INTERNATIONAL

 

Sep 27 - Oct 03, 2004

 

1.INTERNATIONAL

2. PAKISTAN

3. GULF

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FRENCH BUDGET TO CONTROL DEFICIT

France has unveiled a budget for 2005 which should bring its deficit back under European Union (EU) limits for the first time in four years.
The budget is finance minister, and future presidential hopeful, Nicolas Sarkozy's first and his last before becoming head of the ruling UMP party.
Its main feature is a set of high-profile tax breaks for both businesses and households.
They are to be paid for by boosted tax revenues and some cuts in spending.
For the public, some experts believe there may be little tangible benefit.

 

 

 

 

Other levies have been rising, such as pensioners' welfare payments, while opposition politicians said the tax deductions would disproportionately benefit the well-off.

And the government's 2002 promise to cut income tax by 30%

before 2007 has stalled, since in order to bring the deficit under control Mr Sarkozy has permission from President Jacques Chirac to suspend three years of tax cuts.

Mr Sarkozy will publicly introduce the budget shortly.

The headline-grabbing tax breaks and the news on the deficit may help him to attain his ambitions.

His new post as party leader is often a stepping-stone to the presidency, and the budget fulfils his promise to get the deficit under control.

Since 2001, France has flouted the EU's rule that budget shortfalls must stay below 3% of GDP, in the name of stimulating the economy and evading recession.

$280BN TOBACCO TRIAL UNDER WAY

America's largest tobacco companies are accused of lying about the effects of smoking over a 50-year period as a government lawsuit gets under way.

The case "is about a 50-year pattern of misrepresentation, half-truths and lies", US Justice Department lawyer Frank Marine said in opening comments.

Among the accused are Altria Group and RJ Reynolds Tobacco.

The $280bn lawsuit filed by the Clinton adminstration in 1999 is expected to conclude in six months.

Prosecutors want the cigarette firms to surrender $280bn in profits accumulated over the past 50 years and impose tougher rules on marketing their products.

"The government's case against the tobacco industry is an important effort to prevent fraudulent activity and uphold corporate integrity," US Attorney General John Ashcroft said in a statement last week.

Lawyers for the cigarette companies are scheduled to make their response to US District Judge Gladys Kessler.

In its lawsuit, the government claims tobacco firms manipulated nicotine levels to increase addiction, targeted teenagers with multi-billion dollar advertising campaigns, lied about the dangers of smoking and ignored research to the contrary.

A 1953 meeting in New York attended by executives from the country's top five cigarette makers resulted in a "massive 50-year scheme to defraud the public", the lawsuit claims.

The defendants include Philip Morris US, Reynolds American Inc, Lorillard Tobacco, the Liggett Group and Brown and Williamson, a US subsidiary of British American Tobacco.

The firms, which deny any wrongdoing, have been indicted under legislation drawn up to counteract Mafia infliltration of business.

US FREES UP EMERGENCY OIL SUPPLY

The US government is to let oil refineries borrow crude from its emergency stockpile to make up for supplies disrupted by Hurricane Ivan.

A "limited quantity" will be released, said the US Energy Department.

The decision comes after oil prices briefly hit the $49 barrel mark last week on continuing concerns over the level of US stocks.

US light crude traded up 11 cents to close $48.46 dollars a barrel in New York on Sept 23.

Commercial crude stocks fell 9.1 million barrels to 269.5 million barrels in the preceding week, their lowest since 6 February.

The Energy Department said it would approve the loans once the details were worked out with the refineries, but did not say how much oil would be loaned or which refineries it would go to.

 

 

HEAVY COST OF HURRICANE FRANCES

Insurance payments to victims of Hurricane Frances look set to reach $4.4bn (2.4bn), making the storm the fourth most expensive in US history.

August's Hurricane Charley has already cost $7.4bn and insurers have yet to calculate the costs of Hurricane Ivan.

"We're seeing Ivan as being much like Frances," said a spokeswoman for the US Insurance Information Institute (III).

Heavy losses from flooding are expected from Frances and Ivan, but with less structural damage than from Charley.

Hurricane Frances hit central Florida on 3 September with winds of 105 mph (169 kph).

JAPAN TRADE SURPLUS IN SHOCK FALL

Japan's trade surplus shrank in August for the first time in 14 months, official finance ministry figures show.

The value of Japan's exports exceeded that of its imports by 576.1 billion yen ($5.25bn) last month, a 26% fall compared to August 2003.

The figure was far smaller than predicted by market analysts, who had expected a modest rise.

But officials in Tokyo expressed confidence that the country's export-led recovery would continue.

Oil price rises and strengthening domestic demand meant that growth in Japan's imports outpaced that of exports last month.

Imports were up by 18.4% on August 2003, the sixth straight month of increase, while exports rose by just 10.4%.

Finance ministry officials in Tokyo said the decline in the trade surplus was expected to ease now that oil prices had come down from their peaks.

TEXTILES BOOST BANGLADESH EXPORTS

Bangladesh reported a jump in exports in July, boosted by strong demand for clothing and other textiles.

Exports rose by 28% to $868.1m (487m) during the month, led by sales to Europe where the stronger euro helped Bangladeshi exporters.

The country's Export Promotion Bureau (EPB) said Bangladesh was on target to reach total annual exports of $8.56bn.

But manufacturers expressed doubts that Bangladesh could achieve this goal, following recent heavy floods.

More than half of Bangladesh was under water in July as the worst floods in 15 years took the lives of at least 600 people and caused $7bn worth of damage.

Bangladesh's knitwear exports grew almost 48% to around $280m in July, while exports of woven garments rose by 18% to $402m, the state-run EPB reported.

BILL GATES TOPS FORBES RICH LIST

Bill Gates, founder of software giant Microsoft, is still the richest man in America, according to Forbes magazine.

2004 is the eleventh year in a row that Mr Gates has topped Forbes's list of the 400 wealthiest people in the US.

Investment guru Warren Buffett is in second place, with $41bn (33bn euros; 23bn); Mr Gates has earned $48bn.

The combined net worth of the top 400 is $1 trillion, $45bn more than last year. The magazine said the rise was due to an improving global economy.

Out of the 400 on the list, a record 313 are billionaires.

EU SATISFIED WITH TURKISH REFORMS

The European Union enlargement chief has voiced satisfaction with Turkey's reforms as Ankara presses for formal negotiations on its EU membership bid.

Enlargement Commissioner Guenter Verheugen said there were "no more obstacles" for Turkey on its path towards opening accession talks.

Turkey's prime minister confirmed a new penal code did not include a controversial clause banning adultery.

 

 

Ankara's delay in adopting the code had earlier troubled EU officials.

But the Turkish parliament has now decided to reconvene a meeting to discuss it.

IMF WARNS ON GLOBAL HOUSE PRICES

The International Monetary Fund has warned that rising interest rates in some of the world's biggest economies may slow global house price growth.

Most at risk are some of the world's richest countries, where the property market has boomed in recent years.

Since 1997, house prices are up by at least 50% in nations such as the UK, Spain, Ireland and Australia.

The IMF said it is hard to justify all the gains and should house prices dip, then the global economy may suffer.

GM REVIEWING EUROPEAN OPERATIONS

General Motors is reviewing its European operations as it aims to trim costs in the loss-making division.

The US car maker said production could be reduced but dismissed reports it had already decided to cut 3,000 jobs.

INDIA'S MARUTI BOOSTS PRODUCTION

India's biggest carmaker Maruti is to hold a 70% stake in a new joint venture with its parent, Suzuki, to take advantage of the booming car market.

Suzuki has a 54% stake in the Maruti firm, which has half the share of the Indian market with its small, cheap mass-produced cars.

LOSSES CONTINUE FOR THOMAS COOK

Travel operator Thomas Cook made a 196m (286m euro) pre-tax loss in the first nine months of the year despite seeing an increase in holiday bookings.

UK RATE HOLD MOVE WAS 'UNANIMOUS'

The Bank of England voted unanimously to keep interest rates on hold this month, the minutes of its Monetary Policy Committee (MPC) have revealed.

The 9-0 decision to keep rates at 4.75% had been widely expected after a run of weakish data on house prices, personal borrowing and the labour market.

The pace of UK economic growth was "a little slower than envisaged", it said, but it "was too soon to judge". Interest rates have risen five times since November.

US FED INCREASES RATES TO 1.75%

US interest rates have risen for the third time this year as the world's largest economy continues to show signs of a steady recovery.

The Federal Reserve increased its key rate by a quarter of a percentage point to 1.75% in its recent meeting.

It said the new level was "supportive" and "accommodative" to the economy.

The Fed also signalled it was willing to continue lifting borrowing costs from the record lows reached after a 2001 slowdown and the 9/11 attacks.

MAURITIAN FEAR OVER SUGAR EXPORTS

Mauritius could see its foreign income slashed if reforms of European Union sugar subsidies go ahead, an industry official has warned.

EU farm ministers are discussing plans to abolish the system which keeps EU sugar prices more than three times higher than the world market rate.

But the Mauritius Sugar Producers Association (MSPA) said exports to the EU would be severely hit by the move. Mauritius would lose about 3bn rupees ($105m; 59m) in revenue, it said.

ADB SEES STRONGER GROWTH IN ASIA

Asian economies are heading for robust economic growth in 2004, followed by a slight slowdown in 2005, the Asian Development Bank (ADB) has said.

It raised its forecast for regional economic growth in 2004 to 7%, up from an estimate of 6.8% made in April.

The impact of high oil prices and more moderate growth in China should produce regional growth of 6.2% in 2005, 0.5% below its April forecast, the ADB said.

All Asia's developing countries are growing well, helped by regional trade, said the bank.

OVER A MILLION BOSNIANS BACK HOME

The United Nations says more than a million people displaced by the war in Bosnia-Hercegovina in the early 1990s have now returned home.

A spokesman for the UN refugee agency (UNHCR), Peter Kessler, described it as a "significant milestone".

Nearly 500,000 of the returnees went back to areas where they were ethnically in a minority especially Muslims, but also Serbs and Croats.

Mr Kessler stressed that "enormous obstacles" still had to be tackled.

The problems on the ground include restoring infrastructure, education and healthcare, rebuilding homes and simply finding jobs. More than two million people fled their homes during the war.

NIKE SPRINTS TO QUARTERLY GROWTH

Boosted by the Olympics, Nike enjoyed a spurt in sales of sports clothing which saw its income grow 26% in the three months to August.

The US footwear and equipment firm saw healthy sales of branded sports gear, particularly in the US and Europe.

Pre-tax income during the three months rose to $505.5m (283m) while revenues jumped 18% to $3.6bn.

PROTESTS OVER TOUGH DUTCH BUDGET

Protestors gathered in the streets of the Dutch capital, The Hague, to denounce plans for tough economic austerity measures.

The Dutch government wants to keep the budget deficit below European Union limits of 3% of Gross Domestic Product.

It aims to turn fragile recovery into sustained economic growth and has rejected a short-term spending boost.

The plan includes 2.4 billion euros ($2.9bn) of previously announced spending cuts and income measures.

EU DEBATES WORKING HOURS CHANGES

The European Commission is to discuss changes to the EU's Working Time Directive as it tries to limit the time employees spend at work.

On the table will be plans that would curtail the ability of member states, including the UK, to opt out of the 48-hour maximum working week.

Business leaders in the UK have already criticised the move, saying it will increase bureaucracy and hit output. Trade unions, on the other hand, argue that the moves do not go far enough.