Cyprus tightens belt
The Cypriot parliament on Friday approved a raft of government austerity measures to shave the budget deficit in an effort to avoid the Mediterranean island needing an EU bailout. A key vote in the 56-seat to raise VAT, however, was postponed. The overall package was aimed at saving 750 million euros (US$1,080 million) and by raising VAT from 15 percent to 17 percent it would generate extra revenue of around 160 million euros. The vote followed a week of horse-trading to ensure the crisis measures were not top-heavy with tax hikes but provide for 70,000 employees in the wider public sector to also make a contribution. To persuade a majority opposition to approve the measures, the government vowed to present a second package soon. It would save a further 360 million euros by means-testing social benefits, getting tough on tax evasion, reducing civil service starting salaries, and freezing twice-yearly index-linked salaries for next year.
Apple gives Cook shares
Apple has given Tim Cook 1 million shares of restricted stock as he takes over the reins of the company from Steve Jobs. At current prices, the stock package is worth more than US$383 million. Cook assumed CEO duties this week when Jobs stepped aside after 14 years, saying he was no longer able to do the job. Cook won’t immediately have access to the stock. Half of the award vests over five years, and the other half five years after that, so the full value won’t be known for years.
Sweden cuts growth outlook
Sweden’s finance ministry on Friday slashed its growth forecast for next year and said the budget surplus would shrink to all but nothing. “Growth in Sweden will be strongly dampened in the wake of the global debt crisis,” the ministry said in a statement. It said the country’s economy was now expected to expand by 1.3 percent next year instead of the 3.8 percent estimated in the spring budget presented in April. Finance Minister Anders Borg had already warned earlier this month that the country would need to “significantly” revise down its growth expectations for next year amid the rekindled global financial crisis. For this year, the ministry cut its growth forecast to 4.1 percent from 4.6 percent. At the same time, the large budget surplus of 1.8 percent next year that was predicted in April has shrunk to “near-balance” of just 0.1 percent.
Finnish PM urges action
A dispute over a model for collateral from Greece in exchange for loans has to be solved as quickly as possible to prevent more inconvenience to Athens and other countries, the Finnish prime minister was quoted as saying yesterday. Finland is standing by a demand for collateral as an absolute precondition for new loans to Greece and made a deal with the debt-laden country earlier this month. However, it was rejected by other euro-area countries. Talks on a new collateral model continue, the Helsingin Sanomat daily reported. “This mater has to be solved as soon as possible so Finland’s aims will not hurt other countries,” Prime Minister Jyrki Katainen said in an interview with the newspaper. He added it was clear the collateral hurdle would dent Finland’s reputation in the EU and said it was in the interest of the Nordic country to maximize its influence.