INTERNATIONAL

 

Mar 31 -April 06, 2003 

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

BUSH SEEKS $74.7BN IN WAR FUNDS 

President George W. Bush formally announced that he was asking Congress to approve $74.7 billion in new spending on operational, humanitarian and homeland security measures associated with the war in Iraq.The money was needed for "the conflict in Iraq and for the global war against terrorism", Mr Bush told a news briefing last week at the Pentagon.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The spending request includes about $63 billion for the Pentagon for the Iraq mobilization as well as the ongoing war on terrorism.

The measure will apply to the current fiscal year which ends on September 30. "This spending should not be viewed as a spending that's unwise, unrelated and unnecessary," said Mr Bush, adding that every dollar spent on the war was needed to make America a safer place.

Mr Bush said he had informed the leaders of Congress that "the situation is fluid" and the administration requires "flexibility on how this fund is spent". He asked Congress to "act quickly and responsibly" in approving the request for more funds.

He also asked Congress to release fund for relief and reconstruction in "free Iraq".

A leading anti-war Democrat, Rep Dennis Kucinich of Ohio, blasted the president's request.

"The bill for this unprovoked attack is just starting to come in, and the American people should start worrying that the administration has lost control over the costs," said Kucinich, who is mounting a long shot bid for the Democratic presidential nomination.

FRESH DOUBT FOR GERMAN RECOVERY

Businesses in Germany turned gloomier in March, according to one of the most reputable surveys of corporate confidence.

The survey throws cold water on hopes that Germany's troubled economy could have turned the corner.

The Ifo institute's monthly survey of the business climate registered modest gains in January and February, but the institute said it takes three months to establish a trend.

The survey, said Ifo survey director Gernot Nerb, "means we did not get a signal that many have expected that we have reached the low turning point".

 

 

"It's not dramatic, but we have to live with some uncertainty about when the recovery will start."

The index was reading 88.1 in March, down from 88.9 in February, despite predictions from many econonists that the March reading would prove unchanged.

German Chancellor Gerhard Schroeder, though, played down the figures.

"It's not surprising that the Ifo index hasn't made giant leaps upwards in the current situation... marked by the Iraq war," he said. "How else could it be?"

Germany is wrestling with a budget deficit spiralling well beyond the 3% limit laid out in European Union agreements, as well as stubbornly high unemployment of 11% of the workforce.

Some economists believe that the second half of the year will see a pick-up in economic growth, and the government says that expansion could hit 1% after last year's anaemic 0.2%.

ARGENTINA LIFTS FINAL CASH CURBS

Argentina has said it will lift the remaining restrictions on citizens withdrawing cash from banks.

The move will unfreeze 14 billion pesos ($4.8bn, 3.1bn), further easing the country's financial crisis.

The Argentine government has gradually relaxed cash curbs introduced in late 2001 that froze half of all bank deposits.

The restrictions, known as the "corralito" or "little fence", sparked violent street protests that helped bring down President Fernando de la Rua.

They were swiftly followed by Argentina defaulting on its debts and devaluing the currency, the peso.

Many bank depositors realised what was coming and wanted to get their money out to convert it into dollars a currency that would retain its value.

The ban on withdrawals was designed to prevent too many people withdrawing their money and precipitating the collapse of the financial system.

OIL SHORTAGE ROCKS MARKETS

Oil prices have marched higher and key share indexes have fallen, as the war in Iraq continues to dominate world markets.

The world's stock markets were falling, as investors fretted about the impact of war on future economic growth.

London's FTSE 100 index of leading shares closed 64 points or 1.7% lower at 3,729, France's Cac 40 ended 2.3% down, while Germany's Dax had fallen by 1.5%.

In New York, the Dow Jones Industrial Average initially lost more than 100 points before rebounding strongly to stand 28 points, or 0.35%, at 8,201, a the closing bell.

In Asia, the Nikkei 225 index in Tokyo closed up 0.2% while Hong Kong's Hang Seng closed 1% lower.

BOOST FOR UK ECONOMY

The UK's economy grew at a slightly better rate last year than was estimated, according to new government figures.

This was because financial services and transport and storage performed more strongly than first thought, according to the Office for National Statistics (ONS).

It said the economy grew by 2.2% in the last three months of the year compared with a year earlier, slightly higher than was estimated in February.

And the figure for the whole of the year was revised up to 1.8% from 1.6%.

That makes the growth in the economy during 2002 slightly better than Mr Brown's forecast of 1.6%, given in November's pre-budget report.

He has pencilled in growth of 2.5% to 3% in 2003 but analysts think he might have to revise that figure in April's budget.

US OFFERS TURKEY BILLIONS IN LOANS

The US has surprised Turkey with an offer of up to $8.5bn in loan guarantees, despite their disagreement over the deployment of American troops.

The package falls well short of the $6bn in direct aid, which could have secured $24bn in loans, in exchange for "full cooperation" on Iraq, which was rejected on March 1 by the Turkish Parliament.

But President George W. Bush's war budget for Iraq offers Turkey much more than they expected and could ease the economic blow of the war.

"A portion of this ($1bn in grants) may be used by Turkey to pay fees to cover the budget cost of up to $8.5bn in direct loans or loan guarantees to help Turkey in carrying out comprehensive economic and financial reforms and relieving potential balance of payments needs that may result from hostilities in Iraq," the White House budget document said.

The budget, which still needs to be approved by the US Congress, said the grants could be used to secure loans or loan guarantees "not to exceed $8.5bn."

EU WEIGHS AIRLINE AID

European Transport Ministers are meeting in Brussels to discuss helping out the cash-strapped airline industry.

The war in Iraq has led to a slowdown in global travel, forcing airlines to take emergency measures such as drastic cuts in flight schedules and jobs.

One of the proposals on the agenda for the 15 transport ministers meeting is allowing EU governments to cover the costs of extra security measures.

Regulations forcing airlines to give up under-used routes to rivals could also be relaxed.

Normally, airlines would lose a slot if it were being used less than 80% of the time.

 

 

UK BIGGEST ONLINE BANKERS

Nearly 60 million online bank accounts are currently in use across Europe according to independent market analysts Datamonitor.

The numbers of active online current, savings and investment bank accounts has more than doubled since 2000 and is set to increase to 84m by 2007, the report's authors suggest.

More Britons and Germans bank online than French or Italians.

But the Scandinavians are the most likely to use the Internet to manage their finances, with four out of 10 Swedes and Finns banking online.

MOZAMBIQUE PRIVATISES MAPUTO PORT

Mozambique has privatised the operations of Maputo's port with plans to make it a major South African gateway.

Mersey Docks & Harbour Company, Britain's second largest ports operator, heads a consortium that will own 51% of the Maputo Port Development Company (MPDC).

The consortium will take over operations of Maputo and the coal, grain and aluminium terminal of Matola from the government on April 14.

UAL CORP REPORTS LOSS

UAL Corp, the owner of crisis-hit US carrier United Airlines, has reported a net loss of $367m (233m) for the month of February.

US STEEL TARIFFS 'BROKE RULES'

The US decision to impose tariffs on steel imports broke global trade rules, the World Trade Organisation has said in a preliminary ruling.

The finding has been submitted for comment to both the US government and the EU with a final ruling expected next month, diplomats said.

The EU and several other countries complained to the WTO after the US imposed tariffs of between 8% and 30% on certain kinds of foreign steel a year ago.

PREMIER OIL DELAYS RESTRUCTURING

British oil firm Premier Oil has delayed its restructuring plan, including its withdrawal from controversial activities in Burma.

Premier said its restructuring, aimed at making it a completely independent oil company, was still going ahead but had been delayed as partners finalise details.

Through a deal struck last year, two of premier's largest investors Amerada Hess of the US and Malaysia's Petronas will give up their combined 50% stake in return for some of Premier's key assets in Burma and Indonesia.

UK FIRM DENIES SELLING TO IRAQ

A British defence firm has categorically denied supplying Iraq with boxes of rocket-propelled grenades bearing its name reportedly found near Basra.

Hampshire-based Wallop Defence Systems told BBC News Online it had never produced anything with high explosives and had never sold anything to Iraq.

GOLD SMUGGLING HITS ETHIOPIA

Ethiopia's drought-hit economy is losing $30m (19m) a year from gold smuggling, its government believes.

Up to 3 million grams are leaving the country every year, according to Khasu Tadesse, head of the Mines Ministry's project co-ordination department.

Local diggers throughout Ethiopia are selling on the black market to traders from neighbouring Sudan, Kenya and Somalia, he said.

DR CONGO GETS $36M FROM IMF

The Democratic Republic of Congo (DRC) has won $36m (23m) of aid for development spending, despite having missed several of the conditions being demanded in exchange.

The money takes the amount loaned by the International Monetary Fund (IMF) to the DRC to $569m of a total $786m available.

 

 

SENATE REVERSES BUSH TAX CUTS

In a surprising reversal, the Senate has reduced the size of proposed tax cuts by 50%.

The plan to cut taxes by $726bn over the next 10 years is the centrepiece of the Bush administration's domestic agenda.

The president believes it is crucial to create jobs and boost the flagging US economy, but critics say it will add to the surging US budget deficit, which is already projected to be over $300bn this year.

Last week, a coalition of moderate Republicans and Democrats lost a vote to reduce that tax cut by $360bn, in order to limit the size of future deficits.

WAR KNOCKS US CONSUMERS

US consumer confidence fell to a new 10-year low in March during the build-up to the war on Iraq.

The Conference Board's consumer confidence index fell to 62.5 points from 64.8 points in February, the lowest level since October 1993, up to March 18.

BANK OF JAPAN HOLDS WAR COUNCIL

Top bankers in Tokyo have agreed to spend an extra trillion yen ($8.4bn; 5.3bn) on buying stocks from Japan's hard-pressed banks, in an attempt to defend the tattered financial system from the after-effects of the war in Iraq.

The new governor of the Bank of Japan, Toshihiko Fukui, made the announcement boosting the target for stock buying from 2 trillion yen to 3 trillion after a double meeting of the BoJ's policy board.

TURKISH MARKETS HIT RECORD LOWS

Turkey's stock markets have plummeted to record lows on news US forces are starting to leave the country.

The Turkish lira is also falling as investors fret over the absence of a multi-billion dollar US aid package.

Turkey had been in line for up to $30bn from Washington, in return for allowing 62,000 US troops to be stationed on its soil.

But a decision in the Turkish parliament not to allow the troops to stay has left US-Turkish relations on a knife-edge.

UK HOUSE PRICES STAGNATE

UK house prices failed to increase during March, according to the latest survey from property website Hometrack.

Prices in London and the South East fell while growth remained strong in northern areas, causing the average price of a home to stagnate.