US & World News

The rumor of a deterioration in the rating of France has prompted a new collapse of the entire stock market. "This is completely untrue," says the entourage of Baroin. View of the Ministry of Economy and Finance at Bercy.

Bercy has "formally" denied rumors Wednesday of degradation of the French debt rating by a rating agency that led to a new collapse of the entire stock market. "These rumors are totally unfounded and the three agencies Standard and Poor's, Fitch and Moody's have confirmed that there was no risk of degradation," it was stated in the entourage of the Minister of Finance Baroin.

Rating agencies Moody's Investors Service Inc.., Standard and Poor's Corp.. Fitch Ratings and have in fact all three confirmed Wednesday the sovereign debt rating of triple A with a stable outlook they attribute to France.Fitch confirmed the note on May 31 and S & P, December 23. Moody's does not usually confirms his notes.

"It's totally false", it was stressed the same source, when asked about the rumors, which also claimed that this is why French President Nicolas Sarkozy interrupted his holiday to hold a crisis meeting at the Elysee Palace . After the meeting, the Head of State said that new measures to reduce the deficit will be announced on August 24.

European shares are down sharply divided Wednesday, two hours before the close, led by falling bank stocks as a result of new concerns fueled also by the situation in Greece and the decline of Wall Street opening. The New York Stock Exchange opened sharply down Wednesday also unable to continue the strong rebound yesterday.In Paris the CAC-40 plunged almost 5% hit by bank stocks.

The perspective attached to the sovereign rating of the United States could be raised to stable if the bipartisan agreement on reducing the U.S. deficit is being implemented and if the tax cuts of the Bush era are eliminated, said Monday director of sovereign ratings Standard & Poor's.

In an interview with Reuters Insider, David Beers warned that the rating agency would closely monitor whether the U.S. Congress is at what he has committed.

S & P on Friday denied the United States of the note "triple A", giving them now rated AA + coupled with a negative outlook.

David Beers reiterated that there was at least one in three chance that the U.S. sovereign rating is lowered again within 6 to 24 months.

A group of six U.S. senators, Democrat and Republican, introduced Tuesday a new plan for deficit reduction in exchange for raising the debt ceiling. Capitol

A group of six U.S. senators, Democrats and Republicans, called the "gang of six" presented Tuesday in closed session before other elected a new plan to try to find a solution to the crisis related to raising the debt ceiling . According to a source familiar with the matter, the plan includes spending cuts of 3600-3700 billion over 10 years. It would include increased revenues from the federal government, not by raising taxes – something the Republicans are viscerally opposed – but by reforming the tax system. The same source, the proposal also attacked the Medicare (health insurance for the elderly), dear to the Democrats.

The new plan was presented to fifty elected as one of six senators, Republican Tom Coburn, who had left the group in May announced his return Tuesday. The group is also composed of Democrats Kent Conrad, Mark Warner, Richard Durbin and Republican Saxby Chambliss and Mike Crapo. The plan of the "Gang of Six" is inspired by findings made in 2010, a special parliamentary committee. The recommendations of the commission, established by U.S. President Barack Obama, have never been approved in Congress. The commission proposed a reduction of 4,000 billion over 10 years, with cuts in social programs.

According to Senator Conrad, the reaction of elected officials present at the presentation Tuesday morning was "extremely positive"."We promised to come back and listen to their reactions over the next 24 hours and decide what to do," he told reporters. Side House, elected officials were preparing to vote Tuesday on the latest Republican proposal, entitled "Reduce, cap, balance." This radical plan of budget cuts, which contains an amendment to the Constitution for a budget to "balance" should not get through the Senate.

YGM Trading distributor plans to acquire European luxury brands to expand its portfolio in China, a promising market that may well become the first in the world within 10 years.

YGM, which already holds licenses on Aquascutum Asia and the French brand Guy Laroche, said Tuesday aimed unlisted companies, European, preferably already in the Asian market.

"We really think our strength is in Asia, and is a growing market," he told Reuters its CEO Shirley Chan.

Immediately after the announcement, the action group YGM – with a market capitalization reached $ 435 million (300.4 million euros) – has jumped from 9.3% to its highest since December.

Distributors and YGM Trinity covet such European brands as increased purchasing power of Chinese consumers grows to turn to foreign luxury brands, while in China soaring rents and labor costs is a challenge major sector development.

YGM, which distributes men's suits, evening dresses and leather goods from a range of brands including French, Charles Jourdan, but Ashworth, and J. Michel ReneLindeberg, said he wanted to expand "more aggressively" in China in coming years.

According to analysts, YGM has an ample cash to engage in acquisitions, or 54.85 million dollars last fiscal year, nearly double the previous year.

Last week, YGM has reported an annual profit increase of 42.4% for the fiscal year ended in late March, to 36 million. Buoyed by strong demand in China, its sales came out up 16.4%.

The majority party starts on Tuesday an agreement on social reconstruction. The legal work will again divide the participants. The head of the UMP Jean-Francois Cope (here at a meeting in Paris in March 2011)

Again, waving a red rag to a removal of 35 hours in 2012, the former Minister Herve Novelli has revived a debate that divided the ranks of the UMP and calls into question the system of overtime, a key measure of the review of Nicolas Sarkozy.

As was quick to say so himself very liberal deputy secretary general of the UMP, it is for the time that a proposal of his party, to be discussed Tuesday at its "convention on social reconstruction. " Certainly not a "Presidential arbitration."

But still.Suggesting that the right could "go further" on the foreheads of 35 hours, the voice of the liberal wing of the UMP has seriously shaken his camp. "We propose that working time is part of the negotiation, industry or business, rather than being fixed by law," he said Saturday in the World.

On that front, Hervé Novelli is a repeat offender. Last winter, with the Secretary General of the UMP Jean-Francois Cope, he once launched into the pool for the majority of the pavement removal of the statutory working hours and some of the exemptions from linked to 35 hours.

Labour Minister Xavier Bertrand replied that they had while raising the legal working time would supersede the overtime tax-free and positive effect on purchasing power.Laurent Wauquiez and his colleague had warned against reforms that would "on the back of the middle class."

In January, Nicolas Sarkozy was buried, temporarily, the hatchet by recalling that "35 hours are no longer uniform and mandatory." Above all, he had set two conditions for those who want to permanently remove the card: "Do not touch the purchasing power of employees" and "not to weigh on business competitiveness." For the sake of appeasement, the head of the UMP and his deputy had decided to put their proposal in parentheses.

With less than a year of presidential, they decided to highlight boxes … Just after the opening match of the patron saint of the PS and "lady of 35 hours' Martine Aubry in the primary socialist. To meet the constraints of the fight against deficits, Jean-Francois Cope has pointed out that this time 35 hours costing 12 billion euros per year."We will not take the blow," he said. And to prevent the end of exemptions will increase the cost of labor, he emphasized the need to open "the site of the financing of social protection" by transferring the burden of the end of 35 hours on VAT or CSG , Hervé Novelli dixit.

Despite these precautions, the Elysee them opposite end of the same refusal. "There is no question of removing 35 hours, we want more purchasing power for the French," repeats it in the presidential entourage. "The UMP can say what she wants, if the President decides to stand, it is he and he alone, decide on its program." Elected in 2007 on the promise of being the "president of purchasing power," Nicolas Sarkozy knows – he often reminded – that overtime is one of the few achievements of a delicate balance in this area. Ségolène Royal (PS) has not taken wrong."Reaching the 35 hours (…) it would mean that Nicolas Sarkozy, who was elected on the 'work more to earn more', today we would do the" work more to earn less, '"she mocked Monday.

The Tokyo Stock Exchange closed up Friday, thanks to positive U.S. data – the Chicago PMI in particular – and the relief felt vis-à-vis Greece which is thought to prevent a default.

The Nikkei gained 51.98 points (0.53%) to 9,868.07 and the Topix, broader took 4.64 points (0.55%) to 853.86.

The Nikkei has ended a little above its closely watched moving average of 200 days of 9866.86.

The quarterly Bank of Japan on the sense of enterprises (Tankan) had a limited impact on the Exchange. However, investors are relieved that the recovery is expected in the coming quarter.

Values, the bank Mitsubishi UFJ Financial Group gained 2.05% to 398 yen.The Nikkei financial daily writes that the bank has increased its stake in Morgan Stanley to 22.4% by converting its preference shares into ordinary.

The Nikkei adds that this transaction will result in more than 200 billion yen ($ 2.5 billion) profit for the quarter April-June.

Nicolas Sarkozy confirmed on Monday the outline of a French plan foresees the participation of European banks and insurance companies to resolve the crisis in Greece, which has not yet been approved by the partners of France.

A meeting on modalities for private sector participation to a new rescue plan for Greece was held Monday morning in Rome between representatives of the banking lobby Institute of International Finance (IIF) and the Economic and Financial Committee of the euro area without reaching agreement.

French President confirmed that private creditors would exchange their debt against the Greek 30-year bonds at rates equivalent to those of European support loans, issued at a premium indexed to economic growth in Greece.

He hoped that the European partners of France accepted the plan but was willing to change to get their agreement.

"We have concluded that spreading the loan over a period of 30 years, putting them in European loans, plus a premium indexation on what will be the growth of Greece, there was a system that each country could probably find interesting, "he said at a news conference.

"So the project that we have, we put it in the debate as something we hope positive, we are ready to amend it, too, the French project is not the alpha and omega", has he said.

The leaders of the euro area are seeking how to involve the private sector in a second aid package to Greece without this lead rating agencies to estimate that the country is in default.

The European Union and the International Monetary Fund warned that they would pay the fifth installment of a $ 12 billion, the plan developed in 2010 to help save Greece from bankruptcy, if latter did not take further austerity measures by July 3.

The Greek Parliament began debating Monday of these measures and must decide Wednesday on the overall framework of the austerity plan and Thursday on specific steps to its implementation.

"HAIR CUT Mask"

In anticipation of a possible European agreement on the participation of the private sector, the scheme outlined by the Treasury and the French financial institutions provides that private creditors are willing to reinvest 70% of the Greek repayment of loans maturing in new obligations.

Half of the securities held by private creditors would be reinvested in Greek bonds to 30 years.

Some 20% would be reinvested in securities backed by the European Financial Stability Fund (FSEF), created in 2010 to assist countries in the Eurozone in trouble (Greece, Ireland, Portugal).

"From what has filtered at this stage, it would be a 'hair cut' hidden on 50% of the amounts held by private banks," said one credit strategist a French bank.

For the rest, 20% would be reinvested in securities issued by the EFSF, which in turn lend the funds to Greece, he adds, this part of the "rollover" benefiting from "AAA" rating of EFSF and therefore a security.

Gilles Moec, an economist at Deutsche Bank, sees two possible logic behind the proposal provides that 20% refund will be deposited into a "guarantee fund" that would invest in the EFSF and MSE (European Stability Mechanism).

"The EFSF / MSE would act as an intermediary 'between investors and Greece by granting it loans backing the bonds purchased in the' rollover '," he said, adding, as the strategist, it protects Creditors of a default risk.

The economist added that in the latter case, the "guarantee fund" could play firefighters in case of default on the new 30-year Greek bonds and cover any "hair cut" 40% of these securities.

"However, in this second case, the final risk continue to be carried by the private sector," he wrote in a note.

"As it stands, the French plan does not lead to" an ordered default "of Greece. In fact, 20% of repayments in 2012/2013 to cover approximately 20 billion euros, while the total government debt amounted to 328 billion euros at the end of last year, "said Gilles Moec.

The Alcoa aluminum companies announced a multiyear contract Friday to around one billion dollars (700 million) by which it will supply the metal to Airbus. EADS

Alcoa will supply the aircraft manufacturer plates and plate alloys from current and advanced, stronger and lighter than conventional metals and composites.

The agreement was reached at the Paris Air Show.

The Alcoa aluminum will be used on most airliners Airbus single-aisle A380 jetliner to.

The action Alcoa earns 1.24% to 15.47 dollars on Wall Street in early trade.

Gross domestic product (GDP) in Ireland increased by 1.3% in the first quarter compared with the previous three months, according to official figures released on Thursday, well above expectations of analysts who had forecast 0.8%.

However the gross national product (GNP), considered by some economists as a more accurate indicator of the state of the Irish economy, fell by 4.3% over the same period, while a stagnation was expected.

According to the Central Statistics Office, GDP rose 0.1% year on year between January and March, while GNP decreased by 0.9%.

The figures in the fourth quarter of 2010 were significantly revised, with a decline of 1.4% a quarter over quarter for GDP, against 1.6% previously, and an increase of 0.3% GNP (2.0% initially).

For the full year 2010, the Irish economy has experienced a contraction of 0.4% against 1.0% previously announced.

The Italian government has asked Lorenzo Bini Smaghi to resign from the Executive Board of the European Central Bank, as part of a tacit agreement reached between Paris and Rome wants to ensure the accession of Mario Draghi as the monetary institution.

Former Governor of the Bank of Italy, is the only candidate to replace Jean-Claude Trichet, whose term ends in late October, but his ambition could face a refusal by Lorenzo Bini Smaghi to resign.

"There is a formal request from the government to resign Bini Smaghi," he said Thursday at the Press Council President Silvio Berlusconi.

MEPs endorsed Wednesday the appointment of Mario Draghi as President of the ECB, and the Heads of State and Government of the EU must validate definitively at a summit in Brussels on 23 and 24 June

Although there are no rules governing the nationality of the Executive Board of the ECB, several countries in the euro area have indicated they would not accept the presence of two Italian members within the monetary institution.

"To get the consent of France to Mario Draghi, our candidate for the ECB, there must be a French seat on the Executive Board of the ECB, this should happen through the resignation of Bini Smaghi," said the head of Italian government.

Lorenzo Bini Smaghi, who sits on the Executive Board since 2005 and whose term expires in 2013, declined to comment on the announcement.

"No comment, I do not answer," he told reporters.

In a speech earlier in the day, Lorenzo Bini Smaghi criticized the attempts of political interference in the functioning of the ECB, insisting on the independence of its members.

Last week, the vice-president of the ECB's Vitor Constancio has also considered that there should be no political pressure for the resignation of board members.