:00:07. > :00:24.Here is World Business Report. A familiar tale, a multibillion
:00:25. > :00:26.dollar bailout of the European bank. Banco Espirito Santo is to be
:00:27. > :00:29.rescued by Portugal's central bank and broken up to prevent a costly
:00:30. > :00:32.collapse. Playing catch`up ` President Obama
:00:33. > :00:35.is host to 50 leaders from the African continent in a bid to boost
:00:36. > :00:48.trade and take back the title of largest trading partner from China.
:00:49. > :00:52.Welcome to World Business Report. I'm Sally Bundock. Also in the
:00:53. > :00:54.programme ` I ask a leading economist what the European Central
:00:55. > :01:00.Bank can do to protect the Eurozone from the most feared word in the
:01:01. > :01:04.economic dictionary ` deflation. But first. The Bank of Portugal has
:01:05. > :01:11.announced details of a 4.9 billion euro rescue of Banco Espirito Santo,
:01:12. > :01:15.one of the country's largest banks. Funding for the operation is to come
:01:16. > :01:20.from an until now unused portion of the eurozone bailout money that
:01:21. > :01:28.Portugal sought three years ago. Alison Roberts reports from Lisbon.
:01:29. > :01:34.The announcement by Portugal's top ranking supervisor was aimed at
:01:35. > :01:36.reassuring the public that steps had been taken to safeguard the
:01:37. > :01:46.stability of the country's financial system. TRANSLATION: The back of
:01:47. > :01:51.Portugal decided today to apply eight resolution measure to Banco
:01:52. > :01:58.Espirito Santo. Most of the activity and assets will be transferred to a
:01:59. > :02:03.new bank, properly capitalised and purged of problematic assets.
:02:04. > :02:08.Details of the plan were flagged in advance. But it was a dramatic
:02:09. > :02:11.moment. The Governor made it clear that this was a new kind of bank
:02:12. > :02:16.rescue in which shareholders shouldered the losses while steps
:02:17. > :02:19.are taken to protect other institutions from any contagion.
:02:20. > :02:24.Portugal's Prime Minister had already sought to reassure the
:02:25. > :02:31.public and bank depositors that the album was being adequately dealt
:02:32. > :02:35.with. TRANSLATION: Financial stability is important for our
:02:36. > :02:39.economy. We will certainly take all of the necessary measures to ensure
:02:40. > :02:45.stability. The chief executive of the new bank that is to take over
:02:46. > :02:49.Banco Espirito Santo's commercial banking activities set up to the
:02:50. > :02:56.plan was unveiled at the bank's customers can be confident that it
:02:57. > :03:01.is stronger and safer than before. There is still anger in Portugal
:03:02. > :03:04.about past bank bailouts which saw the state pumping billions of euros
:03:05. > :03:09.in capital was no sign of any return. That feeds into
:03:10. > :03:15.dissatisfaction with the austerity policies of the government under the
:03:16. > :03:18.country's bailout. With barely a year to go until the general
:03:19. > :03:22.election, the question is whether by lending money to the new good bank
:03:23. > :03:25.rather than taking a stake in its the government can convince the
:03:26. > :03:29.public it has listened to their concerns.
:03:30. > :03:32.This week will see the greatest ever concentration of African leadership
:03:33. > :03:35.in Washington. President Obama has invited 50 African heads of state
:03:36. > :03:39.and government to a three`day meeting which starts today. And the
:03:40. > :03:43.focus is on trade and investment, as the President tries to make up for
:03:44. > :03:48.lost time ` and possibly a lost opportunity. Over the past decade
:03:49. > :03:51.it's China that has made much of the running on investment in the region,
:03:52. > :03:55.while the US has found itself caught up in dealing with the spread of
:03:56. > :03:57.terrorism. Now the US is hoping $900 million worth of deals between
:03:58. > :04:00.American companies and African nations will be formally announced
:04:01. > :04:09.this week but as ever the politics will play a big part in the
:04:10. > :04:15.negotiations. With me is Jag Singh who is a political strategist. Good
:04:16. > :04:21.morning. America is on the back foot. It is. This whole summit is a
:04:22. > :04:32.chance for the US to recalibrate its image. With the African continent.
:04:33. > :04:34.Africa holds a lot of policy implications for the US, from
:04:35. > :04:42.security to trade, to everything in between. This summit, while it is
:04:43. > :04:48.useful to look at in the context of Africa's relationship with China, it
:04:49. > :04:52.is worth noting that the US does have historical ties to the African
:04:53. > :04:57.continent and President Obama is the first African`American president. He
:04:58. > :05:03.will possibly already be thinking about his legacy about what the
:05:04. > :05:08.first African`American president has done for Africa. It is an
:05:09. > :05:12.interesting time. He is going to be there. That he is also not going to
:05:13. > :05:17.be there as well. John Kerry is going to do most of the legwork.
:05:18. > :05:25.What is the prize for America in this? It boils down to helping the
:05:26. > :05:30.US private sector re`engage with Africa in a meaningful way. 15 years
:05:31. > :05:35.ago there was the African growth and opportunity act, which was brought
:05:36. > :05:41.in place in the dying days of the Quentin Administration. `` Bill
:05:42. > :05:46.Clinton. To start a small free`trade area for African countries to trade
:05:47. > :05:54.with the US. It's all limited success. It only worked in the
:05:55. > :06:00.textile industry. It is also dominated by oil and gas. It is an
:06:01. > :06:05.opportunity for the US to go guns blazing and say, we are going to try
:06:06. > :06:11.a fresh approach. Very quickly, Ebola. That is affecting this. Of
:06:12. > :06:17.course it has. About three leaders have had to drop out because of a
:06:18. > :06:21.crisis in the country. While we are comparing and contrasting with the
:06:22. > :06:32.Chinese approach, it is worth noting that the US is sending technical
:06:33. > :06:36.expertise and medical expertise. Thank you for coming in. It is an
:06:37. > :06:43.event that we are keeping a close eye on. There are announcements that
:06:44. > :06:47.we will keep you up`to`date on. Other stories are making headlines.
:06:48. > :06:50.The world's casino capital is on a bit of losing streak. The Chinese
:06:51. > :06:52.territory of Macau has just recorded its second consecutive monthly fall
:06:53. > :06:58.in takings. Gambling revenue declined 3.6% in July ` but it was
:06:59. > :07:01.still over $3.5 billion. That's on top of a similar slump in June,
:07:02. > :07:04.which was the first drop in five years. And analysts are warning of
:07:05. > :07:09.continued weakness as China's anti`corruption drive keeps the high
:07:10. > :07:12.rollers away. EU sanctions targeting Russia over
:07:13. > :07:15.its role in Ukraine's conflict have hit Aeroflot's low`cost domestic
:07:16. > :07:21.airline Dobrolet, forcing it to cancel all its flights. It said the
:07:22. > :07:23.sanctions imposed last Thursday resulted in the cancellation of
:07:24. > :07:31.contracts under which it leased Boeing 737`800 planes.
:07:32. > :07:34.The struggling Eurozone's policies have not delivered economic rewards
:07:35. > :07:37.and there is a real risk of deflation ` that was the warning
:07:38. > :07:44.coming from the Prime Minister of France at the end of last week. His
:07:45. > :07:47.comments came ahead of a key meeting of the European Central Bank this
:07:48. > :07:50.Thursday, and as key indicators for the French economy suggest that it
:07:51. > :07:55.is lagging behind the recovery of other leading economies in the
:07:56. > :07:59.European Union. Valls said the ECB was powerless in the face of low
:08:00. > :08:04.inflation and added that the coming months would be difficult for
:08:05. > :08:07.Europe. What can the ECB do? Joining me from our main newsroom is
:08:08. > :08:19.Christian Schulz, Senior Economist at Berenberg Bank. Good morning.
:08:20. > :08:23.What can the ECB do? Everyone has been warning them about this. There
:08:24. > :08:29.are plenty of things they can do. Ultimately what you want to have his
:08:30. > :08:33.the currency losing a bit of value so you can produce more of it, print
:08:34. > :08:40.money. There are many ways of doing this. Lending cheap money to banks
:08:41. > :08:46.in the hope that they will lend on to the real economy. Another would
:08:47. > :08:52.be to buy bonds directly. The famous quantitative easing, something that
:08:53. > :08:56.ECB has not done. Not necessarily doing that yet, but certainly
:08:57. > :09:06.discussing it. Will we see that this week? I do not think so. The ECB has
:09:07. > :09:08.just announced a range of controversial and potentially
:09:09. > :09:14.powerful measures, such as negative interest rates and long`term loans
:09:15. > :09:20.to banks. They probably want to see how the measures feed and to the
:09:21. > :09:25.real economy. Before the end of the year, I do not think the ECB will
:09:26. > :09:30.employ quantitative easing. Thank you.
:09:31. > :09:36.A quick perspective on an event that is going to be on the minds of
:09:37. > :09:39.investors. I am not bank assured the numbers briefly. But the markets in
:09:40. > :09:46.Asia are in and out a positive territory. Concern about Portugal is
:09:47. > :09:58.hitting sentiment to a degree. CU soon as we go to the papers.
:09:59. > :10:01.A major study suggests the workload of GP's surgeries is increased
:10:02. > :10:04.rather than reduced by getting patients to call in for advice
:10:05. > :10:09.instead of having a face`to`face appointment. The British Medical
:10:10. > :10:11.Association says the research shows phone assessments can't always
:10:12. > :10:15.satisfactorily replace in`person consultations. Here's our health
:10:16. > :10:16.correspondent, Jane