ministers over the measures in as many days.

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German Chancellor Angela Merkel hosts a summit to tackle Europe's

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youth unemployment crisis, but will it deliver anything substantial? We

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look at a controversial new plan to Welcome to World Business Report.

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I'm Sally Bundock. Also in the programme: We await the verdict of

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the accounting scandal that To pinch a phrase from Oscar Wilde:

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To lose one minister is unfortunate. To lose two looks like carelessness.

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That's the situation Portugal's Prime Minister finds himself in

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this morning. Earlier, in a televised address, Prime Minister

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Pedro Passos Coelho vowed he'd fight on with austerity measures as

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resignations threaten his government. On Tuesday the

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country's Foreign Minister, Paulo Portas, attempted to resign. He is

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also the leader of the junior partner in the governing coalition.

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And on Monday, the country's Finance Minister, Vitor Gaspar,

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resigned. He'd been overseeing the government's efforts to reduce

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Portugal's debt by means of drastic public spending cuts and tax rises.

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Austerity policies in Portugal have so far failed to stem a deep

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recession and a rapid rise in unemployment, as Alison Roberts now

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reports from the capital Lisbon. Despite his two most senior

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officers entering the resignation, the par Minister of Portugal

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pledged to continue in offers. Tries but I will not resign. I'll

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not abandon my country. We live in a time when cannot do this in the

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face of adversity. How can I get scared when I see bravery in

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hundreds of thousands of people in Portugal? The Prime Minister has

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not accepted the resignation of the Foreign Minister, submitted a few

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hours earlier. As leader of the junior partner in the two party

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coalition, he repeatedly distanced himself from the unrelieved

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austerity advocated by the Finance Minister. Critics say it has pushed

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the country deeper into recession and debt. The resignation on Monday

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shook the government. He cited public weariness with two years of

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austerity, a series of missed deficit targets and a lack of

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political backing within the coalition, reasons for his stepping

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down. The Prime Minister's decision to replace him as a woman equally

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committed to austerity was seen as a signal there will be no major

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shift in economic policy. According to the Foreign Minister in his

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resignation statement on Tuesday, but appointment was made his

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explicit advice. He has not responded to the Prime Minister's

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refusal to accept his resignation or for the call that the party will

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continue. Outside, the mood had shifted against austerity of. Last

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week, unity among the unions with a general strike. Some opposition

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politicians are calling for people to come onto the streets to demand

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the government's resignation. German Chancellor Angela Merkel is

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hosting a summit on youth unemployment in Berlin later today.

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It comes at a time when unemployment across the 17 European

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Union countries that use the euro hit an all-time high in May. The

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most recent figures from Eurostat, the EU's statistics office, found

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the eurozone's unemployment rate was 12.2% in May, up from 12.1% in

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April. Across the eurozone, there were 19.34 million people

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unemployed - around 70,000 higher than the previous month. Nearly one

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in four people aged under 25 are estimated to be out of work. This

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latest coming together of leaders aims to agree on how best to spend

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the 6 billion-euro fund - around $8 billion - dedicated to reducing the

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high levels of youth unemployment. One idea on the table is a new

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scheme to attract the young and unemployed to Germany, where many

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companies are keen to recruit new talent. But is this good for

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Europe? Is it creating further problems for the future? Germany's

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Labour Minister, Ursula von der Leyen, told Steve Evans why the

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Young people are willing to move. They want perspective. The only

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barrier they have in the European labour market is a language barrier.

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We are paying for language classes if the want them. And also

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travelling costs. The cost to have eight weeks of internships, just

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have to match the expectation of the potential employee. -- employee

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era. I can hear voices in Greece and Spain saying, you are taking

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our ghost workers, you are taking our future. -- best workers. These

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young people do not have work. They are looking for a job. Unemployment

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is painful for families because these young people have no future

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right now. It is not the only one way thing. We have to invest in the

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country with the highest youth unemployment. There has to be

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billions to invest in companies that are healthy and need

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investment credit for a moderate interest rate. This is the growth

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initiative right now, giving relief in the short-term and investing in

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the future. We will update you with the news

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later. Let's look at Japan now, where the

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Tokyo District Court will hand down its verdict on a case involving the

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former chairman and two other ex- senior executives of camera and

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medical equipment maker Olympus. The court will rule over their role

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in the huge accounting scandal that rocked the firm in 2011. The case

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has just started in Tokyo, so we won't get the verdict immediately.

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The scandal made headlines around the world. Has anything actually

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changed in corporate Japan as a result? I'm joined by Dr. Seijiro

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Takeshita, Director of Mizuho International.

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We have talked about this many times. The government at the time

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said it would clean up corporate Japan. Has anything changed?

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really. There was the seeming economic revival we saw. But as you

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suggested, we need to see more internationalisation in many of the

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Japanese companies to have some segments of governors in many areas.

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What will kick-start a serious change? Does it take another

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scandal like the Olympics scenario? What was the verdict be today?

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relative strength of foreign investors is actually giving some

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pressure. There are some changes being made. That includes clarity

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in auditors. Increased diversity on the employment side. That is

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gradually happening. When something hot goes down the throat and

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stomach, forget about it. That is as saying in Japan. We need to put

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pressure to open up the doors on Oil is above $100 a barrel. Traders

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are worried about disruptions to supplies after embattled Egyptian

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President Mohammed Morsi vowed not to resign. For a bit of analysis on

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this, I'm joined by Justin Urquhart Stewart, Director of Seven

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Investment Management. Is it about the Suez Canal?

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Partially. That is one of the key arteries to world oil. We have to

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differentiate between different types of crude oil. We have liked

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oil. That is used in the US. It is not affected that much. Then you

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have the heavier, sour crude oil. We have seen price rises with that.

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There are restrictions. Exports have decreased by half. In the US,

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the energy department will release their weekly report on stockpiles.

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They will show the demands going up in the US. It is interesting. One

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of the reasons the price has been OK used because the demand in US

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has been, not flat, but a spiky. America, the economy is improving

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