ARAB TIMES, TUESDAY, NOVEMBER 22, 2011
Greek govt gives way on property tax Centrica, Statoil agree deal to meet Britain gas needs
Greece’s new government bowed Monday to public agement of Dei so that vulnerable groups are not cut British energy company Centrica on Monday gas-focused exploration opportunities in Norway and
pressure and announced that people on low-incomes off from the grid.” announced a North Sea agreement with Norway’s Britain, according to a joint statement.
who struggled to pay a new property tax levied via A finance ministry source told AFP that a decision Statoil to help protect Britain’s gas security over a 10- Under the supply agreement hailed by Prime
electricity bills would not have their power cut. was due “in the next couple of days” about providing year period starting in 2015. Minister David Cameron as a deal that would help to
The state-run Public Power Corporation (Dei) was a formal exemption for the worst-off, including the The deal, which replaces a previous decade-long protect Britain’s energy security, Centrica will feed the
due to start disconnecting on Monday those who failed poorest pensioners, the unemployed and the dis- agreement, is worth £13.0 billion (15.1 billion euros, country with 50 billion cubic metres of gas in the ten
to pay the tax, one of numerous revenue-raising meas- abled. $20.3 billion) at current gas prices. years to 2025.
ures demanded in return for European Union and The decision came as Lucas Papademos, the prime Centrica also unveiled a cash deal to buy North Sea “Today’s agreement will help to ensure the contin-
International Monetary Fund loans. minister installed 10 days ago to save Greece from assets run by Statoil for £1.0 billion, boosting the ued security and competitiveness of gas supplies to
But after furious opposition by the unions, the envi- financial ruin, visited Brussels for talks on releasing British group’s oil and gas output by 25 percent. Britain, from a trusted and reliable neighbour,”
ronment and energy ministry announced in a state- desperately needed aid from the European Union and Centrica and Statoil additionally signed a memoran- Cameron said in the statement issued by Centrica.
ment: “The government is in discussions with the man- International Monetary Fund. (AFP) dum of understanding to consider working together on (AFP)
UK PM sets out plans to pull housebuilding out of slump
Cameron says eurozone crisis has ‘chilling effect’
LONDON, Nov 21, (RTRS): The crisis ing that that affects business and con- The unemployment rate in Britain
in the eurozone is having a “chilling
effect” on the British economy, Prime
Minister David Cameron said on
Monday, as he set out a £400 million
sumer confidence,” he added.
“I am absolutely clear about the right
answer for the UK economy. It can be
summed up in one sentence. We need
Britain’s CBI calls for export boost has risen to a 15-year high of 8.3 per-
cent, data showed last week.
“Unblocking the market will provide
a much-needed boost to employment,”
($630 million) plan to help boost the to deal with our debts and go for LONDON, Nov 21, (AFP):Britain’s Later Monday, British Prime Minister neighbours.” The powerful lobby Cameron and Clegg aid.
housebuilding sector. growth.” biggest employers group on Monday David Cameron, Foreign Secretary group is focussing on a so-called “Second, these plans are designed to
The initiative is likely to be one of a Finance minister George Osborne urged the government to help boost William Hague and Turkish President “Plan A+” that is centred on securing spread opportunity in our society. For
exports, especially to emerging mar- Abdullah Gul all address the confer- private-sector growth.
series of measures announced over the will make his autumn statement to par- kets, so as to drive a struggling eco- ence. “Today we are focussing on the “In the six months of my presidency,
too long, millions have been locked out
next week as the Conservative-led gov- liament on Nov 29, coinciding with a nomic recovery hit by the eurozone critical driver of growth: exports,” said the challenges have become larger but of home ownership.”
ernment aims to breathe life into an downgrading of growth forecasts from debt crisis. CBI President Roger Carr in an opening my conviction as to the way ahead has The industry welcomed the plans.
economy which risks returning to the independent Office for Budget The Confederation of British Industry speech to delegates. remained unwavering,” Carr said. “The “This is a positive move by govern-
recession as activity dries up in the cri- Responsibility watchdog. began its annual conference with a call “Our message is the urgent need to appetite for bad news by the prophets ment,” said Steve Turner of the Home
sis-hit eurozone. The coalition, in power for 18 for the coalition government to champi- prospect and build in new growth of doom has been well fed by the euro- Builders Federation.
“Paralysis in the euro zone is causing months, has made cutting a budget on exports — and also help the private markets rather than continue to har- zone crisis, a stuttering recovery in the “It clearly has recognised the need to
alarm in the markets and having a chill- deficit that peaked at 11 percent of sector meet the difficult challenges of vest the traditional — and currently USA, fears of stagnation in the West boost house building, both to address
ing effect on economies in many coun- national output its priority and has lim- soaring youth unemployment. less fertile — markets of our close and inflation in the East. the housing crisis and create jobs. The
tries — including our own,” Cameron ited money available for investment industry will work with government to
said in advance excerpts of a speech to projects. time buyers has climbed as many young build and buyers can’t buy,” Cameron funds and plans to favour “shovel ready” find ways to increase supply,” he added.
the CBI business lobby. It has earmarked precious funding to people are priced out of the market. and his deputy Nick Clegg wrote in the projects, with the aim of starting build- CBI Director-General John Cridland
“When the nightly news is about ris- boost housebuilding in Britain which has “The housing market is one of the foreword to a new housing strategy ing by July 2012. The fund could see the has been calling for the government to
ing interest rates in Europe and uncer- slumped to the lowest peacetime level biggest victims of the credit crunch: document for England. construction of up to 16,000 homes and work with the private sector to encour-
tainty about the future, it is not surpris- since the 1920s. The average age of first lenders won’t lend, so builders can’t It wants developers to compete for support up to 32,000 jobs, it said. age investment in infrastructure projects.
‘Big decisions’ needed quickly
Moody’s says debt yields rise
Debt crisis strikes
at heart of Europe hurting French rating outlook
BRUSSELS/MADRID, Nov 21, ket analysts, mostly outside the
(RTRS): The euro zone’s debt cri- euro area, as EU paymaster French financing costs near historic lows: AFT
sis struck again at the heart of Germany has rejected most of the
Europe on Monday despite a clear- widely-touted solutions to the debt PARIS, Nov 21, (RTRS): Moody’s warned France on Monday protect its top rating.
cut election victory in Spain for crisis. Moody’s announced in mid-October it could place France’s AAA rating on neg-
conservatives committed to The chairman of Goldman Sachs that a sustained rise in its debt yields coupled with weakening
ative outlook in three months if the costs for helping to bailout French banks and
tougher austerity. Asset Management, Jim O’Neill, economic growth could harm its ratings outlook, fuelling con- other euro zone members overstretched its budget.
Spain’s Socialists became the said the crisis of European eco- cern the euro zone’s second largest economy might lose its On Monday, the rating agency said that a worsening in the French bond market
fifth government in the 17-nation nomic and monetary union (EMU)
single currency area to be toppled had reached a point where “big
AAA status. — amid fears the sovereign debt crisis was spreading to the euro zone’s core —
by the debt crisis this year. decisions have to be taken pretty Worries about a high fiscal deficit and banks’ exposure to other troubled posed a threat to its credit outlook, though not at this stage to its actual rating.
Portugal, Ireland, Italy and Greece quickly”. European sovereign debt have drawn France into the firing line of the bloc’s “Elevated borrowing costs persisting for an extended period would amplify the
went before. “It’s not obvious to me that EMU crisis, despite the government’s insistence it would do everything necessary to fiscal challenges the French government faces amid a deteriorating growth out-
But an absolute parliamentary could survive without Italy,” he look, with negative credit implica-
majority for Mariano Rajoy’s cen- told a Confederation of British tions,” Senior Credit Officer Alexander
tre-right Popular Party brought no Industry conference. Kockerbeck said in Moody’s Weekly
respite on financial markets increas- “It’s not obvious to me that Italy Credit Outlook dated Nov 21.
ingly alarmed by the absence of an can survive with 6-7 percent bond The premium investors charge on
effective firewall to halt a meltdown yields, so something’s going to French 10-year debt compared to the
on sovereign bond markets. have give pretty quickly. Italian German equivalent was up around 20
The risk premiums on Spanish, bond yields have got to come down basis points at 163 bps following publi-
Italian and French government pretty quickly or EMU will have cation of Moody’s report but remained
bonds rose as investors fled to safe- some severe challenges.” well short of the 202 bps hit last week,
haven German Bunds, while a new euro-era high.
European shares fell more than 2 Funding
percent after Moody’s warned that Dutch Finance Minister Jan Kees
de Jager, one of Berlin’s closest Moody’s said that at last week’s
France’s credit rating faces new record level, France pays nearly twice
dangers. allies, acknowledged that the euro
zone could splinter. as much as Germany for long-term
“This crisis is hitting the core of funding, adding that a 100 basis point
the euro zone. We should have no Asked whether a break-up of the
euro would cause an economic increase in yields roughly equates to an
illusions about this,” European additional three billion euros in yearly
Economic and Monetary Affairs depression, he told BNR radio:
“This could be a consequence from funding costs.
Commissioner Olli Rehn said. Many investors have already dis-
He defended the European the euro zone falling apart, that is
correct. counted a downgrade to France’s AAA
Union executive’s advocacy of aus- rating, given expectations its economy
terity policies blamed for choking “You never know it for sure but
it is a likely outcome if the euro will enter recession next year.
off growth and jobs. “In the current environment, people are
“One simply cannot build a zone falls apart. Therefore all our expecting France to be downgraded,” said
growth strategy on accumulating efforts are to prevent that sce- Olivier Bizimana of Morgan Stanley, say-
more debt, when the capacity to nario,” De Jager said. ing it appeared likely Moody’s would
service the current debt is ques- Spaniards gave the People’s Party revise down France’s stable outlook if
tioned by the markets,” Rehn told a a clear mandate for more austerity nothing changed. “The fiscal position is
Brussels seminar. “One cannot against a background of 21 percent probably worse than other triple A coun-
force foreign creditors to lend more unemployment and one of the high- tries and on top of that you don’t have the
money, if they don’t have the con- est budget shortfalls in the region. back up of a central bank.”
fidence to do it.” “We will stop being part of the France’s AFT debt agency said on
problem and will be part of the Monday that, despite a recent increase in
Turmoil solution,” party leader Mariano
Cranes at a construction site are reflected on the electronic stock board of a securities firm in Tokyo, on Nov 21. Japan’s the spread of French yields over bench-
In Greece, the starting point of Rajoy said after the vote. exports fell for the first time in three months in October, eroded by a strong yen and a sputtering global economy. Exports mark German debt, its average medium-
market turmoil now felt around the Analysts said they expected declined 3.7 percent from a year earlier to 5.51 trillion yen ($71.7 billion), Finance Ministry said Monday. (AP) and long-term financing cost remained
world, more political wrangling Rajoy, who will not be sworn in close to historically low levels.
cast a pall over the new technocrat
prime minister’s bid to win the nod
until December, to move quickly to
turn the economy around.
Japan posts drop in October exports “For the first 11 months of the year,
it stood at 2.78 percent, its (second)
from European leaders on Monday “This could calm markets but lowest level since the creation of the
for bailout funds.
Borrowing costs for both Spain
and Italy hit levels regarded as
until the new government does
what it says it is going to do, noth-
ing will change,” said Angel
Global economic outlook grim: China euro, after 2.53 percent observed in
2010,” AFT told Reuters in a statement.
Economists, however, said that
unsustainable last week before the Laborda, analyst at Madrid think- CHENGDU, China, Nov 21, (RTRS): China and the United States should “The one thing that we can be cer- France risked being sucked into a “fis-
European Central Bank stepped in tank Funcas. Chinese Vice-Premier Wang Qishan work together to achieve balanced eco- tain of, among all the uncertainties, is cal trap” where slowing growth neces-
to stabilise the market. Nicolas Lopez, head of research warned on Monday the global econo- nomic growth. that the global economic recession sitated more austerity measures which
Two newspapers said the ECB’s at M&G Valores, said the govern- my is in a grim state and that an “unbal- But his comments also suggested caused by the international financial in turn slowed growth even further.
governing council had imposed a ment had to introduce convincing anced recovery” might be the best that Beijing should attend to bolstering crisis will be chronic,” Wang was “If on top of that you have interest
weekly limit of 20 billion euros on measures. “While these measures option, at talks where senior US offi- China’s own growth before it worried quoted as saying by the official rates which are increasing it means you
purchases of euro zone government are being taken, the ECB will have cials said the mood at home towards about global imbalances — in other Xinhua news agency. have a vicious cycle where it’s almost
bonds, a figure analysts say prevents to buy up bonds as it has been doing China was souring. words, that a strong Chinese economy China’s growth is slowing — down impossible to stabilise the trajectory of
it acting as an effective firebreak. to maintain confidence,” he said. The remark marked Wang’s second that brings a continued trade deficit to 9.1 percent in the third quarter from the debt and that could add pressure on
Ratings agency Moody’s said a In Italy, newly-installed Prime dire comment on the world economy in with the United States would be better 9.5 percent in the second-quarter and the ratings,” Bizimana said.
recent rise in interest rates on Minister Mario Monti, who easily just a few days. On Saturday, he said a for the world economy than a slow- 9.7 percent in the first quarter, but the France’s government recently cut its
French government debt and weak- won confidence votes in both houses “chronic” global recession was “cer- down in China itself. “An unbalanced rate remains within the government’s growth forecast for next year to 1 per-
er economic growth prospects of parliament last week, could face a tain” and China must focus on its recovery would be better than a bal- comfort zone. cent, from 1.75 percent, but most pri-
could be negative for France’s battle to win backing for greater aus- domestic problems. anced recession,” he said. After tightening monetary policy to vate economists still consider that far
credit rating. terity or liberalisation than Silvio Policymakers globally have fight the threat of inflation, the central too optimistic.
“Elevated borrowing costs persist- Berlusconi was able to achieve. expressed increasing alarm at the risks
Steady bank has since loosened its grip on Budget Minister Valerie Pecresse
ing for an extended period would Italian newspapers said on facing the world economy, mainly “As major world economies, China bank credit in a bid to support cash- said the government would not take
amplify the fiscal challenges the Sunday that new budget measures stemming from financial contagion in and the United States would make a starved small firms and pledged to further austerity measures, after
French government faces amid a were likely to be unveiled within Europe. On Monday, Singapore and positive contribution to the world fine-tune policy if needed as economic announcing a 65 billion euro package
deteriorating growth outlook, with two weeks, with a property tax Thailand forecast their economies through their own steady develop- growth slowed down. of cuts this month, saying a budgetary
negative credit implications,” Senior abolished by Berlusconi set to would shrink in the fourth quarter and ment,” Wang told dozens of trade, “It’s clear now that Beijing is ready buffer of 6 billion euros next year
Credit Officer Alexander return, plus moves to tackle tax Japan posted a much bigger fall in investment, energy and agricultural to make policy fine-tuning (to support would give it breathing room even if
Kockerbeck said in Moody’s Weekly evasion and a cut in payroll taxes to October exports than expected. officials from each government seated growth) at a time when the overall growth underperformed.
Credit Outlook dated Nov 21. lift employment. “Global economic conditions remain in a conference hall. domestic and foreign economic situa- “We must above all avoid taking
France’s government spokes- Greek Prime Minister Lucas grim, and ensuring economic recovery Wang’s Saturday comments on the tion is not optimistic,” said Hua measures that plunge the country into
woman reaffirmed on Monday that Papademos will meet EU is the overriding priority,” said Wang, global economy were the most down- Zhongwei, an economist with recession,” Pecresse said.
Paris would not impose a third Commission President Jose the top official steering China’s finan- beat to date from a senior Chinese pol- Huachuang Securities in Beijing. But Moody’s said that slowing
package of budget savings, despite Manuel Barroso and Eurogroup cial and trade policy, at the start of the icymaker and weighed down Chinese The JCCT talks do not address growth combined with rising interest
market pressure on its cost of credit. head Jean-Claude Juncker on second day of talks. and Hong Kong stocks on Monday. exchange rate policies, but US officials rates would make it hard for France to
Talk of a possible break-up of Monday after EU, IMF and Wang, speaking at the annual US- World markets were also weak, over at the talks warned Wang and his col- hit its target of cutting the fiscal deficit
the 12-year-old single currency has European Central Bank representa- China Joint Commission on Commerce worries about the euro zone debt crisis, leagues that they could not ignore ris- from an estimated 5.7 percent at the
grown among economists and mar- tives held tough talks in Athens. and Trade, or JCCT, in the southwest which represents the biggest threat to ing American impatience with China’s end of this year to an EU ceiling of 3
Chinese city of Chengdu, also said the world economy. trade policies and investment barriers. percent by 2013.