World Business Quick Take


Thu, Nov 13, 2003 - Page 12

■ German economy
Wise Men forecast deficit

The German government's so-called "Five Wise Men" panel of independent economic advisors, said yesterday they expected the German public deficit to amount to 4.1 percent of GDP this year, far more than the 3.0-percent limit allowed by the EU. Furthermore, the German deficit ratio will exceed EU limits again next year, the economic advisors predicted in their annual report published yesterday. The advisors said that their base forecast, which does not take into account the government's proposals to bring forward planned tax cuts to the beginning of next year, was for a public deficit ratio of 3.4 percent in next year.

■ Software

Oracle upset by offer

Oracle Corp may drop its hostile takeover bid of PeopleSoft Inc because its rival is offering generous customer refunds if the deal goes through. Oracle filed a sternly worded court motion on Monday, demand-ing that PeopleSoft halt its "Customer Assurance Program." The program guarantees customers will receive refunds of two to five times their initial license fee -- often tens of millions of dollars or more -- if an acquiring company fails to support PeopleSoft products. Oracle criticized the program as so "draco-nian" and "unreasonable" that it could make the takeover "unfeasible." PeopleSoft began offering customers generous refunds shortly after Oracle began its takeover bid in June. Oracle said it became aware that the program could cost as much as US$800 million only on Oct. 27.

■ Japan

Current account surplus up

Japan's current account surplus in September jumped 37.6 percent, led by strong exports to Asia and Europe and a sharp con-traction in the services deficit, the finance ministry said yesterday. The surplus on the current account hit ¥1.59 trillion (US$14.7 billion), recording a third consecutive monthly gain, the ministry said. For the six months to September, the current account surplus rose 20 percent from a year earlier to a record ¥8.35 trillion, with the trade surplus up 0.8 percent to ¥6.03 trillion. Exports in the first half rose 5.1 percent to a record ¥25.8 trillion and imports grew 6.5 percent to ¥19.8 trillion, the ministry said. In September alone, the trade surplus was up 8.7 percent from a year earlier to ¥1.29 trillion, with exports rising 9.3 percent to ¥4.63 trillion and imports up 9.6 percent to ¥3.34 trillion.

■ Travel

Business fares hold steady

Business travel fares likely won't rise in Europe next year as companies switch to economy-class tickets for employees and low-cost carriers force traditional airlines to cut prices, said Andrew Buckley, an American Express vice president. "We will see more travelers going to the back of the cabin," Buckley said, citing a study by his company. He spoke at an airline conference in London. Slowing economies in Europe and a three-year slump in travel exacerbated this year by the war in Iraq and an outbreak of the SARS virus have hurt earnings at British Airways Plc and others. Low-cost carriers such as Ryanair Holdings Plc and EasyJet Plc have seen demand rise by attracting budget-conscious travellers. No-frills flights accounted for 20 percent of European travel in the eight months through August, tourism consultancy IPK Interna-tional said yesterday.