These are stories Report on Business is following Monday, Nov. 12, 2012.
Two more years
Greece's neighbours have given the country another two years to meet deficit targets as the 'Ponzi scheme goes on.'
European finance ministers meeting in Brussels today agreed to push back the goal of a deficit of just 2 per cent of gross domestic product to 2016, according to Bloomberg News, but have kicked a decision on the next tranche of bailout funds into next week.
That extension will have ramifications, however, as it means billions of euros more in funding requirements for Athens.
"Greece has done a big part of what it was supposed to do, adopted an ambitious reform program and a budget for 2013 that is impressive," the chief of the finance group, Luxembourg's Jean-Claude Juncker, said at a news conference, the news agency reported.
"A few more things have to be checked, because not everything that was promised to be done, has been done. But these are more minor things that can be tackled administratively and not legally. I expect that we'll be able to take a definite decision about the disbursement of the next tranche at the Nov. 20 meeting."
Athens also faces a redemption Friday of €5-billion ($6.35-billion U.S.) of Treasury bills, and some have feared an "accidental default" without the bailout money.
However, Mr. Juncker said "there won't be any problem" rolling over the debt, though he would not disclose how this would be done, according to Reuters.
As senior analyst Michael Hewson of CMC Markets in London put it, "the Ponzi scheme goes on."
"If Greece was a company, it would have been wound up months ago," he added.
For now, markets are taking the latest developments in stride, not getting too exercised, but this has the ability to turn on a drachma.
"The lack of market response to this is a sign of the degree of crisis fatigue that prevails among investors, but more of a reaction seems likely tomorrow as Athens makes a bid for emergency funding from bond markets in case the bailout tranche does not arrive in time," said market analyst Chris Beauchamp of IG in London.
There are several things at play here. First, Prime Minister Antonis Samaras promises this will be the last austerity budget, in a country deep in recession and crippled by 25 per cent unemployment. Protests have been frequent.
But, said Mr. Hewson, it won't be the last austerity budget and it won't be the last bailout, given Greece's outlook and finances.
"He's kidding himself, or trying to kid the Greek people," the analyst said. "If people believe that, they're deluding themselves. He's selling a lie."
The other problem is Germany, where voters are running out of patience with being the deep pockets and where Chancellor Angela Merkel is heading into an election in less than a year. Ms. Merkel wants Athens to remain in the euro zone, at least until then, as she has promised Germans that the bailouts will, in the end, be profitable.
"Unfortunately, the Greek situation is now out of her hands," said Mr. Hewson, referring to the widespread social unrest in Greece.
- Recessionary gusts buffet EU's biggest economies
- OECD sees China, U.S. outlook stabilizing, Europe still hobbled
Spanish banks halt evictions
Spain's major banks pledged today to halt foreclosures for the neediest homeowners after the suicide of a 53-year-old woman.
The woman killed herself while she was being evicted, news agencies reported, sparking public anger in what already is already widespread social unrest.
The unemployment rate in Spain, where the housing market crashed several years ago, is forecast to top 26 per cent next year. Half the country's young people are unemployed.
The Spanish Banking Association made the promise after several meetings with the government.
In a statement, it cited its policy of social responsibility, though, Reuters noted, there have been about 400,000 foreclosures since the meltdown.
Brick shares soar
Shares of The Brick Ltd. surged by more than 50 per cent today in the wake of the $5.40-a-share friendly bid from rival Leon's Furniture Ltd.
As The Globe and Mail's Marina Strauss reports, Canada's two biggest specialty furniture companies are teaming up amid a cooling housing market and growing competition from foreign retailers, such as Target Corp., that are piling into Canada.
"During these economic times where have seen multiple American corporations make inroads in our country through acquisitions, it is a pleasure to see two successful Canadian retailers reach such an agreement that will better serve Canadian consumers," said Leon's chief executive officer Terry Leon.
One would be tempted to speculate that the deal won't close for a year - Canadians are intimately familiar with the Leon's "don't pay a cent event," though, given the holidays loom its website now boast "Ho Ho Hold the payments – but it's expected to close in the first quarter of 2013.
(Just a little side note here, Hilary Duff is part of the Brick family given her marriage to retired hockey player Mike Comrie a couple of years ago.)
- Leon's buys rival The Brick, to take on U.S. retailers
- Subscribers only: Would The Brick be better off on its own?
RIM to launch BB10 in January
Research In Motion Ltd. has now set a firm date for its crucial BlackBerry 10 platform, The Globe and Mail's Iain Marlow reports.
There have been several delays amid deteriorating financial results, and fears that the BB10 devices could be delayed again.
RIM, however, said today it would officially launch the BB 10 on Jan. 30, and unveil the first two devices.
"In building BlackBerry 10, we set out to create a truly unique mobile computing experience that constantly adapts to your needs. Our team has been working tirelessly to bring our customers innovative features combined with a best in class browser, a rich application ecosystem, and cutting-edge multimedia capabilities," said chief executive officer Thorsten Heins.
"All of this will be integrated into a user experience - the BlackBerry Flow - that is unlike any smartphone on the market today."
- RIM to launch make-or-break BlackBerry 10 on Jan 30
- In the developing world, RIM makes its last stand
North America forecast to become net oil exporter
North America will become a net oil exporter by 2030, as booming unconventional production and tougher mileage standards for vehicles squeeze out offshore imports, the International Energy Agency forecast today.
The United States is expected to become the largest crude producer in the world by 2020, overtaking Saudi Arabia and Russia, due to soaring production in tight-oil fields like North Dakota's Bakken and Texas's Eagle Ford, the Paris-based energy agency said in its annual forecast of energy-market trends, The Globe and Mail's Shawn McCarthy reports.
Japan's economy shrinks
Japan may well be in the midst of another recession amid fresh data showing the economy contracted in the latest quarter at an annualized pace of 3.5 per cent.
Two back-to-back quarters of decline typically marks a recession.
Today's reading of gross domestic product will add to the already intense pressure on the Bank of Japan, notably from its government, to do more.
Japan has been struggling with a high yen and, adding to the troubles of its exporters, a dispute with China over a string of island that has sparked a consumer backlash in that country over Japanese goods.
"This was the first quarterly decline since 2011 and increases pressure on the BoJ to ease monetary policy further," said senior currency strategist Sue Trinh of RBC in Hong Kong.
- Japan's economy shrinks as firms cut spending, recession looms
- Japanese PM looks to join Trans-Pacific Partnership trade deal
From Automobil Lamborghini today:
"Automobili Lamborghini presents the new Lamborghini Aventador LP700-4 Roadster, the most exciting series production Lamborghini ever built and the new benchmark in the world of open-top luxury super sports cars … The new Lamborghini Aventador LP 700-4 Roadster is a dream that can be realized and ordered at any Lamborghini dealer in the world for the price of €300,000, excluding taxes."
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