02/03/2012 World Business Report


02/03/2012

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will represent England at the euro's -- Eurovision Song Contest.

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You're watching the World Business Report on BBC. EU leaders ask for

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more details before they hand over a bail-out package to Greece. Is

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the downturn in Europe affecting to Japan's economic recovery? Europe's

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leaders are in summit session in Brussels once again. The 27 will

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try to balance tougher austerity measures. They want to stop another

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recession. 25 of the 27 will agree to keep -- to bring big spending

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countries into line. There rides to phase two with completing tasks.

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They have been forced to make deficit cuts and austerity measures.

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Luckily, a flood of European Central Bank cash has calmed the

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debt market. 25 of the 27 was signed up to much tighter spending

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rules. They will vote for the EU President to chair future euro area

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summits. A promise deal to boost future bail-out by power has been

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denied. They want Germany to pledge more for the permanent rescue

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flight -- fund. The commitment was to reassess the adequacy of the

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overall lending capacity in March. Now we can do it, but we are still

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in February and we can have a good progress on these matter later. The

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world is watching Europe's decision carefully. The leaders know they

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must dig deeper into their own pockets before other countries will

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step in to help contain the contagion. The EU leaders have also

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asked for more detail on Greek reforms before the handover the

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bulk of the 130 billion euros in additional aid. If satisfied, they

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will sign off the payment later in the mouth. They have until next

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Thursday to sign up to the deal. -- later in the months. The design in

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Brussels appears to be from move to crisis mode to growth mode. Are we

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ready to do that? I do not think so. There are still problems with

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growth. If you look at the economic data that is coming from Greece.

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The Greek economy is imploding. The situation on the ground is getting

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worse day by day. They are being asked to sign up for another eight

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years of austerity. They cannot contain that. Let's look at the 130

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billion euros. In the Financial Times there is a breakdown on what

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that would do. None of that will go to the Greek people. 20% will go to

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the Greek government. That is about it. The rest will go to rollover

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the existing debts in the form of interest. Essentially, even though

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they're talking about writing off 100 and 130 billion euros. It

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basically delay is inevitable. Let's talk about the issue of

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growth. This is a way out of the crisis? Had you get growth to

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happen when the oil prices are at a record high? We saw the price of

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crude go to 95 euros a barrel, it has never be that high before.

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Spain is in recession battling 22% unemployment. Greek unemployment is

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above 22% and youth unemployment is 50%. What is the way out of these?

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They need to address the debt problem essentially. Europe is

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drowning in debt. Until we do that, until the banking problems are

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fixed.... They need to recapitalise banks? They have to do that anyway.

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Do you do that now or five or six years down the line when

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essentially the prices will be higher. It will continue to fall

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back. The longer you at delay in addressing it did worse it will get.

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Nearly a year after the earthquake and tsunami in Japan, the

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reconstruction is now under way fit. Figures showed that people are

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investing in plant and machinery again which will boost national

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wealth. Data on Friday suggests that households continue to have a

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tough time. Spending was down more than expected in January compared

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to last year. The number of Japanese out-of-work is up. We are

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joined from a Tokyo bureau from a correspondent. Japan has had a

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long-standing problem with lack of gross and the eurozone problem is

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not helping? -- growth. Europe is a big market for Japan. The latest

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figures showed that the core Consumer Price Index fell by 0.1%.

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That means that it was deflation in Japan, not inflation which is a

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persistent problem for the country. Last month the Bank of the Japan

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said for the first time that it is targeting a long-term 1% inflation.

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Earlier this week, they were supporting better news. Capital

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expenditure was up by 7.6%. The reason why is that spending on

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reconstruction, replacing factories, and also reconnecting transport

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links in the North have helped the economy there. On one side, the

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economy is doing very well. They are still struggling in the House

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of however. The central bank is doing the best they can to push

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inflation higher and therefore demands? Yes, the central bank has

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expanded in Sev -- recent weeks. Monetary policy has increased the

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money supply and setting the target as well. If you look closely at

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these inflation figures, it shows that the problem he's structural in

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Japan. Potentially, something to do with globalisation. A big party is

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the price of television's falling by one-third. -- a big problem. The

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Japanese are increasingly buying televisions from cheaper economies

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are bored -- abroad. It is contributing to companies facing

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pricing pressures. They are looking for bargains. On the streets in

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Tokyo, what is your feeling? Is there optimism that the state of

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the Japanese economy, because Asia continues to grow? In recent weeks,

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the Japanese currency has declined against the American dollar, for

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Japanese companies that is good news. Their exports become more

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competitive and it certainly helps the stock market. In that sense,

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there is optimism about the future. When we talk about the Japanese

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stagnation, Japan is stagnating at a very affluent place. Unemployment

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is only 4.6%. Most people are pretty well off. Even though the

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economic figures look bad, on the streets and in the restaurants,

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people do seem to be getting on with their lives. Paint you very

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much. Other stories making the news on Friday -- thank you. Kodak has

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sold its online service to online publisher shatter fly for $24

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million. They have 75 million euros it -- users. They have very stop

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selling film and plans to withdraw from photography entirely by the

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end of the Year. They ran up large losses in January. So far, Barbie

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has been upstaged after an up your -- and 80 battle. Mattel were not

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receive compensation after a court ruled today. A US federal court

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disagreed and reversed a 310 million dollar damages. Mattel is

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now appealing against a ruling. While the injection of cheap loans

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into the market by the European Central Bank is inevitably having

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an effect on markets, the Asian markets are not doing badly at all.

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The euro has been flitting around recently. With prospects of the

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