Floodwaters that have wreaked havoc in Austria are
now threatening the Slovak capital, Bratislava, where the level of the
River Danube has risen dramatically.
The flood affecting the Czech capital, Prague, is
receding — although the tens of thousands of residents who have been
recently evacuated have been told to stay away.
In Dresden, in the hard-hit eastern state of Saxony,
army helicopters flew hundreds of hospital patients out of the reach of
the advancing floods on Wednesday.
The authorities are rushing to empty the historic
city centre, which is already flooded waist-deep in places.
In other East German cities — such as Chemnitz and
Leipzig — residents have fled water pouring over the banks of the
German Chancellor Gerhard Schroeder, on a visit to
Saxony, described the situation as a catastrophe and promised federal
aid to flood victims.
"This is not a task for one state or for
Saxony," he said, "this is a task for Germany."
At least 12 flood victims have been killed across
Germany, and a state of emergency has been declared in several Bavarian
In the Czech capital, Prague, water levels appear to
be going down after two days of destructive flooding.
US INTEREST RATES KEPT ON HOLD
The Federal Reserve has retained rates at 1.75%, the
lowest since July 1961.
But the Fed said that economic weakness, rather than
rising inflation, was now its greatest concern.
"The risks are weighted mainly toward conditions
that may generate economic weakness," the Fed said.
The bank blamed falling share values and concerns
over accounting scams for delaying the US's revival this year.
The statement also left the door open for future rate
cuts in an effort to stimulate the economy.
"If the economic statistics continue to come in
on the weak side I would think we would see an easing in
September," said Mary Ann Hurley, vice-president of fixed income
trading at DA Davidson in Seattle.
But the prospect of lower rates failed to perk up US
The Dow Jones Industrial Average, which had stood
seven points lower before the Fed announcement, fell a further 80 points
in the following minutes, and closed down 206 points.
The decision to keep rates on hold was backed by all
members of the Fed's rate setting committee.
The US economy is taking longer than many economists
had expected to recover from last year's recession.
"If you look at the economic data... it is
largely consistent with warnings the Fed has been providing the market
this year, that the recovery may be modest by historical
standards," Steve Mayon, economist at Scotia Capital Markets, said.
US President George W Bush held a summit on Tuesday
with about 240 Americans, ranging from company bosses to a rubbish
collector, to discuss the challenges facing the US economy.
EUROPE COUNTS COST OF FLOOD DAMAGE
The floods sweeping through Europe and leaving
devastation in their wake could cost local people and companies billions
Insurers, farmers, consumers and governments are set
to foot the bill for the floods which have left about 90 people dead and
hundreds of thousands homeless.
The Austrian government is considering drastic cuts
in its defence budget to pay for the damage, while German politicians
have to reconcile the pressures of an election year with the constraints
of a budget in deficit.
Consumers could face higher food prices thanks to the
damage caused to crops at the start of the harvest season.
CONCERNS OVER AFRICAN MINING OWNERSHIP
A top level meeting was taking place in South Africa
on Wednesday between cabinet ministers and bosses of the big mining
groups about how to increase black ownership in the sector.
Last month a government document was leaked which
suggested that 51% of all mining operations should be in the hands of
black empowerment groups within 10 years.
The government has said this charter is a negotiating
document rather than policy.
It also said on Wednesday that it had no intention of
nationalising any part of the mining industry, despite fears to the
SURPRISE RISE FOR UK INFLATION
UK inflation has risen higher than expected, casting
doubt on the need for another interest rate cut.
The annual underlying rate of inflation rose by half
a percentage point last month to 2%, official figures showed on Tuesday.
But it was still well below the Bank of England's
target rate of 2.5%, with 1% leeway either way.
The headline rate of inflation, which includes
mortgage interest payments, also rose half a percentage point to 1.5%,
the Office for National Statistics (ONS) said.
IMF PROPOSES $200M LOAN TO PARAGUAY
The International Monetary Fund (MF) has proposed a
$200 million loan to Paraguay to combat a deepening recession sparked by
neighbouring Argentina's economic woes.
A statement by the IMF said that the 18-month loan
would be given to Paraguay on the condition that the country's
parliament approved government measures to strengthen public finances
and the country's banks.
HOPE GLIMMERS FOR TURKISH LEFT
Former Turkish Economy Minister Kemal Dervis has said
he will not give up efforts to form a social democratic alliance for
November's election, despite failing to do so this week.
Mr Dervis, seen by many as Turkey's best guarantee of
financial stability, quit the government on Saturday to work on building
a strong, secular alliance capable of challenging the pro-Islamic
Justice and Development Party, which is topping opinion polls.
BRAZILIAN REAL RESUMES SLIDE
The Brazilian currency has resumed its slide to fresh
lows, just days after the International Monetary Fund's (IMF) $30bn aid
package was approved.
The real's slide coincided with a downgrade of
Brazil's debts by the credit rating agency Moody's Investors Service.
The real fell 4.1% to close at 3.15 reals to the US
dollar on Monday despite attempts by the central bank to prop up the
Brazil's stock market also headed lower, with the
Bovespa index of leading shares falling by 2.6%.
SPAIN UNVEILS COASTAL SPY SYSTEM
Spain has unveiled a multi-million-dollar
surveillance system to protect its southern coast from the immigrants
who brave treacherous waters to enter the country.
Radar sensors and night-vision cameras will monitor
the 110 kilometres (70 miles) of Spanish coastline closest to Morocco,
where many clandestine migrants start their journey.
AMERICA ONLINE FINDS AUDIT PROBLEM
US media and entertainment firm, has said it may have
overstated the revenues of its America Online internet business by $49m
The group's accounting practices are already being
investigated by the US stock market regulator and the US Justice
In a filing to the stock market regulator, AOL Time
Warner said it may have "improperly recognised" three payments
to America Online as advertising revenue.
MURDOCH TO FIGHT UK EURO ENTRY
Media tycoon Rupert Murdoch has said he will use his
best-selling UK newspapers to campaign against British euro membership
if the government calls a referendum on the single currency.
Mr Murdoch told the Financial Times that he would
like his UK newspapers to spread the message "vote no" in the
run-up to a referendum.
ASIA STOCKS CHEERED BY US GAINS
Shares rose across Asia on Thursday morning, lifted
by a strong closing surge on US markets, which had been losing ground
for much of Wednesday.
In Tokyo, the benchmark Nikkei index closed the
morning 157 points higher at 9,795. Stocks were higher elsewhere in
Asia, including Hong Kong and Sydney.
In New York, the technology-laden Nasdaq index had
rocketed 5.1% upwards, gaining 65 points to close Wednesday's session at
The Dow Jones index jumped 260 points, or more than
3%, to end the day 8,743.31, while the wider Standards and Poor's 500
index rose 4% to 919.62.
CHINA MOBILE STEPS UP THE PACE
China Mobile has continued its sizzling pace of
growth, becoming the world's biggest mobile phone firm and again posting
profits ahead of expectations.
The company, which last month expanded its network on
the mainland with the acquisition of eight local operators, said it now
had 105.4 million users, nosing ahead of Britain's Vodafone, which has
103.8 million worldwide.
TROUBLED MARKETS EDGE LOWER
A last-minute slump on Wall Street has soured the
market mood on Wednesday morning, but the expected collapse has so far
London's FTSE 100 index, usually the closest European
follower of Wall Street sentiment, opened down 84 points at 4187, wiping
out the previous day's gains, but then clawed back 20 points by
Across Europe, markets suffered equivalent falls,
with Frankfurt's Dax worst hit, losing almost 100 points to 3586.
SHELL QUITS NAMIBIA GAS FIELD
Anglo-Dutch oil firm Shell has decided to pull out of
a gas exploration project in Namibia after investing $140m (£91.4m).
Shell said it has concluded that the offshore Kudu
field did not contain enough gas for a sustainable export business.
"We didn't find any gas in two recent
drills," a Shell spokeswoman said.
BELUGA CAVIAR FACES US BAN
The United States is planning to ban the import of
beluga caviar because the fish that produces the expensive eggs — the
sturgeon is heading for extinction.
The US currently takes 80% of the world's legally
traded output of beluga — the rest is sold to the European market —
and environmentalists say the ban offers the first real hope of saving
the sturgeon species.
NORTH KOREA DEVALUES
North Korea has devalued its currency by 99% as part
of a sweeping series of economic reforms, according to unconfirmed
Diplomats in Pyongyang said that North Korea's won is
now set at 150 against the US dollar, compared with 2.15 before the
reform programme was launched last month.
PHONE COMPETITION FOR BANGLADESH
Bangladesh has unveiled plans to open up the
country's fixed-line telephone service to competition.
It will end the monopoly enjoyed by the state-owned
Bangladesh telegraph and telephone board (BTTB).
And it should increase the reach of telephone
services in a nation which has one of the world's lowest ratios of
telephones to people.
SURPRISE FALL IN UK UNEMPLOYMENT
Unemployment in the UK fell in July and stands at
3.1% — the lowest rate since 1975.
The number of people out of work and claiming
unemployment benefit fell 3,100 in July to 949,600, according to the
Office for National Statistics (ONS).
SITUATION IN ARGENTINA SET TO WORSEN
Argentina's continuing political and economic crisis
could soon get worse, according to a leading academic who follows the
Professor Martin Uribe of Pennsylvania University
said the current policies emanating from the International Monetary Fund
(IMF) and the US government were "counter-productive".
"I think that at this point the first priority
is to remove the existing financial restrictions that are in place in
Argentina," he said.
"I don't see neither the IMF nor the US
administration placing the removal of those restrictions at the top of
the list, so until that is done I don't see Argentina moving on."
DUTCH CALL FOR ACTION ON 'EUROFLATION'
A political row has broken out in the Netherlands,
after the central bank admitted that the launch of euro cash had sparked
twice as much inflation as previously admitted.
Over the weekend, Nout Wellink, president of the
Nederlandsche Bank, said in an interview that the currency changeover
had caused a 0.7 percentage point acceleration in inflation at the
beginning of the year.
WORK STARTS ON GIANT ETHIOPIAN DAM
The construction of a $224m hydroelectric dam in
Ethiopia has begun, marking the start of China's largest joint-venture
China National Water Resources and Hydropower
Engineering Corporation (CWHEC) will build the main concrete dam for the
Tekeze Hydro-Power Project (THPP).
The dam, which at 185 metres is 10 metres higher than
China's controversial Three Gorges Dam, and installation of a 300
megawatt power plant is expected to take five years to complete.