15/08/2011 World Business Report


15/08/2011

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around the island. They are as are the latest

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headlines. Now for the latest financial news.

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Welcome to World Business Report. Here are the headlines: A victim of

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its own success. Switzerland are battles on the rise of the franc.

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And Japan's economy are still hit by earthquakes but not as much as

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many had feared. The president of the World Bank is

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warning that markets are heading towards a new danger zone.

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Reports are emerging of a crisis meeting in Switzerland to discuss

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the relentless rise of the franc. A Swiss newspaper reported that the

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government and central bank held talks over the weekend.

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But first we report on the strength of the franc is forcing companies

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to choose between a making a proper to a losing market share.

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It may look like business as usual, but the Swiss bank has risen 25% on

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the row in 18 months. Locals are getting better value elsewhere so

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local businesses are deserted. Not so long ago companies were actually

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moving to Switzerland because of the tax advantages of not being in

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the European Union. But now the height of the franc is causing a

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problem. Investors are repeatedly having to cut their prices just to

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keep their customers. This company create designer -- fabrics. The

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company has already said it has cut prices to the point where it is no

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longer making a profit. We are looking for new strategies. It is

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very important that we can survive here in Switzerland. A body

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representing these was mechanical and engineering industries are

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saying that one in three companies are now losing money. This goes

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directly into the margins. We estimate that one third of our

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members are now on the losses own. It seems that Swiss tourism and

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exporters are paying the price for their country's safe haven status.

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Switzerland finds itself in the same boat as a Brazil and Japan. A

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strong currency it can do little about.

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For more on the possible solutions to Swiss's franc we are joined from

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capital markets. Is it likely that Switzerland will try to introduce a

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limit. This might conform -- compromise its status as a tax

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haven. The bank has tried to intervene. The problem in doing so

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is that it would have to give up control over monetary policy.

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us turn to Italy. There are concerns about Italy's position. It

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has now passed some sort of measure last Friday. How convincing is it?

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There is no definitive picture yet until we get all the details. It is

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a credible measure worth about 45 billion euros. It looks to decrease

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spending and increased taxes. It is a significant step in the right

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direction. Given that is what is unsettling the market, could we be

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in for, a week? The market is exceptionally volatile. We should

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expect something a little bit. But we are not out of the woods yet.

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And Nicholas Sarkozy and Chancellor Michel are meeting once again. --

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Michel. There are no major announcements to come out of the

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meeting. I think we and can expect support for the Europe. But I'm not

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sure we will get any specific measures. -- the road. Let us move

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on to Japan where the economy is recovering from the devastating

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earthquake and tsunami earlier this year. The economy contracted by

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0.3%. That is much less than analysts had been expecting. Let us

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cross over to Tokyo. The response in Japan is pretty good. The growth

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in Japan -- the recession in Japan is much less than had initially

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been up feared. We got a decline of 0.3%. Analysts hero had been

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expecting a decline of a 2%. Production is picking up. The

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supply chains that were broken when factories making components were

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damaged or destroyed are being reconnected more quickly than

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expected. Japanese consumers seem to be getting over their mover of

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self- -- mood of self-restraint. What is going on in the rest of the

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world may still pose problems. you compare it to the eurozone and

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the United States then the underlying dynamic in Asia is much

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more positive. That is the case. But the critical thing is the

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dollar - yen exchange rate. Exporters are being relied on in

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Japan for growth. The issue is how high the end is. It is approaching

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-- yen. It is approaching its highest levels since the Second

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World War. Those high rates are really what could harm Japan's

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progression in the months ahead. A warning from the World Bank

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president about the state of the market. What did the President have

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to say? He is concerned about developments

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that are on going in the global economy. He says that recent events

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have led a many investors to lose confidence in Europe and the United

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States. He stressed that policy makers have taken too long to deal

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with debt issues. Economic recovery is now under threat from a new and

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different storm. He is referring to the slump in investor confidence.

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There is concern that Europe's debt crisis may spread. This has

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basically contributed to double- digit declines in Asian stock

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markets over the past three weeks. He also talk about China's

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inflation rate. He said that the appreciation of the currency would

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reduce pressure. But if the numbers rise to about eight - 10% this

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would be seen as a very serious problem. It has the potential to

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disrupt the leadership transition and the growth of the Chinese

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economy. Thank you. One last a story.

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Authorities in China closed a chemical plant after thousands of

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protesters took to the street over pollution fears. 10,000 residents

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confronted riot police outside local government officers. They

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have refused to accept insurances that there was no leak at the

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factory. Looking at the market we have really wild swings.

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have really wild swings. We saw some dramatic losses for the

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We saw some dramatic losses for the Dow. Market were able to recoup

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Dow. Market were able to recoup those losses. That's it from me.

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Here in the UK, the Prime Minister is to announce a review of every

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aspect of the government's policy in response to the right across the

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UK. Mr Cameron spoke of the need for a social fight back.

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A week after England was engulfed by some of the worst rioting in

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many decades, David Cameron and L - - Ed Miliband went head-to-head on

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how to stop the violence happening again. This was Mr Cameron in

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Croydon last week. In a speech later this morning he talked about

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the slow motion moral collapse in parts of the country. He said this

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has been a wake-up call for the country. He promises to meant what

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he calls a broken society. He adds, I will not be found wanting. Ed

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Miliband are said to the people he met after the riots want a real

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change. He said that policies needed to be thought through

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otherwise they would not solve the problem. He renewed calls for a

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public inquiry. He also said there has been too much prime -- finger-

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pointing at the police. Theresa May has been accused of criticising the

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police and interfering too much in their work. She says that she has a

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duty to set a framework. We need to ensure that the police have the

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backing for what they are doing and that we make sure they know what

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the public expect of them. senior police officers and

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politicians will need to set their differences aside as they sit down

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face to face for another emergency committee meeting.

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Coming up at six o'clock: We will be here with breakfast. They will

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have all the day's business, news and sport.

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You are watching BBC World News. Here are the headlines: Syrian

:12:09.:12:14.

government forces have attacked democracy activists. A resident of

:12:14.:12:19.

the town it told us about the army is stormed to residential

:12:19.:12:29.
:12:29.:12:36.

neighbourhoods. At least 28 people were killed.

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This has come just after a crackdown that went on in another

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city the Syrian government is bombarding city and the City again.

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They are shooting anything that moves. The situation is really

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critical. We do not have a full information about what is going on.

:12:58.:13:03.

Hosni Mubarak is expected back in a Cairo court shortly. He is accused

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of corruption and killing hundreds of protesters in the uprising

:13:08.:13:13.

earlier this year. Human Rights Watch has accused Somalia's warring

:13:13.:13:18.

parties of contributing up to the humanitarian catastrophe that is

:13:18.:13:22.

ravaging the country. It is calling for all sides to end abuses against

:13:22.:13:28.

civilians and injuring access to aid.

:13:28.:13:33.

The Norwegian gunman who shot 68 people has been brought back to the

:13:33.:13:36.

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