Greek parliament expected to approve next stage of cuts despite violent protests in Athens The battle to prevent Greece lurching into disorderly default continues as lawmakers return to the Athens parliament on Thursday to approve the next stage in the hugely unpopular austerity package. Having approved the €28bn (£25bn) programme of fresh taxes and cutbacks in principle on Wednesday , Greek MPs will vote on an enabling bill giving the government authority to implement the new measures speedily. Analysts are broadly confident that the legislation will pass but are still unconvinced that George Papandreou’s administration can actually implement the tough measures in the face of deep public hostility. “If we wanted to be cynical, or realistic, we could say that the disaster scenario has been averted for now but we may well be revisiting in three or six months,” predicted Gary Jenkins of Evolution Securities in a research note on Thursday morning. Jenkins fears that Greece will fail to make enough progress to placate its European neighbours and the International Monetary Fund (IMF), which it relies on for its funding. The financial markets were broadly calm on Thursday, following strong gains on Wednesday. The FTSE 100 index opened 22 points higher at 5878, after Asian markets recorded gains. The euro gained around 0.7 cents against the US dollar, to $1.4505. European leaders have hailed Wednesday’s vote, by 155 votes to 138, as a key moment in the debt crisis that has gripped the region for many months. “The country has taken an important step forward along the necessary path of fiscal consolidation and growth-enhancing structural reform. But it has also taken a vital step back – from the very grave scenario of default. This was a vote of national responsibility,” said Herman Van Rompuy, president of the European Council, and European commission president José Manuel Barroso in a joint statement. Attention may shift to Italy, as the Italian cabinet meets on Thursday to approve its own austerity budget. This includes about €47bn of spending cuts and tax increases, and is rumoured to include a Robin Hood-style tax on financial transactions. Clashes Wednesday’s vote took place against a backdrop of clashes between protestors and police in Athens. About 100 people were treated in hospital, according to Reuters. Several people reported that police officers had fired stun grenades and tear gas at peaceful crowds . But there were also images of individuals, some wearing gas masks, throwing stones or wielding sticks at police officers . Further demonstrations are expected on Thursday. A new EU/IMF rescue package for Greece worth about €110bn is expected to be agreed in the next few weeks. Some form of Greek debt restructuring is seen as inevitable – the challenge is to find a method that will not be treated as a default by credit rating agencies. Eurozone finance ministers will meet on Sunday to consider a proposal from France under which lenders would agree to roll over their maturing Greek debt and buy new bonds. John Lipsky, acting chief of the IMF, said on Wednesday that the private sector will have to be involved in the second Greek bailout. “Eventually there will be on a voluntary basis some degree of contribution by private-sector creditors,” Lipsky said. European debt crisis European banks Greece Europe Graeme Wearden guardian.co.uk
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Five years ago News Corp bought it for US$580m – then it was crushed by Facebook, leaving it at a fraction of its peak value Myspace, once the world’s hottest internet firm, has been sold to an online ad company for around $35m, a fraction of the $100m its parent company was seeking for the ailing social network and billions less than its value five years ago. Rupert Murdoch’s News Corporation bought Myspace in 2005 for $580m. In 2006 Google signed a $900m deal to sell ads on Myspace; by 2007 it had 300m registered users and was being valued at $12bn. But the social network was subsequently crushed by Facebook, which launched a year after Myspace. News Corp put Myspace up for sale this year, engaging investment bank Allen & Co to find a buyer. News had been looking for $100m but settled for $35m offer from advertising targeting firm Specific Media. The sale is believed to be mainly in stock and News Corp will retain a small holding. Myspace is expected to shed more than half of its 500 remaining members of staff as part of the deal. The layoffs follow a 30% staff reduction in April 2010 and a further cut of 47% in January 2011. Two years ago Myspace emplyed more than 1,400 people. Facebook passed Myspace in terms of numbers of users two years ago. As people dropped Myspace, so did advertisers. Market research firm eMarketer estimates that the site will earn about $183m in worldwide ad revenues this year, down from $605m at its peak. The sale comes as a new generation of internet firms are attracting sky-high valuations. Zygna, the online gaming form behind hits including CityVille and FarmVille, is planning an initial public offering (IPO) that could value it at $20bn. LinkedIn, the business-focused social network, has already gone public and is valued at $8.6bn. Next year Facebook is expected to go public – analysts have estimated it could be worth $80bn or more. Myspace News Corporation Internet Social networking Media business Dominic Rushe guardian.co.uk
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• Total job cuts now almost 45,000 • Unite condemns ‘deplorable’ action • Strategic review hopes to save £1.5bn a year • Halifax to be revamped and open branches on Saturday António Horta-Osório, the new boss of Lloyds Banking Group, was unrepentant on Thursday after announcing 15,000 job cuts at the bailed out bank in an effort to cut costs and return the bank to financial health. On a bleak day for jobs in the banking industry, HSBC is expected to cut up to 1,000 roles later today. But the City welcomed the cost reductions, and Lloyds was the biggest riser in the FTSE 100 in early trading. The shares started 5% higher at 42p – but still well below the 73.6p at which the taxpayer breaks even on its 41% stake. In the face of a furious reaction from unions, the Portuguese-born banker insisted the cuts were necessary. “We have to do this because this bank has been loss making last year. This bank is also making an after tax loss [in the first quarter] this year,” said Horta-Osorio. Some 28,000 roles have already been axed as result of the rescue of HBOS during the 2008 banking crisis and the new round of reductions was met with shock by unions. This takes the toll of job cuts to almost 45,000 since the deal was finalised in early 2009, when HBOS employed 75,000. “Astonishingly one in eight roles will be lost over the next three years,” said David Fleming, Unite national officer. “The conclusion of this review to make 15,000 staff cuts is yet another extreme example of the financial services industry cutting vital staff in a desperate attempt to create a mirage of acceptability following the financial crisis. But this total failure to take significant action to make appropriate changes to rebuild the public confidence in the sector is deplorable,” he said. Ged Nichols, general secretary of the Accord union, said: “Accord knows that LBG employees are extremely concerned by today’s news, not only what it might mean for them and their workmates, but also the possible effect it may have on customer service.”. Horta-Osório stressed that the bank hires 10,000 staff a year and that he hoped that “national attrition and internal deployment” would help achieve the cuts which are expected to target middle managers and back office staff. Since taking the helm on March, he has embarked upon the strategic review which has resulted in the job cuts announced on Thursday which he hopes will achieve £1.5bn of annual savings in 2014, on top of £2bn of savings achieved through integration. Labour rewrote the competition rules to allow Lloyds to rescue HBOS during the banking crisis and the new management is now facing pressure from the independent banking commission to sell of branches to bolster competition on the high street. But Horta-Osório wants to show that the bank can compete with itself. The Halifax brand is to be revamped and relaunched in September with its “irreverent” attitude of the past and all its branches opened on Saturday. “Our aim is to become the best bank for customers. We have around 30 million customers, iconic brands, including Lloyds TSB, Halifax, Bank of Scotland and Scottish Widows, and high-quality, committed people. We will unlock the potential in this franchise over time by creating a simpler, more agile and responsive organisation, and by making substantial investments in better-value products and services for our customers, to deliver strong, stable and sustainable returns for our shareholders.” The bank will have to spend £2.3bn to achieve the cost cuts, which also includes pulling out of half of the 30 countries where it currently has operations by 2014. It is targeting a return on equity of between 12.5% and 14.5% by 2014 and hopes to start paying a dividend again once the EU ban on such payouts is lifted next year. António Horta-Osório Banking Lloyds Banking Group Job losses Jill Treanor guardian.co.uk
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Culture secretary says News Corp’s proposal for Sky News to be spun-off from Sky should go ahead to allay plurality fears Jeremy Hunt has confirmed that he plans to give News Corporation’s BSkyB takeover the green light, after nearly four months of negotiations between the culture secretary, Rupert Murdoch’s media company and regulators over spinning off Sky News. The culture secretary said on Thursday that News Corp’s proposal for Sky News to be spun-off from Sky into an independent listed company should go ahead to allay plurality fears. Hunt added that since he gave the News Corp/Sky deal the provisional go ahead in March, a “more robust set of undertakings” had been agreed for the Sky News spin-off. These extra undertakings will now be put out to further consultation, with a deadline of midday on Friday 8 July for interested parties to make submissions to Hunt. The extra measures include having an independent director with senior journalism expertise present at Sky News board meetings where decisions on editorial matters are taken and a requirement for Sky to continue to cross-promote the 24 hour news service on its channels. The other extra undertakings agreed during protracted negotiations between Hunt, News Corp, the Office of Fair Trading and Ofcom are for the appointment of a monitoring trustee whose main role is to ensure that News Corp complies with the undertakings in the run up to spin-off, and a requirement for Sky News’ articles of association to be approved by the culture secretary. “I have considered carefully the points raised and, as at all steps in this process, taken advice from the independent regulators. The regulators have confirmed that the proposed undertakings are still sufficient to ensure media plurality,” Hunt said. “I could have decided to accept the original undertakings but a number of suggestions were made in response to the consultation which could further strengthen the undertakings, particularly around editorial independence, business viability and the articles of association. I am therefore proposing some changes to the undertakings and I will now hold a further public consultation.” Hunt’s clearance fires the starting gun on negotiations with investors in Sky who are pushing for almost £4bn more than the £7.8bn originally offered by News Corp a year ago. The company originally tabled a 700p a share offer when Sky’s share price was under 600p. Since then a continuing strong financial performance – thanks in part to reaping the benefits of investment in areas including high-definition and broadband – and market speculation that Murdoch will be willing to significantly up his bid has seen the company’s share price rocket. Sky’s share price was 848p at the close of the market on Wednesday. The Department for Culture, Media and Sport said it had received more than 40,000 submissions for its consultation on the News Corp/Sky deal, “including a very large number of near-identical responses as a result of internet campaigns”. Hunt also met representatives of rival media companies Trinity Mirror, Guardian Media Group – which publishes the Guardian – Telegraph Media Group and Daily Mail publisher Associated News and Media. These media groups came together in an informal alliance last autumn to oppose the News Corp/Sky takeover, arguing it would stifle media plurality by bringing together the UK’s largest newspaper group, Sun and Times owner News International with a 37% share of the national market, and the largest broadcaster, BSkyB. Hunt also met with law firm Slaughter and May and Avaaz, the campaigning group that has opposed the deal.Hunt gave provisional clearance for the merger in March on the condition that News Corp agreed to spin-off Sky News into a separate company and limit its shareholding in the channel to 39.1%. Initially Hunt said that he would give his final decision by the end of April, following a consultation period. However Ofcom and the Office of Fair Trading, who have been advising Hunt, took longer than anticipated in hammering out a water-tight legal agreement to make sure that Murdoch cannot “get around” clauses designed to ensure Sky News remains independent. Critics of the proposed News Corp/BSkyB deal argue that he has successfully been able to work around previous legal agreements designed to secure the editor’s independence when the Times was acquired in 1981 and when the Wall Street Journal was bought in 2007. Investors including Crispin Odey, founder of Odey Asset Management, which has a 2.7% stake in Sky, and Fidelity are pushing for a price as high as £11 a share. On that basis News Corp would have to find well over £11bn, although the company has already made it clear it does not intend to overpay. There has been speculation that a deal could be reached at about 875p – costing News Corp about £1.8bn more than the original £7.5bn proposal. Under an agreement struck between the two sides when News Corp made its first approach to Sky last June, they will now have five months to reach a deal or Murdoch will have to pay the satellite broadcaster £38.5m. In the first two months of negotiations following Hunt’s approval News Corp needs to get an offer recommended by Sky’s independent directors. Over the next three month period any offer must be subject to a minimum acceptance of 70% of Sky’s shareholders. If a deal is not struck after five months then News Corp stumps up the £38.5m fee and is able to seek a deal requiring just 50.1% shareholder approval. As Murdoch controls just over 39% that means winning over investors controlling 11% of stock. “News Corporation’s leverage over BSkyB gets better over time,” said one City source. News Corporation Media business Jeremy Hunt BSkyB Television industry BSkyB Rupert Murdoch Jason Deans Mark Sweney guardian.co.uk
Continue reading …President Obama today cast the budget fight today as a choice between jet owners and ordinary Americans at his press conference . Some reactions: Greg Sargent, Washington Post : “He was clearly out to pick a major public fight with Republicans over tax cuts for the rich. Obama mounted a surprisingly aggressive…
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Committee on Climate Change says making energy companies to insulate empty lofts and walls would cut national emissions Energy companies should be forced to insulate every empty loft and cavity wall in the UK within four years, say the government’s climate change advisers. The independent Committee on Climate Change (CCC) says the measure would boost efforts to cut national carbon emissions; in 2010 the number of loft insulations fell by 30% on the previous year. “The government should state this ambition and energy companies should be on the hook to deliver these emissions reductions,” said David Kennedy, the CCC’s chief executive. The coalition’s government’s ” green deal ” proposals to overhaul ageing and leaky homes and reduce consumer energy bills could be a major part of the UK’s action against global warming, says Kennedy, but must have firm targets to be effective. The committee’s recommendations are often accepted by ministers. In the UK, 10m (43%) of all lofts remain unlagged and 8m houses with cavity walls (42%) have yet to be insulated. Kennedy made his call as the CCC launched its legally requiredannual report on progress in cutting greenhouse gases. It found that people were buying less-polluting cars, but the required improvements in environmentally friendly driving had not materialised. Furthermore, delays in building the first carbon capture and storage demonstration plants and boosting use of public transport were damaging efforts to meet the UK’s legally binding carbon targets, the toughest in the world. Christine McGourty, director of Energy UK, which represents the gas and electricity industry, said: “Energy companies have already made a substantial contribution to improving people’s leaky homes. In the past few years, companies have insulated more than 1.5m cavity walls and more than 2m lofts, helping consumers save up to £260 a year on their bills.” According to the CCC report, the number of professional installations of loft and cavity wall insulation fell by 30% between 2009 and 2010. Kennedy blamed this on a “perverse incentive” in the existing scheme for energy companies to help their customers stop heat leaking from their homes, which meant activity stopped when a certain number had been treated. Electricity and gas providers are currently under fire from regulators and consumer groups, who criticise the scores of confusing price tariffs and recent large price rises. Kennedy acknowledged the risk in asking the companies that sell energy to enable their customers to use less. But he said that risk could be overcome if the scheme was carefully designed. “It is very important that someone is on the hook,” he said. “The experience over four decades is that the free market does not deliver home energy-efficiency measures.” Friends of the Earth campaigner Dave Timms agreed the government’s policies “don’t go far enough or fast enough” to meet carbon targets, adding: “For too long energy firms have made huge profits selling ever-increasing amounts of energy while some people freeze in poorly insulated homes. Forcing energy companies to carry out all the necessary energy efficiency improvements is an attractive idea.” A CCC spokesperson added: “Safeguards are needed to ensure energy companies do not pass through excessive costs. Also, compensatory measures may be needed for fuel-poor households.” The CCC report analyses the changes in the UK’s carbon emissions and found that, when the effects of the recent cold winter and the recession were accounted for, the trend was flat. “We are below the level of the 2008-12 budget because of the very big emissions reduction in 2009 due to the recession , not because we had begun to do things fundamentally differently, and we should not be deceived by that,” said Kennedy. A return to business as usual in the economy would mean the UK would exceed its future carbon targets, because they required a 3% cut every year. Changes to car emissions were rated as “good” in the CCC report, with the average pollution by new vehicles down from 160g of CO 2 /km in 2008 to 144g in 2010. But counteracting that was a slight rise in speeding and the prospect of the speed limit being raised to 80mph , which the CCC said would result in 3.5m extra tonnes of CO 2 being emitted each year. Carbon emissions Climate change Energy efficiency Energy Green building Energy bills Consumer affairs Household bills Energy industry Green politics Green deal Committee on Climate Change Damian Carrington guardian.co.uk
Continue reading …There’s an app for pretty much everything—except cutting through bureaucracy. A woman who mistakenly left her iPad on a plane was able to track the whereabouts of the device, but couldn’t convince authorities to follow up on it, reports the Syracuse Post-Standard , via the Consumerist . The woman was fairly…
Continue reading …Tiger Woods has landed his first endorsement deal since the sex scandal. It’s just not in this country. Woods signed a three-year deal with Japan’s Kowa Company to promote a pain reliever there. Woods already has filmed commercials for “Vantelin Kowa,” a heat rub used to relieve muscle and joint…
Continue reading …A Houston man told the cop who pulled him over he thought he might have hit something on the freeway, but couldn’t be sure. That’s when the officer pointed out his shattered windshield and the mangled corpse in his passenger seat, reports the Houston Chronicle .
Continue reading …School’s out in North Korea, but not just for summer. Universities will be shut down until next April and students will be sent to work on construction projects in major cities, reports the Telegraph . Only those close to graduating and foreign students will be allowed to continue classes. The rest…
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