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									                                                                                                                                                                                                                             ARAB TIMES, MONDAY, AUGUST 13, 2012
    BUSINESS                                                                                                                                                                                                                                                                      35

                                 ‘Spain won’t need bailout’                                                                                                             new Barclays chairman to review ‘entire’ business

    German Foreign Minister Guido                   “I consider Spain a very strong                 The new chairman of Barclays                except getting it right.”                     trillions of dollars in loans and            Barclays to pare back its invest-
    Westerwelle said he does not think           country with a strong economy.”                    Bank says he’ll undertake a top-to-            Walker said he wanted to review            investments such as bonds, auto              ment banking arm, Barclays
    Spain’s government will need help               The eurozone in mid-July approved               bottom review of the embattled              the company’s business plan, but              loans and derivatives.                       Capital. But Walker, who takes
    from European relief funds, accord-          an aid package for Spanish banks                   business, telling a British newspa-         didn’t want to sound “threatening.”              The scandal has damaged the               over from Agius on Nov 1, seemed
    ing to an interview in a Sunday              with funds of up to 100 billion euros.             per that he isn’t wedded to any of             Walker is due to replace                   bank’s reputation and led to a slew          cool to the idea, telling the
    newspaper.                                      In return, it imposed strict condi-             his predecessor’s policies.                 Marcus Agius, who offered his                 of resignations — most publically            Telegraph he wanted to remain a
       Speaking to the Bild am Sonntag,          tions, especially on the financial                    Asked if he was committed to the         resignation last month following              that of former Chief Executive Bob           “universal bank.”
    he said that “the Spanish government         sector, and Madrid must also meet                  current business plan of Barclays,          the imposition of a $453 million              Diamond. Regulators are still                   But Walker did seem to suggest
    with its Prime Minister (Mariano)            its pledges to cut its deficit by 2014             which is reeling from a massive             fine for manipulating the critical            weighing whether to bring criminal           changes in the way the retail end
    Rajoy shows great determination in           and implement recommendations                      rate-fixing scandal, David Walker           London interbank offered rate, or             charges against those involved.              of the bank works, saying “in prin-
    implementing its reforms. This is why        by the European Commission on                      told The Sunday Telegraph that he           LIBOR, which is used to calculate                Market-watchers had speculated            ciple” he was in favor of charging
    I am optimistic.”                            economic issues. (AFP)                             wasn’t “committed to anything               borrowing costs for hundreds of               that the scandal would prompt                customers for bank accounts. (AP)

                                                                                       9.3 bln pound event has failed to lift tourism: official

British economy struggles to secure golden Olympics boost
LONDON, Aug 12, (AFP): With the                Rance told AFP.                              were warned to stay away amid fears that       London,” she added.                                 Britain’s Office for National Statistics     from the first three months of this year.
London Olympics set to wrap up Sunday,            But she added: “All the signs are that    London’s transport system could not cope          Businesses complained of being side-          has already said that Olympic tickets sold         Meanwhile the nation’s coalition gov-
analysts said Britain’s recession-hit econ-    the Olympics have not delivered addi-        with millions of extra people descending       lined as tourists made a beeline for the         last year would be incorporated into gross      ernment, which has been hosting country
omy was unlikely to have won a major           tional visitors to London and the UK. In     on the capital.                                Games and avoided the capital’s other            domestic product figures for the third          leaders such as Russian President
boost from the Games that have been a          fact, it is expected that numbers may well      The Games had long been heralded as         attractions and shopping destinations,           quarter, despite the bulk having been paid      Vladimir Putin on the sidelines of the
triumph for the nation’s athletes.             end up having fallen by well over 30 per-    a key boost to the British economy but         while non-sports fans opted to stay at           for last year.                                  Olympics, said it hoped to strike trade
   While Britain’s construction sector ben-    cent.”                                       industry body the European Tour                home or delay their trips.                          Asked about the long-term benefits to        deals during the event.
efited hugely before the Olympics, experts        Following claims in the first few days    Operators Association said tourist num-           The Bank of England’s chief econo-            the economy from the Olympics, Dale                And it believes it can generate ¬£13
have said the 17-day sporting spectacle had    of the Games that they had turned            bers had fallen “dramatically” in the first    mist Spencer Dale last week said the             said: “Those type of effects are a lot hard-    billion of business, including almost half
not delivered significant financial rewards    London into a ghost town, British Prime      few days of the Games.                         Olympics would provide only “a small             er to try and work out and I don’t think it     coming from foreign direct investment,
and neither was it expected to in the          Minister David Cameron urged people to          “Hotels have been cutting their prices      positive contribution” to the British econ-      will have a material impact in our projec-      over the next four years as a direct result
months and years ahead.                        “come back into the capital.”                and many shopping areas, restaurants,          omy.                                             tions.”                                         of the Olympics.
   Mary Rance, chief executive of tourism         And his words seem to have made an        theatres, attractions and entertainment           “There may well be some extra spend-             Analysts have said the Games could              But Slavena Nazarova, economist at
body UKinbound, said the Olympics which        impact, with retailers across London’s       venues have seen a significant reduction       ing from tourism, but as many of us know         added 0.3 percentage points to British          French bank Credit Agricole, said the
have cost British taxpayers ¬£9.3 billion      main shopping district in and around         in business,” added Rance.                     there has also been travel disruption,           output in the third quarter, or July to         longer-term target was “a little exaggerat-
($14.5 billion, 11.8 billion euros) to stage   Oxford Street reporting an increase in          “Although it must be said that shop-        more people are going on holiday. So I           September period.                               ed” given that Cameron had not included
have failed to lift her sector.                sales and a higher footfall in the days      ping centres like Westfield Stratford City,    think those effects are small.                      Britain escaped a deep downturn in late      the greatest benefit thus far — the boost
   “From a positive perspective, the           after Cameron’s remarks.                     next to the Olympic Park, have benefited          “But the contribution from ticket sales       2009 but fell back into recession at the end    to the construction sector as a result of
Olympics have been a catalyst for huge            In the run-up to the Olympics, which      significantly — and over recent days vis-      and TV rights may lead to a very small           of 2011. Latest official data showed GDP        transforming a disused part of east
investment in infrastructure in London,”       began on July 27, commuters and tourists     itors seem to be returning to central          boost to GDP in the third quarter.”              slumped 0.7 percent in the second quarter       London to host much of the Games.

           Economic policy ‘frozen’: analysts

    Romania recovery now
                                                                                            Swiss banks sweat it out
    coming under ‘threat’
    BUCHAREST, Aug 12, (AFP):
    The recovery in Romania’s econo-
    my after two years of severe reces-
                                                  She added that foreign investors
                                               need political stability as well as a
                                                                                            as US, Europe mull redress
    sion is now coming under threat,
    analysts warn, victim to the
                                               stable and transparent legal system.
                                                  The IMF, which is conducting an
                                                                                                                     Berne needs a deal to remove the taint from financial industry
    months-long political crisis that has      assessment mission in Romania,
    engulfed the EU country.                   voiced concern over the ongoing              ZURICH, Aug 12, (RTRS): Swiss banks hoping to atone for                                         ilar agreements elsewhere in Europe. So the Swiss may be in limbo for a while.
       Prime Minister Victor Ponta told        political disputes and urged the             decades of complicity in tax evasion may be left to sweat it out                                   The wait is painful for a country which counts on banking for 7 percent of its eco-
    the International Monetary Fund            government to focus on economic                                                                                                              nomic output: until Swiss banks know how much information they need to share with
    this past week that his centre-left        reforms.                                     for months as the United States and Germany ponder the                                          foreign tax authorities they will struggle to attract new clients.
    government was determined to                  “Over the last few years                  right level of punishment.                                                                         As a result the share prices of its top banks — Credit Suisse and Julius Baer are
    continue cost-cutting reforms and          Romania has made progress in                    Switzerland has long dodged US accusations of hiding money for wealthy                       among those being investigated — are falling as investors fret about earnings.
    stick to plans to sell stakes in major     recovering from the financial crisis         Americans. But now eleven Swiss banks are under investigation in the United                        “We are prepared to sign a settlement with the US for the Swiss banks today. We feel
    energy companies that underpin             and the economy has made                     States and there is pressure too from Europe where burdened taxpayers want                      we have made a constructive proposal to the US but it is up to them to accept it or not,”
    recovery plans.                            progress in stabilising inflation and        scalps after numerous banking scandals. The Swiss need a deal to remove the                     said Switzerland’s Finance Minister Eveline Widmer-Schlumpf.
       But analysts say that economic          the budget situation but the current         taint from their financial industry.                                                               “This depends on whether the US is willing to reach a settlement before or after their
    policy is “frozen”, held hostage by        turmoil has taken its toll on the              However, Washington must factor forthcoming elections into its thinking, and                  elections, which is unclear at the moment,” she said.
    the political war underway between         economy,” chief negotiator Erik de           Germany is delaying ratification of a tax deal key to Switzerland’s efforts to strike sim-         Both Widmer-Schlumpf and chief negotiator Michael Ambuehl have dampened
    the ruling Social-Liberal Union            Vrijer said.                                                                                                                                                                                 expectations for a US deal by November,
    coalition and centre-right President          Romania obtained a 20-billion-                                                                                                                                                            stoked as recently as last month by the
    Traian Basescu, targeted by an             euro ($25-billion) rescue package                                                                                                                                                            finance minister herself.
    impeachment move launched six              from the IMF, the EU and the                                                                                                                                                                    “There is an open window after the
    weeks ago.                                 World Bank in May 2009, in                                                                                                                                                                   summer lull, but it’s relatively tight.
       Romanians which cast ballots in         exchange for drastic spending cuts.                                                                                                                                                          Otherwise, I think we’re looking at next
    a controversial referendum last               In March 2011, the IMF and the                                                                                                                                                            year,” said Martin Naville, chief execu-
    month voted overwhelmingly for             EU provided a fresh credit line of                                                                                                                                                           tive of the Swiss-American Chamber of
    Basescu’s removal, but its validity        five billion euros to be drawn only                                                                                                                                                          Commerce in Zurich.
    is being disputed and there have           in case of emergency.                                                                                                                                                                                         Deal
    been allegations judges have been             De Vrijer added that investor                                                                                                                                                               Switzerland’s efforts to spur along a
    pressured and intimidated.                 confidence and Romania’s standing                                                                                                                                                           deal include tentatively agreeing with the
       “Stop the circus, try building          in financial markets have lately                                                                                                                                                            US Foreign Account Tax Compliance
    something,” urged recently the             been undermined, while the cost of                                                                                                                                                          Act, an anti-tax evasion law known as
    Ziarul Financiar daily, voicing the        borrowing surged.                                                                                                                                                                           FATCA.
    exasperation of the business com-             “It is important for the govern-                                                                                                                                                            The rules on enforcing FATCA have
    munity.                                    ment to focus on macroeconomic                                                                                                                                                              yet to be finalised, but many Swiss
                  Blocked                      priorities, which means pushing                                                                                                                                                             bankers see it as a crippling blow that
                                               ahead with sound budgetary poli-                                                                                                                                                            effectively prevents their clients from
       “The economy is clogged,                                                                                                                                                                                                            investing in US securities.
    money is no longer changing                cies and with reforms that will
                                               enable the economy to grow                                                                                                                                                                     Acquiescing to FATCA was a tactic to
    hands, the public administration is                                                                                                                                                                                                    build goodwill for a Swiss bank deal, a
    blocked, major decisions are               faster,” he stressed.
                                                                                                                                                                                                                                           source close to the talks said.
    delayed and no important contracts            Financial analyst Aurelian                                                                                                                                                                  But the strategy doesn’t seem to be
    are signed,” economic analyst              Dochia deplored the government is                                                                                                                                                           paying off.
    Doru Lionachescu of Capital                too busy quarrelling with the presi-                                                                                                                                                           Washington is now pushing banks in
    Partners consulting firm told AFP.         dent instead of taking steps to boost                                                                                                                                                       Switzerland to divulge names and finan-
       The first victim of the political       the economy.                                                                                                                                                                                cial details of wealthy Americans hiding
    row has been the local currency, the          “Politicians don’t realize how                                                                                                                                                           money in their accounts, spurred on by
    leu, which has lost nearly five per-       dramatic the situation is both in                                                                                                                                                           success in 2009 when UBS handed over
    cent of its value over the past few        Romania and internationally,” he                                                                                                                                                            data to avert a criminal indictment.
    weeks.                                     said, stressing that the Balkan                                                                                                                                                                “Contrary to what may appear as inac-
       The depreciation will lead to           country’s economy is closely                                                                                                                                                                tivity, the US is in fact keeping the pres-
    hikes in the prices of fuel and of         linked to the eurozone, although it                                                                                                                                                         sure on Swiss banks, which are like mice
    other imported goods.                      is not part of it.                                                                                                                                                                          before a snake,” said Martin Janssen, pro-
       Romania emerged from two                   “The main thing we should have            Visitors admire the giant cruise ship ‘Celebrity Reflection’ as it leaves the Meyer shipyard in Papenburg, northern Germany                    fessor of finance at the University of
    years of severe recession by post-         avoided was to dig our own grave.            on Aug 12. The 319 meter (1,046 ft) long ship was built for US shipping company Celebrity Cruises and has room for                             Zurich. “The US is really maximising its
                                               Unfortunately this is exactly what                                                          around 3,000 passengers. (AP)                                                                   position here.”
    ing 2.5 percent growth in 2011, but                                                                                                                                                                                                       The tension is such that Swiss bankers
    the economy has lost steam.                we are doing.”
                                                          Also:                                                                                                                                                                            are afraid they will be personally targeted
       It dipped into recession at the
    beginning of this year, and an             SARAJEVO: Bosnia is likely to tip                               Patience with Greece reform efforts wearing thin                                                                            by US officials if they leave the country,
                                                                                                                                                                                                                                           after Credit Suisse and Julius Baer hand-
    expectations of a recovery are             back into recession in 2012 and the                                                                                                                                                         ed over employee names to US authori-
    evaporating quickly.                       Balkan country’s political instabili-                                                                                                                                                       ties.
       The forecast for growth this year
    has been cut from 1.5 to 1.0 per-
    cent, and a drought which has
                                               ty prevents reforms necessary for
                                               turnaround, central bank governor
                                               Kemal Kozaric said Friday.
                                                                                            Germany warns of Greek aid veto                                                                                                                   Originally a gesture towards coopera-
                                                                                                                                                                                                                                           tion, the move now has many Swiss
                                                                                                                                                                                                                                           bankers hunkered down at home, fearful
    severely affected wheat and maize             “We are heading towards reces-                                                                                                                                                           of arrest and extradition if they leave
    crops will hurt overall economic           sion. Economic tendencies show us            BERLIN, Aug 12, (AFP): Germany will            the requirements”.                               Focus.                                         Switzerland.
    performance, analysts pointed out.         that we are going into this direc-           block any new aid to ailing Greece if             He noted it was impossible to force a            “I’ve lost my illusions,” said Roesler,        Adding to the agony, several key US
       While some of Romania’s slow-           tion,” Kozaric said in an interview          Athens does not fully comply with the          country out of the eurozone but assumed          who is also vice chancellor and leads the      officials plan to step down, which could
    down is a spillover from the trou-         to the Oslobodjenje daily.                   terms of previous rescue packages, even        the “Greek government knows what it              pro-business Free Democrats in                 mean negotiations having to be reset.
    bles of its larger EU partners, the           Kozaric said industrial produc-           if other countries support unlocking           needs to do if it is not in a position to ful-   Germany’s ruling coalition.                       Internal Revenue Service commission-
    political gridlock threatens to            tion fell by 6.7 percent in the first        funds, a senior lawmaker said Sunday.          fil the reform requirements.”                       “I proposed with German businesses a        er Doug Shulman and Treasury Secretary
                                                                                               The deputy head of Chancellor Angela           Germany “has reached the limits of            whole series of support measures for the       Timothy Geithner, who discussed the
    aggravate the situation further.           half of the year compared to the
                                                                                            Merkel’s conservative parliamentary            what it can bear,” he added.                     Greek government. The Greeks have hard-        case with Widmer-Schlumpf in April, are
       Faced with the endless squab-           same period in 2011, while exports                                                             He said he also opposed the European
    bling, central bank governor               were 5.1 percent lower.                      bloc, Michael Fuchs, told business daily                                                        ly responded to our offers,” he told Focus     both scheduled to depart after the elec-
                                                                                            Handelsblatt that Berlin was ready to use      Central Bank providing further emer-             according to an advance copy of an article     tion. Secretary of State Hillary Clinton,
    Mugur Isarescu abandoned his                  After Bosnian economy con-                                                               gency loans to Greece and thus becom-
                                                                                            its veto if it is unhappy with findings                                                         to appear in its Monday edition.               credited by Swiss officials with helping
    courteous tone and came close to           tracted by 2.9 percent in 2009, in                                                          ing a “covert money printing press”.                                                            negotiations over a settlement for UBS in
    using a four-letter word in a public       2010 it rebounded by 0.7 percent a           from the Greece creditors “troika”.                                                                On July 22 Roesler had voiced his
                                                                                               “You can quote me: even if the glass is                      Pledges                         doubts concerning the possibility of           2009, is also leaving her job.
    address, hoping this will draw the         grew by 1.3 percent last year,                                                                                                                                                                 Another key US contact, Attorney
    politicians’ attention.                    according to the data by the Central         half-full, that is not enough for a new aid       Fuchs said that if Greece fails to live       Greece staying in the eurozone, saying
                                                                                            package,” he said in an interview to           up to its reform pledges, then “the ECB          that in his view there had been “nothing       General Eric Holder, the top law enforce-
       “We depend on the international         bank said.                                                                                                                                                                                  ment officer, is under pressure after a
    markets and they will punish us               Kozaric said the International            appear in the paper’s Monday issue.            cannot open up detour possibilities and          frightening” about a Greek exit “for a
                                                                                            “Germany cannot and will not agree to          provide money that the Greeks could not          long time”.                                    Republican-led Congress found him in
    severely,” Isarescu stressed.              Monetary Fund (IMF) was set to                                                                                                                                                              contempt of Congress for withholding doc-
                                                                                            that.”                                         otherwise get from the (European) rescue            The next day the German government
       In this tense environment,              approve a new 400-million-euro                                                                                                                                                              uments in a gun-running sting operation.
                                                                                               Germany, Europe’s biggest economy,          funds”.                                          said it was torn between hope and scepti-
    investors have shown increased             ($493 million) loan to Bosnia in                                                                                                                                                               But all of that could be trumped by the
                                                                                            is waiting with eurozone partners for the         Patience with Greece’s sputtering             cism about Greece’s ability to meet its
    caution and capital flows have             September which would enable                 report on Greece from a so-called troika                                                        commitments to its international credi-        “fiscal cliff” — a combination of tax
    dried up.                                  local governments to cover their                                                            reform efforts is wearing thin in                                                               hikes and automatic spending cuts that
                                                                                            of inspectors from the European Union,         Germany, Europe’s effective paymaster,           tors.                                          will take effect at the end of the year if
       “The political crisis and the insta-    budget deficits.                             International Monetary Fund and                                                                    The responsibility for managing the
    bility is has spurred could make              “But this will be only a by-pass                                                         with leading members of Merkel’s ruling                                                         lawmakers in the Democratic-controlled
                                                                                            European Central Bank.                         coalition openly questioning its ability to      debt crisis for Germany however rests          Senate and Republican-controlled House
    some entrepreneurs delay their deci-       ... Certain reforms should be car-              Their verdict, which is expected by                                                          with Finance Minister Wolfgang
    sions to invest in Romania,” a west-       ried out,” Kozaric insisted, warning                                                        stay in the eurozone.                                                                           are unable to reach a compromise.
                                                                                            mid-September, will determine if Athens           The government’s official line is that it     Schaeuble, not Roesler.                           By that point, if the Swiss haven’t got
    ern diplomatic source said.                that the constant crisis caused by           receives the next installment of 31.5 bil-                                                         Germany, Europe’s biggest economy,
                                                                                                                                           will wait for the troika report before                                                          a deal, they will face an even longer wait.
       “The question is how foreign            local political elite have prevented         lion euros ($38.7 billion) in rescue funds.                                                     is now waiting with its eurozone partners
                                                                                                                                           drawing any conclusions.                                                                           The going is equally sluggish closer to
    companies that considered invest-          economic growth.                                Fuchs said that even if other eurozone         German Economy Minister Philipp               for the auditors’ report on Greece, which
    ing in Romania will react to the sit-         The IMF has reduced its forecast                                                                                                                                                         home. Crisis-hit European countries in
                                                                                            countries call to release the funds after      Roesler expressed disappointment with            will determine if Athens receives the          need of extra income are delaying settle-
    uation,” said Annika Pattberg of           for Bosnia’s economic growth to              the report, “Germany will use its veto” as     the efforts of debt-wracked Greece to            next tranche of 31.5 billion euros as part     ment with Switzerland as a flourishing
    Germany Trade and Investment               zero in 2012.                                part of the EFSF temporary rescue fund         implement necessary reforms, in an               of its second bailout. The report is           trade in leaked bank client data tilts the
                                                                                            if it concludes that Greece “has not met       interview with the weekly magazine               expected by mid-September.                     talks further in their favour.

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