EU crisis slows economy
The economy grew at a slower pace than initially estimated in the June quarter, data showed yesterday, increasing pressure on the central bank to cut interest rates again. With the deepening eurozone debt crisis hitting exports at a time of cooling consumption, the bank revised its 0.4 percent growth figure for the second quarter down to 0.3 percent from the January to March period. The growth rate was one-third of the 0.9 percent posted in the first quarter and marked the slowest increase in GDP since a 0.3 percent expansion in the fourth quarter of last year. On an annual basis, GDP grew 2.3 percent from the second quarter last year.
Unemployment climbed to 9.7 percent of the workforce in the second quarter of this year, an increase of 0.1 percent from the first three months, official data showed yesterday. When data for the country’s overseas territories was included, the second-quarter rate came to 10.2 percent, national statistics office Insee said, a level last seen in 1999. A total of 2.8 million people were registered as looking for work in the eurozone’s second-biggest economy.
Riksbanks cuts key rate
The central bank has cut its key interest rate by one-quarter of a percentage point to 1.25 percent, saying economic growth will slow due to the downturn in the eurozone. The Riksbank said yesterday that weak demand from the 17-country eurozone would “dampen” national exports and hold back the economy, which it said had been “unexpectedly resilient” this year. The economy grew 2.2 percent in the second quarter from a year earlier.
IMF urges Irish investment
The IMF urged the EU on Wednesday to allow its stability fund to invest in Irish banks as it freed up fresh funds for the country’s restructuring program, after the fund released US$1.15 billion of its bailout lending to Ireland on Wednesday. IMF deputy managing director David Lipton encouraged the move, floated two months ago, to have the European Stability Mechanism invest directly in key Irish banks to alleviate the pressure on the Irish government’s finances.
Samsung monopoly probed
Samsung Electronics Co is under investigation by South Korea’s fair trade watchdog over whether it is abusing its dominant position in the wireless market to disadvantage Apple Inc. The Fair Trade Commission opened the probe in March into whether Samsung is using its monopolistic power to negotiate higher license fees from Apple. In January, Europe’s antitrust watchdog launched a similar investigation into Samsung over whether it is fairly licensing its patented wireless technology to other mobile phone makers.
Qantas,Emirates ink deal
Qantas Airways says it has signed a 10-year partnership deal with rival Emirates Airlines. The move is a bid by the Australian airline to boost its struggling international business. Qantas said yesterday that it will move its hub for European flights from Singapore to Dubai, coordinate with Emirates on ticket pricing and scheduling and benefit-sharing starting in April next year. The alliance is subject to regulatory approval. Qantas said it will end its 17-year alliance with International Airlines Group’s wholly-owned subsidiary British Airways next year on March 31.