09/06/2014 World Business Report

latest headlines from BBC World News. Is are the latest headlines ``

of those are the latest headlines. Now for the latest financial news

with Sally and World Business Report. Settling on a price, Russia,

Ukraine and the EU prepare to restart talks over the gas dispute

as another cut off deadline looms. Metro workers strike for a third day

causing chaos in Sao Paulo, just days before the start of the World

Cup kick`off, despite a court declaring their walk`out illegal.

Welcome to World Business Report. I'm Sally Bundock. Also in the

programme: China and India are hoping to strengthen their economic

ties. We'll have the latest from our team in the region. But first,

Ukraine, Russia and the European Union will restart talks today to

try and resolve the ongoing dispute over gas prices. Russia says it will

cut off gas supplies by June 10th, that is tomorrow, if it isn't paid.

This is a slight extension to the first deadline after Ukraine

part`paid $786 million. The two sides differ on how much is owed by

Ukrainian state energy company Naftogaz. While Ukraine says its

outstanding debt as of April first was $2.2 billion, Russia's Gazprom

claims it is in fact more than double that, at just under $4.5

billion. The dispute could threaten gas flows to Europe. With me now is

Trevor Sikorski, head of natural gas, coal and carbon at Energy

Aspects. Trevor, nice to see you. It feels like Groundhog Day on a Monday

morning at the moment. We talk about the new talks beginning about this

dispute. But what is different of course is that over the weekend

President Petro Poroshenko was sworn in in Ukraine. Also the D`Day

anniversary meant there were lots of negotiations, diplomatic meetings

going on in front, which President Putin was there. Do you think

today's talks may be a bit smoother, there may be some goodwill on all

sides, even the events of the last few days? Absolutely. I think for

Russia, what they don't want to be seen is to be overly aggressive on

this new government. They are looking to normalise the situation

in Ukraine. To pull back already in terms of the military threat on the

borders, and they are really just saying let's get active normality

aspect. So this kind of holds out quite a positive out come I think

for today. Certainly both sides would see it as a big failure if

they couldn't hammer out some kind of agreement to keep gas flowing

into Ukraine. President Poroshenko saying he is expecting to form a

governing team to mediate between Naftogaz and Gazprom. The issue thus

far has been that Ukraine has been unable to pay. That is where the

spats have cropped up. If you look at western Europe, gas supplies from

Russia via Ukraine, Ukraine find it very hard to pay its gas bills. Of

course, the price is really important. You can see in the size

of the difference in debt owed, what that difference in price can do.

Certainly Ukraine says that they had discounted gas, which they like.

Despite the political changes in Ukraine, they think they should

still get discounted gas. So they really are pushing for that. Gazprom

a saying they only give discounted gas to people who pay their bills or

who they like a lot, who are their friends. That is when you have a

more eastern looking government. That was on the table, now it is

gone. You haven't paid your bills, so we have reverted to the

contract. So Gazprom is very commercial, but they are trying to

do it in a hothouse of politics. And that has to be resolved. Bank you

very much indeed for coming in. `` thank you very much. We will keep

you up`to`date. A Brazilian court has ruled that a subway strike that

has caused traffic mayhem in Sao Paulo is illegal. But workers have

vowed to continue with their industrial action, despite it being

just days before the start of the football World Cup. The move is the

latest of several strikes and protests to have hit the country in

the past year. So could wage demands mar the football tournament? Katy

Watson, our business reporter in Brazil reports from Sao Paulo.

Emotions were running high on Sunday afternoon, union leaders rallied

their members after a court ruling urging people to return to work.

Unions want a pay rise of more than 12%. The state owned company has

offered eight .7. Despite the court threatening them with a fine of more

than $200,000 a day, for every day they continue to strike, it was

pretty clear what they thought as union members raised their ID cards

to vote. The overwhelming feeling here was one of anger and

frustration. Despite the judge's ruling they voted to continue the

indefinite strike. They say unless the government meet their demands

that could affect transport on opening match day. The congestion in

the city is bad at the best of times. But the last few days saw it

get even worse. With huge traffic jams and bus queues, as people tried

to get to work. The accusation that the unions are using the World Cup

is an opportunity to extract more from the government was strongly

denied. TRANSLATION: They have put the World Cup in the middle of our

salary negotiations. We have been negotiating our salaries may. And

because it has carried on until June, we now have the World Cup.

Strike is just a latest in a string of wage demands in recent months.

Rubbish collectors in Rio, bus drivers and teachers in Sao Paulo,

have been pushing for higher pay as inflation pushes 6% per year. Even

police walked up the job in the north`east Brazil, leading to

looting, a few weeks ago. TRANSLATION: The truth is that the

government has to give in. In the very short term, at least, it has to

give in. After the World Cup, the conditions for negotiation change.

But they aren't automatically resolved, because after the World

Cup, you have another important agenda. The elections. So these wage

demands won't go away any time soon. But the more pressing concern is

sorting out the city's transport. With trendlines that take fans to

the stadium still remaining shut, that pressure on the government is

growing. Other stories: Chinese imports dipped in May, suggesting

there is a weakening demand for the world's second largest economy. The

country's exports rose by 7% in May, but imports fell by 1.6% on a year

earlier. It meant the nation's trade surplus widened sharply to $35.9bn

from April's $18.5bn. Bulgaria is to halt work on its Russian`backed

South Stream gas pipeline, following criticism and requests from the EU

and US. The Prime Minister said he will now have start talks with the

EU over how to proceed next. The Gazprom`financed pipeline would ship

gas to western Europe via the Balkans, thus avoiding Ukraine. Sony

has sold more games consoles than its rival Nintendo for the first

time in eight years. Sony sold 18.7 million systems in the last

financial year, which ended in March, compared to Nintendo's tally

of 16.3 million video games machines. Sony's PlayStation 4 has

emerged as the bestselling "new`gen" console while Nintendo's Wii U, with

its touchscreen controller, has lagged far behind the original Wii.

Let's talk about a meeting of minds. The world's two most populous

countries have vowed to increase economic cooperation follow a

meeting between senior Chinese and Indian officials. In the first

high`level talks between the two countries since the new Indian Prime

Minister Modi took office, officials said that China and India see eye to

eye on most issues. But with flagging economies to deal with and

a border dispute in the Himalayan region, was the meeting really all

smiles? Let's get more on this. Ali Moore joins me now from our Asia

Business hub in Singapore. Nice to see you. Tell us more about how this

meeting went. It certainly was all smiles in terms of the public

releases, but behind the scenes we can only guess at what went on. The

message from China is that they are here to help when it comes to

India's economic development. In fact, the Chinese Foreign Minister

has been quoted in the Indian press saying that no country can choose

its neighbour, but friendship may be fostered. Which perhaps is quite a

bit about the underlying tensions between these two giants. Those

tensions go way back to 1962 when China defeated India in a short

water war. This does seem like an attempt to reset the relationship ``

border war. Money talks. Two way, as is close to $70 billion. At the same

time, India's trade deficit with China has soared to over $40

billion. So it is highly likely I would imagine that that will be near

the top of Narendra Modi's agenda when he met the Foreign Minister

later today. There is no doubt that India wants greater market access to

reduce that gap. When you think about it, if India looks to China

for economic tips they will be learning from the masters. China's

export growth is one of the things that has helped to make it the

world's second`biggest economy. Thank you very much indeed. A very

quick look at markets. A positive start today, Australia closed for a

public holiday. Elsewhere we see gains apart from in South Korea.

That is about payrolls on Friday in the US really boosted these markets.

Also the use news about China. And Japanese growth being revised

upwards. Which also helped. I will see you soon. Thanks to Sally for

that. We will take a look at the papers in a moment, but first: A

report into the failings at a care home, where 19 elderly and

vulnerable residents died, is due to be published on Monday. A coroner

described Orchid View in West Sussex as riddled with institutional abuse

and said neglect had contributed to the deaths of