Ukraine, bowing to pressure from the IMF ahead of a new loan deal, will take the painful step of raising gas prices for households from August, the government has announced. Prime Minister Mykola Azarov said the 50 percent price hike, an unpopular move aimed at cutting the budget deficit, was necessary to secure a new $14.9bn stand-by facility from the fund. “We have to tell people the truth. In these circumstances, we had no other choice than to agree with the IMF on financial support,” Azarov said at a televised government meeting. “In talks with the IMF, the government defended its own vision of ways to combat the crisis and protect ...
It is every manufacturer’s worst nightmare – the product that the company has spent millions developing, producing, marketing and shipping all around the world may have a fault. There is a risk that some of the products – maybe a few, perhaps many – could be harmful. The company faces a stark choice: voluntarily pull the stock off the shelves or the forecourt and ask customers to return items for an immediate refund, or wait until the authorities compel them to do so, while also making potentially sensitive product information public. Either way, the costs can easily escalate into tens of millions of pounds and leave the company reeli...
Japan’s government has announced it will press on with tax reforms to cut a huge public debt despite a stunning election setback, and was looking to two opposition parties to help drive policy change. Prime Minister Naoto Kan’s ruling coalition lost its upper house majority in a weekend election, putting his policies to deal with debt and generate growth at risk and prompting warnings by credit rating agencies S&P and Fitch on Japan’s sovereign ratings. His Democratic Party of Japan (DPJ) still controls the more powerful lower house. But it needs help from other parties to push bills through the upper chamber in the struggle to end...
Spain’s largest bank Santander moved one step closer to its goal to be a full service retail bank in Germany with the acquisition of Sweden’s SEB retail banking division, the bank has announced. The Ä555m ($699.1m) deal comes as Santander attempts to increase its footprint in both Europe, particularly Germany and Britain, as well as in higher growth markets like Latin America, where it is reported to be planning acquisitions in Columbia and Peru. “Germany is a core market for Santander. This acquisition is a significant step toward achieving our goal of being a full service retail bank in Europe,” Chairman Emilio Botin said in the ba...
ECB President Jean-Claude Trichet dismissed warnings that drastic and simultaneous spending cuts planned by eurozone governments could send the 16-country bloc back into recession. US policymakers have called for continued stimulus to keep momentum in the global recovery, while many economists and academics have raised fears that austerity measures on the cards in Athens and a clutch of other European capitals could snuff out the eurozone’s nascent recovery. “We are totally against the view that reducing public expenditures will hinder economic growth,” Trichet said at an ECB watchers conference organised by the Goethe University Frankf...
Japanese machinery orders tumbled by the most in almost two years in May as companies grew more cautious about the business outlook due to a rising yen and signs of a global economic slowdown. Bank lending in June also fell, matching the biggest annual decline in almost five years, as demand from companies for funds to invest in plants and equipment remained sluggish. Bank of Japan Governor Masaaki Shirakawa stuck to the central bank’s view that Japan’s economy was showing further signs of a moderate recovery, but he and other market watchers voiced concerns about the potential fallout from Europe’s debt woes. A senior government offici...
German defence ministry experts have drawn up a list of potential savings in weapons and equipment worth Ä9.3bn in the long-term, according to newspaper reports. German daily Bild reported the number of A400M military transport aircraft would be reduced and 15 Transall transport planes taken out of service immediately. Under the proposal, Germany would buy only 80 NH-90 helicopters instead of the planned 122 and halve the number of new Tiger attack helicopters to 40. Bild and business daily Handelsblatt reported the plan included buying 37 fewer Eurofighter combat jets than originally planned. Handelsblatt said the 23-page document recommend...
Dutch carmaker Spyker Cars used internal funding rather than external debt to pay General Motors the final $24m purchase price for Sweden’s Saab, ending concern over how it would foot the bill. Niche carmaker Spyker, which has never made a profit, took over the larger Saab from GM earlier this year and is now working to revive the flagging brand, but the final instalment of the purchase price had been due on July 15. Spyker Cars said it made the payment without increasing its external debt or issuing new shares, adding the internal funding became available after the acquisition of Saab Great Britain Limited by Spyker on May 31. A Spyker Car...
Japanese business confidence was at its best in two years in the three months to June and big firms revised up capital spending plans, a Bank of Japan survey showed, in a sign the export-driven economic recovery is taking hold. The tankan survey showed Europe’s sovereign debt woes and the sharp appreciation in the yen that followed have not yet taken a toll as Japanese companies benefit from solid exports to Asia, to the relief of policymakers. But analysts say sentiment may sour as world stock prices extend losses on fresh sovereign debt stress in Europe and growing fears of another global economic downturn. “Overall, the tankan survey s...