Debt rises to 72.1% of GDP
Spain’s public debt rose to 72.1 percent of GDP in the first quarter of the year, from 63.6 percent in the same period a year earlier, the Bank of Spain said yesterday. The government expects the public debt to reach 79.8 percent of GDP by the end of the year, a figure that does not include the impact of a eurozone loan of up to 100 billion euros (US$126 billion) to ailing Spanish banks. Ratings agency Moody’s warned on Wednesday that the loan “will materially worsen the government’s debt position,” and projected Spain’s public deficit would hit 90 percent of GDP this year and continue rising through 2015.
Carrefour to sell Greek stake
France’s Carrefour, one of the world’s top retailers, yesterday said it would cede its share of a joint Greek network to deal with “challenges posed by the Greek economic context.” Carrefour said it would sell its interest in Carrefour Marinopoulos to Greek partner Marinopoulos, but that the entity would remain an exclusive franchise for the French company in Greece, Cyprus, Bulgaria, Albania and other Balkan countries. The decision was aimed at “dealing with challenges posed by the Greek economic context,” a statement said. Carrefour plans to take a financial charge of about 220 million euros in connection with the move, it added.
AIG repays NY Fed loans
Beleaguered insurance giant American International Group (AIG) has repaid all of its bailout loans from the Federal Reserve Bank of New York. The insurer repaid a total of US$53.12 billion in loans, with interest, the New York Fed said on Thursday. The government stepped in with a US$182.5 billion package to rescue New York-based AIG from collapse in the depths of the financial crisis in 2008. It was the largest bailout in history. The US Department of Treasury provided US$68 billion under its financial bailout program, and the New York Fed gave AIG a US$114 billion lifeline, part of it in loans. The repayment of loans by AIG represents a turnaround for an insurance company that many had given up for dead during and even after the financial crisis. The insurance company has slimmed down its operations, closed down many of its loss-making divisions and has been profitable for two years. The Treasury still owns about 60 percent of AIG’s common stock and has been selling its shares in chunks. It has recovered US$18 billion of the US$68 billion it gave AIG.
Carbon tax’s effect limited
Australia will levy a controversial carbon tax on about half the number of companies originally expected, a government list released yesterday shows, which may limit the economic and political impact of the tax which starts on July 1. Prime Minister Julia Gillard has pinned her government’s survival on implementing the carbon price, while hoping for a muted voter reaction to blunt a persistent opposition attack warning of higher prices, job losses and factory closures. The nation’s Clean Energy Regulator has named 294 firms that will be liable for the A$23 per tonne (US$22.96 per tonne) carbon tax, with electricity generators, steelmakers and mining companies among the biggest emitters. The list was based on emissions output. The list is well short of the government’s initial estimate that about 500 firms would be forced to pay to pollute under its sweeping carbon price, designed to cut the nation’s carbon emissions by 5 percent of 2000 levels by 2020.