27/02/2017 World Business Report

Those are the new headlines. And now for the biggest business stories.

Hopes of a European mega-exchange between London and Frankfurt

The London Stock Exchange says the regulatory hurdles are too high.

Nokia hopes to revive its flagging fortunes as it resurrects

We'll get a hands-on preview from The Mobile World Congress in

Welcome to World Business Report. I'm Sally Bundock.

In a minute, we'll look at the potential collapse

of the merger between the London Stock Exchange and Deutsche.

The clock is ticking, with speculation mounting the UK

Prime Minister may trigger Article 50 on the country's departure

from the European Union in early March.

Since the referendum, there have been major concerns

in London it could lose its position as Europe's financial capital.

But one of Germany's most senior central bankers tells us why

he believes the city will retain its crown.

At present, Britain benefits from so-called "Passporting Rights"

which allow UK-based banks free access to the European Union.

The City of London's main industry lobby group appears to have given up

hope on maintaining these rights and is now campaigning

for "equivalency" to form part of the UK's package when it leaves

Equivalency is a relatively new legal concept which allows

companies to trade freely within the EU, assuming it has

But the Financial Times is reporting this diluted equivalency agreement

may be tougher on Britain than was previously thought.

Andreas Dombret is a board member of the Bundesbank that oversees

He told the BBC he is open to consulting with banks wishing

to relocate to Frankfurt, but he also issued a warning.

From a German perspective, should a business or a bank be looking

towards moving to Germany, we will not accept empty shells, letterbox

companies. We will make sure that the management, the controlling, the

risk controlling, etc, is done out of Germany. That does not mean we

would have back-to-back booking models. But the structures and all

the like is not something we would forgive. Andreas Dombret from

Bundesbank. It's also being reported this

morning the $31 billion merger of the London Stock Exchange

and Deutsche Boerse could collapse. It looks like the regulatory hurdles

are too high ending the companies efforts to create

a European mega-exchange. Peter Hahn is the Henry Grunfeld

Professor at The London Institute Good morning. Good morning. Good to

see you. Let us start with the exchanges. Are you surprised they

will not come together eventually? No. It is an amazingly complex

issue, especially with Brexit. It was a contest in a certain way

between Frankfurt and London for dominance. London was going to get

the overall holding company. That was always presented, first with

Germany and Brexit, and the bigger issue. What they are relying on is

something more complex than a merger problem, a set of activities and a

merger that has to happen. The city of London and the whole Brexit

negotiations. As we mentioned, Theresa May is likely to trigger

Article 50 in March, just a few days away, the month of March. This stops

the process of the negotiation, the exit of the EU, and will take up to

two years. Now, there is so much to negotiate within that. But the city

of London is incredibly important, isn't it, to the UK economy, that

they get a great deal. It is a major taxpayer, a disproportionately large

one. Just from the income of business is. But from the people who

work in the city as well, it is substantially above average and they

pay a lot of income tax. We talked about the Passporting Rights issue

and this so-called new equivalency, which is not quite an equivalency.

Talk us through these two and what the outcome might be. Passporting

Rights simply says that a bank in any EU country is able to do

business in another EU country without having to set itself up and

get a separate licence, et cetera. Equivalence means my country has

rules and your country should have equivalent rules to ours. Even if

they are not the same. Therefore, you can do business in my country

and vice-versa. It has all been a kind of tentative races and hasn't

really worked out. -- process. Because of that it could almost be

shut off. 30 days if you do not like it. That has always been a bit of a

charade. We have been trying to see the outcome but I do not know. What

about the rules of banks operating outside London? It is important to

London, but also to Europe, that it works well. Andreas said it clearly.

Europe expects, and Germany in particular, he was almost speaking

for Germany, it wants fully operational businesses to move to

Germany, and not come from the UK any more. And that is relatively

similar to the way Europeans do business in the US. Now, the US, a

European bank of any size, it supposed have what is called an

intermediate holding company, and that means a separate bank that is

rig goodbye the United States. And that is what we are moving to with

the use. -- that is seperate to the United States. There is a lot more

detail and more of the interview on our website. Do take a look. Now,

let us talk about Nokia! Nokia used to be synonymous

with the mobile phone. And HMD, the company which recently

bought the rights to the Nokia brand, is hoping a blast

from the past will restore The handset on the left may not look

immediately familiar to you. But the handset on the right

should ring some bells. Nokia is resurrecting its iconic

3310 model, but the latest version has a battery that can last

an entire month on a single charge. That's Mobile World

Congress in Barcelona. Rory Cellan-Jones sent us this

report from The Mobile World Barcelona. And as the mobile phone

industry arrives for its annual jamboree, there is the starter in

the air. SINGING THE NOKIA TUNE. Nokia is making a comeback. This was

its first chance to make a big splash. And with a range of new

smartphones, it brought out something very retro. Let me

reintroduce the Nokia 3310. You cannot do much with this phone

except make calls and play a game of Snake, but the battery lasts

forever. We ask consumers what is the best iConnect device from Nokia?

We thought, let us have some fun and be creative with this device. This

may be fun, but let us face it, it is a gimmick. If Nokia wants to be a

major force in the world again, it will not be because of the 3310, but

a new range of Android smartphones. This is already selling well in

China. But in a market where it smartphones all look the same, the

market is tough. They had to look backwards as well as forward. By

bringing out this truly iconic device with bags of nostalgic, for

many people it was their first mobile phone, it captures the

attention of the people and let them know that Nokia is back. Will

would switch my phone. Even if it had no Internet? Yes. I would change

my mind. Here is another phone making a comeback. This is the

Blackberry 31 launched by a Chinese firm. Two big names making an

unlikely bet they could be big again in the future. BBC News, Barcelona.

And there is a lot more on the website. Take a look. From me, it is

goodbye. But I will be back soon to look at the papers. See you then.

Chancellor Philip Hammond should make schools a priority

in the budget, according to a teaching union

and the National Association of Governors are calling for.