Sun, Jun 22, 2014 page15

• World Business Quick Take

  • Agencies
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  ARGENTINA

  President to negotiate debt

  Investors betting that talks between President Cristina Fernandez and holders of the nation’s defaulted bonds from 2001 will avert a second default in 13 years may be headed for disappointment, TCW Group Inc said. For the first time in a decade, Fernandez agreed on Friday to negotiate with holdout creditors from the nation’s US$95 billion default. The dispute has hit markets since the US Supreme Court on Monday last week left intact a ruling requiring Argentina to pay the investors in full. On Monday next week, the country has an interest payment due on its restructured bonds that would be blocked if the holdouts remain unpaid. The country’s bonds rallied 8.8 percent on average after Fernandez’s comments.

  ECONOMY

  Official sees bust bubbling

  German Federal Minister of Finance Wolfgang Schaeuble on Friday said that central banks’ efforts to inject liquidity into the financial system are feeding asset bubbles that could burst and cause the next crisis. Schaeuble also rejected a recommendation by the IMF that the European Central Bank should resort to large-scale bond purchases — of the kind the US Federal Reserve is making — to help growth and protect the 18-nation eurozone from deflation. “We do not have too little liquidity in financial markets, but rather too much,” Schaeuble said after a meeting of European finance ministers in Luxembourg. “All experience of economic history tells us that such situations lead to bubbles,” he added, saying that the low interest rates in developed economies are pushing investors into riskier markets including real estate.

  JAPAN

  Panasonic TV plant for sale

  Electronics giant Panasonic plans to sell the plant where it first got into the television business half a century ago as it shifts away from the money-losing division, a report said yesterday. The company plans to sell 60 percent of the plant’s 120,000m2 site in Ibaraki, near the western city of Osaka, to major homebuilder Daiwa House by early next year, the business daily Nikkei said. The price tag is estimated at ￥10 billion (US$97.9 million). Daiwa House is expected to build a logistics facility at the site and lease it to parcel-delivery company Yamato Holdings Co, Nikkei said. The plant started producing cathode-ray tube sets in 1958 and helped turn Matsushita Electric Industrial — as Panasonic was then known — into a global electronics company.

  SPAIN

  Tax cuts pledged, bashed

  Spain said on Friday that it would cut income tax and reduce corporate tax to 25 percent for large companies by 2016, aiming to speed up a nascent economic recovery. The cuts are part of a proposed bill that is Prime Minister Mariano Rajoy’s main structural reform this year and also included reducing tax breaks to lift the country’s tax revenue, currently one of the lowest in Europe. The government said the plan would boost GDP by 0.55 percent over the next two years, but it has been roundly criticized by unions and economists over the past few months. Unions say tax cuts are merely a populist measure ahead of elections next year, while some economists say growth is not yet strong enough to justify tax cuts and the move risks hurting the government’s ability to meet its deficit targets.
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