03/08/2011 World Business Report


03/08/2011

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Welcome to World Business Report. Italian bond yields soared to

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levels not seen since the euro was introduced as the eurozone crisis

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returned to the plot line. Portugal's Parliament is about to

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debate amendments to this year's budget as the centre-right

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government fight to bring the deficit and debt under control.

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In Asian stock markets, live there for a second trading day as

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investors worry about the state of the US economy.

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More and Italy's financial woes in a moment. First, the credit rating

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agency Moody's has confirmed that the US will keep its triple-A

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rating and avoid a default on its debt. But it has a negative a book

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after its rival Fitch ratings that held the US's rating with a similar

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warning. Standard and Poor's has been tougher than its rivals,

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threatening to downgrade US ratings by mid-October before makers don't

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come up with a plan to meaningfully cut the budget deficit.

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The markets have been a problem that ties by the US drama but the

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problems in the eurozone continue to escalate. A clear signal is that

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action needs to be taken. Italian bond yields have reached 6.3%.

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Th Thcould soon Top Spain's. The country's financial stability

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Committee held a -- an emergency meeting to discuss the market

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turmoil that has sent the Italian stock market to a 20 mud load.

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Later today, Silvio Berlusconi is expected to break days of public

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silence over the crisis but a special address on the Connor will

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stop joining us from Rome is the academic director of the European

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School of Economics. Tee mac for joining us. Or will we see the kind

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of structural reform from Silvio Berlusconi that markets and

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investors want to see? Their -- is anticipation regarding the speech

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of Mr Berlusconi. He is talking about reforms regarding the labour

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market. In Italy, we already have some reforms regarding the labour

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market. The investors and international markets are expected

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-- expected something more regarding the debt and the way we

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are going to use the public resources to privatise some assets

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and reduce the cost of the administration and other

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institutions in Italy in order to give a clear sign that we're going

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to change the way we are using public resources in Italy.

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difficult is it at the moment? Italy's public debt is huge. 120 %

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of GDP. How much room does it have to manoeuvre? In principle, there

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are some studies that demonstrates that public assets in Italy

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acquired huge. The value of these public assets can be used to cover

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the public debt. The problem is that in this year, no government

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tried to transform these assets in a way to reduce the public debt.

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This is time to move in this direction. The political interests

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is huge. Sometimes it is difficult because the public interest tends

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to stop any reform. Tee mac for joining us.

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Portugal's Parliament on Wednesday debates and then bent to the budget

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for the coming year. The centre- right fight to bring the deficit

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and debt under control. Legislation was drafted by financial officials

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to allow the state to pumped 4 billion euros into the country's

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banks which had been shunned by international commercial lenders. A

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much larger bear that is already agreed with the European Union and

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IMF. This week has seen another blow for

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the long suffering Portuguese with public transport prices going up by

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an average of 15%. If we spend here, we have to make

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cuts elsewhere. It is the same old story about the need to tighten our

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belts. We have tightened them so much it is getting increasingly

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difficult to cope. The right-of- centre coalition has blamed its

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predecessor for the extra spending cuts it says I needed. But the

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Finance Minister is submitting a corrective budget to allow for a

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massive recapitalisation of Portugal's banks as part of the

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country's 78 billion euros bail-out. The bench will that shutting out

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other international markets. A businesses say the reluctance to

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lend his deepening the recession. Economists agree Portugal's

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underlying problem has long been its chronically weak growth. In an

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interview with state television, the economy minister criticised

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public row of -- past reliance on public works projects. He committed

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the government to rolling back the patient's age that traditionally

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pads the state payroll and cutting spending even faster than

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international lenders demand. TRANSLATION: The accord calls for

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15% cuts in expenditure. We will try to be more ambitious and make

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it a target of 30%. Portugal has pledged to cut its public sector

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deficit from more than 9% last year. The opposition Socialist Party is

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committed to implementing the bail- out negotiated by its own leaders

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months ago. Unions are opposed to plans to loosen job protection.

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Protests are expected to multiply as the cuts bite. All of this at a

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time when officials from the UN di mare for in-town to assess progress

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and to decide whether to release the next ones. -- of funds.

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We have been talking about credit agencies and a few of the US. There

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is one agency that cut its downgrade.

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That right. It is the China's leading credit agency. They

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undertook a major move which none of the other global ratings

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agencies have done and that is downgrading US sovereign debt. They

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-- they lowered the rating to a single a with a negative outlook

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from a pass. -- A-plus. The gloomy assessment was inevitable. It will

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eventually lead to a further decline in its debt payment ability.

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This move could not just at the US but also China, the largest foreign

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owner of US debt with holdings worth almost 1.2 trillion US

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dollars. The privately held firm which was founded in 1994 to

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Greater Chinese companies attracted worldwide attention last July when

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it published its first seven credit ratings and cited growing deficits

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in the developed world Bank of China higher than the US and Japan.

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-- ranked China higher. What is going on in the Asian markets this

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morning? All in negative territory because of the slowdown of the US

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economy. Japan, South Korea, Hong Kong, Australia, all in negative

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territory for a second day. Wall Street shares have plunged, retail

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sales are falling. Thank you. Some of the Other

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business news: Dougal's new social their workers attracted 25 million

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users making it the fastest website to reach that audience size. In

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contrast, it took Facebook around three years to attract 25 million

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visitors while Twitter took over 30 months.

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A shake-up of UK copyright law is expected today. At the moment, it

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is technically illegal to transfer content from CDs and DVDs on to a

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different format such as an MP3 file on a computer. The government

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will today scrap these restrictions and make it legal for individuals

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to burn copies have purchased content for other family members to

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use. A look at the market. Not much

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change from yesterday. Goodbye. News from around the UK: the

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Department of Health has been told to urgently reconsider spending

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billions of pounds it set aside for a national computer system for the

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NHS in England. The Public Accounts Committee says the system is

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unworkable and many are now coming up at their own systems which may

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not be compatible. It was supposed to be a revolution

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in the bay the NHS uses technology. The results of scans and other

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detail patient records going on to a universal computer system which

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doctors and nurses across England could save. Today's report says

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that will never happen and millions of pounds may have been wasted. It

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says trying to create a system of one size fits all has proved

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unworkable. The remaining �4.3 billion of the budget may be better

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used on other systems that do work. The Department of Health was

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clearly overpaying for computers, including spending �9 million for

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systems that have cost other parts of the NHS less than �2 million.

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Even the money that has produced something you can touch and feel

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has been spun -- spent much less efficiently there could have been.

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The most important thing, the detail of care record, the central

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purpose of this entire programme, will not now be achieved. Many

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hospital trusts have gone their own way with other computer systems.

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The government says it is already working to cut spending on NHS.

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Coming up, IBreakfast. All the papers mac news, business and sport

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and a discussion of the Trade Not many of us are willing to give up.

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Shows on the stage a more successful than ever. 14 million of

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us have attended them. All of that and a ball from 6pm this mac 6am. -

:11:41.:11:51.
:11:51.:11:52.

You are watching BBC World news. The headlines: Egypt's former

:11:52.:11:56.

president is due to go on trial later today. He is accused of

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corruption and ordering the killing of hundreds of demonstrators who

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took to the streets to demand his removal.

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The UN says that Syria's president has lost all sense of humanity

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after a brutal crackdown by government forces claimed dozens of

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lives. The US has held on to its triple A

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rating after an agreement was reached to raise the debt ceiling

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and slash spending. A Washington correspondent says there is still

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plenty of cause for concern. Within hours of President Obama

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signing the Bill to raise the debt ceiling, the stock market plummeted.

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The figures show that consumer spending, the powerhouse behind

:12:35.:12:40.

America's economy also fell for the first time in two years. The

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country's sterling credit rating could still be downgraded in the

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months to come. Italy's PM is to address parliament

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in Rome amid growing fears for the It's that time where we look

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through all of the newspapers and stories making headlines around the

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world. Let's start with an image in the International Her apld Tribune.

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It's of a -- Herald. It's of a vandalised picture of Egyptians

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with Hosni Mubarak's image splattered with paint. The deposed

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