05/11/2012 World Business Report

family after she looked at a boy. Those are the latest headlines from

BBC World news. Now for the latest Hello and a warm welcome. You're

with World Business Report. I'm Sally Bundock. The headlines:

Making France more competitive. The government gets a high level report

today, but it might not like the contents. A key week for Greece,

parliament votes on more austerity and reform to the labour market,

unions plan massive demonstrations. Japan's Toyota gets set to issue

higher forecasts for profits Good to have you with us. France

has asked one of its most respected businessmen to find out how to make

the country more competitive. Today Louise Gallois, the former head of

Airbus owner, EADS, delivers his report to the government. His

recommendations are expected to include rethinking the country's

controversial 35-hour working week. But it seems the government is

already trying to distance itself from his ideas. Maddy Savage

For workers here at one of Peugeot's factories the word

competition is one they have heard a lot recently. Two weeks ago their

bosses accepted the first date bail-out for France's car industry

since the start of the financial crisis. -- state bail-out. There

has been a meltdown in the steel industry. This plant in eastern

France used to be a key supplier for countries across Europe but it

has been closed. The demand for steel is down and those buying are

going elsewhere. The government has admitted this is part of a national

problem with competitiveness. need to sort out the finances and

the economy. We want to have a stronger economy that can be more

innovative and has stronger exports. It needs to hold its own on the

world market and in particular on the European market. Earlier this

year businessman Louis de Loire, who used to run the aerospace group

A E D S, was asked to brainstorm solutions. His report is expected

to suggest lower welfare payments for employers and longer hours for

employees. Last week the country's Prime Minister hinted the

government would consider extending the working week. But he quickly

backtracked during a heated debate in Parliament. TRANSLATION: I'm

going to disappoint you. My position is and always has been,

and that is why I always oppose your policies, the legal limit

should be 35 hours. This won't change as long as the left is in

power. When ministers discuss the full report on Tuesday, the speed

of any reforms they agree with is likely to be a key issue. Rushing

changes to France's main industries is something Francois Hollande says

he is keen to avoid. But his critics say the country needs to

act quickly to stop further investments being driven abroad. I

know I have said this before but It's a crucial week for Greece as

the government attempts to drive through budget savings and reforms

that will keep its international lenders happy. Today a new

austerity package will be presented to parliament. It amounts to $17

billion worth of cost cuts and tax increases. It also includes reforms

to the labour market that will make it easier to hire and fire staff.

Parliament is expected to vote on Wednesday. Meanwhile Greece's main

public and private sector unions are planning a 2-day strike

starting on Tuesday to protest against the legislation. Sony

Kapoor is the managing director of the think-tank Re-Define. He joins

us from Berlin. Nice to see you, Sony. It is not going to go without

a fight. But do you think they will manage to get these latest

austerity measures through Parliament on Wednesday? Given how

desperate things are and how the country is more or less seeing the

fact ring of the social and economic fabric, things will pass -

- fracturing. But not without a fight, as you said. In terms of how

things are, we have got two days of strike action starting tomorrow,

and you say the pressure on everyone in Greece is at the utmost

now, isn't it? Completely. We are basically stuck in a trap where the

creditors and the European partners don't trust the Greek government

and the Greek people to deliver on the reforms. And hence they want to

continue to push them close to the edge, so things are desperate and

there's an incentive to reform. The problem is this strategy also means

there's a large amount of economic uncertainty driving investment away,

it stops people spending, and it is sharply reducing any revenue that

might arise from privatisation because the economic prospects are

looking so gloomy. We are stuck in this trap where the loss of trust

has basically pushed us into a policy position which is

undermining the Greek economy in a very substantial way, and is eating

away at the social and political fabric. As you say, politicians in

Greece and lenders to Greece are doing everything they can to stop

it from exiting the euro. But is the costs too high now? -- the cost.

It depends on for whom. You could possibly imagine a scenario where

over a substantial length of time, let's say ten years, if Greece left

the euro on terms, which meant that the debt burden was reduced

completely 20, it could potentially be good for Greece. But under no

scenario is the total cost of an exit less than the total benefits

that might arise. No matter what scenario you think of the total

cost borne by not just Greece but also the European partners it has

will be very substantial. It remains a bad idea for everybody

involved. Sony, thank you for joining us. Of course there's a lot

more to discuss with Greece and we will keep on the subject through

the week. Let's now look at the Japanese car maker, because they

are having a rough time at the moment partly due to a political

dispute between China and Japan hitting sales of cars in China.

Today we get an update from Japan's biggest car maker, Toyota or. We

can go now to Singapore. -- Twitter. What is Toyota likely to say? --

Toyota. Good things, Sally. In spite of the problems with China,

which have hit sales to the mainland, Toyota has actually said

it will issue a higher forecast according to Japanese media reports.

It is likely to say that sales were driven up by sales to North America

and south-east Asia in particular, which will help to offset the

decline in China. Expectations are that Toyota will tweet their profit

forecasts higher, possibly tripling their quarterly profit. It will be

releasing those profits in about an hour. The shares rose to a one-

month high after those media reports, they are still rising as

well compared to a slight decline for the broader market. Alice are

forecasting calls for Japan's biggest carmaker to have earned

profits up to three times higher from a year ago. -- analysts are.

That is when it was reeling from the tsunami and the earthquake.

Toyota of course proving somewhat more resilient than a lot of their

rivals, the likes of Nissan for example, and Honda Motor, which cut

its forecast last week. Both of them are more reliant on sales to

China than Toyota or is. But having said that China did account for 12

% of total's global sales last year, that is well below Nissan's 27 %

and Honda's 20 %. -- Toyota's global. But sales halved after

those followed -- those protests in China. The full impact will not be

felt in the current quarter, it will only be in the 4th quarter.

Toyota has 7% of its market share in China. That of course is the

world's biggest car market. Of cost this year it has seen better sales

in the US, which is Toyota's biggest market -- of course. As

well as south-east Asia. In the first nine months of the year

Toyota sold over 7 million vehicles, that is more than any other car

maker, and it could regain their top spot in the world when official

numbers are out. Thank you for joining us. Some other business

stories now. Apple paid tax at a rate less than 2% on its profits

made outside the United States. In the end of the year to September it

made $37 billion, but paid tax of $713 million. Like other

multinationals, Apple uses legal methods to ship its earnings around

the world to minimise their tax bill. India's second biggest

private airline Jet Airways has recorded a quarterly loss of $80

million. They have been boosted by problems with Kingfisher, which was

grounded as their staff refused to work. And the animated movie topped

the North American box-office over the weekend, it took $49 million,

the biggest opening weekend for a Disney animation. Markets in Asia

are relatively nervous today. It will probably remain so for most of