30/09/2011 World Business Report


30/09/2011

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their lives since March. Those are the latest headlines. We now have

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World Business Report. This is World Business Report. Progress on

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Europe's new bail-out fund. It is the end of a turbulent water that

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has seen $9 billion wiped out. -- quarter. The European Central

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Bank's other headache, rising inflation in the eurozone as it

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faces growing calls to cut interest rates.

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The political battle to shore up the eurozone continues after that

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key vote in Germany yesterday, Estonia has become the latest

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member to sign off on the bail-out fund. The Baltic nation's

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parliament voted in favour on debate. Today is the turn of

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Austria, it is expected to pass the measures, it leaves only the

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Netherlands and Slovakia or of the 17 eurozone members to approve the

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plan. There is a growing sense amongst investors that policy

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makers are behind the curve. The expanded fund of 440 billion euros

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sounded like a lot of money when it was Greece and Ireland in trouble.

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Spain has public debt of 730 billion euros. Italy has debt of

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1.8 trillion euros, four times larger than the fund itself. Let's

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have a look at how the markets are reacting to this in Asia. We go to

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Singapore. A great deal of turbulence on the markets and

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investors have lost a lot of money. It is right. Despite the vote, Asia

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stocks did not make any big games here. -- gains. In fact, most Asia

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markets are trading in negative territory at the moment. There are

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concerns over Europe, the global economy over the last few months

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has led to so much volatility on the markets. They have wiped out

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nine trillion dollars value. It is driving investors to stay clear of

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the yen, De La -- dollar. Many in the region have taken a very

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cautious view. The Nikkei is going to put in its worst quarter in more

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than one year. It has lost more than 11%. That is the worst since

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June at 2010. Australian showers are forecast to be making big

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losses. It has lost 15% this year. That is its second sharpest yearly

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fall in two decades. All of these volatility will continue until the

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Europeans take their bail-out plans one step further. Whether the

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Germans will agree to a more permanent solution in addressing

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the problem. Thanks mac. -- Thank you. There are reports to boost the

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bail-out fund to two trillion euros. We now have the German vote, there

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are other nations yet to vote, how encouraged can we be by the fact

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that Germany has said yes? My eyes of Angela Merkel's coalition said

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yes, but not everyone did. -- most. We are talking about a plan that

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was hatched two months ago and was hatched for a different problem. We

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have moved on considerably. There is a dislocation and what the

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markets are looking for and what the policy makers are debating. --

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between what. Maybe something will be hatched at the G20 summit in

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five weeks. I think Greece, we know cannot pay its debts as they stand.

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We have to have some degree of a haircut. As a by-product of that we

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have to have a recapitalisation of some of the banks. Markets do not

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really believe... We need to have the capitalisation of the banks to

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with down the right down on Greece. This is not restricted to Greece,

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we have concerns about Italy as well. You have mentioned the size

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of the Italian bond market. It is 120 %. It has been of that

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magnitude for the last 10-15 years. In that context it has not changed

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that much. But this is an economy that has not shown much growth

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either. Structural reforms are needed. They take a great deal of

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time to work through the system. Is it for her to say because the

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eurozone leaders are behind the curve, the problem is costing

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investors as well? -- is it fair to say. It is very difficult for

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politician has to step up to the plate and say we have a structural

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problem, we need to fix it now. is a bit like the German

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politicians yesterday, it is only when they get to the endgame and

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feel the risks of a structural default that they take the tough

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decision. Another headache for the European Central Bank, inflation in

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Germany hit 2.6% in September. That is the highest in three years. It

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is expected to be a similar story across the eurozone. Rising prices

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present a growing dilemma for the European Central Bank. This is a

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difficult time for policy makers in Frankfurt. Under normal

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circumstances the European Central Bank has one overriding goal, to

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keep inflation under control. Consumer prices have been rising

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faster than the Central Bank would like. It is a particular problem in

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Germany. Circumstances in the eurozone are far from normal.

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Greece is expected to default on its debt despite harsh cuts and

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public spending. -- cuts in public spending. Larger European economies

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like Spain and Italy are struggling with high debts and low growth. The

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ECB is under pressure to boost growth. The eurozone is slowing

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market Glee and there is concern about funding availability for

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banks. -- markedly. They are less worried about inflation in the

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medium term, they think that Lord growth now and a weakened outlook

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will lead to inflation falling down later. -- lower growth. It has made

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cash available to banks to stabilise it turbulent financial

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markets. That makes it harder for the

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financial power-brokers of Frankfurt to cut interest rates.

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Time for one more item of news. Hewlett-Packard has announced that

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its ousted boss will get a pay-out of $10 million. He saw $14 billion

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wiped off its market value. He is being replaced by the former eBay

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boss, Meg Whitman. She would get a salary of $1 a year with the

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ability to earn millions in share options and performance bonuses.

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Let's take a look at the market. The Nikkei has a bit of a mixed

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response. There are some votes outstanding for the European

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stability fund. There is a cap on optimism. That's it from me and

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World Business Report. More news from the UK. The European

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Commission is threatening legal action against Britain in a dispute

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about a residency test about which EU nationals are eligible for

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benefits. They discriminate unfairly against foreigners. 140

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members of the armed forces have been honoured for bravery. 16

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Military crosses banned by those serving in Afghanistan last winter.

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-- earned. His action is where a display of decisive courage. When a

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grenade landed three fee it away, - - three feet away. It was just a

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reaction. He would have done the same for me. The majority of those

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honoured faced a hard three months of fighting. Building relations

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with the Afghan population was a crucial part of the operation. She

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did more than Glenn gardener, he raced his life to bring a badly

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injured Afghan soldier to safely. If he did not show the

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willingness... 140 military personnel have received awards.

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Each story a reminder of the dangers they face every working day.

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Coming up at 6am, we have Breakfast. They have a special report on a

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warning about conspiracy theories and propaganda are entering the

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classrooms. This is BBC News. The headlines:

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George Papandreou is set to continue his bid to convince Europe

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that his country can meet the terms of the austerity programme. He will

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meet the President of the European Council and then will go on to

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Paris to top with President Nicolas Sarkozy. Michael Jackson's former

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bodyguard has told a court in California that Conrad Murray asked

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him to gather up medicine before calling the emergency services.

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More than 1,000 Royal Navy personnel will be told they have

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been made redundant today as part of the UK's Strategic and Defence

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Review. 50 people are reported to have been killed in anti-government

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protests in Syria in the last two days. Hillary Clinton has condemned

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an attack on the ambassador to Syria after he was pelted with

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stones and tomatoes. This inexcusable assaults his par of an

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ongoing campaign of intimidation. - inexcusable assault is part. We

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are raising questions about what is going on inside Syria. It reflects

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an entire loans on part of the regime and its supporters. -- and

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intolerance. It is deeply Let's have a look at a headlines

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from around the world. The story that most of the International

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