26/08/2014 World Business Report


26/08/2014

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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

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Report. A fresh financial crisis in France

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as President Hollande orders a cabinet shake`up.

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Could South Africa be on the brink of recession? We'll find out in a

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few hours when it releases figures for its second quarter GDP. Welcome

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to World Business Report. In a minute we'll have the latest on the

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earnings and expected restructure of troubled Malaysia Airlines. France

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has been thrown into a fresh crisis as President Francois Hollande told

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his Prime Minister to form a new government. The now former Economy

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Minister, Arnaud Montebourg, attacked the eurozone powerhouse

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Germany for ruining the region's economy with what he called an

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obsession with economic austerity and called for a policy U`turn.

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France is struggling with high unemployment and low growth, and Mr

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Hollande's popularity is the lowest for a president in more than 50

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years. A new line`up is expected to be announced later today, but will a

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new team be able to tackle the country's biggest problem, the

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economy? As our business correspondent Jonty Bloom reports,

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this political crisis could hardly have come at a worse time. His

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report contains flash photography. France is in the doldrums.

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Unemployment over 10%. Growth has grown to a halt. The government will

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miss its own target to bring them the size of its borrowings. The

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government has responded by cutting business tax and spending. All

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measures are unpopular with the ruling Socialist party. That feud

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has emerged in problem. The economic minister has lost his job for

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criticising the government was Mike policies and saying that austerity

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is not working. TRANSLATION: Wrote these politics

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are absurd. They prevent, freefall economic, the achievement of their

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objectives. Francois Hollande has as his Prime Minister to form a new

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government. The rebels have let the cabinet. It could lead to quicker

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reform of the economy, including changes to the building industry.

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The bigger pool is where this leaves the eurozone's economic policies.

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This will increase pressure on the European Central bank to step in and

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This any sign that the new avoid inflation.

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This any sign that the new can help? Joining me now is Francois de Curel,

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asset allocation fund manager, Edmund de Rothchild Asset Management

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South Africa releases its latest GDP figures soon, and they could show

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that Africa's most advanced economy has entered into a recession. Thank

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you for joining us. Let's talk the impact what has happened.

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Minimal impact on the markets generally. Quite the" on the

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economy. `` quite a big pack. That is a key question. Francois Hollande

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decided to back up the responsibility. He wanted to keep

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with engagement, European engagement of France. On the markets,

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historically, we have noticed almost no impact. Yesterday, we have

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analysed that there has been no impact. French equities have gone up

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by 2.10% exactly in line with other markets. I know that the Minister

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has badmouthed economic direction of France and spoken about the German

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austerity policies which France is changed to. We'll France move away

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from those policies? It is completely unrealistic to expect

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that. Rance is in Europe and shares the currency with other countries.

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The president and prime have decided to stick with French resolutions.

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What has happened yesterday, the president has decided that the

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guidelines could not be changed now. Thank you. South Africa will release

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its latest economic growth figures soon. You can show recession. In the

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first quarter of the year, economy shrank by 0.6%. That was caused by a

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five`month long strike in the platinum mining sector. But, since

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then, there has been another major strike in the engineering sector and

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now the banks have run into trouble. The ratings agency, Moody's,

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downgraded the country's banks on fears of a credit bubble.

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The fields of industry turning and the minds are back in production.

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That is despite rising costs and frequent disputes. Mining is

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important to South Africa. When there are problems, the effects are

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felt across the board. The mining sector is currently contributing 54%

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of export earnings in this country. That is disproportionate. Mining

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accounts for less than 10% of visit the applicant economy. It is the

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largest economy. Small and medium companies are used as suppliers in

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the production chain. The shape of the economy is changing. It revealed

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you look there are banks and retailers. These are the drivers of

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growth on the South African economy. Consumer spending has been on the

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rise. That has pushed up loans and debt. Without stricter controls,

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experts warn, South Africa has a looming threat above that which is

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bigger than the issue is bigger than the issues on the market. Tanks

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account for 20% of economic activity. There have been a few

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cracks in the system. The reserve bank has taken control. There was a

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lifeline of $800 million. There were huge losses because of your

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management decisions and bad loans. Rating agencies to not believe this

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is an isolated case. Last week, the issued warnings. It has grown from a

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low base. It has grown `35%. In the last few quarters, it has levelled.

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It still constitutes about 11% of total credit. From a systemic point

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of view, not the problem. Local banks are safe, according to the

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regulator. Consumer behaviour is now a warrior. South Africans use up to

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70% of monthly wages to give up. Growth can remain weak. The future

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is not looking bright. Investors are focused on Malaysia airlines this

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week. They have revealed their latest earning numbers and an

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expected announcement on plans to beef the company soon. The state

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investment fund, which is the majority shareholder, is proposing a

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major overhaul in an attempt to save the airline. Let's start to record

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the song and Singapore. You had been too big an eye on this. Will we see

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this continue in its foreign form? It looks like it or not. Major plans

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for restructuring over the next couple of days. The two disasters

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have expedited their Rancho problems. They have a list of

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issues. The competition from regional carriers. Earnings will be

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announced on the 28th of August. The potential reforms come from this

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organisation cutting rates. They need to way of around 3000`4000

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staff. That is about one fifth of total employee base. Around 10,000

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employees are represented by the National Union of Flight Attendance.

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I spoke to the president earlier. He said that steep job cuts could be

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wanted. When their loan regains its feet, employees can come back to

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work full time again. A lot of decisions will be made by management

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this week. That is all for now. Good buy. All

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43 police forces in England and Wales has signed up for a new

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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,

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authors will need authorisation

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