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Here is World Business Report. A familiar tale, a multibillion | :00:07. | :00:24. | |
dollar bailout of the European bank. Banco Espirito Santo is to be | :00:25. | :00:26. | |
rescued by Portugal's central bank and broken up to prevent a costly | :00:27. | :00:29. | |
collapse. Playing catch`up ` President Obama | :00:30. | :00:32. | |
is host to 50 leaders from the African continent in a bid to boost | :00:33. | :00:35. | |
trade and take back the title of largest trading partner from China. | :00:36. | :00:48. | |
Welcome to World Business Report. I'm Sally Bundock. Also in the | :00:49. | :00:52. | |
programme ` I ask a leading economist what the European Central | :00:53. | :00:54. | |
Bank can do to protect the Eurozone from the most feared word in the | :00:55. | :01:00. | |
economic dictionary ` deflation. But first. The Bank of Portugal has | :01:01. | :01:04. | |
announced details of a 4.9 billion euro rescue of Banco Espirito Santo, | :01:05. | :01:11. | |
one of the country's largest banks. Funding for the operation is to come | :01:12. | :01:15. | |
from an until now unused portion of the eurozone bailout money that | :01:16. | :01:20. | |
Portugal sought three years ago. Alison Roberts reports from Lisbon. | :01:21. | :01:28. | |
The announcement by Portugal's top ranking supervisor was aimed at | :01:29. | :01:34. | |
reassuring the public that steps had been taken to safeguard the | :01:35. | :01:36. | |
stability of the country's financial system. TRANSLATION: The back of | :01:37. | :01:46. | |
Portugal decided today to apply eight resolution measure to Banco | :01:47. | :01:51. | |
Espirito Santo. Most of the activity and assets will be transferred to a | :01:52. | :01:58. | |
new bank, properly capitalised and purged of problematic assets. | :01:59. | :02:03. | |
Details of the plan were flagged in advance. But it was a dramatic | :02:04. | :02:08. | |
moment. The Governor made it clear that this was a new kind of bank | :02:09. | :02:11. | |
rescue in which shareholders shouldered the losses while steps | :02:12. | :02:16. | |
are taken to protect other institutions from any contagion. | :02:17. | :02:19. | |
Portugal's Prime Minister had already sought to reassure the | :02:20. | :02:24. | |
public and bank depositors that the album was being adequately dealt | :02:25. | :02:31. | |
with. TRANSLATION: Financial stability is important for our | :02:32. | :02:35. | |
economy. We will certainly take all of the necessary measures to ensure | :02:36. | :02:39. | |
stability. The chief executive of the new bank that is to take over | :02:40. | :02:45. | |
Banco Espirito Santo's commercial banking activities set up to the | :02:46. | :02:49. | |
plan was unveiled at the bank's customers can be confident that it | :02:50. | :02:56. | |
is stronger and safer than before. There is still anger in Portugal | :02:57. | :03:01. | |
about past bank bailouts which saw the state pumping billions of euros | :03:02. | :03:04. | |
in capital was no sign of any return. That feeds into | :03:05. | :03:09. | |
dissatisfaction with the austerity policies of the government under the | :03:10. | :03:15. | |
country's bailout. With barely a year to go until the general | :03:16. | :03:18. | |
election, the question is whether by lending money to the new good bank | :03:19. | :03:22. | |
rather than taking a stake in its the government can convince the | :03:23. | :03:25. | |
public it has listened to their concerns. | :03:26. | :03:29. | |
This week will see the greatest ever concentration of African leadership | :03:30. | :03:32. | |
in Washington. President Obama has invited 50 African heads of state | :03:33. | :03:35. | |
and government to a three`day meeting which starts today. And the | :03:36. | :03:39. | |
focus is on trade and investment, as the President tries to make up for | :03:40. | :03:43. | |
lost time ` and possibly a lost opportunity. Over the past decade | :03:44. | :03:48. | |
it's China that has made much of the running on investment in the region, | :03:49. | :03:51. | |
while the US has found itself caught up in dealing with the spread of | :03:52. | :03:55. | |
terrorism. Now the US is hoping $900 million worth of deals between | :03:56. | :03:57. | |
American companies and African nations will be formally announced | :03:58. | :04:00. | |
this week but as ever the politics will play a big part in the | :04:01. | :04:09. | |
negotiations. With me is Jag Singh who is a political strategist. Good | :04:10. | :04:15. | |
morning. America is on the back foot. It is. This whole summit is a | :04:16. | :04:21. | |
chance for the US to recalibrate its image. With the African continent. | :04:22. | :04:32. | |
Africa holds a lot of policy implications for the US, from | :04:33. | :04:34. | |
security to trade, to everything in between. This summit, while it is | :04:35. | :04:42. | |
useful to look at in the context of Africa's relationship with China, it | :04:43. | :04:48. | |
is worth noting that the US does have historical ties to the African | :04:49. | :04:52. | |
continent and President Obama is the first African`American president. He | :04:53. | :04:57. | |
will possibly already be thinking about his legacy about what the | :04:58. | :05:03. | |
first African`American president has done for Africa. It is an | :05:04. | :05:08. | |
interesting time. He is going to be there. That he is also not going to | :05:09. | :05:12. | |
be there as well. John Kerry is going to do most of the legwork. | :05:13. | :05:17. | |
What is the prize for America in this? It boils down to helping the | :05:18. | :05:25. | |
US private sector re`engage with Africa in a meaningful way. 15 years | :05:26. | :05:30. | |
ago there was the African growth and opportunity act, which was brought | :05:31. | :05:35. | |
in place in the dying days of the Quentin Administration. `` Bill | :05:36. | :05:41. | |
Clinton. To start a small free`trade area for African countries to trade | :05:42. | :05:46. | |
with the US. It's all limited success. It only worked in the | :05:47. | :05:54. | |
textile industry. It is also dominated by oil and gas. It is an | :05:55. | :06:00. | |
opportunity for the US to go guns blazing and say, we are going to try | :06:01. | :06:05. | |
a fresh approach. Very quickly, Ebola. That is affecting this. Of | :06:06. | :06:11. | |
course it has. About three leaders have had to drop out because of a | :06:12. | :06:17. | |
crisis in the country. While we are comparing and contrasting with the | :06:18. | :06:21. | |
Chinese approach, it is worth noting that the US is sending technical | :06:22. | :06:32. | |
expertise and medical expertise. Thank you for coming in. It is an | :06:33. | :06:36. | |
event that we are keeping a close eye on. There are announcements that | :06:37. | :06:43. | |
we will keep you up`to`date on. Other stories are making headlines. | :06:44. | :06:47. | |
The world's casino capital is on a bit of losing streak. The Chinese | :06:48. | :06:50. | |
territory of Macau has just recorded its second consecutive monthly fall | :06:51. | :06:52. | |
in takings. Gambling revenue declined 3.6% in July ` but it was | :06:53. | :06:58. | |
still over $3.5 billion. That's on top of a similar slump in June, | :06:59. | :07:01. | |
which was the first drop in five years. And analysts are warning of | :07:02. | :07:04. | |
continued weakness as China's anti`corruption drive keeps the high | :07:05. | :07:09. | |
rollers away. EU sanctions targeting Russia over | :07:10. | :07:12. | |
its role in Ukraine's conflict have hit Aeroflot's low`cost domestic | :07:13. | :07:15. | |
airline Dobrolet, forcing it to cancel all its flights. It said the | :07:16. | :07:21. | |
sanctions imposed last Thursday resulted in the cancellation of | :07:22. | :07:23. | |
contracts under which it leased Boeing 737`800 planes. | :07:24. | :07:31. | |
The struggling Eurozone's policies have not delivered economic rewards | :07:32. | :07:34. | |
and there is a real risk of deflation ` that was the warning | :07:35. | :07:37. | |
coming from the Prime Minister of France at the end of last week. His | :07:38. | :07:44. | |
comments came ahead of a key meeting of the European Central Bank this | :07:45. | :07:47. | |
Thursday, and as key indicators for the French economy suggest that it | :07:48. | :07:50. | |
is lagging behind the recovery of other leading economies in the | :07:51. | :07:55. | |
European Union. Valls said the ECB was powerless in the face of low | :07:56. | :07:59. | |
inflation and added that the coming months would be difficult for | :08:00. | :08:04. | |
Europe. What can the ECB do? Joining me from our main newsroom is | :08:05. | :08:07. | |
Christian Schulz, Senior Economist at Berenberg Bank. Good morning. | :08:08. | :08:19. | |
What can the ECB do? Everyone has been warning them about this. There | :08:20. | :08:23. | |
are plenty of things they can do. Ultimately what you want to have his | :08:24. | :08:29. | |
the currency losing a bit of value so you can produce more of it, print | :08:30. | :08:33. | |
money. There are many ways of doing this. Lending cheap money to banks | :08:34. | :08:40. | |
in the hope that they will lend on to the real economy. Another would | :08:41. | :08:46. | |
be to buy bonds directly. The famous quantitative easing, something that | :08:47. | :08:52. | |
ECB has not done. Not necessarily doing that yet, but certainly | :08:53. | :08:56. | |
discussing it. Will we see that this week? I do not think so. The ECB has | :08:57. | :09:06. | |
just announced a range of controversial and potentially | :09:07. | :09:08. | |
powerful measures, such as negative interest rates and long`term loans | :09:09. | :09:14. | |
to banks. They probably want to see how the measures feed and to the | :09:15. | :09:20. | |
real economy. Before the end of the year, I do not think the ECB will | :09:21. | :09:25. | |
employ quantitative easing. Thank you. | :09:26. | :09:30. | |
A quick perspective on an event that is going to be on the minds of | :09:31. | :09:36. | |
investors. I am not bank assured the numbers briefly. But the markets in | :09:37. | :09:39. | |
Asia are in and out a positive territory. Concern about Portugal is | :09:40. | :09:46. | |
hitting sentiment to a degree. CU soon as we go to the papers. | :09:47. | :09:58. | |
A major study suggests the workload of GP's surgeries is increased | :09:59. | :10:01. | |
rather than reduced by getting patients to call in for advice | :10:02. | :10:04. | |
instead of having a face`to`face appointment. The British Medical | :10:05. | :10:09. | |
Association says the research shows phone assessments can't always | :10:10. | :10:11. | |
satisfactorily replace in`person consultations. Here's our health | :10:12. | :10:15. | |
correspondent, Jane | :10:16. | :10:16. |