The Senate panel finished writing its energy
legislation with the utility merger issue, which comes amid rapid
consolidation in the industry, including this week's sale of
PacifiCorp to MidAmerican Energy for $5.1 billion.
Republican lawmakers have long pushed to repeal the
Public Utility Holding Company Act (PUHCA), enacted in 1935 to protect
consumers by requiring utilities to limit their operations to a single
area or region. They contend it is an outdated law that discouraged
investment in the electricity sector.
Some Democrats on the Senate panel agreed to
eliminating PUHCA only if FERC was given more authority to approve
mergers to prevent more Enron-type corporate wrongdoing.
The legislative language approved by the committee
would expand FERC's authority to review the impact of utility mergers
on competition and consumer rates. The measure was added to a broader
energy bill that the committee debated over five days and finally
approved in a 21-to-1 vote. Democrat Ron Wyden from Oregon was the
FRENCH EU VOTE BATTLE NEARS END
French Socialists will hold rallies in support of
the "Yes" vote on the final day of campaigning for Sunday's
referendum on the EU constitution.
On Thursday President Jacques Chirac made a TV plea
for the country to back the charter, in which he said it was in
France's best interests to vote "Yes".
But the latest poll suggests that 54% of the French
plan to vote "No".
Germany is set to ratify the charter with a vote in
the upper house of parliament, or Bundesrat.
The EU constitution has to be ratified by all 25
member states to become law.
France is the second EU member to hold a referendum
on the constitution. Spain's referendum resulted in a "Yes"
vote, which was then ratified by both houses of parliament.
The BBC's Caroline Wyatt in Paris says politicians
are far from certain that they will be able to shift public opinion on
a vote which has divided France.
The latest opinion poll, by TNS Sofres-Unilog,
shows the "No" camp on 54%, with "Yes" on 46%.
Mr Chirac said the vote was vital for the
"future of France and the future of Europe".
A vote against the treaty would be a serious blow
to the EU, he told viewers.
"It would open a period of divisions, doubts,
uncertainties," he said.
The French president urged voters not to use the
referendum as a vote against the government.
BUSH PLEDGES AID TO PALESTINIANS
US President George W Bush has pledged $50m in
direct aid for the Palestinian Authority, at a meeting with
Palestinian leader Mahmoud Abbas. Bush also reiterated his commitment
to the roadmap for peace and the creation of a Palestinian state.
He said that Israel must not take any actions that
violated its roadmap obligations and said all settlement expansion on
the West Bank must stop. Abbas is the first Palestinian leader to be
hosted by Bush.
He said that he was more confident about the role
the US administration would play in achieving peace, but that time was
"Time is becoming our greatest enemy, we
should end this conflict before it is too late," he said.
The new aid is part of a $350m package earmarked
for the Palestinians.
It will go to fund housing and infrastructure
projects in the Gaza Strip.
"These funds will be used to improve the
quality of life of the Palestinians living in Gaza, where poverty and
unemployment are very high," Bush said.
The BBC's Justin Webb in Washington says that while
the money is a pat on the back for Abbas, the US does not want him to
feel so comfortable that he fails to take actions it regards as
necessary to guarantee Israeli security.
Abbas had asked Congress to channel financial
assistance directly to the Palestinian Authority, instead of to NGOs.
US politicians have been reluctant to do that,
accusing the PA of corruption, and preferring to fund aid agencies and
WTO AGREES ENTRY TALKS WITH IRAN
The World Trade Organisation has agreed to allow
Iran to begin membership talks after the US lifted its opposition to
Tehran joining the body.
The move comes a day after Iran agreed a deal with
European countries to maintain its suspension of nuclear activities
and continue talks.
The US said in March it would drop its decade-long
block on Iran to help those negotiations.
Iran applied to join the 148-member trade group in
Following the WTO decision, Mohammad Reza Alborzi,
Iran's ambassador to the United Nations in Geneva, was immediately
invited to attend the WTO's General Council meeting, according to the
Reuters news agency.
However, WTO officials have told the BBC they
cannot say how long it will take for Iran to become a member.
President George W. Bush announced a major change
in US policy towards Iran in March, saying that he would back European
talks to resolve the stand-off over Iran's nuclear activities and was
prepared to extend economic incentives to Tehran.
These included the lifting of a decade-long block
on Iran's membership of the WTO, and objections to Tehran obtaining
parts for commercial planes.
Washington accuses Iran of using its nuclear energy
programme as a cover for developing nuclear weapons.
Tehran denies seeking nuclear weapons, but
suspended uranium enrichment after negotiations with France, Germany
and the UK.
OPEC ASKED TO MAINTAIN OUTPUT
The Organization of Petroleum Exporting Countries (Opec)
must resist temptation to cut output and instead allow crude stocks to
build further, the Centre for Global Energy Studies (CGES) said in its
monthly report published last Monday. "Opec's resolve is now
being tested as consumer-held oil stocks increase, with some members
starting to bulk at lower prices and calling for output cuts,"
the CGES said.
The oil cartel's output meeting in Vienna on June
15 "will be the real mark of Opec's intentions and will show
whether it is serious about allowing stocks to rise further, or
whether Opec is targeting as high a price as it can get away with
without provoking a response from customers."
"Stocks must be allowed to build up over the
second and third quarters to allow peak winter demand to be met,"
according to the widely-respected CGES report.
"The stocks are needed as a cushion against
higher demand during the coming (northern hemisphere) winter by an oil
industry that has seen spare capacity, both upstream and downstream,
eroded by global oil demand and insufficient investment in new oil
production, transportation and refining capacity."
BD TRADE DEFICIT UP 71 PER CENT
Bangladesh's trade deficit shot up by 71.27 percent
in the first eight months (July-February) of the current fiscal year,
over the same period last fiscal year. The latest official figures
show that trade deficit rose to $2.12 billion in February, up by 35
percent from January, compared to $1.2 billion during the same period
a year back.
The trade deficit was 2.37 billion in the fiscal
year 2003-04. Imports led by consumer goods, petroleum products and
capital machinery grew at much faster rate in February as compared to
the preceding months, shows the balance of payment data prepared by
Bangladesh Bank, the central bank of the country.
During July-February, exports rose 13.3 percent to
$5.38 billion while imports rose by 25.3 percent to $7.5 billion. It
also shows that the trade deficit in services increased to $638
million as compared to $456 million a year back.
The growing trade deficit becomes the concern for
the economy, especially the external trade management, as current
account deficit increased further in February to $263 million as
against a surplus position of $473 million a year back.
IRAQ CENTRAL BANK COMBATS INFLATION
Iraq's inflation rate may fall to 20 percent this
year if sabotage attacks that deepened shortages in the economy ease,
Central Bank governor Sinan al-Shabibi said last Saturday. Inflation
reached 30 percent last year as mismanagement, lawlessness and attacks
against refineries and supply lines drove up fuel and electricity
prices and pushed overall prices and insurance rates higher, Shabibi
told newsmen on the sidelines of a World Economic Forum meeting in
We have seen the pressures ease so far this year
and we are hoping for a faster pace of rebuilding that could a create
a more desirable kind of inflation, Shabibi said. Anti-US insurgents
have waged attacks against Iraq's food and fuel lines that managed to
disrupt supplies, drive prices up and create a black market parallel
to the subsidised prices, although government efforts in recent months
have succeeded in easing the situation.
US GROWTH FIGURES REVISED UPWARDS
The US economy fared better in the first quarter of
the year than originally estimated, thanks to a decline in the
country's trade deficit.
Gross domestic product, a measure of economic
output, grew 3.6% in the three months to March on an annualised basis,
higher than the 3.1% forecast.
The 3.6% figure represents a slight dip on the 3.8%
growth seen in the last quarter of 2004.
A rise in exports reduced the trade deficit to a
six month low in March.
America's trade balance was boosted by the weakness
of the US dollar and a decline in Chinese imports.
Nevertheless, the deficit still stands at more than
Recent indicators have pointed to a slight
softening in the world's largest economy after the strong growth
enjoyed throughout 2004.
The rate of job creation eased in March to its
lowest level since last July, although more than 270,000 new jobs were
created in April, ahead of market forecasts.
EU 'WON'T REVIVE CHINESE QUOTAS'
The European Union's (EU) trade chief has said any
measures to curb Chinese exports will be temporary.
Peter Mandelson said any measures would merely aim
to offer European firms time to adapt to changes to trade brought in
at the start of the year.
The comments came as the two sides held talks over
how to curb surging Chinese textile imports.
Following discussions, the EU set a May 31 deadline
for China to take steps to slow the boom in its clothing exports.
However, Mandelson said that the threat of such
measures did not mean a return to quotas.
He told the BBC's Newsnight programme that instead
he would be looking at ways to restrict the "very dramatic
growth" in China's textile exports.
TRADE PACT FOR JAPAN, MALAYSIA
Japan and Malaysia say they have reached a basic
deal on a free trade pact covering most economic sectors.
The announcement came after a meeting in Tokyo
between Japan's Prime Minister Junichiro Koizumi and his Malaysian
counterpart, Abdullah Ahmad Badawi.
The deal includes moves to open up the sensitive
Malaysian car market to Japanese firms, in exchange for Japan's help
in training Malaysian car workers.
Japan has so far signed just two other such pacts,
with Singapore and Mexico.
It has also reached a broad agreement on a free
trade deal with the Philippines.
In the past, Japan has been reluctant to sign free
trade agreements because of pressure from its inefficient agricultural
sector, analysts say.
TSUNAMI PUTS SRI LANKA IN SURPLUS
Aid given to Sri Lanka since December's tsunami
disaster is set to put the country's balance of payments into surplus,
its central bank has said.
Substantial amounts in remittances from Sri Lankans
abroad after the disaster helped produce a first-quarter balance of
payments surplus of $179m, it said.
The bank forecast an overall surplus for 2005 after
a deficit of $205m (£112m) last year, but gave no figure.
Nearly 31,000 people were killed when the tsunami
struck Sri Lanka's coast.
Sri Lanka has been promised $2bn in aid pledges to
help rebuild infrastructure devastated by the sea surge, which also
made one million people homeless.
GOLD BARELY CHANGED IN EUROPE
Gold marked time with very little change near
three-month lows in Europe last Monday, with dealers looking for the
market to probe lower as dollar strength bruised sentiment. Spot gold
stood at $417.50/418.25 per troy ounce compared with $417.40/418.15
late on Friday in New York when the market touched a low of $416.40
— last seen on February 11.
Gold looks like it wants to go lower — the dollar
is quite strong and if it gets to $1.2500 against the euro, you've got
to say that gold will move to $415 or less, a dealer said. Silver was
at a pivotal point after sliding sharply on aggressive fund selling.
It will be interesting to see if there is residual demand left over,
Standard Bank said.
Platinum eased slightly to $858.00/862.00 from
$860.00/865.00, while palladium stood at $187.00/191.00 from
EU TRADE CHIEF WANTS SERVICES DEAL WITH ARAB WORLD
European Union Trade Commissioner Peter Mandelson
said last Saturday he wanted to begin discussions with Arab countries
on freeing trade in services as part of moves to make the region a
more robust economy. Speaking at a World Economic Forum meeting in
Jordan, Mandelson said that although the EU was the major trading
partner for the region, trading patterns were weak.
"The countries of the Middle East and North
Africa together have few non-oil exports than a country like
Hungary," he said. He added that foreign direct investment and
trade flows from the EU were also small.
GERMANY TO RATIFY EU CONSTITUTION
Germany is to complete the process of ratifying the
European Constitution with a vote in the upper house of parliament,
The vote follows overwhelming approval by the lower
house two weeks ago.
It has been timed to provide support for the
failing "Yes" campaign in Sunday's French referendum.
Former French President Valery Giscard d'Estaing,
who helped draft the constitution, will address the Bundesrat ahead of
the debate. The German ratification process is now speeding to a
CBI CUTS ECONOMIC GROWTH ESTIMATE
The CBI has cut it forecast for UK economic growth
in 2005 to 2.5% from its previous 2.7% estimate.
The business organisation's decline in confidence
for the UK economy comes after its latest manufacturing survey showed
a big growth in pessimism.
Manufacturers are now more downbeat about output
levels than at any time in the past five months.
The CBI's figure comes a day after official data
showed that UK GDP is now growing at an annual rate of 2.7%.
Gross domestic product (GDP) is a measure of
Both the Confederation of British Industry's 2.5%
prediction and the 2.7% figure from the Office for National Statistics
are below Chancellor Gordon Brown's forecast of growth between 3% and
3.5% this year.
TAX EVASION AND FRAUD CRACKDOWNS
The British government has introduced its first
finance bill of the new Parliament, with a number of measures designed
to tackle tax avoidance.
It modifies measures first introduced in this
year's Budget, but now makes them more precisely targeted.
The government said it was responding to claims
from business that the new rules might penalise the innocent.
Meanwhile, eight existing fraud offences are to be
replaced by one general offence, ministers announced.
The Fraud Bill should make it easier to convict
those who carry out sophisticated scams, including offences carried
out over the Internet such as "phishing".
GOLD MINING 'KEY TO POOR NATIONS'
Gold mining is becoming more and more important to
developing countries, the World Gold Council (WGC) has said.
In its report A Touch Of Gold the WGC said exports
of gold output from heavily indebted countries had surged by 84%
between 1994 and 2004. In 2004, developing countries produced 72% of
the global output of gold.
RENAULT TO BUILD MEGANE IN IRAN
French carmaker Renault is to build its Megane
saloon model in Iran from 2006.
The firm's joint venture with Iran's Industrial
Development and Renovation Organisation and two leading carmakers will
make about 15,000 Meganes a year.
The car is the second to be introduced by Renault
to Iran following the Logan, a stripped-down version of the Clio
Supermini, also due for a 2006 release.
The venture is 51% owned by Renault, despite a law
passed this year banning foreign firms from majority ownership.
The law, passed in September 2004, imposed a
retroactive 20 March cut-off point. Renault signed its deal for
AUSTRALIA SEEKS WORKPLACE REFORMS
The Australian government has unveiled proposals to
radically reform labour laws in an effort to enhance productivity and
The measures include the creation of a new body to
set the minimum wage and the exemption of firms with less than 100
workers from unfair dismissal laws.
Prime Minister John Howard said the reforms were
needed to ensure the country's continuing prosperity. But critics said
the changes would disadvantage low-income families.
GERMAN CONFIDENCE AT TWO-YEAR LOW
German business confidence has fallen to its lowest
level since August 2003, according to research institute Ifo.
Munich-based Ifo's confidence index fell from 93.3
in April to 92.9 in May, its fourth straight month of decline.
The news follows similarly weak German data from
economic think tank ZEW and the Organisation for Economic Co-operation
and Development (OECD).
Chancellor Gerhard Schroeder is facing increasing
economic pressure ahead of a vote of confidence on July 1.
FINES AIM TO CUT PHONE 'SLAMMING'
Fixed-line phone operators who switch consumers to
their service without consent, a practice called "slamming",
face hefty fines from Thursday.
UK telecoms regulator Ofcom has said it aims to
stamp out the practice.
Over the past six weeks operators have been drawing
up their own code of practice, based on Ofcom rules, to stop the
BROWN HAILS EU AID AGREEMENT
Chancellor Gordon Brown says "huge
progress" has been made after the European Union agreed to double
its development aid to poorer nations.
In five years time, the EU's aid to poor countries
will be worth an extra £14bn annually.
The deal was signed in Brussels, but Germany, Italy
and Portugal say they may not be able to afford the increase.
It comes as Britain prepares to put the fight
against world poverty at the top of its G8 summit agenda this summer.
The 15 richest EU member states have agreed to set
a new spending target — at least 0.51% of their national wealth —
on the developing world by 2010.
The other 10 poorer, mostly eastern European member
states — who joined the EU last year — agreed a 0.17% target.
GIANT CASPIAN OIL PIPELINE OPENS
Oil is set to flow from the Caspian Sea direct to
the Mediterranean for the first time after a $3.6bn (£2bn) pipeline
opened last Wednesday.
Starting in Azerbaijan, the 1,600km (1,000 mile)
pipeline will pass through Georgia to the Turkish port of Ceyhan.
The project has taken more than 10 years to finish
and will unlock one of the world's biggest energy reserves.
It has not been without controversy, however, and
there have been protests about the impact on the environment.
Some demonstrators were beaten and arrested
earlier, with Azeri authorities saying that they acted because the
protest was too close to the pipeline.
DEUTSCHE BOERSE FACES INVESTORS
Deutsche Boerse shareholders piled into the
Frankfurt stock market's first annual general meeting since its failed
bid to buy the London Stock Exchange.
It comes just over a fortnight after shareholders
opposed to the bid ousted the exchange's top two bosses.
Interim boss Mathias Hlubek told investors that
acquisitions remained part of the exchange's business plan.
But he gave no hints on who would eventually run
Deutsche Boerse or what its strategy would be.
WEAK DOLLAR 'A THREAT TO GROWTH'
A sudden drop in the value of the dollar poses a
threat to the global economy, the OECD has said in a report.
"Co-operative adjustment" to the value of
some Asian currencies would help reduce the danger, the body said.
Growth in the industrialised world this year
already will miss forecasts, held back by a sluggish Europe and Japan.
The OECD called on the European Central Bank to cut
interest rates, saying the war in Iraq, strong euro and high oil
prices were only partly to blame.
FRESH JITTERS HIT EU BUDGET RULES
EU rules governing the budgets of eurozone member
states — the subject of fierce criticism from some governments —
are coming under fresh strain.
Portugal, whose budgets have frequently come in for
criticism from Brussels, admitted that its deficit could hit 6.8% of
gross domestic product in 2005.
This is more than twice the 3% eurozone ceiling,
and would represent the biggest breach so far in the rules. And
Brussels said Italy had miscounted its budget figures in 2003 and
US RATES UPPED ON INFLATION FEARS
Fears of increasing inflationary pressures prompted
the US central bank to raise rates.
The Federal Open Market Committee (FOMC) opted to
take action amid concern over rising prices, minutes of the meeting
show. But while there had been an "upcreep" in short term
inflation it remained worried about slowing economic growth.
As a result, the FOMC opted to maintain its
"measured pace" of rates rises, increasing rates by 0.25% to
UK CONTINUES DEFENCE OF EU REBATE
The UK's controversial £3bn EU rebate is set to
overshadow budget discussions in Brussels for a second day.
UK Foreign Secretary Jack Straw appeared isolated
but defiant after several hours of talks among EU ministers.
The issue is not officially on Monday's agenda, but
looks likely to dominate informal discussions in the corridors.
The UK won the rebate 21 years ago as it gets paid
fewer subsidies than other European Union members.