27/05/2016 BBC Business Live


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This is Business Live from BBC News with Alice Baxer


Gripped by labour pains - but after years of weak growth,


and a jobless rate more than double that of Germany, is France getting


Live from London, that's our top story on Friday the 27th of May.


French unions urge workers to set up their action as pressure mounts


The French President says he will not budge.


Also in the programme: Walking their own paths -


G7 leaders call the world economy an urgent priority, but fail


to agree on co-ordinated steps to head off a crisis.


We will keep a close eye on the markets at the end of the trading


week. Asian stocks ahead on Friday after US data continues to cast a


positive light on the economy. Europe stocks also higher.


And tough words between the International monetary fund and the


European Union over Greece's debt deal. Oil flutters above $50 a


barrel and the G7 in Japan, we will look at the week in business with


our economic strip corresponded Andrew Walker. And today, we want to


know what you think about Apple possibly buying Time Warner, is this


them jumping onto the bandwagon of failing to come up with another


cracking product and it needs to do something about its future growth?


Let us know what you think. It is simple.


We start in France, where pressure is mounting on the government


as a wave of strikes hits oil refineries, ports and nuclear power


stations, causing fuel shortages and panic buying at petrol stations.


The cause - a controversial shake-up of labour rules aimed at making it


easier and cheaper to hire and fire workers.


Labour unions are fiercely opposed to it.


But its supporters say it is vital to make French business more


competitive - and energise the country's stagnant economy.


Let me give you some background to this.


France's unemployment rate is over 10%, well over double


Among young people, it's much higher.


Proof - say critics - that the system needs reform.


Then there is France's economic growth.


This graph shows how persistently weak it has been


The IMF says growth will improve a bit this year.


But it warns that the government's reforms don't go far enough


Our business correspondent Jonty Bloom has been to Toulouse


to find out why these reforms are so controversial.


We will get more of that later. Managing director of financial


services joins ours now. And our correspondent Hugh Schofield is in


Paris. In Alaska but of hours, have we been hearing the unions have been


calling upon the workers and urging them to continue the strike action?


-- the last couple of hours. Ramping things up? Yes, no surprise, they


have issued a statement saying after yesterday's action, their conclusion


is the action must continue so they have called for an intensification


of the groups and activities and protests going on. It does not mean


today will be like yesterday. It means they will plan more actions in


the future and the next big one is not until June 14. Next week, we can


expect some action on the railways and maybe at the airports. Protests


which do not mean they are connected with the label or protest, they


could be for other reasons, but it is combining into a big


anti-government movement across the country. It will not be sold on. I


predict in the next couple of weeks, there will be a role and it will be


quiet and it will pick up again with more sporadic days like yesterday


which might be quite nicely. Indeed. We will leave it there. But you


soon, it you will keep across everything, I know. That was from


Paris. -- we will talk to you soon. Just


talk us through wide these Labour reforms are so controversial, why is


everybody up in arms, Virginie? There is an historical component.


The system in France is generous in terms of benefits and there is a


lack of flexibility that when economies are quite strong, it can


work. In a low growth economy, it makes it difficult for companies to


hire and so it is sticky in unemployment especially among young


people. The reforms are about giving more flexibility to companies. You


have heard about the 35 hour week and after that, you have to pay


overtime. They want more flexibility among that. Firing people, hiring


people. And I think it is a very good reform not only for business,


but also for young people. A lot of young people in France is stuck in


very short-term friends because -- short-term jobs because there is no


room in the market to get contracts for long-term jobs. We took about


the stagnant economic growth. -- we talk about. This is the graph that


shows that stagnant growth since the financial crisis, the deep recession


in 2008. We talk about structural and Labour reforms. If the Labour


reforms go through, do they change that picture? Is it a reality? I


think there is a lack. Think about the reforms we had in the UK under


the Thatcher years, it takes time but it is fundamental in terms of


the unemployment rate compared to Germany and the UK, Germany is 4.3%.


Growth has picked up a little bit in France on a quarterly basis but on


an annual basis compared to last year, we are down. So we need to


unlock this paralysis. Economic league, they are part of the strikes


is very hard to say at this point, probably not much. But politically,


it is very important. We have elections a 2017 and Manuel Valls


does not want to budge. But the Finance Minister is much more... Is


softening of his time. So from a government standpoint and employees


and is now employer, the law has been quite diluted. People were not


partnering and this was the problem. We really appreciate your input and


have a great weekend! Thank you! The leaders of the world's top seven


economies have closed the G7 summit with a pledge more. Policies to


boost global growth. In a final meeting in Japan, they warned of


threats to the global economy including a British vote to leave


the EU and Chinese steel, we will talk more about that. Listen to


this. Google has won a major legal victory


in its multi-billion dollar copyright battle with software firm


Oracle. A US jury has unanimously upheld


Google's claim it had the right to use Oracle's Java programming


language to develop Android - the operating system used by 80%


of the world's smartphones. Oracle has been claiming


$9 billion in damages Microsoft and Facebook have


announced plans to build the Atlantic's highest capacity datalink


to run between the US and Europe. The cable will run underneath the


Ocean, between Virginia in the US and Bilbao in Spain. The tech


companies have to pay external firms to use their cables and this could


be costly and the large amount of traffic across these lines could


make connections much slower. What is on the business news? We


have talked about the G7 a what and we will talk to Andrew but the


interesting thing is how the Japanese Prime Minister Ise-Shima


was urging the other leaders to print more money and splash it out,


get it out into the economy. They have been doing this for years.


But the other thing is some critics will say that he was like, if you


can't put more dollars into the US and European pocket, what will you


do, they will buy stuff? And hopefully Japanese stuff! I am not


saying that, some critics have said that. He is drawing parallels with


2008 and the Riemann crisis, others do not believe it is that severe.


And more cars have been recalled over that airbag problem. Another


extra 7 million cars. Let's talk about the world's biggest PC maker.


It has made a loss of $120 million for the first opera, verse three


months of the year. Thank you very much!


The first net loss in six years. What has gone so wrong? They are


disappointing numbers and shares in Hong Kong have gone down nearly 4%


and the reason they are doing badly is because of losses in the


smartphone division. This is because shipments to China, one of their


biggest markets, have plunged by about 85%. Lenovo is facing stiff


competition from rivals and as we know, it is other -- its other


business has been fizzling out, of personal computers, the trend across


the globe. Lenovo talks about how their smartphone division is


struggling from the cost of buying over the motor rally unit in 2014


and its chairman said the purchase has not met expectations of fixing


the business. Analysts believe the smartphone unit will keep making


losses. Tough times for Lenovo. And Asian stocks have pulled ahead


on Friday after US data continue to the gas the economy in a positive


light and the dollar went on the offensive. Japan sought its indexed


boys by Tokyo delaying a tax hike to about 0.5%. And crude oil after


nudging through the $50 barrel mark yesterday, psychologically


important, it has slumped back. In Europe's, stocks have opened flat at


the moment flat. We have the details of what is ahead on Wall Street


today. On Friday, we will see how the US


economy fared in the first three months of this year. We initially


heard the economy grew by only 0.5%. In this revision, it is likely the


economy grew a bit faster than that. About 0.9% because of decent gains


in consumer spending and presidential construction. Also


happening on Friday, the share of the US Central Bank -- the chair of


the US Central Bank Janet yelling will take part in a central


discussion and what she says will be met with great interest as we move


closer to the mid June meeting of the US Federal reserve. There has


been a rise in interest rates since December but if you look at the


minutes of the last meeting of the Federal reserve, it was suggested


that a tune or July, a rate rise Ben is firmly on the cards.


There you go. Let's stay with that. Our business economist is joining


us. We will give you the credit, a bout a month ago when experts were


saying they would push the rate rise until September. But the big boss


said no, June. And you said June and we had numbers yesterday, Americans


buying more durable goods and jobs down, it is looking good for June.


It is looking good for June. I think the message from the minutes, back


in April, they were saying that if the economy does not deteriorate, we


will keep raising rates. A little bit at a time. 14 -- the 14th and


15th of June is a good time and next week we have the big data. It is


payroll rolls on Friday. If that is good and Janet yelling is speaking


on the following evening and what she says could make a difference.


Those minutes did cause a bit of a stir. Everybody massively ringing


for these predictions from September but what does this mean if there is


a rate hike in June and how many more could we see over the year?


I think the dollar will go up, the problem with that is, the dollar


goes up and countries in emerging markets have problems. That is


always an issue. When the dollar moves up, the rest of the world


suffers. Really good to talk to you. You're going to go through the


papers soon. Great papers stories coming up. Still to come, tough


words between the IMF and the EU over the Greek debt deal. Oil is


about 50 bucks, which we haven't seen for about seven months. And big


stories in Japan. Andrew Walker is right in the wings. Stay with us.


We have heard plenty about dipping into the bank of mum and dad. My


favourite bank! But what about living


in the house of Mum and Dad? High property costs means the trend


of people living with their parents A report by Aviva has put some


figures on what it calls the growing number of multi-generational


households. Rob Young is on our


Business newsroom. Are you still in the


house of Mum and Dad? Kind, it is so hard for young people


to save money for a deposit for a house, because house prices have


been rising rapidly in London and the south-east. Rent has been going


up by so much in recent years as well, they say it is impossible to


save for a deposit. This study has put a number on the amount of young


people in their 20s and early 30s living with their parents. It is 3


million of them. This study says that has gone up by 500,000 over the


past ten years. It is forecasting that over the next decade it will go


up by yet another 1 million. We are not just talking about a single


young men and women living with their parents. The report has also


identified what they are calling a big rise in multifamily households,


young couples, often married, living with one set of parents. Does this


trend show any sign of abating? It seems like we here for the long


haul, the prices don't seem to be coming down? And what about economy?


It says if house prices continue to rise faster than wages, there will


be more and more people that dream of owning their own home, but it is


increasingly out of reach. You are right, there might be an economic


impact. People might have a bit more disposable income because they are


letting rent-free at home, so they can spend a bit more. Or maybe they


are saving a lot of money. If potentially means they are delaying


having children, which potentially also has an economic impact. Good on


you, mate, have a great weekend. Say hello to mum and dad. We will have a


quick look at this live page. VHS, what will happen in terms of the


pension deficit, in terms of trying to find a new buyer? The deadlines


are fast approaching. Interesting, news coming in about the Mothercare


boss Greg Tufnell. You're watching Business Live -


our top story: France's President Francois Hollande says he won't back


down on labour reforms as unions urge workers


to step up strike action. No sign of an end in the misery for


French commuters. And now let's get the inside track


on some of the big stories of the week including Greece's debt


deal, the G7 meeting in Japan With us is Andrew Walker,


Economics Correspondent. Were usually drag him in on Friday.


A pleasure! Say it with a smile, next time. Talking about smiling or


not smiling, the G7, as some were expecting. Here is what is hard for


Lehman, the leaders agree that, globally, things are getting worse,


not getting better. The IMF has revised downwards its global


economic forecast. They still can't come to a unified agreement. They


agree things have got worse. But how much worse? It is a difference of


emphasis. The Japanese Prime Minister gave a presentation to the


other leaders, drawing some slightly alarming parallels with 2008, the


aftermath of the collapse of Lehman Brothers in the United States, in


particular looking at commodity prices, suggesting the fall has been


of a similar magnitude, looking at investments that are particularly


relevant in the emerging economies. They agreed that the emerging


economies are in a difficult situation. But he was giving a more


alarming view of the outlook for that part of the world and,


potentially, with knock-on effects to the rest of the world. In


particular, David Cameron, the British Prime Minister, and


Chancellor Angela Merkel of Germany, they would have been much less


convinced about just how bleak the outlook is. They're in mind those


are two leaders that are more resistant to the idea of more


stimulus coming from government spending and tax cuts. A lot of the


other leaders take the view that Germany has got more scope to do


that, because government finances are in relatively robust shape. But


Angela Merkel is not so keen. Another big story of the week, where


Germany found itself in a different come to everyone else, that was


Greece. They kind of lost, because Greece did get debt relief? Well, a


commitment in principle to debt relief. They went far enough to


persuade the IMF, who have long been arguing that Greece must have debt


relief, they have gone far enough to get the IMF to start cranking itself


up, to come in principle, getting financially involved in the


programme. The third Greek bailout, they have made no financial


contribution. They did contribute to the first two. They have refused,


hitherto, on number three, because of concerns about whether the debt


burden is sustainable. They are not quite ready to write a check, but


they are getting a lot closer. We have about 20 seconds. The oil


price, about $50, is it going to continue? A lot of people think


American shale oil production might start cranking back-up. That would


mean more supply, and that could be enough to catch the upward momentum,


bearing in mind that Iran is also coming back into the market as


rapidly as it can. There is always the possibility that some of the


supply disruptions we have seen in Nigeria, Canada, one of the reasons


for the price rises, there was might come to an end. I don't think


anybody would be betting on a big further upward movement. Goldman


Sachs has been saying that. Goldman Sachs, just get back in there! They


have! The US Republican candidate


Donald Trump has officially reached the number of delegates needed


to secure the party's If he's successful in his bid


for the Whitehouse, the billionaire politician could anger overseas


businesses by placing import restrictions


on foreign-produced goods. But for one Asian manufacturer,


it seems that every cloud Donald Trump says Chinese factories


are stealing American jobs. Well, this one has


pinched something else, And they have rendered it artfully


in novelty rubber and The production process, though,


offers no clues to those It is a questionable proposition,


of course, but if rubber mask sales are a reliable gauge of US


electoral sentiment, the coming months could be looking


bright for the controversial TRANSLATION: To be frank,


I prefer Trump to Hillary. Even though the sales


are more or less the same, I think in 2016 this mask


will completely sell out If he is right, though,


he might want to get in before the election, in case


Mr Trump slaps an import Of course, both sides of politics


get the rubber treatment here. And if rubber Donald Trump looks


a little stern, rubber Recent polls show the presidential


race narrowing. Orders for Clinton and Trump rubber


masks are also neck and neck, I wanted to get one of those! All


three of us. We are going to go through the papers. Can we start


with this? I'm really fascinated, Apple, there are rumours and talk


about buying Time Warner. One would think that is because of the


content. Is that because iPhone sales are sort of peaking? It is


also competing against Netflix, and Amazon Prime, who make their own


content? It's really interesting. What would Steve Jobs have done? He


would be rolling in his grave. I think so. What was Apple about when


he was in charge? New things, technology, hardware, but new ways


of doing things. You know, all of this pointing on screens, moving


stuff around you have been doing on your iPad. This seems like it is


like a child with money in their pocket and it is burning a hole in


their pocket. They are looking at other people and saying, this is an


area where there is growth, so let's go into there. They do have a huge


stockpile, they recently bought that rival to Uber in China. But neither


Apple Time Warner have confirmed anything. Are they behind the curve


in terms of providing content? Ever since the passing of Steve Jobs, we


have not had a whizbang product, have we? Do you want to talk about


this one? This is the Huffington Post. Is the writing on the wall for


e-mail, even in a work situation? We get so much spam that people are


using social media apps to communicate even in the workplace.


Would you allow that? Most companies find it difficult, they want to


control it. Things like WhatsApp, it is outside of the company. There are


things where you can do messaging, but it is all controlled, encrypted


and controlled centrally. So it will not be the companies like iMessage


that will do well out of this if it is a trend. But it is a trend, I use


WhatsApp all the time. Thank you for joining


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