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selling drugs, has won the highest honour at this year was Mike any | :00:00. | :00:07. | |
awards. Now, time for the latest financial news in World Business | :00:08. | :00:08. | |
Report. A fresh financial crisis in France | :00:09. | :00:22. | |
as President Hollande orders a cabinet shake`up. | :00:23. | :00:28. | |
Could South Africa be on the brink of recession? We'll find out in a | :00:29. | :00:37. | |
few hours when it releases figures for its second quarter GDP. Welcome | :00:38. | :00:45. | |
to World Business Report. In a minute we'll have the latest on the | :00:46. | :00:48. | |
earnings and expected restructure of troubled Malaysia Airlines. France | :00:49. | :00:51. | |
has been thrown into a fresh crisis as President Francois Hollande told | :00:52. | :00:54. | |
his Prime Minister to form a new government. The now former Economy | :00:55. | :01:01. | |
Minister, Arnaud Montebourg, attacked the eurozone powerhouse | :01:02. | :01:04. | |
Germany for ruining the region's economy with what he called an | :01:05. | :01:06. | |
obsession with economic austerity and called for a policy U`turn. | :01:07. | :01:13. | |
France is struggling with high unemployment and low growth, and Mr | :01:14. | :01:15. | |
Hollande's popularity is the lowest for a president in more than 50 | :01:16. | :01:24. | |
years. A new line`up is expected to be announced later today, but will a | :01:25. | :01:27. | |
new team be able to tackle the country's biggest problem, the | :01:28. | :01:39. | |
economy? As our business correspondent Jonty Bloom reports, | :01:40. | :01:42. | |
this political crisis could hardly have come at a worse time. His | :01:43. | :01:44. | |
report contains flash photography. France is in the doldrums. | :01:45. | :01:49. | |
Unemployment over 10%. Growth has grown to a halt. The government will | :01:50. | :01:53. | |
miss its own target to bring them the size of its borrowings. The | :01:54. | :01:57. | |
government has responded by cutting business tax and spending. All | :01:58. | :02:03. | |
measures are unpopular with the ruling Socialist party. That feud | :02:04. | :02:07. | |
has emerged in problem. The economic minister has lost his job for | :02:08. | :02:14. | |
criticising the government was Mike policies and saying that austerity | :02:15. | :02:17. | |
is not working. TRANSLATION: Wrote these politics | :02:18. | :02:25. | |
are absurd. They prevent, freefall economic, the achievement of their | :02:26. | :02:34. | |
objectives. Francois Hollande has as his Prime Minister to form a new | :02:35. | :02:40. | |
government. The rebels have let the cabinet. It could lead to quicker | :02:41. | :02:43. | |
reform of the economy, including changes to the building industry. | :02:44. | :02:50. | |
The bigger pool is where this leaves the eurozone's economic policies. | :02:51. | :02:55. | |
This will increase pressure on the European Central bank to step in and | :02:56. | :02:58. | |
This any sign that the new avoid inflation. | :02:59. | :03:10. | |
This any sign that the new can help? Joining me now is Francois de Curel, | :03:11. | :03:13. | |
asset allocation fund manager, Edmund de Rothchild Asset Management | :03:14. | :03:16. | |
South Africa releases its latest GDP figures soon, and they could show | :03:17. | :03:19. | |
that Africa's most advanced economy has entered into a recession. Thank | :03:20. | :03:20. | |
you for joining us. Let's talk the impact what has happened. | :03:21. | :03:24. | |
Minimal impact on the markets generally. Quite the" on the | :03:25. | :03:33. | |
economy. `` quite a big pack. That is a key question. Francois Hollande | :03:34. | :03:41. | |
decided to back up the responsibility. He wanted to keep | :03:42. | :03:46. | |
with engagement, European engagement of France. On the markets, | :03:47. | :03:50. | |
historically, we have noticed almost no impact. Yesterday, we have | :03:51. | :03:58. | |
analysed that there has been no impact. French equities have gone up | :03:59. | :04:13. | |
by 2.10% exactly in line with other markets. I know that the Minister | :04:14. | :04:19. | |
has badmouthed economic direction of France and spoken about the German | :04:20. | :04:23. | |
austerity policies which France is changed to. We'll France move away | :04:24. | :04:29. | |
from those policies? It is completely unrealistic to expect | :04:30. | :04:30. | |
that. Rance is in Europe and shares the currency with other countries. | :04:31. | :04:42. | |
The president and prime have decided to stick with French resolutions. | :04:43. | :04:53. | |
What has happened yesterday, the president has decided that the | :04:54. | :05:01. | |
guidelines could not be changed now. Thank you. South Africa will release | :05:02. | :05:13. | |
its latest economic growth figures soon. You can show recession. In the | :05:14. | :05:20. | |
first quarter of the year, economy shrank by 0.6%. That was caused by a | :05:21. | :05:27. | |
five`month long strike in the platinum mining sector. But, since | :05:28. | :05:29. | |
then, there has been another major strike in the engineering sector and | :05:30. | :05:33. | |
now the banks have run into trouble. The ratings agency, Moody's, | :05:34. | :05:35. | |
downgraded the country's banks on fears of a credit bubble. | :05:36. | :05:41. | |
The fields of industry turning and the minds are back in production. | :05:42. | :05:49. | |
That is despite rising costs and frequent disputes. Mining is | :05:50. | :05:54. | |
important to South Africa. When there are problems, the effects are | :05:55. | :06:02. | |
felt across the board. The mining sector is currently contributing 54% | :06:03. | :06:07. | |
of export earnings in this country. That is disproportionate. Mining | :06:08. | :06:12. | |
accounts for less than 10% of visit the applicant economy. It is the | :06:13. | :06:21. | |
largest economy. Small and medium companies are used as suppliers in | :06:22. | :06:25. | |
the production chain. The shape of the economy is changing. It revealed | :06:26. | :06:31. | |
you look there are banks and retailers. These are the drivers of | :06:32. | :06:36. | |
growth on the South African economy. Consumer spending has been on the | :06:37. | :06:41. | |
rise. That has pushed up loans and debt. Without stricter controls, | :06:42. | :06:48. | |
experts warn, South Africa has a looming threat above that which is | :06:49. | :06:51. | |
bigger than the issue is bigger than the issues on the market. Tanks | :06:52. | :06:55. | |
account for 20% of economic activity. There have been a few | :06:56. | :07:02. | |
cracks in the system. The reserve bank has taken control. There was a | :07:03. | :07:07. | |
lifeline of $800 million. There were huge losses because of your | :07:08. | :07:12. | |
management decisions and bad loans. Rating agencies to not believe this | :07:13. | :07:17. | |
is an isolated case. Last week, the issued warnings. It has grown from a | :07:18. | :07:30. | |
low base. It has grown `35%. In the last few quarters, it has levelled. | :07:31. | :07:37. | |
It still constitutes about 11% of total credit. From a systemic point | :07:38. | :07:44. | |
of view, not the problem. Local banks are safe, according to the | :07:45. | :07:48. | |
regulator. Consumer behaviour is now a warrior. South Africans use up to | :07:49. | :08:02. | |
70% of monthly wages to give up. Growth can remain weak. The future | :08:03. | :08:09. | |
is not looking bright. Investors are focused on Malaysia airlines this | :08:10. | :08:14. | |
week. They have revealed their latest earning numbers and an | :08:15. | :08:16. | |
expected announcement on plans to beef the company soon. The state | :08:17. | :08:24. | |
investment fund, which is the majority shareholder, is proposing a | :08:25. | :08:28. | |
major overhaul in an attempt to save the airline. Let's start to record | :08:29. | :08:31. | |
the song and Singapore. You had been too big an eye on this. Will we see | :08:32. | :08:42. | |
this continue in its foreign form? It looks like it or not. Major plans | :08:43. | :08:46. | |
for restructuring over the next couple of days. The two disasters | :08:47. | :08:50. | |
have expedited their Rancho problems. They have a list of | :08:51. | :08:57. | |
issues. The competition from regional carriers. Earnings will be | :08:58. | :09:02. | |
announced on the 28th of August. The potential reforms come from this | :09:03. | :09:10. | |
organisation cutting rates. They need to way of around 3000`4000 | :09:11. | :09:17. | |
staff. That is about one fifth of total employee base. Around 10,000 | :09:18. | :09:28. | |
employees are represented by the National Union of Flight Attendance. | :09:29. | :09:35. | |
I spoke to the president earlier. He said that steep job cuts could be | :09:36. | :09:42. | |
wanted. When their loan regains its feet, employees can come back to | :09:43. | :09:50. | |
work full time again. A lot of decisions will be made by management | :09:51. | :09:51. | |
this week. That is all for now. Good buy. All | :09:52. | :10:12. | |
43 police forces in England and Wales has signed up for a new | :10:13. | :10:17. | |
voluntary code of conduct to determine how they use controversial | :10:18. | :10:19. | |
powers to stop`and`search members of the public. Under the new rules, | :10:20. | :10:23. | |
authors will need authorisation | :10:24. | :10:25. |