REFILE-UPDATE 1-LG Display Q2 profit doubles;warns of price fall

July 23, 2010 By Leave a Comment

SEOUL, July 22 (Reuters) – South Korea’s LG Display (034220.KS) reported quarterly profit more than doubled but it faces weaker profit growth in the second half, as TV sales lose momentum due to uncertainty over a global economic recovery.

Though the second half is seasonally strong, LCD makers are bracing for shrinking order books, as TV sales, which account for more than half of the sector’s total demand, weaken on concerns a debt crisis in Europe will crimp overall IT spending.

Strong demand from China and tight supplies of components boosted LCD panel prices earlier this year. Prices however started falling from June on worries of slowing demand from Europe and China, forcing panel producers to lower production.

“We are entering the seasonally strong third quarter with uncertainties involving the European fiscal crisis and (high LCD) inventory,” LG Display Chief Financial Officer Jung Ho-young said in a statement.

“Demand will grow but… panel prices will gradually fall in the third quarter and may start stabilising or rebound from September when (high) panel inventories are addressed.”

On Thursday, the world’s No.2 maker of liquid crystal display (LCD), which competes with home rival Samsung Electronics Co (005930.KS) and Taiwan’s Chimei Innolux (3481.TW) saw shipments for the current quarter rising by a teens percentage.

“Inventories in China are a concern for me and the demand situation in Europe does not look very good,” said Michael On, managing director at Beyond Asset Management in Taipei.

“Prices might weaken further to the fourth quarter. The first quarter next year could be a bottom, so from an investment point of view, LCD shares are not good targets now.”

LCD producers are now hoping reduced production, a shift to high-end panels such as those using light emitting diode (LED) technology, and a recovery in demand towards the year-end holiday season will help reverse a fall in prices.

LG Display reported a 726 billion won ($603.2 million) operating profit in April-June versus a forecast of 744 billion won from 22 analysts polled by Thomson Reuters I/B/E/S.

The result marked a sharp improvement from a profit of revised 352 billion won a year ago, but fell 8 percent from in the previous quarter, as sales of flat-screen TVs grew less than expected during the World Cup soccer event.

Sales rose to a record 6.5 trillion won from 4.8 trillion wona year ago and 5.88 trillion won in the first quarter. The company is a supplier to Apple’s (AAPL.O) iPad tablet PC, which has sold 3.47 million units since its April launch. [ID:nN20107855]

Ahead of the results, LG Display shares closed down 3.0 percent at a four-month low, lagging a 0.8 percent drop n a broader market . (Reporting by Miyoung Kim; Editing by Jonathan Hopfner and Anshuman Daga)

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POSCO Q2 profit jumps on firm sales, lower costs

July 14, 2010 By Leave a Comment

July 13 (Reuters) – South Korea’s POSCO (005490.KS), the world’s No.3 steelmaker, reported on Tuesday its highest quarterly profit in nearly two years on solid demand from automakers and lower costs for materials such as iron ore and coking coal.

POSCO (PKX.N), which kicks off April-June earnings reporting by major Asian mills, earned 1.84 trillion won ($1.53 billion) in second-quarter operating profit, higher than a consensus forecast of 1.73 trillion won polled by Thomson Reuters I/B/E/S.

The profit jumped 11 fold from last year’s 170 billion won and marks the highest since it reported a record 1.98 trillion won profit in the September quarter of 2008.

POSCO, which relies almost completely on imports of iron ore and coking coal, will see earnings falter in the current quarter, hit by rising raw material costs and an inability to fully pass on soaring costs to customers.

The company, which overtook Nippon Steel (5401.T) last year to rank just behind ArcelorMittal (ISPA.AS) and Baosteel (600019.SS), increased domestic steel prices by a smaller-than-expected 6 percent from July, amid growing concerns that China’s monetary tightening and the European fiscal crisis may hit second-half demand growth. [ID:nTOE65L006] ($1=1203.3 Won) (Reporting by Cho Mee-young; Editing by Jonathan Hopfner)

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New UK fiscal watchdog to publish first forecasts

June 14, 2010 By Leave a Comment

LONDON, June 14 (Reuters) – Britain’s new fiscal policy watchdog is expected on Monday to pour cold water on the previous Labour government’s hopes for a powerful recovery when it unveils its first growth and state borrowing forecasts.

That, in turn, will hint at the scale of spending cuts and tax hikes needed for the Conservative-Liberal Democrat coalition to rein in a record budget deficit running close to 11 percent of national output and among the highest in the developed world.

The figures from the independent Office for Budget Responsibility, created by the coalition that took over from the 13-year-old Labour administration in May, are intended to clarify the fiscal picture ahead of this month’s budget.

“The emergency budget on 22 June and the comprehensive spending review this autumn is not going to be pleasant for anyone as further major spending cuts and tax hikes are inevitable,” said Howard Archer, an economist at Global Insight.

Archer said the coalition had been preparing “the public to take the nasty medicine that the UK economy has to take for a long time to get back to long-term fiscal health”.

The new forecasts arrive after revised official data showed borrowing coming in lower than expected for the fiscal year 2009/10 at 156 billion pounds ($227.2 billion), but still at previously unseen levels.

Britain’s economy also appears to have pulled safely out of an 18-month recession but market turbulence over the euro zone’s fiscal crisis and a continued lack of credit availability have cast a shadow over future prospects for growth.

Investors can expect the OBR to cut Labour’s forecast for growth above 3 percent next year and beyond.

SWEEPING CHANGES

As such, while near-term borrowing could look better, it may not fall as fast as previously hoped over the next few years — potentially providing further support for the hefty spending cuts planned by Conservative finance minister George Osborne.

Monday’s forecasts are also likely to suggest much of Britain’s borrowing is structural — pointing to sweeping changes to the way the state budget is financed and run. The OBR, expected to restore some credibility to UK fiscal policy, will change the way estimates are made public, giving a fan chart of likely outcomes for growth with one “most likely” central forecast that will feed into borrowing projections.

Under Labour, the finance minister would outline two forecasts: a headline one and a more cautious estimate that was used for public finances calculations.

The range of possibilities for the economy, similar to that issued by the Bank of England each quarter, will be based on government policy at the time the coalition took power in May, excluding the 6.2 billion pounds of cuts introduced since then.

The OBR, headed up by former Treasury official and ex-BoE policymaker Alan Budd, will also go into some detail alongside the headline figures for borrowing and growth.

Estimates for growth will include quarterly forecasts for the near-term, sub-sector breakdowns for growth will be given for several years and the OBR will reveal more of the factors underpinning its judgements.

The document will also include a study of into the sustainability of long-term government liabilities such as public sector pensions and big public-private sector contracts. (Editing by Matthew Jones)

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Act now on deficit to protect needy-UK’s Clegg

June 14, 2010 By Leave a Comment

LONDON, June 14 (Reuters) – Deputy Prime Minister Nick Clegg will tell Britons on Monday the coalition government must act now to reduce a record budget deficit to retain control of how it tackles the problem and protect the most vulnerable.

The Liberal Democrat chief, deputy to Conservative Prime Minister David Cameron, will say in a speech the sovereign debt crisis in euro zone countries means the option of running a loose fiscal policy — which he had previously supported — no longer exists.

“By taking action, we do something hugely important — we give ourselves the chance to shape outcomes, to do all we can to bring down the deficit in a way that delivers fairness, to protect those who need it most,” he will say according to extracts of the speech released in advance.

The coalition government, formed after last month’s election failed to produce a clear winner, is seeking to prepare Britons for an era of lower public spending and higher taxation.

It has already announced 6.2 billion pounds ($9 billion) worth of spending cuts for this year.

In next week’s budget it will give more details of measures to cut a deficit of 156 billion pounds, close to 11 percent of national income and one of the highest in the developed world.

Clegg will say Britain needs to reassure markets to prevent a steep rise in the interest rate charged for its debt.

“I was in Madrid on Friday. There, the government has seen the premium they have to pay investors to buy their bonds compared to German bonds jump from a third of one per cent to two per cent in only a few weeks.

“As the nation with the highest deficit in Europe in 2010, we simply cannot afford to let that happen to us too.”

Europe is engulfed in a fiscal crisis that has led some to question whether the euro zone can survive in its present form.

Before the election Clegg supported a delay in spending cuts to avoid damaging the economy’s weak recovery from the worst recession in decades, a position still maintained by the defeated Labour Party.

But he will say the euro zone crisis has forced a change of policy — in line with that of the hawkish approach on the deficit promoted by the Conservatives, the coalition’s major partner.

“The world has changed since the days people advocated a looser fiscal policy. We need to adapt to those changing circumstances and change our fiscal position, too.

“The choices that were available to us just two months ago are no longer available. We have to take action now so that we can still be in control of our future.” (Editing by Jon Boyle)

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Romania – Factors to Watch on June 8

June 9, 2010 By Leave a Comment

June 8 (Reuters) – Here are news stories, press reports and events to watch which may affect Romanian financial markets on Tuesday.

Energy

INDUSTRIAL OUTPUT DATA

The National Statistics Board to release industrial output data for April.

TAX EVASION

Finance Minister Sebastian Vladescu and Interior Minister Vasile Blaga hold a news conference on tax evasion at 0900 GMT.

PROTESTS

Unions will picket parliament on Tuesday protesting against planned spending cuts.

BOURSE LISTING

Bucharest Stock Exchange’s shares start trading on the Romanian bourse on Tuesday.

Agerpres

ROMANIA DITCHES T-BILL SALE AMID HUNGARY DEBT FURORE

A sale of one-year sovereign debt by Romania failed on Monday as investors spooked by a possible fiscal crisis in neighbouring Hungary and worries over domestic reforms sought yields the government was unwilling to pay.

[ID:nLDE6561V5]

NO CONFIDENCE VOTE MAY UNDERMINE ROMANIA GOVT

Romania’s coalition government faces substantial opposition to its plans for drastic spending cuts and needs to survive a no confidence vote in parliament to secure vital international economic aid.

[ID:nLDE65623Q

ROMANIA POWER OUTPUT FALLS 2.2 PCT Y/Y IN JAN-APRIL

Romania's domestic energy production fell 2.2 percent on the year in January-April, driven mainly by a decline in coal-fired power output, while imports rose 6.4 percent, data showed on Monday.

[ID:nLDE6530AH]

ROMANIA NET WAGES ROSE 2.0 PCT Y/Y IN APRIL

Average net wages in Romania rose in April by a nominal 2.0 percent year-on-year and fell by 4.8 percent from March, data showed on Monday.

[ID:nLDE6530H9]

BETS

Betting companies in Romania close for an unlimited period to protest against reported government plans to apply a 25 percent tax on earnings from gambling.

Evenimentul Zilei, Page 6

LUSTRATION LAW

The Constitutional Court ruled on Monday the lustration law was not constitutional, after a complaint filed by the ex-communists Social Democrats.

Gandul, Page 6

NOTE- For a diary of forthcoming Romanian events, double

click [RO/DIARY], and a calendar of east European economic indicators, see [CONV/DIARY].

For other related news, double click on: ————————————————————— Romania Market Debt [RO-DBT] Romanian forex [RO-FRX] Romania Market Report [ROL/] Romanian money [RO-M] Emerging Market Debt [EMRG/DBT] Emerging forex [EMRG/FRX] All Emerging Markets news [EMRG] CEE indicators [CONV/DIARY] All East Europe News [EEU] E.Europe equities [.CEE] TOP NEWS — Emerging markets [TOP/EMRG] TOP NEWS — Convergence watch [TOP/EAST] Romanian indicators [RO/ECI] Main page of Reuters poll —————————————————————

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US STOCKS-Markets to open sharply lower after payrolls data

June 5, 2010 By Leave a Comment

NEW YORK, June 4 (Reuters) – U.S. stock index futures were sharply lower on Friday, with the S&P 500 and Nasdaq set to drop more than 2 percent at the open, after the May payrolls report showed private hiring slowed sharply.

The Labor Department said 431,000 jobs were added to the U.S. economy, but of that total, 411,000 workers were hired for the U.S. Census. Wall Street looked for payrolls to rise by 513,000. For details, see [ID:nN032434311]

“This shows that the economy is a lot weaker than most people had suspected,” said Gary Shilling, president of an investment research firm in Springfield, New Jersey. “It raises the risk of a double-dip recession.”

The data came a day after a private employment report and weekly jobless claims data showed an improved labor market, though not as much as expected.

S&P 500 futures SPc1 fell 23.9 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures DJc1 sank 190 points and Nasdaq 100 futures NDc1 plummeted 44.25 points.

Futures was already in negative territory before the payrolls report, tracking European equities on concerns about Societe Generale’s (SOGN.PA) derivatives business. Also, investors worried about the sovereign debt crisis spreading after a spokesman for Hungary’s prime minister said the country was at some risk of a Greek-style fiscal crisis. The euro fell to a four-year low against the dollar. [ID:nLDE65317T]

BP Plc (BP.N) (BP.L) made strides in its bid to stop the massive oil spill in the Gulf of Mexico and capture oil spewing from a ruptured well. Still, BP’s U.S.-listed shares fell 2.9 percent to $38.14 premarket. [ID:nN0444097]

Policymakers from the Group of 20 nations expressed concern Friday about the health of the world economy as they closed ranks behind the euro zone’s efforts to tackle a debt crisis that has rattled global markets. [ID:nTOE65300H]

Martek Biosciences Corp (MATK.O) reported second-quarter earnings late Thursday that beat expectations and forecast full-year revenues above consensus. [ID:nSGE6520IR]

Three top Federal Reserve officials said Thursday it may soon be time to begin raising interest rates as the U.S. economic recovery gathers momentum despite persistently high unemployment. [ID:nN03253532]

Wall Street rose for a second straight day on Thursday, with the Nasdaq advancing 1 percent on a late-day surge in technology shares. (Editing by Jeffrey Benkoe)

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UK coalition to start budget deficit cuts this week

May 24, 2010 By Leave a Comment

Britain’s Conservative-Liberal Democrat coalition government will on Monday get to work cutting spending to reduce a record budget deficit as it seeks to ease fears of contagion spreading from Europe’s fiscal crisis.

The new coalition, formed after the May 6 election produced no outright victor, will also announce its first programme of law-making this week, including political reforms and tighter banking regulation.

Conservative finance minister George Osborne and his Lib Dem deputy David Laws will on Monday announce how government departments will share the burden of an initial 6 billion pounds ($8.62 billion) of savings in 2010.

Government advisory bodies — known as quangos — are expected to lose about 500 million pounds in funding and the sprawling business ministry may have to shoulder upwards of 700 million pounds of savings.

The coalition says cutting Britain’s budget deficit, which is running above 11 percent of gross domestic product, is its top priority, especially since Greece’s debt crisis has rattled investor confidence the euro zone.

“I don’t think we anticipated … quite how sharply the economic conditions in the euro zone would have deteriorated and the need to show that we need to get to grips with this suddenly became much greater,” Lib Dem Deputy Prime Minister Nick Clegg told BBC television on Sunday.

An emergency budget on June 22 will outline the scale of spending cuts and tax rises needed to achieve the coalition’s aim of cutting the deficit faster than the previous Labour government, which wanted to halve borrowing over four years.

BANK TAXES

The Independent on Sunday newspaper said Treasury officials were looking into a tax or combination of measures on banks, possibly worth up to 8 billion pounds a year. There has also been speculation of a rise in the rate of VAT sales tax.

The Treasury declined to comment on the report but the Conservatives have said they would be prepared to introduce a bank tax even before international agreement had been reached. Policymakers from leading economies will discuss proposals for such taxes early next month.

Even with such a hefty tax income from the financial sector, the size of Britain’s budget deficit, forecast to hit 163 billion pounds this year, means far harsher spending cuts are needed in years to come than those announced for 2010.

Putting those tough decisions into action and negotiating which public services should be cut could put pressure on relations within the coalition, which has been keen to stress so far that it intends to serve a full five-year term.

Parts of both parties have voiced concerns about the compatibility of the two parties in Britain’s first coalition government since World War Two — and both sides have already made significant concessions so far.

The Lib Dems had been opposed to spending cuts this year for fear they could derail Britain’s frail economic recovery from the worst recession in at least 60 years.

The Conservatives, opposed to any changes to the electoral system, have said they are prepared to give voters the chance to change how they elect party candidates to parliament — a coup for the reform-hungry Lib Dems.

Political reforms, including a switch to fixed-term parliaments and cutting the number of members of parliament, are likely to form part of the coalition’s first legislative programme due to be announced by the Queen at the state opening of parliament on Tuesday.

Two Sunday newspapers said they had obtained drafts of that speech, which outlined an ambitious aim to introduce more than 20 new bills to parliament over 18 months but contained few surprises on top of the already agreed coalition policy plan.

(Editing by Elizabeth Fullerton)

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Greek civil servants strike, challenge EU/IMF talks

April 23, 2010 By Leave a Comment

Tens of thousands of Greek civil servants will strike on Thursday to protest against austerity measures and press the government not to agree to further cuts as it discusses an aid package with the EU and IMF.

Doctors, nurses, teachers, tax officials and others will stop work, paralysing public services, while thousands are expected to march to parliament at midday as European and IMF officials meet for talks that could lead to a financial bailout.

They will protest against European Union-backed measures including public wage cuts, a pensions freeze and tax hikes taken by the government to try to pull Greece out of a severe fiscal crisis that has shaken markets worldwide.

“These blood-thirsty measures won’t help Greece exit the crisis. A tragic period begins,” said Ilias Iliopoulos, secretary general of public sector union ADEDY, which represents half a million workers.

Many in Greece fear strings attached to the 40-45 billion euro aid package, if the cash-strapped nation decides to tap it, will hit living standards in a country where one in five lives below the poverty threshold, according to EU data.

“With the IMF’s involvement the situation will become a lot worse,” Iliopoulos told Reuters. “They will ask for more measures, more cuts, they will raise retirement age limits, they will cut pensions and fire people.”

The socialist government, which has been pressured by markets and EU policymakers for months to tidy up its finances, has vowed to go ahead with the reforms it has announced over the past months but also said there would be no additional austerity measures this year.

Participation in the protest — the fourth nationwide strike organised by the public sector union this year — will be closely watched by investors and policymakers, as concerns grow over whether Greece will honour its plan to slash its double digit budget deficit to under 3 percent of GDP in 2012.

Opposition to the measures has so far been relatively muted, although polls show most Greeks oppose the measures. Violence has been much less frequent than in 2008 riots that paralyzed Athens for weeks after the police killing of a teenager.

Worries about a surge in unemployment highlight the delicate balance Athens needs to strike in meeting international demands for cutbacks and maintaining enough support at home to ensure it can implement the reforms.

On Wednesday, the IMF said unemployment would rise to 13 percent in 2011, and Greece would be the only euro zone country to see its economy contract next year with a 1.1 percent drop.

Hundreds of dockworkers disrupted passenger boat traffic at Greece’s largest port Piraeus on Wednesday, part of another strike called for by communist trade union PAME.

Air traffic controllers have decided not to strike on Thursday, saying they did not want to further burden travellers and aggravate flight disruptions caused by the cloud of volcanic ash that caused havoc this week across Europe.

The market showed its impatience with the uncertainty about how Greece will finance its debt on Wednesday, driving the yield on the 10-year bond to 8.4 percent, the highest since at least 1999, a signal of growing doubt over Greece’s solvency.

(Additional reporting by Harry Papachristou; Editing by Janet Lawrence)

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G-20 is the appropriate forum to resolve global meltdown: BRIC leaders

April 17, 2010 By Leave a Comment

Brasilia (Brazil), Apr.16 (ANI): Reaffirming the central role of the Group of 20 (G-20) member nations in combatting and neutralising the impact of the global fiscal crisis, leaders of Brazil,Russia, India and China (BRIC) on Thursday said the grouping is the right forum for resolving the crisis.

A joint statement issued by the BRIC leader said: “We stress the central role played by the G-20 in combating the crisis through unprecedented levels of coordinated action. We welcome the fact that the G-20 was confirmed as the premier forum for international economic coordination and cooperation of all its member states.”

“Compared to previous arrangements, the G-20 is broader, more inclusive, diverse, representative and effective. We call upon all its member states to undertake further efforts to implement jointly the decisions adopted at the three G-20 Summits. We advocate the need for the G-20 to be proactive and formulate a coherent strategy for the post-crisis period. We stand ready to make a joint contribution to this effort,” the BRIC leaders added.

Expressing their strong commitment to multilateral diplomacy with the United Nations playing the central role in dealing with global challenges and threats, they said they reaffirmed “the need for a comprehensive reform of the UN, with a view to making it more effective, efficient and representative, so that it can deal with today’s global challenges more effectively.”

“We reiterate the importance we attach to the status of India and Brazil in international affairs, and understand and support their aspirations to play a greater role in the United Nations. We believe the deepened and broadened dialogue and cooperation of the BRIC countries is conducive not only to serving common interests of emerging market economies and developing countries, but also to building a harmonious world of lasting peace and common prosperity,” the joint statement quoted the BRIC leaders, as saying.

Expressing their satisfaction over the improving world economic situation since their first meeting in June 2009, in Ekaterinburg, the BRIC leaders said: “We welcome the resumption of economic growth, in which emerging market economies are playing a very important role. However, we recognize that the foundation of world economic recovery is not yet solid, with uncertainties remaining. We call upon all states to strengthen macroeconomic cooperation, jointly secure world economic recovery and achieve a strong, sustainable and balanced growth.”

“We reiterate our determination to make positive efforts in maintaining domestic economic recovery and promoting development in our own countries and worldwide,” the BRIC leaders added.

They also underlined the importance of maintaining relative stability of major reserve currencies and sustainability of fiscal policies in order to achieve a strong, long-term balanced economic growth.

“We are convinced that emerging market economies and developing countries have the potential to play an even larger and active role as engines of economic growth and prosperity, while at the same time commit to work together with other countries towards reducing imbalances in global economic development and fostering social inclusion,” they said. By Ravinder Singh Robin (ANI)

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G-20 is the appropriate forum to resolve global meltdown: BRIC leaders

April 17, 2010 By Leave a Comment

Brasilia (Brazil), Apr.16 (ANI): Reaffirming the central role of the Group of 20 (G-20) member nations in combatting and neutralising the impact of the global fiscal crisis, leaders of Brazil,Russia, India and China (BRIC) on Thursday said the grouping is the right forum for resolving the crisis.

A joint statement issued by the BRIC leader said: “We stress the central role played by the G-20 in combating the crisis through unprecedented levels of coordinated action. We welcome the fact that the G-20 was confirmed as the premier forum for international economic coordination and cooperation of all its member states.”

“Compared to previous arrangements, the G-20 is broader, more inclusive, diverse, representative and effective. We call upon all its member states to undertake further efforts to implement jointly the decisions adopted at the three G-20 Summits. We advocate the need for the G-20 to be proactive and formulate a coherent strategy for the post-crisis period. We stand ready to make a joint contribution to this effort,” the BRIC leaders added.

Expressing their strong commitment to multilateral diplomacy with the United Nations playing the central role in dealing with global challenges and threats, they said they reaffirmed “the need for a comprehensive reform of the UN, with a view to making it more effective, efficient and representative, so that it can deal with today’s global challenges more effectively.”

“We reiterate the importance we attach to the status of India and Brazil in international affairs, and understand and support their aspirations to play a greater role in the United Nations. We believe the deepened and broadened dialogue and cooperation of the BRIC countries is conducive not only to serving common interests of emerging market economies and developing countries, but also to building a harmonious world of lasting peace and common prosperity,” the joint statement quoted the BRIC leaders, as saying.

Expressing their satisfaction over the improving world economic situation since their first meeting in June 2009, in Ekaterinburg, the BRIC leaders said: “We welcome the resumption of economic growth, in which emerging market economies are playing a very important role. However, we recognize that the foundation of world economic recovery is not yet solid, with uncertainties remaining. We call upon all states to strengthen macroeconomic cooperation, jointly secure world economic recovery and achieve a strong, sustainable and balanced growth.”

“We reiterate our determination to make positive efforts in maintaining domestic economic recovery and promoting development in our own countries and worldwide,” the BRIC leaders added.

They also underlined the importance of maintaining relative stability of major reserve currencies and sustainability of fiscal policies in order to achieve a strong, long-term balanced economic growth.

“We are convinced that emerging market economies and developing countries have the potential to play an even larger and active role as engines of economic growth and prosperity, while at the same time commit to work together with other countries towards reducing imbalances in global economic development and fostering social inclusion,” they said. By Ravinder Singh Robin (ANI)

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G-20 is the appropriate forum to resolve global meltdown: BRIC leaders

April 16, 2010 By Leave a Comment

Brasilia (Brazil), Apr.16 (ANI): Reaffirming the central role of the Group of 20 (G-20) member nations in combatting and neutralising the impact of the global fiscal crisis, leaders of Brazil,Russia, India and China (BRIC) on Thursday said the grouping is the right forum for resolving the crisis.

A joint statement issued by the BRIC leader said: “We stress the central role played by the G-20 in combating the crisis through unprecedented levels of coordinated action. We welcome the fact that the G-20 was confirmed as the premier forum for international economic coordination and cooperation of all its member states.”

“Compared to previous arrangements, the G-20 is broader, more inclusive, diverse, representative and effective. We call upon all its member states to undertake further efforts to implement jointly the decisions adopted at the three G-20 Summits. We advocate the need for the G-20 to be proactive and formulate a coherent strategy for the post-crisis period. We stand ready to make a joint contribution to this effort,” the BRIC leaders added.

Expressing their strong commitment to multilateral diplomacy with the United Nations playing the central role in dealing with global challenges and threats, they said they reaffirmed “the need for a comprehensive reform of the UN, with a view to making it more effective, efficient and representative, so that it can deal with today’s global challenges more effectively.”

“We reiterate the importance we attach to the status of India and Brazil in international affairs, and understand and support their aspirations to play a greater role in the United Nations. We believe the deepened and broadened dialogue and cooperation of the BRIC countries is conducive not only to serving common interests of emerging market economies and developing countries, but also to building a harmonious world of lasting peace and common prosperity,” the joint statement quoted the BRIC leaders, as saying.

Expressing their satisfaction over the improving world economic situation since their first meeting in June 2009, in Ekaterinburg, the BRIC leaders said: “We welcome the resumption of economic growth, in which emerging market economies are playing a very important role. However, we recognize that the foundation of world economic recovery is not yet solid, with uncertainties remaining. We call upon all states to strengthen macroeconomic cooperation, jointly secure world economic recovery and achieve a strong, sustainable and balanced growth.”

“We reiterate our determination to make positive efforts in maintaining domestic economic recovery and promoting development in our own countries and worldwide,” the BRIC leaders added.

They also underlined the importance of maintaining relative stability of major reserve currencies and sustainability of fiscal policies in order to achieve a strong, long-term balanced economic growth.

“We are convinced that emerging market economies and developing countries have the potential to play an even larger and active role as engines of economic growth and prosperity, while at the same time commit to work together with other countries towards reducing imbalances in global economic development and fostering social inclusion,” they said. (ANI)

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Majority of Greeks say austerity steps unfair-poll

April 3, 2010 By Leave a Comment

(Reuters) – Three quarters of Greeks think that the government’s plan to cut the country’s budget deficit are “socially unfair” because it is aimed at lower earners, a poll showed on Friday.

World

The survey also showed nearly half of Greeks did not see a safety-net deal agreed last week by euro zone leaders to prevent a fiscal crisis here as positive.

Facing rising borrowing costs and pressure from its euro zone peers, the Socialist-led government has cut public wages, frozen pensions and raised taxes to cut the budget gap by almost a third to 8.7 percent of gross domestic product.

The poll showed 75.2 percent of respondents did not like the measures, mainly because they thought they hit pensioners and salaried workers too much and did not contribute to growth.

Nearly as many — 72.2 percent — believed the direction of developments were “bad” or “very bad” in the Mediterranean state of 11 million, according to the survey taken by agency MRB and published in the Realnews weekly.

The IMF and European Union have supported the austerity steps and say they should be adequate to prevent a deepening of the crisis, but investors are keeping a close eye on public opinion because they are still unsure whether the government will be able to carry them out.

Demonstrators have staged weekly marches in Athens, and memories of violent 2009 clashes between protesters and police have raised concern that the government may lose its nerve if social unrest rises.

DEBT CRUCIAL

The poll showed an almost dead even split of 46.2 percent to 46.3 between those who thought the measures went far enough and those who thought they did not. That was compared with 36.2 percent and 53.0 in a February survey.

Respondents were also skeptical about the EU/IMF plan, with 49.8 percent seeing it as not so positive or not positive at all and only 36.6 percent viewing it as positive or very positive.

Greece says it will turn to the plan only if it is unable to borrow on markets and is trying to convince investors it can shrink its huge deficit and eventually cut a debt load equal to an expected 120 percent of its annual economic output.

But it is facing weak foreign demand for its bonds. Despite the safety net agreement, its borrowing costs rose this week and remain more than double that of fellow euro zone member Germany.

It is struggling to raise about 16 billion euros to roll over debt and cover spending coming due through the end of May.

The Socialists maintained a wide lead in popularity over the right-of-center New Democracy party, the poll showed, with 31.9 percent support, versus 21.2 percent. (Reporting by Lefteris Papadimas; writing by Michael Winfrey)

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Majority of Greeks say austerity steps unfair-poll

April 3, 2010 By Leave a Comment

(Reuters) – Three quarters of Greeks think that the government’s plan to cut the country’s budget deficit are “socially unfair” because it is aimed at lower earners, a poll showed on Friday.

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The survey also showed nearly half of Greeks did not see a safety-net deal agreed last week by euro zone leaders to prevent a fiscal crisis here as positive.

Facing rising borrowing costs and pressure from its euro zone peers, the Socialist-led government has cut public wages, frozen pensions and raised taxes to cut the budget gap by almost a third to 8.7 percent of gross domestic product.

The poll showed 75.2 percent of respondents did not like the measures, mainly because they thought they hit pensioners and salaried workers too much and did not contribute to growth.

Nearly as many — 72.2 percent — believed the direction of developments were “bad” or “very bad” in the Mediterranean state of 11 million, according to the survey taken by agency MRB and published in the Realnews weekly.

The IMF and European Union have supported the austerity steps and say they should be adequate to prevent a deepening of the crisis, but investors are keeping a close eye on public opinion because they are still unsure whether the government will be able to carry them out.

Demonstrators have staged weekly marches in Athens, and memories of violent 2009 clashes between protesters and police have raised concern that the government may lose its nerve if social unrest rises.

DEBT CRUCIAL

The poll showed an almost dead even split of 46.2 percent to 46.3 between those who thought the measures went far enough and those who thought they did not. That was compared with 36.2 percent and 53.0 in a February survey.

Respondents were also skeptical about the EU/IMF plan, with 49.8 percent seeing it as not so positive or not positive at all and only 36.6 percent viewing it as positive or very positive.

Greece says it will turn to the plan only if it is unable to borrow on markets and is trying to convince investors it can shrink its huge deficit and eventually cut a debt load equal to an expected 120 percent of its annual economic output.

But it is facing weak foreign demand for its bonds. Despite the safety net agreement, its borrowing costs rose this week and remain more than double that of fellow euro zone member Germany.

It is struggling to raise about 16 billion euros to roll over debt and cover spending coming due through the end of May.

The Socialists maintained a wide lead in popularity over the right-of-center New Democracy party, the poll showed, with 31.9 percent support, versus 21.2 percent. (Reporting by Lefteris Papadimas; writing by Michael Winfrey)

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Rate rises on the way

March 17, 2010 By Leave a Comment

The Reserve Bank decided to raise interest rates in March because the balance of economic data showed the domestic economy was growing close to its speed limit.

The minutes to the Reserve Bank of Australia’s March policy meeting showed the central bank concluding that, while a fiscal crisis in Europe could roil global markets and the economy if not handled properly, it did not see that as the most likely outcome.

It also noted that domestic house prices were rising strongly almost across the board.

On balance, members concluded, “it remained appropriate for interest rates to move gradually towards normal levels, and that it was timely to take another step in that direction.”

AMP Capital Investors chief economist, Shane Oliver, says he thinks the word gradual means no rate rise in April.

“I get the clear impression that the Reserve Bank is signalling that it’s going to retain this gradual approach and that to me suggests that we’ll have several meetings where absolutely nothing happens,” he told ABC News.

“I think if the Reserve Bank were to raise interest rates in April they might be concerned that that would signal to the market that they’re departing from a gradual approach.”

However, Macquarie’s interest rate strategist, Rory Robertson, says a rate rise in April is as likely as May.

“Some people have grabbed onto the word ‘gradual’ and said well gradual isn’t back-to-back… rate hikes but, in fact, the Reserve Bank used the word gradual in the equivalent minutes in November, when it was just about to deliver a third consecutive rate hike in December,” he told ABC News.

“I think that the market in general is starting to think that the cash rate might be 5 per cent by the end of the year, versus 4 per cent now.

“We’re in March now, so there’s nine more meetings before the end of the year – the market has in mind there might be four more cash rate hikes – so it’s almost a 50-50 chance at any particular meeting.”

Housing, Greece concerns

The Reserve Bank indicated that it is still concerned by the strength of inflation in home prices.

“While housing loan approvals had slowed a little, house prices had gained significant momentum and were continuing to rise strongly for all but the bottom segment of the market,” the board concluded.

The RBA had raised interest rates by 25 basis points to 4.0 per cent in March, marking the fourth time it had tightened policy since October when rates were at a record low of 3.0 per cent.

The moves render Australian rates the highest in the developed world, and underscore the resilience in Australia’s economy.

Australia had survived the world economic crisis relatively unscathed owing to a buoyant property market, a healthy bank sector and strong Chinese demand for its commodity exports.

“Indeed, some recent indicators suggested that growth might already have been running at or close to trend for a few months,” the RBA noted.

Australia’s long-term growth potential is estimated to be around 3.5 per cent, a pace which the RBA expects to see over the next two years.

Healthy consumer spending, a pick-up in housing construction activity, early signs of a recovery in business credit, and a mining boom that should boost the economy over a number of years all underpinned the RBA’s bullish outlook.

On Greece, where a festering fiscal crisis has hammered the euro and dented investors’ demand for riskier assets of late, the RBA noted that the exposure of the global banking sector to Greece were “quite small” in absolute terms.

It said that even for countries with the biggest banking exposure to Greece, the nation only accounted for a small proportion of their total foreign claims.

“The main risk was the possibility of contagion to other sovereigns and perhaps other markets, primarily in the euro area,” the bank noted.

However, the board concluded that it was unlikely this would lead to a renewed bout of turmoil in financial markets.

-Reuters/ABC

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ECB’s Stark in Athens with Rehn to meet Greek officials

March 2, 2010 By Leave a Comment

ATHENS, March 1 (Reuters) – European Central Bank (ECB) Executive Board member Juergen Stark was in Athens on Monday with the European Union’s Economic Affairs Commissioner Olli Rehn to meet Greek officials on the country’s fiscal crisis.

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A Reuters reporter saw Stark inside the Greek finance ministry building with Rehn.

Greece has until March 16 to convince EU finance ministers and the executive European Commission that proposed measures to cut its budget shortfall by four percentage points this year to 8.7 percent of gross domestic product (GDP) are sufficient. (Reporting by Ingrid Melander)

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