16/06/2017 BBC Business Live

This is Business Live from BBC News with Alice Baxter and Rachel Horne.

Greece gets more bailout money to stop it defaulting

Live from London, that's our top story on Friday the 16th of June.

There's still no clear agreement on debt relief for now.

So is the Greek government right to call it light

at the end of the tunnel? Also in the programme...

After the biggest recall in the history of the car industry,

could faulty airbag maker Takata be about to file for bankruptcy?

We will keep across all market movements for you.

European shares open on a positive note

And we'll be getting the inside track on a tumultuous

week for the UK's Brexit negotiations and look

at where the new government goes from here with our Business Editor,

Simon Jack. We usually ask you a twitter

question, but today the founder of Amazon has one for you -

what should he do with all his money?

Jeff Bezos has posted a request for ideas from the public

for philanthropy inspiration - what advice would you give?

Good to have you with us on Business Live.

We start in Greece, which has edged back from the brink of financial

Late on Thursday - after months of wrangling -

European finance ministers, together with the International

Monetary Fund, finally agreed to give Athens its latest slice

And there's a hint it could get some relief from its crippling

Greece will finally get this - 8.5 billion euros -

part of an 86 billion euro bailout plan agreed in 2015.

It will come just in time, as Greece faces 7.3 billion

euros of debt repayments, due next month, which it wouldn't

Its total debt now stands at more than 337 billion euros.

To put that in perspective, have a look at this.

The red is Greece's debt level over the past decade.

The grey is the size of the economy, everything the country produces.

The debt is currently some 180% of GDP one of the highest

levels in the world, and a number Athens

That's why Greece has been insisting on debt relief, which may

IMF boss Christine Lagarde says a write-off is the only way Greece

will ever get back on its feet, and has been refusing to get

German Finance Minister Wolfgang Schaeuble has been amongst those

insisting the debt must eventually be repaid in full.

The chairman of the Eurozone finance ministers' group is optimistic

there could soon be an end in sight.

Overall I think this is a major step forward,

I commend the euro group institutions, the Greek authorities

and foremost of course the Greek people for their intense

We are now going into the last year of the financial support

programme of Greece, we will prepare an exit strategy

going forward to enable Greece to stand on his own feet again over

Thanos Vamvakidis of Bank of America Merrill Lynch warns

that the details of the deal are still vague.

I think the agreement is a compromise, which is the best that

we could have hoped for given all the constraints. But it is not the

final solution. There is a broad understanding that debt relief could

be required, but it is another kick of the can down the road. So you do

not think we will see agreement for a haircut, for a chunk of debt to be

written off? You think it is more extending the payments? This is

exactly what they are discussing, depending on the physical

performance and economic growth. They have to agreed to maturity

extension to allow Greece to eventually repay this debt. We are

talking about maturity extension for between Zoo Road to 15 years, this

is the discussion. -- zero to 15 years. A lot of it depends on your

long-term growth assumption, this will affect the numbers. What will

be the assumption on the interest rate you will be paying on these

loans also. This is what they are discussing, not a haircut. It still

has to be approved by a number of European Parliaments? I don't expect

any problems. They require the participation of the IMF. Some good

news from the deal is that the IMF will participate with a so-called

stand-by arrangement, which does not include any money before a final

deal on the debt. Do you feel there has been softening of the stance

towards Greece because of Brexit? Seeing the UK leaving has perhaps

made your finance ministers think that we do not want another country

to leave? Not really. I think, rightly so, they have kept these

issues separate. If anything, I think the creditors were tough on

Greece, who were to approve measures for the next five years and Quy on

fiscal targets for the next few decades without actually getting a

final answer on debt relief. This is completely separate. That was a

representative from the bank of American Merrill Lynch.

Let's take a look at some of the other stories making the news.

Tesco, which is one of the world's biggest supermarket companies,

appears to be cementing its recovery here in its home market

of the UK after sales growth beat expectations.

In the three months to the end of May -

The firm will face shareholders later today,

who are expected to query a pay deal awarded to the firm's

The Chinese bike-sharing start up Mobike says it has raised

$600 million to help fund its overseas expansion.

Since its launch last year, the firm has rolled out

its brightly coloured bikes in China and Singapore.

It hopes to be in 200 cities by the end of the year.

US authorities are moving to seize a Picasso painting,

an apartment in Manhattan, and rights to a film as part

The US alleges high-level Malaysian officials stole more

than $4.5 billion from the country's economic development fund.

The Japanese company behind the biggest recall in the history

of the car industry appears to be on the verge of bankruptcy.

About 100 million Takata airbags have been recalled

Most major car-makers have used them at some point.

Ruppert, tell us what is the latest? We have heard that shares have been

suspended on the stock markets, could it be the end for the company?

It certainly looks like the end for the company in its present form. It

has been reported from several different sources that Takata will

file for protective bankruptcy both here in Japan and in the United

States sometime next week. That would pave the way for it to be

taken over by an American company, Key Safety Systems,, the preferred

bidder for Takata. This is the end of a very long-running saga dating

back to 2008 when these records began because of faulty inflator is

inside Takata made airbags. The recall has grown and grown and grown

and, with it, potential liabilities for Takata have ballooned to an

extraordinary extent, 100 million records, perhaps 8 billion US

dollars worth of products that they will have to May, essentially, for

free, which is driving the company into bankruptcy.

Let's stay in the region where Asian stocks were mixed,

with shares in Japan advancing, the Nikkei rose to a

We also saw the yen remain near a two-week low

against the dollar after the Bank of Japan left monetary policy

unchanged as expected even as the Federal Reserve

And that more hawkish tone meant we saw treasuries fall and gold

So overall a steady performance in Asia on Friday -

stocks seemingly taking the resumption of the US tech rout

overnight in their stride Meanwhile here in Europe shares open

on a positive note following Thursday's losses.

The FTSE 100 in London is currently up to 0.36%.

And Michelle Fleury has the details about what's ahead

President Trump is expected to announce a shift in US policy

towards Cuba, possibly as soon as this Friday. Watch out for curves on

American companies doing business with the Cuban military -- watch out

for curbs. And also tighter rules on travel to the island. It will be

interesting to see how US businesses react. Since Obama loosened the

embargo on Cuba, several US airlines have daily flights there. Will this

dampened demand? The CEO of the Marriot hotel group has said it

would be exceedingly disappointing to see progress made in the last two

years between the US and Cuba halted and reversed. Meanwhile US

agricultural businesses may be disappointed as they had hoped to

export more American agricultural and food products to the country. On

the economic front, watch out for the latest survey on consumer

sentiment from the University of Michigan and housing starts from the

month of May. Joining us is Jane Foley, senior

currency strategist at Rabobank. Thank you for coming in. We will

start with interest rates, lots of big decisions this week. Let's look

at the UK. It has held them, but three members of the eight voted to

increase? They did. That is interesting given the economic data

we have had recently? It was a surprise for the market. Looking at

what the market is implying, yesterday the market had suggested

that the Bank of England would not hike interest rates to perhaps 2019.

So to suddenly have three committee members voting for an interest rate

hike took the market by surprise. My view, and I am an effect strategist,

is that this might be about the pound. Looking at what the Bank of

England has said for a few months, the inflation that has been coming

through in the UK economy, which is very high, 2.9% each year, has been

because of the weakness of sterling, which fell quite dramatically on the

back of the referendum result last June. And because sterling has been

weak, prices of goods such as food and energy, almost anything to

nominated in another currency, has been going up and driving our

inflation. The bank shot across the bows, which should mean that if the

market is beginning to think the bank could hike interest rates,

there might be less selling pressure.

Given those inflationary pressures you describe, if you look into your

crystal ball, what do you see happening with regards to rates? One

of the most hawkish members of these eight people that decide whether or

not the bank will raise rates, Kristin Forbes, is due to leave

soon, she has been pushing bits for a while? She is due to leave at the

end of the month and there will be two seats left on the committee. We

don't know who will take them and whether they will be biased towards

making change, or increasing rates. Why the market thinks the banks will

not hike interest rates for a few years is because of the type of

inflation we have seen. As I have described, it is not the sort of

inflation that is because we are all rich and demanding more, that is the

sort of inflation we would like. Unfortunately wage inflation is very

low, wages are rising a lot less than inflation, meaning we are

poorer. We have seen very poor results in retail sales, meaning

economic growth will be great as a consequence. Inflation we have seen

is acting in the same way as a tack site. If you saw an interest rate

hike it would make is even pleura. ... Acting in the same way as a tax

hike. We do not think they will hike but they want to stabilise the plan.

In the US, interest rates increased as expected but it still surprise

the markets? Yes, the US central bank has adjusted for a while they

would hike interest rates in June, and they did, but similar to the UK,

wage inflation is relatively low. Again, meaning that demand type of

inflation is not necessarily there, it is very moderate. What the market

thought the Federal Reserve would do is hike interest rates because they

said they would but then maybe signal they would do less further

out, but they did not, they set out from the same area as before and

said we will hike interest rates again, probably at the end of this

year and maybe three times next year. The market was surprised by

that. Jane, you will take us through

papers in a little while. Thank you, Jane.

We'll get the Inside Track on the big business

stories of the week - inlcuding the UK's Brexit plan -

You're with Business Live from BBC News.

In an effort to help businesses grow, HSBC has today launched

a ?10 billion fund to support small and medium sized businesses

Joining us from the London Stock Exchange

is Ian Stuart, Chief Executive of HSBC UK.

Many thanks for joining us. Tog us through the aim of this? This is the

fourth fund that we have launched. ?10 million which we hope SMEs will

take advantage of. It is not just for HSBC customers. It is for all

small and medium-sized businesses, spread regionally. For every corner

of the UK there is a fund to access. We genuinely hope it will give

businesses the oxygen to grow and hopefully do more overseas with

export as well. This is a good time for businesses to borrow money when

interest rates are low. But we were just speaking to Jane a moment ago

about Bank of England committee members possibly trying to move

towards an interest rate hike at some point in the near future. Might

that mean less demand for these loans? I just caught the end of that

interview. What was coming across is, is there a genuine interest for

interest rate rises now? There will be very little chance of a rate

increase this year. I think it is still a great time to be borrowing

money. I think money is as cheap as it ever has been. We help small

businesses will take advantage of it and keep pushing forward and help

the UK economy. No doubt SMEs are the backbone of the UK economy. This

is really important to support them through what is unchartered waters

over the coming weeks and months. You talk about unchartered waters.

In this post Brexit environment, do small and medium-sized businesses

need extra handholding? We are here to help take advantage of the

opportunities. A lot of customers talking about exporting, who maybe

have not exported in the past. We understand that taking that first

step is a big step. Our job is to try to help customers take advantage

of some of the markets, especially outside the EU, where there are

genuine opportunities. Many thanks, Iain Stewart.

You're watching Business Live - our top story...

Finance ministers from the eurozone and the IMF had a -- have agreed to

give Greece another multibillion-dollar bailout. There

was no clear answer about whether Athens will get debt relief.

A quick look at how markets are faring...

They have been open for a fair while. In Europe, we can see they

are closing the week on a positive note after the losses we saw on

Thursday. The FTSE 100 index in London still up 0.34%. That follows

the positive trend in Asia overnight.

And now let's get the inside track on all the big business

It was the first week of Britian's new government and there have been

several developments about the impact of the UK's

And on the other side of the Atlantic the US

Federal Reserve increased the cost of borrowing.

Our business editor Simon Jack is here to pick over it all.

Morning. Let's start with the UK and Brexit. We were expecting to hear

Philip Hammond speaking last night in the Mansion house but that was

cancelled because of the dreadful tower fire in London. What were we

expecting to hear from him? It is a week since the UK election. That

election was called so that the Prime Minister Theresa May could get

a mandate, strengthen your position, to deliver the kind of Brexit she

had promised. We are out of the single market, the Customs Union, no

deal is better than a bad deal, that is what she said. She fell short of

a majority and has to go into talks with the DUP, the Northern Irish

party, to try to get a majority. Are we going to get that kind of

approach now when the Brexit negotiations start on Monday? In a

way it was a shame we didn't hear from Philip Hammond. Of course, we

completely understand why he cancelled it. He is thought to

favour a softer, if you like, soft and hard, not useful but we

understand what they mean, he favours a more conciliatory approach

to Europe, a more collaborative approach, and possibly looking at

things like reopening questions, is there a way we can stay in the

Customs Union? That will be interesting because the Northern

Ireland party, that border would cause a lot of friction going to and

from macro if you had to open every Vaniteuk customs checks. That would

be a big problem. We are trying to figure out what kind of approach we

are going to get from this government. Negotiations start on

Monday. It is not a brilliant position to start from. We don't

know what our starting position is and what our objectives are. The

clock is ticking to that is the thing. You trigger Article 50, then

call an election which you think you're going to win, and is a bit

like going to the front door, ring the buzzer and runaway! Brussels are

waiting for us to come back around the corner. One of the areas of the

economy there are questions over is euro clearing. What is it and why is

it so important? This is one of the bits of plumbing of the financial

system. Buyers and sellers by derivatives. Financial insurance. It

is a massive business. There is 900 billion euros worth trading day.

Some people say it supports up to 85,000 jobs directly and indirectly.

The Europeans, the European Union, have always wanted this huge

business the nominated in Europe to be done inside Europe. This is too

big an industry for us. It is too big for us to be conducted outside

the EU bloc, they said. If they decide the matter trading is

systemically important, which it is, they either want direct oversight of

it, have their monitors monitoring it, or they will force it back into

the European Union. That is what they came to have a look at. None of

the customers that use this clearing house want this to happen. You get a

big economy of scale if you have this deep pool of trading. You have

to put up less margin. A bit in the kitty of something goes wrong. The

bigger the pool, the less margin as a percentage of the business you do.

They say it with drive up costs. It is one of the big titans of city

trading, Sir Michael Spencer, he said it was a political land grab,

dressed up as concerns about financial stability. Not holding

back at all. Bear in mind of course that this also happens in New York.

A lot of people think of the EU and the UK start taking lumps out of

each other, it would be mutually destructive and many big traders

will just move to New York. That doesn't sound good. We will

leave it there. Simon Jack, thank you.

The Duke of York has told the BBC that UK businesses face several

years of uncertainty and upheaval due to Brexit.

But Prince Andrew, a former UK trade on by, said businesses should make

the most of new international opportunities. The Prince has been

in Singapore to attend a conference. He was also hosting pitch the

Palace, a programme he started to support. Entrepreneurs from the UK

and all around the world. We have been concentrating on 27

countries. If you take that as an internal market, there is an

external market that is a lot bigger. And many businesses haven't

got over that garden fence, to some extent. And in my experience

recently, businesses that look over the garden fence have gone, the

grass is not quite as dark and unforgiving as you might expect, and

actually getting over the fence, there might be some fresh grass out

there. What other business

stories has the media been Jane has returned. At the top of the

programme we usually give out our Twitter question. This time we give

you Jeff Bezos's Twitter question. 6 billion short of being the world's

richest man. He has tweeted asking people what he should do in terms of

philanthropy. What Tweets have we got? We have had

a a few. Jeff Bezos seven best in independent film-making. The studios

are churning out cartoons and creativity is indy. Another one

here, give it to the people of Grenfell Tower and help them rebuild

their lives. A reference to that tower in west London that burnt

down. In respect of that last response,

that rings a tune with what Jeff Bezos himself has said. He is

looking in the longer term. What he indicated is in respect of

philanthropy, you would perhaps like to look at the urgency. When Picchu

-- people really urgently need help. That rings true with the last tweet.

When there are disasters, people want to respond immediately. That is

when they will. It is having the organisation and structure in place

to ensure donations go to the right place and I used best? It is

interesting. This newspaper article says he is less than 6 billion away

from being the world's richest man. Just a mere 6 billion! There is a

lot of pressure within America for a very rich people to setup bodies, to

read a script -- to redistribute their wealth. Bill Gates, Warren

Buffet, the top five billionaires, giving away a lot of their money.

If he is going to give away his money, you don't want him to give it

to bitcoin, do you?! Bitcoin has had a bad week. The worst week since

January 20 15. There are a number of factors. I'm sure your viewers are

aware that this has been a very difficult week for a technological

stocks. That has probably contributed to some of the pressure

on here Macron bitcoin as well. Other factors, a bill through

parliament saying they need more regulation. That could take away

some of the advantages will stop I'm going to have to pause that and what

it back in slow motion. Thank you. That is it.

Have a great weekend.