28/11/2011 World Business Report

capped 85 times. Now for the latest financial news with World Business

Report. The headlines: Optimism or fantasy, the euro gained ground on

hopes of action over the debt crisis. Production at Thailand's

factories slumps in October. Australian carrier Qantas is

forecasting further earnings strikes and a slashing of proper

stability by 50%. -- profitability. We start with optimism in Europe

this week. The situation could not have been worse at the end of last

week when many commentators forecast the end of the euro as the

cost of borrowing soared for Spain. The Italian newspapers said that

the IMF is preparing an $800 billion loan for Italy which would

give the new government 18 months to work on its finances without

having to borrow from the money markets. The German Finance

Minister has been talking about a fast-track for countries which want

to form a closer union. Countries which join the stability union

would sign up for much tighter controls over their budgets. We

speak to a senior director of a financial trading group. We are

starting with optimism in the new week. What he make of all the

stories? The first thing I think about is the story of the IMF

providing massive support for Italy. Does that mean they will also

provide the same support for Spain? These are huge numbers we are

talking about. Is that to be done in conjunction with the European

Union and the bail-out fund? These things are still unclear. They are

causing me to wonder about how well this has been co-ordinated. If

there is going to be that kind of lending, does that mean that

Germany needs to provide more for the stability fund? If so, that

will open up the existing German political wins about the amount

that has already been provided. -- German political wounds. The reason

that the euro is up this morning is the market's hearing the kind of

thing they want to hear. Let's get the trees behind the story first.

Be figures are huge and the $800 billion is a lot more than these in

the bail-out fund at the moment. awful lot more. The markets are

saying they are looking at the fact that European policy makers are

taking steps to stem the crisis. Let's talk about this closer union,

closer monetary union, the ideas coming from Germany. Is that

something that can be put into practice quickly? We have the

meeting on 9th December as the next deadline in this process. I am

Markets what will the stability pact actually provide? In return

for greater oversight and giving up national financial sovereignty,

what will countries be able to get? What we saw clearly last week was

confidence in the euro as a whole system beginning to evaporate. That

was most clearly illustrated by the failure of the German bond auction.

If there is something to replace that, well and good. The second

thing he is, is the ECB going to be allowed to rescue European

countries in the form of quantitative easing? Thank you for

now. We take you to Thailand now. One of a share's most important

industrial centres. Serious flooding has shut down a lot of

businesses and data for October is worse than expected. We gave to our

Singapore euro. We were expecting bad news, but this is worse than

that. That's right. Out port saw a very

steep drop of 36%. -- output. Severe flooding forced the closure

of seven industrial estates in October. This caused supply chain

disruption affecting the power and electronics industries. Thailand is

the world's second biggest producer of hard disks. It will still take

months for some factories, especially the technology

facilities, to resume output. Supply disruption is expected to

continue. The Bank of Thailand forecasts a loss of $6 billion. GDP

growth will also suffer a big loss. Tell us about the ongoing drama at

Qantas between management and unions. What is the latest?

They at giving a profit warning. The Australian carrier is warning

shareholders and the markets that it will experience a steep fall in

the first half of its earnings season. They say profitability

could drop by 50% due to strikes, the grounding of the fleet and high

fuel bills. The second half outlook does not look any better. Qantas

says the situation remains volatile, give in the global economic

uncertainty, fuel prices and poor exchange rates. But on the flipside

the airline says that despite suspending flights for two days

last month they said the move had paid off with international forward

bookings back to normal. Other stories: Early indications

point to a strong Tark to the holiday shopping season in the UK.

-- a strong start. The average spend per person was $400, up 9% on

last year. Airlines that use Heathrow are making preparations

for disruption on Wednesday. A strike by public sector workers is

likely to create serious delays in immigration. Travellers may be held

on board and create deadlock. Sweden's Volvo plans to hire 10,000

staff in the coming year, most of them in China. That would increase

the workforce by 40%. Volvo it aims to sell 25% of its cars in China by

2020. The latest in the Twilight series of movies was topping the

American box office over the weekend. Breaking Dawna is the

fourth of the five movies in the Twilight series. It beat the mark

puts into second place. The markets Thanksgiving retail sales jumped to