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
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
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
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
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
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
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
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
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
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
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
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
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)
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
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
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
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
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
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
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
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.