:00:00. > :00:07.selling drugs, has won the highest honour at this year was Mike any
:00:08. > :00:08.awards. Now, time for the latest financial news in World Business
:00:09. > :00:22.Report. A fresh financial crisis in France
:00:23. > :00:28.as President Hollande orders a cabinet shake`up.
:00:29. > :00:37.Could South Africa be on the brink of recession? We'll find out in a
:00:38. > :00:45.few hours when it releases figures for its second quarter GDP. Welcome
:00:46. > :00:48.to World Business Report. In a minute we'll have the latest on the
:00:49. > :00:51.earnings and expected restructure of troubled Malaysia Airlines. France
:00:52. > :00:54.has been thrown into a fresh crisis as President Francois Hollande told
:00:55. > :01:01.his Prime Minister to form a new government. The now former Economy
:01:02. > :01:04.Minister, Arnaud Montebourg, attacked the eurozone powerhouse
:01:05. > :01:06.Germany for ruining the region's economy with what he called an
:01:07. > :01:13.obsession with economic austerity and called for a policy U`turn.
:01:14. > :01:15.France is struggling with high unemployment and low growth, and Mr
:01:16. > :01:24.Hollande's popularity is the lowest for a president in more than 50
:01:25. > :01:27.years. A new line`up is expected to be announced later today, but will a
:01:28. > :01:39.new team be able to tackle the country's biggest problem, the
:01:40. > :01:42.economy? As our business correspondent Jonty Bloom reports,
:01:43. > :01:44.this political crisis could hardly have come at a worse time. His
:01:45. > :01:49.report contains flash photography. France is in the doldrums.
:01:50. > :01:53.Unemployment over 10%. Growth has grown to a halt. The government will
:01:54. > :01:57.miss its own target to bring them the size of its borrowings. The
:01:58. > :02:03.government has responded by cutting business tax and spending. All
:02:04. > :02:07.measures are unpopular with the ruling Socialist party. That feud
:02:08. > :02:14.has emerged in problem. The economic minister has lost his job for
:02:15. > :02:17.criticising the government was Mike policies and saying that austerity
:02:18. > :02:25.is not working. TRANSLATION: Wrote these politics
:02:26. > :02:34.are absurd. They prevent, freefall economic, the achievement of their
:02:35. > :02:40.objectives. Francois Hollande has as his Prime Minister to form a new
:02:41. > :02:43.government. The rebels have let the cabinet. It could lead to quicker
:02:44. > :02:50.reform of the economy, including changes to the building industry.
:02:51. > :02:55.The bigger pool is where this leaves the eurozone's economic policies.
:02:56. > :02:58.This will increase pressure on the European Central bank to step in and
:02:59. > :03:10.This any sign that the new avoid inflation.
:03:11. > :03:13.This any sign that the new can help? Joining me now is Francois de Curel,
:03:14. > :03:16.asset allocation fund manager, Edmund de Rothchild Asset Management
:03:17. > :03:19.South Africa releases its latest GDP figures soon, and they could show
:03:20. > :03:20.that Africa's most advanced economy has entered into a recession. Thank
:03:21. > :03:24.you for joining us. Let's talk the impact what has happened.
:03:25. > :03:33.Minimal impact on the markets generally. Quite the" on the
:03:34. > :03:41.economy. `` quite a big pack. That is a key question. Francois Hollande
:03:42. > :03:46.decided to back up the responsibility. He wanted to keep
:03:47. > :03:50.with engagement, European engagement of France. On the markets,
:03:51. > :03:58.historically, we have noticed almost no impact. Yesterday, we have
:03:59. > :04:13.analysed that there has been no impact. French equities have gone up
:04:14. > :04:19.by 2.10% exactly in line with other markets. I know that the Minister
:04:20. > :04:23.has badmouthed economic direction of France and spoken about the German
:04:24. > :04:29.austerity policies which France is changed to. We'll France move away
:04:30. > :04:30.from those policies? It is completely unrealistic to expect
:04:31. > :04:42.that. Rance is in Europe and shares the currency with other countries.
:04:43. > :04:53.The president and prime have decided to stick with French resolutions.
:04:54. > :05:01.What has happened yesterday, the president has decided that the
:05:02. > :05:13.guidelines could not be changed now. Thank you. South Africa will release
:05:14. > :05:20.its latest economic growth figures soon. You can show recession. In the
:05:21. > :05:27.first quarter of the year, economy shrank by 0.6%. That was caused by a
:05:28. > :05:29.five`month long strike in the platinum mining sector. But, since
:05:30. > :05:33.then, there has been another major strike in the engineering sector and
:05:34. > :05:35.now the banks have run into trouble. The ratings agency, Moody's,
:05:36. > :05:41.downgraded the country's banks on fears of a credit bubble.
:05:42. > :05:49.The fields of industry turning and the minds are back in production.
:05:50. > :05:54.That is despite rising costs and frequent disputes. Mining is
:05:55. > :06:02.important to South Africa. When there are problems, the effects are
:06:03. > :06:07.felt across the board. The mining sector is currently contributing 54%
:06:08. > :06:12.of export earnings in this country. That is disproportionate. Mining
:06:13. > :06:21.accounts for less than 10% of visit the applicant economy. It is the
:06:22. > :06:25.largest economy. Small and medium companies are used as suppliers in
:06:26. > :06:31.the production chain. The shape of the economy is changing. It revealed
:06:32. > :06:36.you look there are banks and retailers. These are the drivers of
:06:37. > :06:41.growth on the South African economy. Consumer spending has been on the
:06:42. > :06:48.rise. That has pushed up loans and debt. Without stricter controls,
:06:49. > :06:51.experts warn, South Africa has a looming threat above that which is
:06:52. > :06:55.bigger than the issue is bigger than the issues on the market. Tanks
:06:56. > :07:02.account for 20% of economic activity. There have been a few
:07:03. > :07:07.cracks in the system. The reserve bank has taken control. There was a
:07:08. > :07:12.lifeline of $800 million. There were huge losses because of your
:07:13. > :07:17.management decisions and bad loans. Rating agencies to not believe this
:07:18. > :07:30.is an isolated case. Last week, the issued warnings. It has grown from a
:07:31. > :07:37.low base. It has grown `35%. In the last few quarters, it has levelled.
:07:38. > :07:44.It still constitutes about 11% of total credit. From a systemic point
:07:45. > :07:48.of view, not the problem. Local banks are safe, according to the
:07:49. > :08:02.regulator. Consumer behaviour is now a warrior. South Africans use up to
:08:03. > :08:09.70% of monthly wages to give up. Growth can remain weak. The future
:08:10. > :08:14.is not looking bright. Investors are focused on Malaysia airlines this
:08:15. > :08:16.week. They have revealed their latest earning numbers and an
:08:17. > :08:24.expected announcement on plans to beef the company soon. The state
:08:25. > :08:28.investment fund, which is the majority shareholder, is proposing a
:08:29. > :08:31.major overhaul in an attempt to save the airline. Let's start to record
:08:32. > :08:42.the song and Singapore. You had been too big an eye on this. Will we see
:08:43. > :08:46.this continue in its foreign form? It looks like it or not. Major plans
:08:47. > :08:50.for restructuring over the next couple of days. The two disasters
:08:51. > :08:57.have expedited their Rancho problems. They have a list of
:08:58. > :09:02.issues. The competition from regional carriers. Earnings will be
:09:03. > :09:10.announced on the 28th of August. The potential reforms come from this
:09:11. > :09:17.organisation cutting rates. They need to way of around 3000`4000
:09:18. > :09:28.staff. That is about one fifth of total employee base. Around 10,000
:09:29. > :09:35.employees are represented by the National Union of Flight Attendance.
:09:36. > :09:42.I spoke to the president earlier. He said that steep job cuts could be
:09:43. > :09:50.wanted. When their loan regains its feet, employees can come back to
:09:51. > :09:51.work full time again. A lot of decisions will be made by management
:09:52. > :10:12.this week. That is all for now. Good buy. All
:10:13. > :10:17.43 police forces in England and Wales has signed up for a new
:10:18. > :10:19.voluntary code of conduct to determine how they use controversial
:10:20. > :10:23.powers to stop`and`search members of the public. Under the new rules,
:10:24. > :10:25.authors will need authorisation