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Business Quick Take

■ HACROECONOMICS
France is bankrupt: Fillon
France is bankrupt because of chronic budget deficits, the country's prime minister said on Friday, pledging to balance the budget before the end of his term. "The truth is that I am the head of a state that is in a state of bankruptcy due to its financing plan," French Prime Minister Francois Fillon said in the Corsican city of Calvi. Fillon answers to French President Nicolas Sarkozy, but heads the French government. "I am the head of a state that has been in chronic deficit for 15 years," the conservative Fillon said, adding, "I am the head of a state that hasn't voted a balanced budget in 25 years."

■ BANKING
Northern Rock borrows funds
Britain's mortgage lender Northern Rock has been forced to borrow around ?3 billion (US$6 billion) from the central bank to ease its financial crisis amid fears about bad investments linked to US home loans, a newspaper reported yesterday. The Financial Times said it obtained the sum from the Bank of England's weekly balance sheets, the first official estimate of the scale of its funding problems. But a spokesman for the Bank of England declined to confirm the report. The loan represents about 10 percent of its deposit base, the newspaper added.

■ AVIATION
Cathay eyes China Eastern
Hong Kong carrier Cathay Pacific will launch a US$4 billion attempt to block Singapore Airlines' bid to gain a foothold in the booming Chinese aviation market, reports said yesterday. Citing unnamed sources, Hong Kong's South China Morning Post said Cathay Pacific would seek to buy a significant stake in China Eastern Airlines. That stake would be worth US$4 billion, Britain's Daily Telegraph said. The shareholding would then be used to try and scupper the Singaporean carrier's own plan to acquire a key stake in China Eastern, the Post said. Cathay would use its alliance with Air China, China's largest airline, which holds 11 percent of China Eastern, to block Singapore Airlines' plan at a December shareholder meeting.

■ BANKING
China Construction in IPO
China Construction Bank Corp (中國建設銀行), China's second-largest bank, said its yuan-denominated shares would start trading in Shanghai on Tuesday. The bank raised 58 billion yuan (US$7.7 billion) in the world's second-biggest share sale this year. It sold 9 billion shares in Shanghai at the top end of a 6.15 yuan-to-6.45 yuan range, the bank said in a statement to the Shanghai stock exchange yesterday.

■ AUTOMAKERS
GM, union close to a deal
General Motors Corp (GM) and the United Auto Workers (UAW) are close to an agreement on a historic deal that would transfer the automaker's retiree health care costs to a trust managed by the union, a person who was briefed on the contract talks said. The details of the plan have not yet been worked out, said the person, who requested anonymity because the talks are private. UAW President Ron Gettelfinger told members on Friday that he was trying to speed up negotiations with General Motors Corp and he wanted to reach a contract agreement without a strike. GM and the UAW spent Friday negotiating issues like wages and job security while experts helped finalize the possible health care deal, people familiar with the negotiations said.


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