UK emerged faster from deeper recession

It turns out Britain’s economy grew faster than previously estimated in the last three months of 2009.

That is according to revised official figures just released which showed fourth quarter GDP growth was 0.3 percent rather than the 0.1 percent originally reported.

But the 18-month recession from which the UK emerged turned out to be deeper than first calculated and was the worst in over 50 years.

The politician in charge of the British economy, Alistair Darling, welcomed the upward revision of
fourth quarter GDP growth but said there were still big risks and that government stimulus support for the economy could not be withdrawn yet.

Telefonica dials up in line profit

Full year profit at Spain’s Telefonica came in pretty much as expected at 7.8 billion euros.

Europe’s second largest telecoms company was able to offset a tough home market in Spain with healthier operations in Latin America.

But investors remain concerned about whether it can meet its targets, as well as weakness in some units and the chance of a costly merger with Telecom Italia.

BBC to cut output

British state-owned broadcaster the BBC is reportedly considering major cutbacks to its radio, online and TV output.

Two British newspapers have said that a draft report, to be published next month, talks of closing two digital radio stations, halving the size of its website and cutting spending for rights to sports events.

The move is reportedly in response to political concerns about the spread of the BBC’s activities.

The BBC has not commented on the reports.

Lloyds trimes losses

There was mixed news from Lloyds, Britain’s largest retail bank.

Its losses last year at the equivalent of seven billion euros, were smaller than the previous years 7.5 billion euros.

The bailed-out bank is still saddled with major bad loans from its takeover of rival HBOS – 27 billion euros worth were not paid back last year -but Lloyds said that situation is improving.

Italian fashion

talian fashion week is underway in Milan with the industry staggering along the catwalks having been dealt a body blow by the economic crisis.

The rag trade is a mainstay of the Italian economy accounting for four percent of the country’s gross domestic product.

The industry’s turnover fell 15 percent last year with evidence emerging that cash strapped fashionistas are turning to fakes.

Euronew’s Patrícia Cardoso in Milan said: “In just this one week of fashion shows, here in Milan, the Italian fashion industry makes half of the season’s turnover, in this case, for the Autumn/Winter season 2010/2011. That money makes it a major target for counterfeiters”

Indeed Italian police recently seized 500,000 tons of fake goods near Rome.

Italy’s national retailers association estimates the counterfeit market is worth seven to eight billion euros a year in Italy and the garment workers union said it cost cost 4,000 jobs with billions lost in sales tax on the fakes.

Armando Brancchini of the trade association for the Italian luxury industry told euronews: “Counterfeiting has a very rich market in Italy and 90 percent of these products are made in China. What is needed is stricter customs controls to stop these items getting into the European market.”

Italy is trying to protect its 57,000 fashion firms, employing 650,000 people.

The industry says it is under seige with 2,000 companies having gone out of business in the last two years.

End of road for Hummer

General Motors has said it will wind down production of Hummers after government regulators in Beijing refused to approve a bid by a small Chinese heavy-machinery maker.

GM had been trying to sell the money losing division that makes the gas-guzzling four-wheel-drive Hummer as part of its restructuring.

The closure mean 3,000 jobs will go including production line workers and dealers.

Iberia's profit slump

Spanish airline Iberia posted a deeper than expected net loss of two hundred and seventy three million euros for last year which it called “the worst ever for the aviation sector.”

A strict cost control programme failed to offset falling passenger numbers, particularly in business class, due to the economic crisis.

Iberia is about to merge with British Airways to create the world’s third largest airline by revenue.

German jobless rises in February

Unemployment in Germany rose in February by just 7,000 from the previous month in figures adjusted to take into account seasonal factors.

That was better than economists had forecast and came despite harsh winter weather.

The more commonly quoted unadjusted figure increased by 26,000 from January with just over 3.6 million people registered as unemployed.

Coca-Cola buy biggest bottler

Coca-Cola has said it is going to buy the North American operations of its largest bottler, Coca-Cola Enterprises.

The deal means it can cut costs and be make its distribution more flexible.

The rest of the bottling company would remain independent and would also acquire some of Coca-Cola’s assets in Scandinavia and Germany.

The announcement came as rival PepsiCo was about to close on the purchase of its largest bottlers.

Euronpean telecoms results

France Telecom has posted a net profit of three billion euros for last year, which was about what was expected by analysts.

Europe’s third-largest telecom operator predicted sales will be stable this year.

And Germany’s Deutsche Telekom made a net profit of 353 million euros, that was 76 percent down on 2008.

The two companies are working on merging their UK mobile phone businesses.

European banks upbeat

As they reported their 2009 figures, several major European banks were upbeat about the year ahead.

France’s biggest high street bank, Credit Agricole said despite losses at its Greek bank Emporiki, it had made a good start to the year.

Agricole’s net profit rose to 433 million euros

Royal Bank of Scotland, which is 84 percent owned by the UK government after a series of bailouts during the financial crisis, posted a seven billion euro loss, but said prospects are brighter for the coming year.

Deutsche Postbank, Germany’s largest retail bank in numbers of customers, suffered an 398 euro pretax loss last year.

But it said lower loan loss provisions and lower writedowns on toxic assets will help it achieve a pretax profit in 2010.

Carrefour to axe Belgian stores

Faced with falling sales at its stores in Belgium, French retailer Carrefour is to close 21 of them and sell off as many as 20 more by the end of June.

The world’s second largest retailer will lay off nearly 1,700 of its 16,000 workers in Belgium.

The unions blamed uninspired management for Carrefour’s problems

Union representative Patrick Savauche said: “Why are our competitors doing better than us? Because they have a strategy, they have good prices. Here, at Carrefour, we’ve never had that. Which isn’t the fault of the workers, that I’m sure about.”

But Carrefour Belgium’s boss, Gerard Lavinay, said the problems are structural and because the workforce is too expensive compared with other stores around Europe.

He told reporters: “The problems of Carrefour Belgium, the problems with a cost structure that is abnormal and different from that of our competitors, that’s specific to Belgium.’‘

Carrefour’s Belgian operations have struggled for years amid intense competition from Belgian groups Delhaize and Colruyt and discounters Aldi and Lidl.

The group does plan to invest 300 million euros over the next three years to refurbish the Belgian stores it is keeping and to try to cut costs it will
renegotiate contracts with suppliers.

US politicians question Toyota safety issues

Top executives at Toyota have promised a shake-up of its quality procedures as the US government said it would hold the carmaker’s chief to his pledge to address safety issues.

In the wake of massive recalls of Toyota vehicles
over unintended acceleration and braking issues, member of the US Congress are holding two days of hearings to question Toyota bosses.

The politicians also called for more research into the problems.

At the same time, Toyota has revealed that it faces a criminal investigation in the US into the handling of its massive safety recalls.

A federal grand jury in New York has asked for documents relating to problems, including sticky accelerators.

A similar request has come from the financial regulator, the US Securities and Exchange Commission.

Unintended acceleration problems have been linked to at least five deaths in the US.

RBS boss spurns bonus

Stephen Hester,the boss of Royal Bank of Scotland has reportedly waived his 1.8 million euros bonus for last year.

The bank, which had to be rescued with British taxpayers’ money, is now 84 percent owned by the government.

This follows a similar move by top bosses at another big British bank, Barclays.

It will put pressure on Eric Daniels, who heads Lloyds Banking Group, also bailed out by the state.

Schlumberger to merge with Smith International

A big merger in the energy sector. Schlumberger, which is the number one oilfield services company, is to buy Smith International.

The all-stock deal is worth the equivalent of 8.3 billion euros.

It will boost Schlumberger’s revenue to double that of its nearest rival, Halliburton.

The merger will have to be approved by shareholders and competition regulators.

Lufthansa pilots suspend strike

Lufthansa pilots have halted a strike after their union and the German airline agreed to hold fresh negotiations.

The walkout was scheduled to last four days but ended after just 24 hours when both sides agree to a suspension and to hold talks following a two-hour session in a Frankfurt labour court on Monday.

"The parties agreed that the strike is to be suspended through the 8th of March,'' Lufthansa spokesman Andreas Bartels said.

Lufthansa had cancelled about 800 of its estimated 1,800 daily flights on Monday, affecting some 10,000 passengers, and the strike was supposed to have lasted four days and would have cost 25m euros ($34m) a day.

Bartels said pilots would return to work on Tuesday although it would take time for normal operations to resume.

Joerge Handwerg, a spokesman for the Vereinigung Cockpit (VC) union representing the pilots said the union was "happy with the agreement because Lufthansa now has to resume negotiations without preconditions'.

More than 4,000 pilots had gone on strike at midnight on Monday over concerns that cheaper crews from Lufthansa's subsidiaries in other countries could eventually replace them, concerns Lufthansa said were unfounded.

The union also wants a 6.4 per cent pay rise, more say in company decisions and commitments that pilots would keep their jobs when Lufthansa shifts passengers to cheaper, foreign affiliates.

Looming strikes

The suspension of the strike is not the end of Lufthansa's woes.

Late on Monday, Germany's UFO cabin crew union said it was considering walkouts of its own "in the coming weeks".

And travellers in Europe face more disruptions ahead as five unions representing French air traffic controllers on Monday announced a four-day strike beginning on Tuesday.

France's aviation authority ordered airlines to cancel half their flights at Orly airport and a quarter at Charles de Gaulle in Paris.

French carrier Air France said it would maintain all of its long-haul flights during the strike, with the protest movement affecting only its routes within France and Europe.

British Airways faced a renewed threat of cabin crew strikes, after the Unite union announced that most of its members had voted in favour of a walkout.

Britain's biggest labour union said after the vote that its members would meet on Thursday to discuss the ballot result before deciding on a strike date.

A previous strike threat by BA cabin crew, planned for the Christmas and New Year holidays, was cancelled only after the airline obtained an emergency court injunction to block it.

And Eurostar, the main train alternative to planes between Paris, Brussels and London, experienced an embarrassing train failure when a Paris-to London train broke down in southern England late on Sunday.

The failure plunged more than 700 passengers into darkness, forced them to climb down ladders on to the track to a replacement train, and caused them to arrive in London more than four hours late.

Toyota boss pledges improvements

The head of Toyota, the Japanese car manufacturer, has vowed to change the way the company does business in the wake of a series of safety recalls.

Writing in the Wall Street Journal on Tuesday, Akio Toyoda said the company had not responded quickly enough to reports about vehicle defects and promised "transparency" in the way it handles customers' concerns.

The recalls over potentially faulty accelerator pedals and brakes have together affected more than eight million vehicles around the world, badly damaging Toyota's reputation for quality and reliability.

Toyoda's article comes two days before he is due to give testimony before a US congressional hearing into his company's handling of the recall and its response to safety concerns.

It also appeared on the same day that the car manufacturer was presented with a subpoena from a US federal grand jury ordering it to handover documents related to the recalls.

Depending on the evidence the grand jury probe reveals, the case could lead to eventual criminal charges being brought against Toyota.

Toyota's US headquarters said on Monday that it would co-operate fully with the inquiry but gave no further details.

As well as two congressional investigations, Toyota is facing a host of US class-action lawsuits potentially costing billions of dollars that link defects in its vehicles to more than 30 deaths.

'Back to basics'

Writing in Tuesday's Wall Street Journal a contrite Toyoda said: "I recognise that we must do better - much better - in responding to safety issues."

He said: "It is clear to me that in recent years we didn't listen as carefully as we should - or respond as quickly as we must - to our customers' concerns".

Toyoda, who is the grandson of the carmaker's founder, said he would take the company "back to basics", pledging that "Toyota will set a new standard for transparency and speed of response on safety issues".

He is due to begin testimony before the congressional inquiry on Wednesday

Critics, including some members of the US congress, have attacked Toyota's response to complaints of sudden, unintended acceleration, accusing it of trying to cover up defects, which also extend to the brake systems of its flagship Prius hybrid cars.

'Evidence hidden'

News of the US grand jury investigation came hours after the release of a document apparently showing Toyota knew of accelerator safety problems in its vehicles as early as 2007.

The internal memo appears to show Toyota executives gloating over their success in limiting a 2007 recall on some cars where the driver's foot mat interfered with the accelerator.

The memo is among thousands that a congressional committee has requested in a subpoena of Dimitrios Biller, who worked as a US lawyer for Toyota from 2003 to 2007.

Biller, who is now in a legal dispute with Toyota, said the internal company documents show the firm was hiding evidence of safety defects from consumers and regulators.

News Middle East Jordan and France sign uranium deal

Jordan has signed an agreement with France's nuclear giant Areva, giving the company exclusive uranium mining rights.

The deal was agreed on Sunday during a visit by Francois Fillon, the French prime minister, who was received by King Abdullah II.

The agreement gives Areva exclusive rights to extract and mine uranium in the central parts of Jordan.

The desert kingdom, which is poor in energy and water resources, is seeking to develop nuclear energy to generate power and desalinate water.

Fillon said he also spoke with Samir Rifai, the Jordian PM, about the prospects for building nuclear plants by French firms in the Gulf of Aqaba on the Red Sea.

"Our goal is to create a full partnership with Jordan on training and obtaining nuclear technology ... or with any other country in the region that seeks civilian nuclear technology," he told reporters.

"We discussed offers to build nuclear plants in Aqaba, and we will work on providing the best offers."

Jordanian officials have said that Areva, which started mining in central Jordan in 2008, could extract around 130,000 tonnes of uranium from the kingdom's 1.2 billion tonnes of phosphate reserves and build a nuclear reactor.

Energy needs

The country, which imports around 95 percent of its energy needs, aims to bring its first nuclear plant on line by 2015.

Officials have said they hope nuclear power will supply 30 percent of energy production by 2030.

Jordan is the latest Arab country to announce plans for nuclear power programmes, despite the controversy which has surrounded Iran's atomic ambitions.

Fillon, who arrived late Saturday in Jordan at the head of a large delegation, also attended an economic forum and said that Paris wanted to forge an "ambitious global partnership" with Jordan and boost economic ties.

Recall memos up stakes for Toyota

Documents released in the US have shown that Toyota knew of safety problems with some of its vehicles as early as last June, and lobbied US regulators to head off an investigation.

One internal company memo uncovered by congressional investigators showed Toyota officials boasting of saving $100m by limiting the extent of vehicle recalls.

The documents also cite efforts to delay safety regulations, avoid investigations, and stall industry requirements.

The latest development in Toyota's safety crisis came as the company's president arrived in Washington to prepare for a congressional hearing on Wednesday, in a bid to salvage the Japanese car giant's dented reputation.

The memos are among thousands that a congressional committee has requested in a subpoena of Dimitrios Biller, who worked as a US lawyer for Toyota from 2003 to 2007.

'Hiding evidence'

Biller said the internal company documents show the firm was hiding evidence of safety defects from consumers and regulators

In a document referring to important security issues, Toyota mentioned "sudden accelerations" on some of its vehicles, showing the company was aware of such problems in July of last year.

Toyota has recalled more than 8.5 million vehicles worldwide in recent months following a series of complaints and a slew of lawsuits linking vehicle flaws to 30 deaths across the US.

The problems include sticky accelerators, accelerators that can be pinned down by loose floor mats and a braking glitch affecting its hybrid models.

Akio Toyoda, the president of Toyota Motor Corp, is due to face a hearing before the House of Representatives Oversight and Government Reform Committee on Wednesday.

Euro zone manufacturing boost

The euro zone’s manufacturing sector enjoyed its best month in two and a half years in February.

The survey of purchasing managers showed Germany was a driving force; its manufacturing sector expand at its fastest pace since June 2007.

The euro trading around nine-month lows against the dollar boosted exports while firms rebuilding inventories also benefited manufacturers.

However the region’s dominant service sector expanded at a slower pace than expected.

Fed changes bank loan rate

The Federal Reserve has sent a message to the market by raised the interest rate it charges banks for short-term loans.

It was the first step by the US central bank towards normalising lending, signalling that the era of cheap borrowing is drawing to a close.

However bank policymakers, led by Fed chairman Ben Bernanke, stressed that borrowing costs for consumers or companies would not rise.

Its main interest rate will remains unchanged, near zero percent, to help sustain a fragile US economic recovery.

What has been raised – for the first time since June 2006 – is the discount rate.

It has gone up from 0.5 percent to 0.75 percent.

That was a response to improved financial market conditions which means the banks do not need so much help.

The Fed was at pains to point out that the move did “not signal any change in the outlook for the economy or for monetary policy.”

It cautioned that recovery from the recession will probably be sluggish and its main interest rate will likely stay near zero for “an extended period.”

Bad news on UK jobs

The number of Britons claiming unemployment benefit rose unexpectedly in January.

There were 23,500 more people on the dole last month.

That wiped out the declines seen in the previous two months and took the total number of claimants to its highest since 1997.

In jobless total in the UK is 7.8 percent of the working population. In the euro zone it is 10 percent and in the US it is 9.7 percent.

Lufthansa strike looms

Late on Friday German airline Lufthansa remained on a collision course with its pilots with neither side seemingly prepared to compromise in a dispute over pay and job security.

Lufthansa said a four-day strike due to start on Monday will cost it at least 100 million euros.

Jörg Handwerk, a spokesman for the Cockpit union, said the pilots would not back down: “It’s important that Lufthansa makes a substantial offer. As it stands now, we haven’t received a single serious offer from them, but a solution is most likely to be found during negotiations.”

The pilots have asked for a 6.4 percent pay rise but said more importantly they want to prevent jobs being moved to Lufthansa subsidiaries where pay is significantly lower.

Lufthansa said it has contingency plans to limit the number of cancellations.

On Friday two Lufthansa passengers questioned at Frankfurt Airport were philosophical.

One said: “From the pilots’ point of view, I can see that it’s a good thing if they are not getting what they think they deserve to get. For the tourists and people travelling, it’s of course a nightmare.”

Another was supportive of the pilots: “Honestly I can understand it. Everyone has the right to strike and even if it’s not particularly good for individuals, it’s a democratic right.”

Ticket sales have fallen as travellers book flights with other carriers in anticipation of disruptions at the airlines.

Lufthansa has said even after the strikes end it will take days to return flights to normal.

Nestle sees strong 2010

Switzerland’s Nestle is predicting higher sales growth this year.

Its 2009 results beat forecasts thanks to strong growth in North America and developing markets. Lower commodity prices also helped.

The world’s biggest food group enjoyed growth in underlying sales of 4.1 percent last year, ahead of rivals Unilever and Danone.

Net profit was just over seven billion euros.

Carrefour facing though times

Carrefour, the world’s second largest retailer, has said it expects a tough 2010 as it posted a plunge in profits.

Operating profit was down 16 percent as sales slipped 1.2 percent but its overall earnings slumped 70 percent to 385 million euros.

That was due to writedowns in the value of assets in Italy and price cuts to lure cash-strapped shoppers.

Carrefour, which has over 15,500 stores in 35 countries, suffered a particularly weak performance in its home market France.

It is also reviewing its Belgian operations.

SocGen's results disappoint

Lacklustre results from France’s second-biggest bank Societe Generale.

The lender, which issued a profit warning last month, announced weak fourth-quarter figures.

Chief Executive Frederic Oudea said he is “confident of its ability to bounce back.”

Net profit for the year was 678 million euros, down by two thirds on the previous year.

In the last quarter it made 221 million euros, must less than in the third quarter.

It will pay out 250 million euros in bonuses.

Frederic Oudea said he will not be taking a bonus but rejected criticism of bonuses.

Just over half of those that are being paid to traders will be in the form of shares, handed out over the next three years.

In addition, if traders do not meet performance criteria they will not get the payments.

The bank’s shares ended the day seven percent lower.

Toyota boss to testify in Congress

Toyota's president has confirmed that he will appear before a US congressional panel next week, to explain the Japanese carmaker's handling of a series of damaging safety recalls.

In a statement Akio Toyoda said he would speak sincerely to the US Congress and the American people about his company's commitment to tackle the problems that have led to recalls of more than 8 million cars around the world.

Toyoda, the grandson of the carmaker's founder, had said earlier this week that he would not attend the US hearings.

His change of mind follows a direct invitation from the head of the congressional panel leading an investigation into the Toyota recalls.

"I look forward to speaking directly with Congress and the American people," Toyoda said in a statement.

He is expected to give testimony in Washington on Wednesday.

Toyota has recalled more than 6 million vehicles in the US – its biggest single market – over problems involving the accelerator pedal becoming stuck, either because of a loose floor mat or as a result of a design fault in the pedal assembly.

According to US safety regulators up to 34 crash deaths have been blamed on unintended acceleration in Toyota vehicles since 2000.

'Helpful'

A separate recall involving the braking system on Toyota's Prius hybrid cars is also under way.

n a joint statement Edolphus Towns, the Democratic chairman of the congressional oversight panel and Darrell Issa, the ranking Republican, said they were "pleased" Toyoda had agreed to appear in person to answer questions.

"We believe his testimony will be helpful in understanding the actions Toyota is taking to ensure the safety of American drivers," they said.

Towns added that Toyoda's appearance was needed to address what he said was "growing public confusion" about the recalls.

Speaking to reporters in Tokyo on Friday, Japan's transport minister said it was the right decision for Toyoda to travel to the US, but added it was regrettable that he had earlier said he would not be going.

"It's good that he has decided to accept," Seiji Maehara said. "But it's a shame there was flip-flopping on the decision."

The massive scale of the recalls has badly damaged Toyota's reputation for quality and reliability, and hit its share price.

Toyota's US sales dropped 16 per cent in January and are expected to take a big hit in February as well.

China in record US debt sell-off

China sold a record amount of its US Treasury holdings in December, ceding its place as the world's biggest foreign holder of US debt to Japan.

According to Treasury figures released on Tuesday, Beijing sold off more than $34bn of its holdings in the final month of 2009, cutting its holding of US debt by just over 4 per cent to $755.4bn.

Japan now holds almost $11bn more US debt than China, with a total of nearly $769bn.

Japan had been the largest holder of US Treasury bonds until September 2008, when it was overtaken by China.

'Subtle message'

The Chinese sell-off of US bonds follows increasingly vocal concern from Beijing over the ballooning US deficit, and comes amid a deterioration in relations between the US and China on a range of fronts.

Eswar Prasad, a trade policy professor at Cornell University in New York state, said the Chinese sales of US Treasuries could contain "a subtle economic and political message" aimed at Washington.

"Chinese leaders are deploying their reserves to try and pressure the US to stop haranguing China about its currency and trade policies and to back off from interference in its domestic political and human rights issues," he told the AFP news agency.

In the latest spat between Beijing and Washington the White House has rejected a Chinese demand that Barack Obama, the US president, cancel his meeting this week with the Dalai Lama, the exiled Tibetan spiritual leader.

Complicating issues still further the rows over Tibet, a US arms sales to Taiwan, China's dispute with Google and a raft of others trade and currency disagreements, come at a time when Obama is seeking China's help to toughen sanctions on Iran.

Chinese dependence

However, US think-tank Stratfor in a note to clients on Tuesday said that while the debt sell-off may have political undertones, China remains fully aware of its own dependence on the US.

"While China may reduce its holdings of US debt in order to send a signal to Washington - though this is not necessarily the only reason it would do so - it has no intention of selling debt to the point that it wrecks the US economic recovery, since doing so would destroy China's own economic and socio-political stability," it said.

China invests the bulk of its $2.2trn in foreign exchange reserves in US Treasury bonds which has virtually financed the snowballing US budget and current account deficits.

At the same time, despite recent increases in China's domestic consumption, its economy and millions of Chinese factory jobs remain highly dependent on US export markets.

Nonetheless, in recent months Chinese officials have repeatedly voiced concern about the mushrooming US debt, fearing it could erode the value of the dollar and its Treasury holding.

Last June Timothy Geithner, the US Treasury Secretary, travelled to Beijing to reassure Chinese leaders, saying their money is "very safe" and pledging to cut the deficit.

Lufthansa pilots to strike

Pilots at German airline Lufthansa have voted to strike in a dispute over wages and job security.

The pilots’ union Vereinigung Cockpit wants a 6.4 percent pay rise for the next 12 months.

It has also demanded job guarantees for pilots at Lufthansa, as well as its cargo unit and at the low-cost airline Germanwings which Lufthansa owns.

Cockpit said 94 percent of its members had voted for strike action during a month-long ballot.

It plans a four-day stoppage from Monday 22 February and has threatened to hold additional walkouts if necessary.

Talks between management and the union broke down at the end of last year.

Lufthansa called the strike action “disproportionate” and it would “hurt the company, its customers and workers to a high degree.”

One industry analyst it would cost the airline at least 10 million euros a day.

A400M deal reported close

Aerospace firm EADS is reportedly close to reaching a long-awaited deal to rescue the A400M military transport plane.

The parent company of Airbus has been haggling with European governments over how much they would offer to cover five billion euros in cost overruns.

Sources say EADS is now just working out details on the funding support.

The report boosted EADS’ shares and eased fears over job losses.

Barclays upbeat

Barclays posted a better than forecast profit of 13.1 billion euros in 2009 and said this year has started well.

Britain’s second-largest bank – which did not get government bailouts during the crisis – has also trimmed bonuses and pay in response to public anger.

Average annual pay for its investment bankers last year was 220,000 euros.

InterContinental profit slips

The world’s biggest hotelier, InterContinental said its profit last year fell by just over a third and it warned that trading conditions would remain tough until business travellers return in greater numbers.

Annual operating profit from the group, which includes the InterContinental, Crowne Plaza and Holiday Inn brands were 266 million euros.

That was better than forecast and showed some improving trends.

Economic recovery stutters in the euro-zone

Economic recovery in the euro-zone stuttered in the final quarter of last year, new statistics from Eurostat have revealed.

Growth was just 0.1 per cent, down on the market forecast of 0.3 per cent.

The German economy stagnated in the final quarter, following expansion in the previous two quarters.

France performed reasonably well with a consumer spending lead growth of 0.6 per cent, but Italy’s economy unexpectedly contracted by 0.2 per cent.

With the final quarter figures in, the annual numbers make for grim reading. 2009 handed Europe’s major economies their sharpest recession in recent times.

Forecasters now believe that the Euro Zone will have a weaker recovery than the United States this year, just as it fell harder than the United States in 2009.

Part of Europe’s problem is that it needs a reasonable pace of economic growth to help limit the surge in sovereign debt caused by the recession.

Signs of hope for Japan recovery

Strong export performance and a rebound in domestic demand have helped boost Japan's economy, with gross domestic product growing 1.1 per cent in the October to December quarter, latest figures have shown.

Taken at an annualised rate, Japan's GDP grew at 4.6 per cent the government said, well above market expectations.

However, for the whole of 2009 Japan's economy contracted by 5.0 per cent as the country battled its worst recession since the Second World War.

The global downturn saw Japanese exports and factory output plunge.

Presenting the latest figures, officials said they were encouraged by the signs of recovery shown towards the end of 2009, particularly since it was the first time in seven quarters that domestic demand has helped to push GDP higher.

Consumer spending, which accounts for about 60 per cent of the economy, rose 0.7 per cent from the previous quarter.

Monday's results indicate that the world's number two economy is continuing to benefit from government stimulus measures around the world, bolstering global trade and persuading Japanese households to increase spending on durable goods.

Exports rise

Japan's Kyodo news agency quoted cabinet official Keisuke Tsumura as saying the data indicates the Japanese economy may now be strong enough to avoid falling back into recession.

Robust overseas demand, particularly from neighbouring Asian nations, has also helped lift the Japanese economy.

Exports in December rose for the first time since the collapse of investment bank Lehman Brothers in late 2008, raising Japanese industrial production by 2.2 per cent from the previous month.

The domestic economy, however, remains fragile and could weigh on growth in the coming months as the impact of government stimulus incentives wane.

Rattled by deepening deflation and falling wages, surveys show Japanese businesses remain cautious about spending and hiring.

Other major world economies also face uncertainty ahead.

Latest figures show the US economy expanded at an annual rate of 5.7 per cent in the fourth quarter, but many analysts predict a slowdown this quarter as high numbers of jobless hold back consumer spending.

Spyker shareholders approve Saab purchase

Shareholders in Spyker have approved the 55 million euro purchase of Saab from General Motors.

The meeting held behind closed doors was convened to approve the deal forged two weeks ago.

Chief Executive Victor Muller said the combined company would seek listings on the London and Stockholm stock exchanges and would delist from the Euronext Amsterdam exchange.

Saab produced just 21 000 cars last year, with sales slumping to 40 000 from 95 000 in 2008.

The company aims to raise production to pre-crisis levels with the help of a new sales and distribution strategy.

The goal is to reach profitability by in 2012 – neither Saab nor Spyker have turned in a profit over the past decade.

Germany steel giant returns to profit

Germany’s biggest steel maker ThyssenKrupp has recorded its first quarterly profit in a year.

The pre-tax profit of 237 million euros was more than four times market forecasts.

But ThyssenKrupp warned recovery from last year’s slump would be slow, with customers buying mainly to restock inventory rather than in response to rising demand.

Michelin vigilant as profits slump

French tyre manufacturer Michelin said it was extremely vigilant because of low market visibility and rising raw material prices.

The group has been hit by the slump in the automotive industry while restructuring costs hit last year’s net profit, which were down to 132 million euros from 360 million euros.

Michelin is proposing a 1 euro dividend to shareholders.

Airbus wants A400M funding sorted

Planemaker Airbus has sent a message to European governments that discussions need to be concluded quickly to sort out funding for the troubled A400M military transport plane.

Airbus says it will start reducing its financial exposure to the programme unless there is tangible progress within days in talks with seven countries over sharing out the cost overruns.

Airbus’ parent company EADS wants 4.5 billion euros from those governments, they are offering 3.5 billion.

Reportedly Airbus’ Chief Executive Tom Enders has told unions that work on the plane could stop.

Alternatively it could freeze investment or hiring until doubts over the aircraft are lifted.

EADS said it needs to have a decision soon, so it knows what its share of the cost overruns will be to be included in its 2009 financial results.

Fiat signs major Russian joint venture

Russia Prime Minister Valdimir Putin was on hand for the signing of a joint venture agreement between Fiat and Russia’s Sollers to create the biggest car maker in Russia.

Fiat’s boss Sergio Marchionne signed the agreement at Sollers’ assembly plant in Tartastan, 1,000 kilometres east of Moscow.

Putin promised financial backing. He said: “This year, we’ll continue the programme of state aid to car production in general, but we’re also ready to give special support to this project, including with money from major Russian state-owned banks.”

Fiat and Sollers will borrow over two billion euros at subsidised rates for the joint venture.

The Italian company is looking to a growth market in Russia and the plant will eventually have the capacity to assemble half a million cars a year with the engines and gear boxes and some other components made in Russia.

The Russian partnership coincides with Fiat plans to close its Termini Imerese plant Sicily which has angered workers there.

They have have held protest and strikes and the closure, along with others, even brought an appeal from the Pope for businesses and government officials to “do everything possible to protect jobs.”

Repsol and Chevron sign Venzuela deal

Spain’s Repsol and US-based Chevron have accepted the risks of operating in Venezuela in order to tap into its huge reserves.

They have signed the largest oil investment deal of President Hugo Chavez’s 11-year rule.

It comes three years after the leftist leader nationalised operations there.

With oil prices weaker, the deal will bring tens of billions of dollars of much-needed foreign finance to Venezuela.

Renaut's losses grow

Renault has posted a wider-than-expected net loss for the whole of last year, almost 3.1 billion euros.

Anticipating a tough market this year, the French carmaker said it will focus on cash flow.

European new car sales fell by 1.6 percent last year. They would have worse but for government scrapping incentives.

Renault warned sales this year could be down 10 percent.

Honda latest with recall woes

Honda is the latest Japanese carmaker to be hit by safety problems.

It has issued a recall of more than 400,000 vehicles to replace their airbags.

The problem is that some have ruptured when deployed during an accident and have fired pieces of the metal casing at the driver.

In a statement published on its website, Honda explained the propellant in the airbags deteriorates over time.

It knows of one fatality and 11 injuries caused by the airbag defect.

This is an expansion of an earlier recall on the Honda Accord, Civic, Odyssey and CR-V as well as Acura TL.

The move comes at a time when Honda’s rival Toyota is coping with the biggest recall in its history.

And now US safety regulators are looking at complaints from owners of Toyota Corollas about steering problems.

A US congressional committee was this week supposed to have held hearings on whether Toyota was too slow to respond to safety issues but had to postpone that because of heavy snow in Washington DC.

Dubai World "to ask for debt freeze"

The state-linked and heavily indebted conglomerate Dubai World is reportedly about to officially ask its creditors for a temporary freeze on repaying 16 billion euros worth of debt.

That would give it time to complete a restructuring.

The report in Arabic-language daily Al Ittihad – quoted sources in creditor banks as saying that restructuring could take as long as six months.

Peugeot Citroen anticipates tough year

PSA Peugeot Citroen has said its losses widened to almost 690 million euros last year.

The French carmaker believes trading conditions will continue to be tough in 2010 but it is counting on cost cuts to help it cope.

Declining to give a business forecast beyond mid-year, Chief Executive Philippe Varin said Peugeot Citroen expected the European market to decline nine percent this year.

Coca Cola bottler's profit sparkles

The European market is fizzing for Coca-Cola Enterprises; the soft drink bottler has just reported the highest earnings in its history.

Profit in the final three month of last year was the equivalent of 80 million euros.

That compares with a loss of just over one billion euros in the period one year earlier though that was due to exceptional one-off items

Coca-Cola Enterprises, which bottles and distributes Coca-Cola and Sprite, Minute Maid juice and Powerade sports drinks, said volume growth in Europe offset a decline in sales in North America.

It was up six percent in Europe, but fell three percent in the US and Canada.

One day before, the bottler’s largest shareholder and supplier – Coca-Cola – reported better than expected sales growth, helped by strength in emerging markets – particularly China, India and Brazil.

Honda expands airbag recall

Japanese carmaker Honda has said it is expanding a global recall of cars over concerns of faulty airbags that have been linked to at least one fatality and several injuries.

The recall by Japan's second largest carmaker comes as Honda rival Toyota battles to contain the fallout from a series of safety recalls affecting more than 8 million vehicles.

The latest expansion of Honda's airbag recall includes 378,000 cars in the US and 41,000 in Canada announced on Tuesday.

On Wednesday the company added another 17,000 cars in Japan, Australia and elsewhere in Asia, taking the number of affected cars to more than 430,000.

In a statement the carmaker said the potentially defective air bag inflators could rupture, "resulting in metal fragments passing through the airbag cushion material and possibly causing injury or fatality to vehicle occupants".

Fatality

The company said it had been alerted to 12 incidents involving the defect, including one fatality, but added that there had been no new reports since last year.

The expanded recall covers models made in 2001 and 2002 of the Honda Accord, Civic, TL, CR-V, Odyssey, Pilot and CL in North America and the Inspire, Saber and Lagreat models sold in Japan.

"We have concluded that we cannot be completely certain that the driver's airbag inflator in the vehicles being added to the recall at this time will perform as designed," Honda said.

The company has said it will replace the driver's side airbag inflator on the cars.

Honda's latest recall is the third the company has made over the airbag problem since it first went public on the matter in November 2008.

The company's announcement comes at a time of increased attention on vehicle recalls - particularly those affecting Japanese carmakers.

On Tuesday, Toyota said it would recall more than 440,000 of the 2010 model of its flagship Prius and other hybrid cars due to a braking glitch.

Toyota issues global Prius recall

Toyota has issued a worldwide recall for about 437,000 of its flagship Prius and other hybrid vehicles in the latest of a series of embarrassing safety problems to hit the Japanese carmaker.

"We have decided to recall as we regard safety for our customers as our foremost priority," Akio Toyoda, the company's president, told a press conference in Tokyo on Tuesday.

The recall follows complaints from Toyota owners in the US and Japan about a delay under some condition when the brakes in the Prius are pressed.

Toyota officials had earlier informed Japan's transport ministry about the Prius recall, with grim-faced company bosses bowing before ranks of assembled media.

Toyota said it was also recalling the Lexus HS250h luxury hybrid sedan, the Sai hybrid sold only in Japan and the Prius plug-in hybrid which is an experimental model used on a small scale in Japan.

Software glitch

The recall in Japan covers about 223,000 vehicles, with most of the rest of the affected cars thought to have been sold in the US – Toyota's biggest market.

Toyota says it has fixed the software programming glitch in Prius vehicles that have gone on sale since last month, but not those sold before, starting last May.

"Let me reassure that we will redouble our commitment to quality as the lifeline of our company," Toyoda told reporters at Tuesday's press conference.

The company's reputation for quality and reliability has been severely dented in recent weeks by a series of recalls of around eight million vehicles due to sticking accelerator pedals.

Vignesh Chandran, an auto industry specialist in London, told Al Jazeera: "If you look at real safety issues, there are regulatory boards that test cars before they go to market.

"It is consumer confidence that has really been affected. It is too early for us to say these cars are not safe."

Toyota says it has fixed the programming glitch in Prius vehicles that have gone on sale since last month, but not those sold before, starting last May.

Al Jazeera's Harry Fawcett, reporting from Tokyo, said Toyota's latest moves indicated the seriousness with which it now viewed the problem.

The Japanese media and politicians have been critical of its slow response and lack of action plan, and drivers told our reporter they felt betrayed by the company.

Toyota had been trying to make out the Prius braking issue as a minor quirk, but in the wake of its recent safety recalls with other models, many consumers feel that is just not good enough, he said.

Lawsuits

The world's top car maker has already recalled more than 8 million other vehicles worldwide in recent weeks because of safety concerns centred on floor mats and sticky accelerator pedals that can cause unintended acceleration.

The company's North American plants have resumed production of eight models involved in the earlier safety recalls now but faces a potential rush of litigation.

At least 30 class-action lawsuits have been filed against the Japanese car maker over the accelerator pedals and on Friday it faced its first US suit over complaints of faulty braking in its Prius model.

The National Highway Traffic Safety Administration (NHTSA) in the US says it has opened a formal investigation into Prius-related complaints of "momentary loss of braking capability while travelling over an uneven road surface, pothole or bump".

The NHTSA has received nearly 200 such complaints since February 3, including four reports of accidents, two of them said to have resulted in injury.

Despite its problems, Toyota's shares, which have lost about a fifth of their value since late January, were up 1.7 per cent early on Tuesday.

Hiroaki Osakabe, a fund manager at Chibagin Asset Management, said Toyota shares fell while the company "appeared not to be doing anything to deal with its problems".

"But now, the fact that they're taking concrete steps on the issue is being seen as positive," he said.

He warned, however, that "the gains will be limited since many investors want to see the impact of the problems on US car sales, with more share selling ahead if there's a big drop".

Frensh GDP growth prediction

The French economy is expected to grow by 0.5 percent in the first three months of this year.

That is according to the latest forecast from economists at the Bank of France.

They base that on an upturn in industrial activity at the start of the year – particularly sales of cars as people rushed to take advantage of the government’s car scrapping subsidy before its gradual removal.

Turkish industrial production surges

The recovery is starting to pick up in Turkey. Industrial production there increased by just over 25 percent in December, compared with the same month a year earlier.

However analysts said much of that rise was due to fact that production was so low at the end of 2008 because of the global economic crisis.

The Turkish economy is expected to have shrunk by six percent last year.

More Greek strikes threatened

Greek civil servants have warned of further strikes if the government unveils tough austerity measures to cut its ballooning deficit and public debt.

The public sector union already plans another 24-hour strike on Wednesday. Previous stoppages have closed businesses and disrupted daily life.

However opinion polls published at the weekend suggested most Greeks back the government’s economic policy and consider the fiscal measures already announced as necessary and fair.

This week’s public sector walkout is planned to coincide with Prime Minister George Papandreou putting the finishing touches to a deficit-cutting plan, endorsed by the European Commission.

Papandreou has promised to tighten one of Europe’s most flouted tax systems and freeze public sector wages to pull Greek state finances back from the brink.

The Socialist government’s response to the latest strike will be closely watched by international financial markets.

Geithner rule out relapse of the US economy

US Treasury Secretary Timothy Geithner that the risk of relapse and return the US economy into recession is less than at any time in the past year.
He said in an interview with ABC television that the US economy grew by up to about 6% in the fourth quarter of last year , and the economy is improving after the economic crisis that brgan the end of 2007.
Geithner and expected to take the process of restoring the economy to recover some time ane thet is the way of that unpaved.

Truckmarker Volvo's losses increase

Swedish lorry maker Volvo made a bigger than expected loss in the fourth-quarter.

The world’s second largest truck company said its operating loss was 224 million euros more than twice the amount it lost in the same period a year earlier.

Volvo blamed restructuring costs and writedowns on the value of inventory, but said its main markets would return to growth this year.

French trade deficite declined in 2009

Official data showed on Friday , the French trade deficit declined in 2009 , due to lower energy prices , this represents the biggest decline in the trade of the country in sixty years. While other data confirmed that Spain is still experiencing an economic recession.
The volume of French trade deficit in December 4.266 billion euro ( 5.85 billion dollars ) , down from 4.966 billion euro ( 6.7 billion dollars ) in Nevember , with data less than the expectation that a deficit of 4.6 billion euro ( 6.3 billion dollars ).
The trade Minister Anne-Marie Idrac that last year was encouraging , and characterized by a marked decline in the trade deficit thanks to the significant reduction of energy cost.
The total deficit for the year 2009 to 43.031 billion euro ( 59.3 billion dollars ) compared to a deficit a record 55.141 billion euro in 2008 ( 75.5 billuion dollars )

China's public land sales increase

Local governments in China have raised billions of dollars from public land sales to property developers, according to new figures released by Beijing's ministry for land resources.

Chinese government officials said in a statement released on Tuesday that public land sales increased by 60 per cent in 2009, netting over $200 billion.

The sharp increase signals the risk that asset bubbles may hamper the recovery of the world's fastest-growing major economy.

It also stokes discontent among workers unable to afford homes as land sale revenues for property development stand near $200 billion.

State-run Xinhua news agency reported that local governments generated a total of $233 billion from the sale of 209,000 hectares of land in 2009, half of which was sold to real estate developers - a 36.7 per cent year on year increase.

The rebound in China's property market began in the second quarter of 2009 when average housing prices soared 23.5 per cent from the previous year, according to data from the National Bureau of Statistics (NBS).

The NBS also said that housing prices in 70 cities, both large and medium-sized, rose by 7.8 per cent in December 2009 from a year earlier, recording the fastest increase in 18 months.

Bao Zonghua, a former chief of the ministry of housing and urban-rural development policy research center, told Xinhua that under the current distribution regime, land sale revenues go to local governments, giving them an incentive to sell land to commercial housing developers and to shy away from reining in housing prices.

'Incentive to sell'

But aside from selling land, local Chinese governments are also seizing it for development, which has prompted the National People's Congress (NPC), China's highest legislative body, to draft new laws in order to quell possible unrest.

The proposed land laws, released on Friday over the state council's website, say that developers must gain 90 per cent approval from all residents to relocate before their property is taken.

Those forced to move would be given the right to return, but in a new building. Sometimes, many residents are sent to cities located several kilometers from where they once lived.

The laws would also make it illegal for developers and local governments to use coercive means, such as shutting of water or electricity supply, which have been common practices in land seizures across China in the past.

As rapid urban development continues to fuel the property boom in China, land seizures are regarded as one of the bigggest source of unrest in the country.

To curb growing discontent over the seizures, China's state council announced the major overhaul of land laws in hopes of slowing the process of home demolitions and giving home-owners greater compensation for their land.

Numerous cases have shown violent resistance in the past where ordinary people took matters into their own hands.

One incident that shocked the nation was the story of Tang Fuzhen, a 47-year-old Sichuan province resident who set herself on fire in November over the planned demolition of her husband's business. She died less than three weeks later.

China's National People's Congress (NPC), the country's highest legislative body, has given the state council the authority to enact the laws afte public comments are taken into account.

Five prominent law scholars from Peking University called for the abolition of a statute in December that allows local officials to seize land if a different use for it is deemed in the public interest.

Mixed signals on US jobless rate

The US unemployment rate has reached a five-month low of 9.7 per cent, despite US employers reporting that they cut 20,000 jobs from their payrolls in January.

Before Friday's announcement from the US labour department, it was widely reported that the number of employed was likely to rise by between 5,000 and 15,000.

The apparent discrepancy between number of jobs lost and the improvement in the unemployment rate reflect the department's use of two different surveys for collecting the data.

The jobless rate is decided based on information gathered from households, while the change in the number of people receiving a paycheck in determined by figures provided by companies.

A sharp increase in the number of people giving up looking for work is believed to have helped depress the jobless rate.

The number of so-called "discouraged job seekers" rose to 1.1 million in January from 734,000 a year ago.

Market reaction

Al Jazeera's Patty Culhane, reporting from Washington, said: "What is going to be important here is how the markets and the general population react to these numbers.

"Whether they focus on the fact that jobs continue to be lost in the US economy or if they think that it doesn't look quite as bad, at least statistically.

"The hope was that you would start to see an increase [in the number of jobs] - obviously the economy has started to grow, so the administration was hoping that jobs would follow suit.

"Most economists will tell you that this economy will have to add 400,000 jobs a month for the next three years to get back to where this country was before the recession began."

Global stock markets were already at three-month lows before the figures were released.

'Psychologically' good

Eugenio Aleman, an economist with the Wells Fargo bank, said that although the figures reflected little change in the number of people working, the drop in the jobless rate was "good for the psychological aspect of the recovery".

"This can improve consumer confidence, and maybe allow consumers to spend more" to boost overall economic activity," he said.

Barack Obama, the US president, has declared that job creation will be his top priority in 2010.

"While unemployment remains a severe problem, today's employment report contains encouraging signs of gradual labour market healing," Christina Romer, the White House economic advisor, said on Friday.

Obama's fellow Democrats fear voters could punish them in November's congressional elections if the administration fails to make headway in tackling the high jobless rate.

Friday's figures followed a revision of 2009 data, which showed about 600,000 more job losses than previously estimated.

For December, the data was revised to show a steep drop of 150,000 jobs instead of 85,000 previously estimated. But November data was revised to show a gain of 64,000 jobs instead of a rise of 4,000.