14/09/2016 World Business Report


14/09/2016

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Those are the headlines. Now it is time for Sally. THEME PLAYS.

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The EU's head honcho sets out his vision for the future

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of the Union after a year of turmoil.

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The billionaire inventor of the Dyson vacuum cleaner says it

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would be "suicidal" for the European Union to impose

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What is the outlook for the oil industry?

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The International Energy Agency has just published its annual report.

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First, we start with the European Union.

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The European Union has the financial muscle to go toe to toe with the US

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or China and contains some of the worlds most powerful countries.

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But in recent months the EU has been hit with new major body blows,

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including of course the UK's decision to leave the Union.

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Today, it's top politician, Jean-Claude Juncker,

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will try to deal with some of those problems as he sets out his vision

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for the future of the block in his State of the Union address.

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As well as talking about the fallout from Britain's historic vote

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to leave the Union Mr Junker will be under pressure to outline reforms

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to head off anti-EU sentiment in other countries.

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He'll also be looking to address some of the bloc's major financial

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gremlins with a number of countries running dangerously high debt to GDP

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ratios including Portugal, Italy and of course Greece.

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EU countries are allowed to run an annual deficit of up to 3%

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of GDP, anything more and they can be fined.

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However with a number of countries currently breaking the rule

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Mr Junker will need to tread a fine line in his speech.

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He's got the tricky balancing act of needing to maintain financial

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stability while at the same time keeping those member states on board

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who want to borrow more cash to boost their economies.

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The ongoing refugee crisis in the region has also opened big

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fault lines across the European Union.

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Germany alone expects to spend $19.2 billion on refugees in this year.

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Paul Ivan is a senior policy analyst at the European Policy Centre

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Good morning. Good morning. A tough job ahead. Convincing his audience

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there is some commonality within the European Union, though he does admit

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there is an existential crisis. Yes. Certainly. We can see that the

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crisis he was mentioning last year in his last State of the Union

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address, is still there. We have stabilisation on a number of them,

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on the migrant crisis, on the Greek economy and so forth. But the

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challenges are clearly still there. Like you mentioned, the result of

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the British referendum will be with us for the next year and on. What

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will he say it is the key element in his strategy ahead? I think we can

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expect a higher focus on issues linked to security, the security of

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the borders and of internal security. We have seen over the last

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year the number of terrorist attacks taking place in Europe and the

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problem of the security of the EU's borders continues to remain and thus

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we need to reinforce those borders and work better together to deal

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with the challenge, like the migration crisis. I think the focus

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will be put on the issue of security. When it comes to economic

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measures, what can we expect? Umm, we already know that there is a plan

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to increase the Juncker investment fund, which has led to likely

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results. We will likely hear or on that. And the commission needs to

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come up with proposals to try to increase the slower economic growth

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we see across the European Union. In terms of the rifts that are

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emerging, like the recent spat between Hungary and others with this

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crisis, what can be European Union due to 60s cracks which are getting

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larger and larger. -- to fix these. I would not give this incident more

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attention than it needs. It looks quite strange and I think it has

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largely to do with the personality of the people involved. All right,

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Paul Ivan, I am sure he hopes you are right from that point of view.

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Thank you for your time this morning. Thank you very much. When

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Jean-Claude Junker starts his speech we will ring you up-to-date on that.

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More now on the EU and in particular the UK's future outside the Union,

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One of Britain's most successful business leaders has said that

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leaving the European Union will liberate the UK economy.

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Speaking to the BBC's economics editor the Billionaire inventor

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Sir James Dyson said it would be suicidal for the EU to impose

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They sell ?100 billion worth of goods more to us than we export to

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them. They will not block British imports. Even if they did put an

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import duty on that would be an insignificant amount compared to

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currency fluctuations. Are not worried with that. We are getting on

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good with Europe. They are 15% of general trade throughout the world.

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We are nicely balanced. There are very exciting markets outside of

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Europe. The far east is expanding at a phenomenal rate. We are very happy

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to be very globally -based and not focused on Europe. Europe is a great

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market. It is growing quite fast actually. I am not complaining about

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it. It is a very nice market for us we have some wonderful employees in

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Europe. But it is only 15% of global trade. The last thing they are going

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to do is imposed these duties. It is suicidal for them. Do you worry that

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the rest of the EU, not having access to the single market, will

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slow down the British economy generally, and will have an effect

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on business people herewe have access to it. They want access to

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our market and vice-versa. The import duty is a negligible issue.

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Currency fluctuations are far greater than that. Variance is far

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greater than that. There is a huge market, 85% global trade is not in

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Europe. Let us go off to that. And, by the way, that is the biggest

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expanding area. The British Commonwealth, who speak English, and

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who have affinities with us, we should be going for those markets as

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well. Interesting. Global investment in the exploration

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and production of oil and gas is expected to fall by 24% this year

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as the industry grapples with the lower prices

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and massive over supply. That's the conclusion

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of the International Energy Agency who have today released their annual

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global Energy Investment report In total $1.8 trillion were invested

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in the supply of energy last year, Of that, around half,

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or $900 billion, was invested in oil, gas and coal,

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down a whopping 18% on 2014. The worst hit sector was the US

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shale oil industry which has now seen 52% drop in investment

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in the past two years. On the up side, renewable's

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investment, primarily in wind, solar and hydropower came close

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to $290 billion last year as countries increasing shift away

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from carbon heavy fuel sources. And we will be speaking to the Head

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of the IEA in a couple of hours. Brazil's government has

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announced today a fresh round of privatisations and tenders

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with the aim of raising $7 billion. South Americas largest economy

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will privatise four airports and offer a wide range of contracts

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far from new roads and railroads The plan is are part

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of an initiative launched by Brazil's new president,

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Michel Temer, which aims to increase Brazil's governments are so does not

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have the money to build new infrastructure. That is because of

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the deep recession that the country is facing. So it is opening up new

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investment opportunities for a private firm foreign and domestic

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survey will build new roads, railroads, operate oil and gas, and

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operate four major airports in large resilient cities. At critics say

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that opening up $7 billion in investment opportunities might not

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be enough. That's because similar attempts have been made by the

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Brazilian government in the past. And those contracts never attracted

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offers from private investors as they were not lucrative enough. The

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challenge for this government is to draft a new contract that can do two

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things, bring new investors that will invest in infrastructure that

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will lift Brazil's economy, but also bring in money that is needed for

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the public coffers, which are in a very difficult financial situation.

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Daniel Gallas, BBC News, Sao Paulo. That is World Business Report. See

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you

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