:00:00. > :00:00.River Jordan. Those are the latest headlines. Now
:00:00. > :00:22.for the latest financial news. The French Finance Minister tells
:00:23. > :00:25.the BBC that the countries on mend and at economic performance is
:00:26. > :00:30.improving despite huge tax rises and high unemployment. `` the country is
:00:31. > :00:39.on the mend. The economic performance in front is getting
:00:40. > :00:42.better. That growth is positive. With a weak figure in twenty
:00:43. > :00:46.thirteen, it will get better in twenty fourteen.
:00:47. > :00:55.It is D`Day for Detroit as the city head to court to prove that it does
:00:56. > :01:01.not have the money to pay its debts. Welcome to World Business Report. In
:01:02. > :01:06.a moment, we will look at Australia where higher than expected inflation
:01:07. > :01:11.has dashed hopes of a rate cut. First, it is the Eurozone's
:01:12. > :01:15.second`biggest economy. For many, France is just not working. Trent
:01:16. > :01:19.families and firms are reluctant to spend and invest. That is because
:01:20. > :01:25.companies and households have been hit by sixty billion euros in
:01:26. > :01:30.additional taxes in twenty eleven. Bosses are reluctant to hire. More
:01:31. > :01:34.than one in ten French, nearly eleven percent of the workforce, are
:01:35. > :01:41.unemployed. Public debt is expected to drop ninety seven five percent of
:01:42. > :01:45.GDP next year. If France of the (MUSIC PLAYS) and of Europe?
:01:46. > :01:52.Our economics correspondant put that question to the country's Finance
:01:53. > :01:58.Minister, Pierre Moscovici. `` is a front of the sick man of Europe? At
:01:59. > :02:03.the same time, we should be conscience that France is still an
:02:04. > :02:16.important economy. Defeat in the world. It a large and competitive
:02:17. > :02:20.economic. I never get dedicate myself to French bashing. The
:02:21. > :02:29.economic performance of France is getting better. That growth is
:02:30. > :02:32.positive. With a weak figure in twenty thirteen, it will get better
:02:33. > :02:40.in twenty fourteen. Why so? Because we are addressing the real
:02:41. > :02:42.problems. We are fighting for competitiveness. With tax credits
:02:43. > :02:52.for competitiveness and employment, where is the tax credit for
:02:53. > :02:56.financing. More financing. Better orientation from savings to
:02:57. > :03:01.investment. This country is reforming. The country is changing.
:03:02. > :03:07.We changed the labour market function with an important reform.
:03:08. > :03:10.We are reducing our deficits. We are doing that through cuts in public
:03:11. > :03:15.expenditures. We're reforming the pension system. We're reforming
:03:16. > :03:21.policies for families. There is a move in France and think that the
:03:22. > :03:26.idea is to have a more competitive and more creative and more
:03:27. > :03:30.innovative country. Isn't a problem or is part of the fact that France
:03:31. > :03:35.has an enormous public sector? The largest in the Eurozone. High tax
:03:36. > :03:39.rate in particular are a dramatic, that seventy five percent tax on
:03:40. > :03:42.high earners for example. Did you need to fundamentally rethink the
:03:43. > :03:50.shape and size of the French public sector? Of eighteen billion euros,
:03:51. > :03:57.fifteen billion will come from cuts. We want to rethink the nature
:03:58. > :04:02.of this the State `` the state of public authorities. We are very
:04:03. > :04:07.proud of our public services. We are very proud of our collection. Very
:04:08. > :04:14.proud of the welfare system. We're not to sacrifice the social model of
:04:15. > :04:20.France but adapt and modernise and this will mean, of course, a
:04:21. > :04:27.reduction in the correct level of the public expenditures. We are now
:04:28. > :04:30.at fifty seven percent. We hope to be at something like fifty three
:04:31. > :04:36.percent in two thousand seventeen. We are reducing. That is not so
:04:37. > :04:47.simple. A period when Griffiths a slow. `` at a period when growth is
:04:48. > :04:51.so slow. It is the largest bankruptcy case in
:04:52. > :04:55.the US. The city Detroit head to court to prove that it is not have
:04:56. > :04:57.the money to pay its debts. Bankruptcy protection would mean
:04:58. > :05:01.that creditors would have to accept pennies on the dollar and retired
:05:02. > :05:05.city workers would see drastic changes to their pensions. That is
:05:06. > :05:09.not sitting well with many who are owed money.
:05:10. > :05:16.It was the fourth largest city in the country, the cradle of American
:05:17. > :05:19.automobile industry. The streets today tell a different story.
:05:20. > :05:25.Decades of decline had led to Detroit becoming broke. This was a
:05:26. > :05:28.Lieutenant Colonel... Gordon McDonald is proud of his thirty nine
:05:29. > :05:35.years at the Detroit police department. He saw the city 's
:05:36. > :05:41.demise firsthand. He and his wife live off the pension and benefits he
:05:42. > :05:45.gets from the city. Detroit says that it can no longer afford to pay
:05:46. > :05:51.pensions for it some twenty three thousand retired workers. We don't
:05:52. > :05:59.sleep very well. It is constantly on your mind. In a few months, the
:06:00. > :06:03.health benefits will end. They will take it away from us and don't know
:06:04. > :06:13.what she will do. Out of that make you feel? Kind of sad for her.
:06:14. > :06:18.Detroit needs to do something. Thousands of abandoned cars litter
:06:19. > :06:24.the streets. As the city tries to declare bankruptcy, municipal worker
:06:25. > :06:29.was like this one and move some of the evidence of just how bad things
:06:30. > :06:34.have become. This is our city and we are doing everything we can to bring
:06:35. > :06:39.it back. You sound hopeful? AM. Detroit has been here for years and
:06:40. > :06:41.will come back. Towing cars can't get the city of debt. It owes
:06:42. > :06:47.roughly eighteen billion dollars and is now looking to van Gogh and Monet
:06:48. > :06:50.to solve the problems. Like many things in the city, Detroit's
:06:51. > :06:58.impressive art collection was actually built during it economic
:06:59. > :07:01.boom. This city owned some of the most famous pieces including this.
:07:02. > :07:07.As Detroit filed for bankruptcy, it means that these works of art are
:07:08. > :07:13.actually assets and, if sold, the city could gain tens of millions of
:07:14. > :07:18.dollars. It is an abominable idea. It is one of America's greatest art
:07:19. > :07:22.collections, something that is talking about the history of
:07:23. > :07:26.Detroit. Many are watching what happens to Detroit very carefully.
:07:27. > :07:28.What takes place here will likely pave the way for other American
:07:29. > :07:35.cities facing the same financial constraints.
:07:36. > :07:40.We move on to Australia where inflation came in at a higher than
:07:41. > :07:48.expected rate, effectively killing off all hopes for a rate cut. We get
:07:49. > :07:54.the latest now. Australia? I spoke to a few analysts earlier and they
:07:55. > :08:00.say that could still go way. First, the sharp spike has pushed the
:08:01. > :08:05.inflation to one point two percent with expectations of zero point
:08:06. > :08:09.eight percent. This height expected them to the Australia dollar to four
:08:10. > :08:13.point five high. The markets speculate that there is this the
:08:14. > :08:17.chance of another interest rate cut in twenty thirteen. The last time
:08:18. > :08:21.the RBA reduced the cost of borrowing was in August to two point
:08:22. > :08:25.five percent, the lowest level since nineteen sixty and a hefty two point
:08:26. > :08:29.seven five percent. Secondly, some analysts are making the case for a
:08:30. > :08:33.potential rate cut, saying that despite the quarterly rise, the
:08:34. > :08:40.annual rate of inflation remains in the bottom half of the Reserve Bank
:08:41. > :08:43.two percent to two percent rate suggesting that there is still room
:08:44. > :08:48.for a reduction of push comes to club. `` push comes to shell. They
:08:49. > :08:52.suggest that the September quarter is strong so it is feasible that
:08:53. > :08:57.this quarter, there are still surprise on the downside. `` push to
:08:58. > :09:02.shove. A look at the markets now. In terms
:09:03. > :09:06.of Asian markets, twenty to think about. Yesterday, the jobs figures
:09:07. > :09:09.came out of the use case and they were disappointing. The US and the
:09:10. > :09:13.added one hundred and forty eight thousand jobs. `` out of the US.
:09:14. > :09:19.Less than expected. Asian markets reacted.
:09:20. > :09:25.In terms of currencies, the dollar is still sitting at a two year low
:09:26. > :09:31.against the euro. We are looking into the Federal Reserve, will it
:09:32. > :09:37.paper the stimulus package? The mood music now is that it will not. That
:09:38. > :09:39.is it for me and the team. Thank you for watching. Goodbye.