31/10/2012 World Business Report


31/10/2012

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film in 2015. Now for the latest financial using

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World Business Report. -- News in. A very warm welcome it to you.

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Paying today or paying tomorrow - the dilemma facing Portugal's

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Parliament as it floats on controversial tax rises.

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Open for business - US financial markets resume trading as people

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Portugal's Parliament is set to vote on the 2013 budget. The

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Finance Bill it includes unprecedented tax rises. The

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measures are part of a drive to meet targets to reduce Portugal's

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large debt. On Tuesday the Prime Minister told deputies more was

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needed. A full review of government services. Those comments could

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further anger critics who are already planning protests outside

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the Parliament. Our correspondent has more.

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The Prime Minister opened the Budget debate with a reiteration of

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the right-of-centre government's determination to keep Portugal

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performance on track. There is, he told deputies, no alternative.

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TRANSLATION: An extension of the programme implies more money, more

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time to have larger deficits. Had you finance this series of larger

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deficits over time? -- How do you. A second bail-out would obviously

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be needed. The Government acknowledges the

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Budget will bring enormous tax increases. Equivalent to a month's

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salary in many cases. Many observers feel a recessionary

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spiral, with austerity sapping economic growth and tax receipts

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and inflating the budget deficit that it is supposed to be cutting.

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The Prime Minister on Tuesday held out the hope of the tax burden

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being gradually reduced. TRANSLATION: From 2013 we have to

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introduce spending cuts which in the long-term should allow us to

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reverse some of the tax rises in this budget bill. The opposition

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Socialists and two smaller leftist parties agreed on one thing at

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least -- hope his fame. The radical Left bloc reiterated its view that

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Portugal will have to renegotiate its debts and suspects the

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Government might already be thinking about seeking more aid.

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TRANSLATION: They have completely lost any chance of returning to the

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markets in September, 2013. Are they already renegotiating a second

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bail-out? After a string of NT austerity protests in recent weeks,

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more a scheduled to coincide with the budget vote right in front of

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the Parliament building. The Prime Minister's latest call for a

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complete review of all the state's functions, including welfare,

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health and education, he shall have to fire up the government's

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opponents even further. -- is sure Now to Greece with the government

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is also expected to present its budget to Parliament on Wednesday.

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The Finance Bill will include spending cuts and higher taxes

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worth some 13.5 billion euros. On Tuesday the Prime Minister said he

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now had a sufficient backing from coalition parties to push through

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tough bridges. But the more controversial plans to make it

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easier to hire and fire workers will be presented to Parliament in

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a separate Bill next week. Portugal and Greece and not and the

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government slashing spending. Austerity as it places right across

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the eurozone. Win family stop spending, wealth shrinks, plunging

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the economy into recession. More than 18 million people are out of

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work in the eurozone. Fresh figures due later on when state are

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expected to show yet another rise. -- Wednesday.

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When they had careers, now they wait in mind for state benefits.

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The euro debt crisis and the recession has killed employment for

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millions. First in southern Europe and now it is spreading into the

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relatively prosperous north. Up to one in four Europeans are now

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looking for work. The rise in joblessness across the eurozone has

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been relentless. Companies have needed to cut costs. The only way

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they can do it is to get rid of staff. Public sector job losses

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have a long way to go. EU institutions and national

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governments are trying but they are finding it near-impossible to

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counter austerity measures with a renewed emphasis on programmes to

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stimulate employment and economic growth. The focus is on youth and

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apprenticeship style training. you were to make the EU more

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competitive in the international economy we need to rebuild their

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institutions, vocational training. But skills are of limited use if

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they cannot be taken up by employers. Joblessness is both a

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symptom of the fall in global demand and a direct cause of

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European -- European's' waning spending power. I think employers

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were hoping that they could hold on to some of their workers. There

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were hopes that the recession would not be long lived. There are also

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some government incentives for firms to have it -- called on to

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workers. More recently I think it has become clear that it will be a

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long-lived recession in the eurozone. It is spreading to the

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larger economies and there is no clear way out of it for the time

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being. That means that employers are just realising that they need

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to cut back. They need to save money. This will last for a long

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time and the workforce is to beat. Empty production plants and idle

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production sites are a stark reminder of the latest drop in

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confidence. When it finally comes, economic recovery may be bumpy and

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slow to reabsorb laid off workers. The European Bank for

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Reconstruction and Development specialises in providing help and

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support to devastated European economies. Jonathan Charles is

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director of communications there. Jobless figures are expected to be

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gloomy yet again. How bad do we expect these to be? I think within

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the EU there is no doubt that unemployment is getting worse. It

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is hardly surprising that when you see in Spain and Greece you have on

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employment rights -- unemployment rates rising to 25%. These will

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increase. All these things are feeding into the European figures.

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The question now is, what are people scene when they look ahead

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to 2013? I think a lot of companies are taking decisions which will

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involve more job losses because they are seen 2013 has not been a

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year of strong recovery. In the -- economic indicators not looking

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great. What are you expecting to do about it? What is your position in

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terms of this path that we seem to be going down? Are you focusing on

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reform...? If you look at the countries that we operate in, which

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include some eurozone countries, they are imposing austerity, but

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what we are saying to them is do not waste 2013. Make sure that as

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you prepare for possible recovery in 2014 day you are really

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reforming new economies. Then it just concentrate on austerity alone.

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Get economic reforms into place which will make you more dynamic

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when the recovery comes. We invest about 9 billion euros a year on

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behalf of the international community. We probably need to use

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some of that money towards orientating growth. It cannot just

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be austerity on its own. There has to be a growth element in economic

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policy because austerity on its own is not the only solution. And your

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President spoke in the past about encouraging private investment in

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south-eastern Europe as well. inevitable. The international

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community cannot do it on just public sector money. The private

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sector is going to have to invest if the economy is to recover. What

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we know is that the uncertainty feeds on itself. You have a lot of

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private company sitting on their hands and they are saying, what are

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we going to do? Should be taking investment decision or should we

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wait for things to improve? It is a vicious circle. If they do not make

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the investment decision, things will not improve.

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Yorke is again open for business on Wednesday after its longest forced

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to shut down since 9/11. -- New York. The Stock Exchange will

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resume trade. It is the last day of the month, a crucial time for

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investors to balance their books and carry out transactions before

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the resumption of normal trade. It is seen as vital for the health of

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global markets. Our correspondent has more.

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The city that never sleeps is strangely quiet. Many are still

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without power. At this tunnel which links Manhattan to Brooklyn, it is

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still under water. Recovery efforts are under way and businesses are

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trying to figure. One icon of American capitalism, the New York

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Stock Exchange, has said it hopes to open its building and is trading

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for this Wednesday. It was closed for two whole days because of

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weather and it is the first time bet that has happened since 1888.

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When it does reopen its doors it is likely to be emptier than usual.

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Electronic trading means that volumes may still be high, but many

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people who work there may have difficulty getting to their place

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of work. That is because although some buses will be running, the

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subways in this part of town are still very damaged. We saw one

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where the winds had ripped the tiles off the walls and there was

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still lots of water. Many other traders to work they also come from

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New Jersey. They were right on the path of the hurricane.

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Having a look at how the equity markets are doing this hour.

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Crossing first to Asia. As we can see it is a mixed group. The Nikkei

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