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River Jordan. Those are the latest headlines. Now | :00:00. | :00:00. | |
for the latest financial news. The French Finance Minister tells | :00:00. | :00:22. | |
the BBC that the countries on mend and at economic performance is | :00:23. | :00:25. | |
improving despite huge tax rises and high unemployment. `` the country is | :00:26. | :00:30. | |
on the mend. The economic performance in front is getting | :00:31. | :00:39. | |
better. That growth is positive. With a weak figure in twenty | :00:40. | :00:42. | |
thirteen, it will get better in twenty fourteen. | :00:43. | :00:46. | |
It is D`Day for Detroit as the city head to court to prove that it does | :00:47. | :00:55. | |
not have the money to pay its debts. Welcome to World Business Report. In | :00:56. | :01:01. | |
a moment, we will look at Australia where higher than expected inflation | :01:02. | :01:06. | |
has dashed hopes of a rate cut. First, it is the Eurozone's | :01:07. | :01:11. | |
second`biggest economy. For many, France is just not working. Trent | :01:12. | :01:15. | |
families and firms are reluctant to spend and invest. That is because | :01:16. | :01:19. | |
companies and households have been hit by sixty billion euros in | :01:20. | :01:25. | |
additional taxes in twenty eleven. Bosses are reluctant to hire. More | :01:26. | :01:30. | |
than one in ten French, nearly eleven percent of the workforce, are | :01:31. | :01:34. | |
unemployed. Public debt is expected to drop ninety seven five percent of | :01:35. | :01:41. | |
GDP next year. If France of the (MUSIC PLAYS) and of Europe? | :01:42. | :01:45. | |
Our economics correspondant put that question to the country's Finance | :01:46. | :01:52. | |
Minister, Pierre Moscovici. `` is a front of the sick man of Europe? At | :01:53. | :01:58. | |
the same time, we should be conscience that France is still an | :01:59. | :02:03. | |
important economy. Defeat in the world. It a large and competitive | :02:04. | :02:16. | |
economic. I never get dedicate myself to French bashing. The | :02:17. | :02:20. | |
economic performance of France is getting better. That growth is | :02:21. | :02:29. | |
positive. With a weak figure in twenty thirteen, it will get better | :02:30. | :02:32. | |
in twenty fourteen. Why so? Because we are addressing the real | :02:33. | :02:40. | |
problems. We are fighting for competitiveness. With tax credits | :02:41. | :02:42. | |
for competitiveness and employment, where is the tax credit for | :02:43. | :02:52. | |
financing. More financing. Better orientation from savings to | :02:53. | :02:56. | |
investment. This country is reforming. The country is changing. | :02:57. | :03:01. | |
We changed the labour market function with an important reform. | :03:02. | :03:07. | |
We are reducing our deficits. We are doing that through cuts in public | :03:08. | :03:10. | |
expenditures. We're reforming the pension system. We're reforming | :03:11. | :03:15. | |
policies for families. There is a move in France and think that the | :03:16. | :03:21. | |
idea is to have a more competitive and more creative and more | :03:22. | :03:26. | |
innovative country. Isn't a problem or is part of the fact that France | :03:27. | :03:30. | |
has an enormous public sector? The largest in the Eurozone. High tax | :03:31. | :03:35. | |
rate in particular are a dramatic, that seventy five percent tax on | :03:36. | :03:39. | |
high earners for example. Did you need to fundamentally rethink the | :03:40. | :03:42. | |
shape and size of the French public sector? Of eighteen billion euros, | :03:43. | :03:50. | |
fifteen billion will come from cuts. We want to rethink the nature | :03:51. | :03:57. | |
of this the State `` the state of public authorities. We are very | :03:58. | :04:02. | |
proud of our public services. We are very proud of our collection. Very | :04:03. | :04:07. | |
proud of the welfare system. We're not to sacrifice the social model of | :04:08. | :04:14. | |
France but adapt and modernise and this will mean, of course, a | :04:15. | :04:20. | |
reduction in the correct level of the public expenditures. We are now | :04:21. | :04:27. | |
at fifty seven percent. We hope to be at something like fifty three | :04:28. | :04:30. | |
percent in two thousand seventeen. We are reducing. That is not so | :04:31. | :04:36. | |
simple. A period when Griffiths a slow. `` at a period when growth is | :04:37. | :04:47. | |
so slow. It is the largest bankruptcy case in | :04:48. | :04:51. | |
the US. The city Detroit head to court to prove that it is not have | :04:52. | :04:55. | |
the money to pay its debts. Bankruptcy protection would mean | :04:56. | :04:57. | |
that creditors would have to accept pennies on the dollar and retired | :04:58. | :05:01. | |
city workers would see drastic changes to their pensions. That is | :05:02. | :05:05. | |
not sitting well with many who are owed money. | :05:06. | :05:09. | |
It was the fourth largest city in the country, the cradle of American | :05:10. | :05:16. | |
automobile industry. The streets today tell a different story. | :05:17. | :05:19. | |
Decades of decline had led to Detroit becoming broke. This was a | :05:20. | :05:25. | |
Lieutenant Colonel... Gordon McDonald is proud of his thirty nine | :05:26. | :05:28. | |
years at the Detroit police department. He saw the city 's | :05:29. | :05:35. | |
demise firsthand. He and his wife live off the pension and benefits he | :05:36. | :05:41. | |
gets from the city. Detroit says that it can no longer afford to pay | :05:42. | :05:45. | |
pensions for it some twenty three thousand retired workers. We don't | :05:46. | :05:51. | |
sleep very well. It is constantly on your mind. In a few months, the | :05:52. | :05:59. | |
health benefits will end. They will take it away from us and don't know | :06:00. | :06:03. | |
what she will do. Out of that make you feel? Kind of sad for her. | :06:04. | :06:13. | |
Detroit needs to do something. Thousands of abandoned cars litter | :06:14. | :06:18. | |
the streets. As the city tries to declare bankruptcy, municipal worker | :06:19. | :06:24. | |
was like this one and move some of the evidence of just how bad things | :06:25. | :06:29. | |
have become. This is our city and we are doing everything we can to bring | :06:30. | :06:34. | |
it back. You sound hopeful? AM. Detroit has been here for years and | :06:35. | :06:39. | |
will come back. Towing cars can't get the city of debt. It owes | :06:40. | :06:41. | |
roughly eighteen billion dollars and is now looking to van Gogh and Monet | :06:42. | :06:47. | |
to solve the problems. Like many things in the city, Detroit's | :06:48. | :06:50. | |
impressive art collection was actually built during it economic | :06:51. | :06:58. | |
boom. This city owned some of the most famous pieces including this. | :06:59. | :07:01. | |
As Detroit filed for bankruptcy, it means that these works of art are | :07:02. | :07:07. | |
actually assets and, if sold, the city could gain tens of millions of | :07:08. | :07:13. | |
dollars. It is an abominable idea. It is one of America's greatest art | :07:14. | :07:18. | |
collections, something that is talking about the history of | :07:19. | :07:22. | |
Detroit. Many are watching what happens to Detroit very carefully. | :07:23. | :07:26. | |
What takes place here will likely pave the way for other American | :07:27. | :07:28. | |
cities facing the same financial constraints. | :07:29. | :07:35. | |
We move on to Australia where inflation came in at a higher than | :07:36. | :07:40. | |
expected rate, effectively killing off all hopes for a rate cut. We get | :07:41. | :07:48. | |
the latest now. Australia? I spoke to a few analysts earlier and they | :07:49. | :07:54. | |
say that could still go way. First, the sharp spike has pushed the | :07:55. | :08:00. | |
inflation to one point two percent with expectations of zero point | :08:01. | :08:05. | |
eight percent. This height expected them to the Australia dollar to four | :08:06. | :08:09. | |
point five high. The markets speculate that there is this the | :08:10. | :08:13. | |
chance of another interest rate cut in twenty thirteen. The last time | :08:14. | :08:17. | |
the RBA reduced the cost of borrowing was in August to two point | :08:18. | :08:21. | |
five percent, the lowest level since nineteen sixty and a hefty two point | :08:22. | :08:25. | |
seven five percent. Secondly, some analysts are making the case for a | :08:26. | :08:29. | |
potential rate cut, saying that despite the quarterly rise, the | :08:30. | :08:33. | |
annual rate of inflation remains in the bottom half of the Reserve Bank | :08:34. | :08:40. | |
two percent to two percent rate suggesting that there is still room | :08:41. | :08:43. | |
for a reduction of push comes to club. `` push comes to shell. They | :08:44. | :08:48. | |
suggest that the September quarter is strong so it is feasible that | :08:49. | :08:52. | |
this quarter, there are still surprise on the downside. `` push to | :08:53. | :08:57. | |
shove. A look at the markets now. In terms | :08:58. | :09:02. | |
of Asian markets, twenty to think about. Yesterday, the jobs figures | :09:03. | :09:06. | |
came out of the use case and they were disappointing. The US and the | :09:07. | :09:09. | |
added one hundred and forty eight thousand jobs. `` out of the US. | :09:10. | :09:13. | |
Less than expected. Asian markets reacted. | :09:14. | :09:19. | |
In terms of currencies, the dollar is still sitting at a two year low | :09:20. | :09:25. | |
against the euro. We are looking into the Federal Reserve, will it | :09:26. | :09:31. | |
paper the stimulus package? The mood music now is that it will not. That | :09:32. | :09:37. | |
is it for me and the team. Thank you for watching. Goodbye. | :09:38. | :09:39. |