10/07/2012 World Business Report


10/07/2012

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abortion. Those are the latest headlines from BBC World News. Time

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now for the financial news. Here is Sally with World Business Report.

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Welcome. This is World Business Report. The headlines: A late night

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meeting in Europe gives us a more time to pay back its debts as the

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country's borrowing costs rise again.

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The battle over a vital mineral used in mobile phones and tablet

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computers. Europe, the US and Japan take on China.

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It was another late night for eurozone finance ministers as they

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thrashed out an agreement to help Spain's banks. They agreed to hand

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over 30 billion euros this month in case of financial emergency as well

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as giving Spain more time to bring down its deficit. It comes as the

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country's borrowing costs soared to dangerously high levels, above 7%

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for ten-year bonds. We endorsed the extension of the

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debt alone for the correction of the excessive deficit by one year.

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This was based on effective action taken and the significantly

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worsening situation in Spain and its impact on the situation.

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Jane Foley is a senior currency strategist at Rabobank. You. --

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good to see. At last we have Sunday Taliban how Spanish fans will be

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helped out. -- we have details about how Spanish banks. It was

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supposed to be in existence now but there have been to tales -- delays

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particularly with Germany. They want to go through the detail

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before putting it into law in Germany. If the BSM is up there

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will the money come from? We have heard that they are going to

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frontrunner about 30 billion from the European government. It is not

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clear how that money will be given to Spain. It will go up to an

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entity within Spain. It is a bank that is there to deal with the

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backing situation. We'll get a little bit of money up front

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quickly. That money is there in case of emergency, as they have put

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it, and critically, but DEC does not go on the Spanish government's

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balance sheet. -- that debt. It is unclear whether the 30 billion will

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go on their books for now. But afterwards when the E S N is set up

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the money will be funnelled directly from the new bail-out fund

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straight to the Spanish banks and therefore avoid going on the

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government's books. That was the deal laid out a few weeks ago. That

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is what will happen in the future. The bail-out fund is not there. For

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the time being we may see these funnelled into the government but

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retrospectively they will take it off their books. Give us a sense of

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where we are now. We had the rate cut from their European Central

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Bank last week. The markets reacted favourably to that. We have had

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this deal overnight. Where are we now? We are still under pressure.

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This deal in a way had to come. We are seeing Spanish borrowing costs

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back over 7%. That is a measure of market stress. It is a measure of

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investors saying, we cannot wait any longer. We are worried Spain

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may need a fully-fledged government bail-out, in which case you would

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see the money going into the government and hopefully this will

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buy some time. Thank you. Jane will newspapers in five minutes. But

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more business news. A threatened strike from oil

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workers in Norway has been called off after the Government used

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emergency measures to intervene. Staff had threatened to shut down

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today as a result over a dispute over pay and pensions. But the

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Labour Ministry stepped in at the 11th hour. It said it was in the

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interest of the country to use the om

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the aluminium firm Alcoa, the largest in the US, have kicked off

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the earnings season there. It posted an operating profit of $61

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million after a jump in orders from car and aerospace firms. The

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numbers were slightly better than The European Union, United States

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and Japan bring a complaint to the World Trade Organisation today.

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They allege China is restricting exports of so-called rare earth

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metals and that distorts the global economy. Rare earth metals are used

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to make high technology devices and the restrictions make it more

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expensive to make such goods outside China. So who will win the

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case? Rare earth levels may not be something you would think about on

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a daily basis but are crucial for making hi-tech gadgets, from mobile

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phones to missiles. China produces 97% of the world's supply. The

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country is set out put caps and export quotas on the valuable

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research which has angered other nations. By restricting the respite

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of rare earth metals internationally China makes it

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easier for companies wanting to make phones and computers and hi-

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tech devices inside its borders. Correspondingly, it also makes it

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more expensive for companies wanting to do the same overseas.

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Because the quotas make it cheaper to make devices like iPads in China,

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the United States, EU, and Japan, today are lodging a complaint with

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the WTO. They beat China's control over that markets as potentially

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dangerous. -- nave view. They're such important metals to everyday

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life in the 21st century. making rare earth metals is an

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environmentally damaging business. China says that other countries

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could produce their own. 82 not to because it is so hazardous and

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produces toxic waste, some of which is radioactive. -- they choose not

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to. This doctor is professor of politics at London School of

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Economics. She watches the way it - - World Trade Organisation and its

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decisions. It is complicated. It is important to note that China was

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ruled against in a similar case earlier this year. So the chances

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are, China will probably lose this case. China is taking a calculated

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risk in deciding to move forward with the dispute and litigate the

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process. That would be good news for all multinationals, like the

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makers of hybrid cars, which need rare earth metals in their

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batteries. But it may be premature to get too excited. The WTO will

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take up to one year to make ruling. It is -- It's early days for new

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plane orders from the giant Farnborough Airshow. But so far its

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Boeing in the lead with an order for 75 of its forthcoming fuel-

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saving 737 Max. Last year at the Paris Airshow the firm fell behind

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arch rival Airbus in overall sales. But the new chief of Airbus seemed

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to concede when he spoke to World Business Report that it won't be a

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bumper Farnborough for the European plane maker.

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This time last year Airbus had a fabulous Paris airshow

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consolidating its number one size

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size aircraft. But now the smart money says that Boeing is answering

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back. It is selling its 737 Max, which will be its answer to the A

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320. They also have a new pilot. This year we will have a good show.

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We believe we will get decent orders which will help us achieve

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our target this year, which is 650 new orders. That means more than

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the 570 aircraft we are about to deliver. Both your competitor and

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yourself have had a lot of delays, reputational issues. How can you

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deliver on all of those orders, which are terribly important for

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the customers who hate to be kept waiting? We need to go step by step.

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We need to be very close to the supply chains. They sometimes

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struggled to increase the production rate. We are increasing

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by 5% the production rate this year. We could do more. On the new

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developments, clearly what counts is to have matured technologies,

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and not to rush to much to the next step. This is a paradox. But if you

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go too fast you miss the end Garbett, which is to deliver

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aircraft to the Allies. -- end target. We have learned that from

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the past. We're very close to our supplies. We support them when

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necessary including Siv -- including financially sometimes. We

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want them to be part of the venture and to be able to deliver to us

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what we need to produce the aircraft. The markets today were up

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a little bit on that news of Booval Spanish banks. But that did not

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last long. I'm afraid to say we have our Nine News dampening trade

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today. Not least news coming from China. -- we have other news. Today

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we have got imports in China. They increased 6.3% from a year earlier

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in the last month. But people were expecting 11%. That is significant.

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Also volumes are very thin in Japan in particular. The Japanese central

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bank is meeting in a few days to decide on any stimulus for the

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