The EU is divided over the financing of the
enlargement and its effect on the Union's budget.
The dispute, which threatens to delay EU expansion if
no agreement is reached at the summit, centres on farm subsidies and
On the eve of the summit, the Dutch parliament voted
to support EU expansion after a 10-hour debate.
There had been concerns that the resignation of the
country's centre-right coalition government might stall the process.
The dispute over funding centres primarily on farm
subsidies and on the amount of regional aid new members would receive
after they join.
EU countries who pay more into the budget than they
get back — led by Germany and backed by Britain, the Netherlands and
Sweden — say spending has to brought under control.
But those member states who receive the most
subsidies, led by France, oppose reform of the farm support system.
Earlier, EU foreign ministers meeting in Luxembourg
failed to reach agreement on how to finance enlargement.
The ministers did not even discuss agricultural
subsidies, after all sides indicated that their positions had not
BBC Europe correspondent Chris Morris says if there
is no deal on money, that could delay negotiations with the candidate
countries themselves on a full financial package.
That in turn, he says, would make it very hard to
complete the enlargement talks by the end of this year.
DATE SET FOR JAPAN CLEANUP PLAN
Japan's stock markets received a much-needed shot in
the arm as the government announced it will unveil its long-awaited plan
to fight deflation and staunch bank bad debts.
Wednesday 30 October is the day when the covers come
off the plans, and investors are betting that despite the best
intentions of Financial Services Minister Heizo Takenaka who favours the
scorched-earth approach to the banking crisis — the final prescription
will not be kill or cure.
The benchmark Nikkei 225 index was up 1.3% at
8,726.57, wiping out fall and marking the high point for the day so far.
"There is likely to be a concession given fierce
opposition from ruling party lawmakers and top banks' recent warnings of
a serious credit crunch," said Tetsuya Ishijima, senior investment
strategist at Okasan Securities.
"Chances have grown that the government is moving
toward a more pragmatic approach, and will come up with a package of
measures including an extra budget and further credit easing (by the
Bank of Japan)," he said.
Banking shares, needless to say, were among the best
performers, with second-ranked Sumitomo Mitsui up 3.1% and UFJ Holdings,
the smallest of the Big Four and the most vulnerable, up 2.56%.
Mr Takenaka still insists that his plan — which would
stiffen rules on how much capital banks have to carry and would probably
result in widespread bankruptcies among their heavily-indebted
borrowers, if not the banks themselves — will not be watered down.
He will meet with banking chiefs, in an attempt to
get them onside. The last attempt ended in ignominious failure, since
banking bosses would be first for the chop should a wholesale shakeup
come to pass.
FRANCE, GERMANY REACH ACCORD
The French and German leaders agreed to cap the
European Union's agricultural spending from 2007, raising hopes of
agreement at an EU summit on financing the bloc's historic enlargement.
"France and Germany are committed to EU enlargement
and are working together to seize this historic chance to further the
EU's development in a peaceful way," German Chancellor Gerhard Schroeder
told reporters after meeting his French counterpart Jacques Chirac in
"From 2007 the agricultural spending of the EU will
be capped, taking into account inflation," Schroeder said, adding that
the deal would be in effect until 2013, when another six-year EU budget
period starts. His comments were confirmed by Chirac.
PACIFIC HITS BACK AT EU FARM DEAL
Countries around the Pacific rim are up in arms over
agriculture subsidies, and their opposition could spell trouble for a
European deal on aid for the continent's own farmers that is just days
In order to settle a row which threatened the
European Union's expansion plans, its 15 member states agreed on a slow
phasing out from 2007 through 2013.
That matches last year's watered-down plans for World
Trade Organisation talks, which promised "reductions with a view towards
phasing out" the payoffs — weakened largely on EU insistence.
But that is not good enough for the 21 economies at
this week's Asia Pacific Economic Cooperation (Apec) forum meeting in
Mexico, who have called for the "abolition of all forms of export
Given that the deadline for completing the current
round of WTO talks is 1 January 2005, there is choppy water ahead.
UK ECONOMY TO 'MISS FORECASTS'
The UK Treasury may need to raise an additional £20bn
in tax revenue by 2006, according to a survey by a leading economic
The National Institute of Economic and Social
Research (NIESR) said a weak global economy together with tumbling
equity markets mean the Treasury is heading for a revenue shortfall in
the near future.
The NIESR has cut economic growth forecasts for the
next two years and predicts interest rates will stay on hold, unless a
deeper slide in global markets sparks another cut.
"The long-term fiscal outlook is gloomy," said the
The NIESR uses its own economic model to publish
forecasts for the UK economy every three months.
It has cut its economic growth forecasts for 2002 to
1.4%, against the Treasury's budget forecasts of between 2% and 2.5%.
'LACKLUSTRE' US ECONOMY CONTINUES
The US is still battling against what the Federal
Reserve has called a "sluggish" economy, following the latest survey of
The Fed suggested that retail and manufacturing
continued to struggle in a number of key areas in September and early
October, while the job market remained stagnant.
The latest findings have prompted suggestions that
the Fed will now cut interest rates again at its November meeting, in an
effort to counter falling consumer confidence.
US interest rates have been at a 40-year low all this
year, following the 11th cut last December.
WALL STREET RALLY FALTERS
A two-week rally on Wall Street has come to an abrupt
halt, dampening hopes of a sustained stock market recovery.
The Dow Jones index of leading US shares closed down
2.1% at 8,317, while the tech-heavy Nasdaq settled 1.6% lower at 1,299.
In Europe, the markets had a better day, with
London's FTSE 100 index closing up 2.4% at 4,104 on the back of gains in
heavyweight financial and telecoms stocks.
Frankfurt's Dax settled 2.3% higher at 3,015, while
in Paris, the blue-chip Cac index closed up 2.7% at 3,075.
TELECOMS WRITE-OFF HITS TYCO PROFITS
Tyco International, the hard-pressed conglomerate
whose former chief executive and finance boss are facing charges of
stealing $600m from the company, has posted its third straight quarterly
Much of the $1.75bn net loss for the July to
September period came from the company's admission that undersea fibre
optic cable network was valued at $2.2bn less than it had been during
the tech boom. The loss compared with a net profit of $1.37bn for the
same period a year before.
ZIMBABWE TOBACCO CROP 'TO HALVE'
Zimbabwe's tobacco harvest is expected to have next
year due to the difficulties facing farmers.
Farm disruptions caused by the land seizures have
already reduced this year's tobacco crop to about 162 million kg, from
202 million kg last year.
Now that figure is expected to halve again, with many
farmers unable to transplant their seedlings during the critical
pre-rain season between 15 October and 15 November.
EU BOLSTERS INVESTOR PROTECTION
Investors across Europe are set to receive greater
protection against insider dealing and other trading scams once the
European Parliament approves a new rulebook.
The Market Abuse directive will force directors to
divulge share dealings in their own company, disclosures already
compulsory in the UK, but not in many other EU member states.
The directive is also aimed at cracking down on
people who leak share tips, and at stopping analysts from profiting from
their own share recommendations.
SPENDING SHOWS SIGNS OF SLOWING
People have carried on spending on the High Streets,
but there are signs that shoppers are becoming more cautious.
Retail sales in September rose by 4.6% over the year,
the Office for National Statistics (ONS) said.
That is the lowest rate of annual growth since
Sales were 0.4% higher than in August, Over the month
sales were 0.4% higher, compared with August's revised rate of 0.7%.
CHINA CONFIRMS STATE POWER SPLIT
China is pushing ahead with plans to split up its
electricity industry by the end of this year, official media has
The massive power sector is currently controlled by
the giant State Power Corp, which owns half the generating plants and
almost all the distribution grid.
The government agreed to split it into five
generation and two supply firms, the China Economic Times reported,
saying the new units had till 15 November to issue their business plans.
Australia and New Zealand Bank (ANZ) saw its net
income — before one-off costs — shoot up 16% in the year to September to
AOL TIME WARNER
Media group AOL Time Warner said restating its
accounts would reduce revenues in the period under review by $190m
(£123m) and earnings by $97m.
NISSAN PROFITS HIT NEW HIGH
Japan's third largest car maker, Nissan Motor, has
reported a sharp and unexpected rise in profits. Net profits rose 24%,
and operating profits rose 84% to a new record high, during the six
months to September.
TANZANIA TOURIST NUMBERS 'TO DOUBLE'
From the picture postcard views of Mount Kilimanjaro
to the wildlife of the Serengeti, Tanzania has no trouble selling its
The tourism industry is a key part of the country's
economy, employing thousands of people, and worth $725m in 2001.
Last year, 500,000 holidaymakers visited the country
and if Tanzania's president Benjamin Mkapa gets his way that number will
double in 10 years.
Glaxo posted pre-tax profit of £1.388bn for the three
month period, a 3% rise on the same period and a 12% rise on a constant
exchange rate basis.
BANK CHIEFS EDGE NEARER RATE CUT
Three members of the Bank of England's interest rate
setting committee voted for a cut in rates at their last meeting,
minutes of the session have revealed.
Members of the Bank's Monetary Policy Committee (MPC)
voted by six to three to keep rates on hold at 4%.
The three advocating a cut were Christopher Allsopp,
Kate Barker and Steven Nickell.
They thought the rate should be reduced to 3.75%.
CHINA AND US SEAL BILLION-DOLLAR DEALS
The US and China have signed billions of dollars
worth of business deals a day before Chinese President Jiang Zemin
arrives in the US.
The deals signed in New York include US investments
in alcohol, oil, telecoms and engineering sectors.
"These signings are a tangible example of the vital
trade relationship between the US and China," said US Commerce Secretary
ISRAEL TO SEEK US LOAN GUARANTEES
Israel is working on a plan to ask the US for
billions of dollars in loan guarantees in a bid to revive its flagging
The country's finance minister Silvan Shalom may ask
the US government for the guarantees as part of a larger aid program to
be submitted at the beginning of 2003.