:00:00. > :00:00.News. Now for the latest financial news with Sally and World Business
:00:00. > :00:19.Report. Economic growth in the eurozone is
:00:20. > :00:25.expected to be bad and worst of the bunch will be the former star,
:00:26. > :00:29.Germany. What went wrong? A Russian gas giant Gazprom reports
:00:30. > :00:32.its results. How will the growing political row with Russia affect
:00:33. > :00:39.energy supplies in Europe this winter?
:00:40. > :00:52.Welcome to World Business Report. I'm Sally Bundock. Also, we look at
:00:53. > :00:57.the PC maker that has posted a 23% jump in profits in the last quarter,
:00:58. > :01:03.despite the fact that we are all using our mobile devices as opposed
:01:04. > :01:07.to the PC on the desktop. First, let's look at the latest growth
:01:08. > :01:12.numbers for the EU, France and Germany, that are out today.
:01:13. > :01:15.France's latest figure is expected to be just positive at 0.1%,
:01:16. > :01:25.compared with zero in the first quarter. The ZEW business confidence
:01:26. > :01:28.measure in Germany, on Tuesday, was at an 18 month low and expectations
:01:29. > :01:39.today are for the second quarter GDP to be zero. After leading the
:01:40. > :01:41.currency bloc out of its longest`ever recession last year,
:01:42. > :01:44.Europe's largest economy has been hit by the downturn elsewhere in the
:01:45. > :01:53.region and industrialists are gloomy about the impact of the trade row
:01:54. > :02:05.with Russia. Joining me now from Berlin is Doctor Tim Gemkow, senior
:02:06. > :02:12.economist at DIHK. Thank you for being on the programme. How
:02:13. > :02:18.pessimistic AU? `` are you? We do see a decrease in the vibrancy of
:02:19. > :02:24.the German economy but we should not overestimate the figures because we
:02:25. > :02:28.had a very mild winter, so a lot of construction continued through the
:02:29. > :02:32.winter, so the figures show a counter movement to the increase in
:02:33. > :02:37.the first quarter. But, as you pointed out, especially due to
:02:38. > :02:41.concerns over exports, because of the geopolitical crisis, especially
:02:42. > :02:44.in Russia and the Ukraine, we also see a slowdown compared to what was
:02:45. > :02:49.possible at the beginning of the year. Germany is an economy that
:02:50. > :02:53.relies heavily on its exports. There is the issue with Russia but there's
:02:54. > :02:58.also the issue of the strong euro hitting German exporters. When do
:02:59. > :03:07.you think things will improve for Germany? Well, it is actually a very
:03:08. > :03:11.complicated situation because the current climate of sanctions and
:03:12. > :03:17.Russian counter sanctions not only keeps Germany directly but also
:03:18. > :03:20.partners in the eurozone, which again are important destination for
:03:21. > :03:23.German exports. On the other hand, when you look at the world at large,
:03:24. > :03:31.the good thing is that German exports, `` are less price
:03:32. > :03:37.sensitive. Because Germany occupies many specialised niches. So it has a
:03:38. > :03:42.smaller effect of German exports than those from other European
:03:43. > :03:47.countries. What does the German economy need? As you say it is
:03:48. > :03:49.complicated, you are within the eurozone so you have a European
:03:50. > :03:55.Central Bank that has to think of many other countries when it set its
:03:56. > :03:58.interest rate policy, etc, so what does the German economy need to move
:03:59. > :04:06.from zero growth to something more impressive? We actually need
:04:07. > :04:11.measures on three levels. Of course the most important is that diplomacy
:04:12. > :04:19.manages to find a way to resolve the current crisis with Russia, without
:04:20. > :04:24.further `` escalation. We also need more pickup of growth in the
:04:25. > :04:28.eurozone, which depends on the reform activities include free
:04:29. > :04:32.countries. We also need a policy in Germany that focuses more on
:04:33. > :04:39.competitiveness. `` in Rectory countries. We have seen this
:04:40. > :04:43.becoming less of a concern in the past few years in Germany because at
:04:44. > :04:52.the moment we are in a good position. Well you can't rest on
:04:53. > :04:56.your laurels. Thank you very much. Needless to say, when we get the
:04:57. > :05:01.numbers from fines, Germany, the eurozone, we will update you. ``
:05:02. > :05:08.from France. They talk about another company, Gazprom. `` let's talk. It
:05:09. > :05:12.will release its half yearly results. This company is tightly
:05:13. > :05:15.bound up in international dispute between Russia and Ukraine. Gazprom
:05:16. > :05:18.has already cut off gas supplies to Ukraine in a row over payment, as
:05:19. > :05:23.winter approaches there are fears that its supplies to the rest of
:05:24. > :05:32.Europe will also be affected. Jeremy Howell reports.
:05:33. > :05:38.Last June Gazprom cut off gas supplies to Ukraine because of
:05:39. > :05:43.unpaid bills. Ukraine has been surviving on its reserves. But now
:05:44. > :05:48.the gas stocks are running low and call the weather is on the way.
:05:49. > :05:54.Unless it can agree a new price for gas supplies with Gazprom soon, the
:05:55. > :05:58.new energy crisis looms. They don't have an agreement with Ukrainians
:05:59. > :06:03.about the cost of gas for Ukraine, so there's `` the danger that
:06:04. > :06:09.Ukraine may simply extract gas from that transit pipeline and use it for
:06:10. > :06:14.its own purposes and therefore depriving the European consumer of
:06:15. > :06:19.its gas from Gazprom. The last time this happened was in 2009, when
:06:20. > :06:24.Gazprom shut off gas supplies to Ukraine and it in turn siphoned off
:06:25. > :06:29.gas passing through the countries to east and central Europe. People
:06:30. > :06:34.there had to chop wood for fuel. Gazprom came the focus for public
:06:35. > :06:39.hatred. It will be keen to not have its business in Europe damaged
:06:40. > :06:44.further. Gazprom's chief executive must now try to persuade the Kremlin
:06:45. > :06:49.to less `` to negotiate a new deal with Ukraine. What will the Kremlin
:06:50. > :06:53.lesson? Gazprom will be pushing for a deal, that they can continue to
:06:54. > :06:58.supply gas to Europe and Ukraine, which remains quite a large market.
:06:59. > :07:02.As the debate rages, Putin will have to choose sides. At the decision
:07:03. > :07:08.which he hasn't had to make much during his ten year `` tenure at the
:07:09. > :07:11.top of the political elite. It is a tough decision for him to face.
:07:12. > :07:17.Analysts say events could play out in two ways. Kremlin could strike a
:07:18. > :07:21.new gas deal with Ukraine and solve Gazprom's problems or it might, for
:07:22. > :07:29.political reasons, hold of, building up is in Ukraine `` building up he
:07:30. > :07:31.is in Ukraine and Europe of a gas shortage.
:07:32. > :07:35.The world's largest PC maker, Lenovo, has reported a 23% jump in
:07:36. > :07:40.profits in the last quarter. Rico Hizon is in our Asia Business Hub in
:07:41. > :07:46.Singapore. Tell us why it is doing so well. They've done it basically
:07:47. > :07:52.with a 2`way strategy. It has maintained its grip in the PC market
:07:53. > :07:55.by remaining the leader in China. At the same time, it has increased
:07:56. > :08:03.sales from Europe, the Middle East, Asia, Africa and the Americas. And
:08:04. > :08:10.it has been successful with its smartphone and tablet models. Sales
:08:11. > :08:15.not only sword but also worldwide `` on the mainland but also worldwide.
:08:16. > :08:23.Global laptop shipments fell by 3.7%. In smart phones, over the past
:08:24. > :08:30.year, it replaced Samsung to become the growing number one smartphone
:08:31. > :08:33.seller in China. Lenovo has been successful in widening its global
:08:34. > :08:38.footprint by making some major acquisitions. This year alone it
:08:39. > :08:44.made $5 billion worth of acquisitions. They struck agreements
:08:45. > :08:51.to acquire IBM's server unit and handset unit from Google. This will
:08:52. > :08:54.indeed contribute to the topic `` profitability of the company going
:08:55. > :08:59.forward. We will keep close eye on it. Thank you. Let's talk about
:09:00. > :09:05.South Korea. Its central bank has cut interest rates for the first
:09:06. > :09:14.time in 15 months. The move was expected by analysts. The Bank of
:09:15. > :09:16.Korea lowered its key rate to 2.25% to try stimulate more spending in
:09:17. > :09:19.the economy. US network equipment`maker Cisco
:09:20. > :09:22.Systems says it plans to cut 6,000 jobs, or about 8% of its workforce.
:09:23. > :09:25.The company has been facing slowing sales in emerging markets as phone
:09:26. > :09:28.companies stop buying new hardware like routers and switches. However,
:09:29. > :09:29.shares rose nearly 2% in late US trading after Cisco reported better
:09:30. > :09:45.than expected quarterly earnings. These are the financial markets. The
:09:46. > :09:53.South Korea story has stocks edging higher. Japan is up by .7%. Hong
:09:54. > :09:57.Kong fairly flat. Let's show you the currencies:
:09:58. > :10:19.GP surgeries in England found to be failing could be put into special
:10:20. > :10:23.measures and closed down if they don't approve, under new proposals
:10:24. > :10:26.announced today. It's part of a new system of inspections for surgeries
:10:27. > :10:30.which officially begins later this year. Every practice will be given a
:10:31. > :10:31.rating on the quality of care it provides to patients, as Branwen
:10:32. > :10:33.Jeffreys