07/11/2011 World Business Report


07/11/2011

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win his third term in power. Now it is time for World Business Report.

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A nervous reaction from the markets as Greece readies a new Coalition

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government. Shopping to the rescue. Can Europe expect a boost from

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consumers? A potential merger of Japan's

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largest stock exchange has could materialise by the second quarter

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of 2012. -- stock exchanges. There has been a cautious reaction

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on financial markets to the news of a new Greek Coalition government.

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The Prime Minister agreed to step down to allow the creation of a

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national unity government. Their priority will be to push through

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the bail out deal agreed with European leaders. France and

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Germany had threatened to cut off funding to Greece if it backed away

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from that deal. Greek politicians were racing to reach a deal before

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a meeting of European finance ministers on Monday. Italy is the

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other potential problem. On Tuesday Prime Minister Berlusconi faces a

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crucial test when the Parliament votes on public finances. Our

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correspondent is in Athens. I mentioned that the markets have

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given a cautious reaction to the latest developments from Greece.

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What is your take on it? They have stepped back from the brink in

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Athens. They have agreed to agree, but they have not yet agreed, if

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you see what training. We know there will be a new Coalition

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government which will last until the middle of February, but we do

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not know who will be the new Prime Minister. There is a name out there.

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The man he is to run the Central Bank. That is not confirmed. -- the

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man who used to run. Both of the main parties have backed the key

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European euros and bail-out deal that George Papandreou originally

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wanted to put to a referendum. With both of the major parties backing

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it that should be enough to unlock the latest tranche of aid from the

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eurozone and the IMF. It is desperately needed to stop Greece

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going bankrupt. Sorry to interrupt. It does not really change anything

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for the people of Greece because they have to face more painful

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austerity. There also has to be a lot of reform, which is slightly

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different from austerity. Part of the problem in Greece over the last

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year is that they have had the austerity but not enough reform.

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Although it is painful, reform leads to benefits in the long-term.

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They have to step on the reform pedal as well as maintaining the

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austerity. What about this week for Italy? Ab two week for Silvio

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Berlusconi. At the G20 summit at last week in Cannes he had a

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humiliating time. He had to agree to monitoring by the IMF. The

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Finance Minister was asked whether he backed Silvio Berlusconi and he

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pointedly refused to say that he did. And there are rumours in Rome

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that there are up to 50 MPs willing to desert the government. I am not

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sure what will happen on Tuesday. That is not take a clear a no

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confidence vote. That will happen later in the week. They think they

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have the numbers to bring him down but they are double-counting

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because Berlusconi does have an ability to pull rabbits out of the

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hat at the last minute. We must leave it, but many thanks indeed

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for your thoughts on Italy and Greece. Europe's debt crisis is a

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fast-moving story. If you want to keep up, please go to our website.

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There is a section devoted to the world economy. Europe would be

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helped out of this debt crisis by a stronger economic growth, but one

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part of that growth, retail sales, has been sluggish. We will get the

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latest figures for the 20 said any you countries including Britain

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later. Retailers across Europe are hoping sales will pick up over

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Christmas. Our correspondent reports. Happy Christmas, please

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give us your money. Most retailers are relying on the next six weeks

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trading to bring in one third of their annual profits. This was

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founded in Denmark and is in 12 countries. It is an upmarket

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bargain store. Its secret is a mix of the everyday and the unusual and

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clear pricing in round numbers. can find similar elsewhere but at a

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much higher price.. People like the experience. It is fun. Customers

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need to know where they are when a walking tour shop. Some stores

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which are struggling are those where it is not clear what they are

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about. Retail sales that taking up in France and Germany. That is not

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enough to compensate for the fall off elsewhere in Europe. Nowhere

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more so than in Spain and Italy, where they are worried about

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austerity. They are and the buying essentials. Other surveys contain

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some seasonal cheer, suggesting that squeezed Europeans may spend

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more if they see exactly what they want. Says stores are working

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overtime to tempt customers before they spend their cash online. BBC

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News. The Tokyo Stock Exchange is the world's third biggest share

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market. And it may be getting bigger. It may buy the Osaka Stock

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Exchange. How serious is this and when might it happen? According to

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the Nikkei newspaper, which is Japan's largest publication, the

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potential merger could take place by the second quarter of 2012. Both

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forces are in the final stages of combining. That could reduce

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technology costs. The Tokyo Stock Exchange would neither confirm nor

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deny these media reports. One scenario is that the Unlisted Tokyo

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courts would have a stage in the smaller but listed was up a

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Exchange. -- have a stake in the smaller but listed at Osaka

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exchange. Due to mergers, they remain competitive. The two

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exchanges have complementary strengths. The Tokyo exchange

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controls 90% of cash. The Osaka exchange controls futures. The

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share price is up by 7%. Thank you. BP's plan to sell its business in

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Argentina has fallen apart. The buyer has withdrawn its offer to

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buy a BP's staking Pan-American energy. BP has been selling off

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assets to pay for the damage caused by the oil spill in the Gulf of

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Mexico. So far it has raised only half its target of $45 billion.

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Spending cuts and tax increases worth $11 billion will be announced

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on Saturday. The moves are aimed at preserving France's credit rating.

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Germans will receive tax breaks worth more than $8 billion over the

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next two years. Chancellor Angela Merkel said the measure was a

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reward for the burden of helping out Europe during the debt crisis.

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The tax cuts are designed to help lower and middle income citizens.

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