See Search Box
lower down this column for searches of Finfacts news pages. Where there may be
the odd special character missing from an older page, it's a problem that
developed when Interactive Tools upgraded to a new content management system.
Finfacts is Ireland's leading business information site and
you are in its business news section.
provide access to live business television and business
related videos from: Bloomberg TV; The Wall Street Journal;
CNBC and the Financial Times. Click image:
The United States is willing to pay a fair share towards a climate change agreement but will not have American taxes subsisding wealthy China, its chief climate negotiator said on Wednesday.
Finfacts said last week, that such a move would create a firestorm in the US, given its serious budgetary situation, in the aftermath of the severe recession.
“I do not envision public funds, certainly not from the US, going to China. We would intend to direct our public funds to the neediest countries,”said Todd Stern, special envoy for climate change. He said China was wealthy enough to fund its own efforts, and firmly rejected the idea that the US and other developed countries owed “reparations” for past emissions.
The European Union has called for industrialised nations to cut their carbon emissions by 30% on 1990 levels by 2020. But America is promising a 3% cut and China has offered to reduce its carbon intensity -- a metric of its industrial efficiency - - by up to 45% by the same date, but its total emissions could still rise.
Beijing's chief negotiator, Xie Zienhua, said on Wednesday that China is willing to play a constructive role at the talks, but wanted the Americans to do more for an agreement.
The two countries account for about 40% of global greenhouse gas emissions.
"I do hope that President Obama can bring a concrete contribution to Copenhagen," Xie said,
China will account for 50% of the growth in carbon dioxide emissions in the next 20 years and produce 60% more greenhouse gases than the US by 2020, British scientist Lord Nicholas Stern said.
China imposes steel duties
Bloomberg reports that China, the world’s largest steel consumer, will impose provisional duties on some U.S. and Russian imports following anti-dumping and subsidy investigations, escalating a trade spat started in September.
Flat-rolled electrical steel products from steelmakers including AK Steel Holding Corp., OAO Novolipetsk Steel and Allegheny Ludlum Corp., would attract duties of as much as 25 percent from tomorrow, China’s commerce ministry said in two statements on its Web site today. The steel is used to make power transformers.
China is striking back after the US, the European Union and other countries slapped tariffs and filed complaints about Chinese steel and commodity products to the World Trade Organization this year. US and Russia last year exported a combined $602 million of the targeted steel products to China, according to Mysteel Research Institute.
Sharp divisions over the role of cap and trade in reducing carbon emissions have been brought into stark relief at the climate summit in Copenhagen. David Jones, CEO of Havas, has more:
The Dow closed up 51 points or 0.5% on Wednesday to 10,337.
The Nasdaq added 0.49% and the S&P 500 gained 0.37%.
It is hard for China to rebalance its economy because it lacks a social security network, says Jerry Lou, China strategist at Morgan Stanley. He offers his analysis of the Chinese economy, with CNBC's Amanda Drury & Cheng Lei:
The MSCI Asia Pacific Index fell 0.7% Thursday -- a second day of losses.
The Nikkei 225 dipped 1.42%; the Shanghai Composite gained 0.68% and in Sydney, the S&P/ASX 200 dropped 0.67% despite the report that employment rose in November for the third straight month.
Insight on whether the dollar can fend off new worldwide debt breakdowns, with Peter Navarro, University Of California; David Goldman, First Things Magazine; Tom Sowanick, Omnivest Group and CNBC's Simon Hobbs:
Goodbody chief economist Dermot O’Leary comments: Economic View; Budget 2010:Politically brave, fiscally responsible - -"The Irish Government followed through with its stated policy of making savings of €4bn, or 3.2% of 2010 GDP, in Budget 2010. Unlike the previous two budgets over the last fourteen months, all of the changes in Budget 2010 take the form of expenditure cuts. These changes should be sufficient to stabilise the budget deficit at less than 12% of GDP, before falling in later years. It’s a politically brave but fiscally responsible Budget that shows a real willingness to tackle the problems in the public finances. The lessons of previous successful fiscal consolidations suggest that cuts to public expenditure should represent a key part of the adjustment. That area is the focus of Budget 2010, with savings of €1.3bn on the public service pay and pensions’ bill, €0.8bn on social welfare spending, €1bn on capital expenditure and €1bn in other expenditure savings. As expected, the only tax increase is in the form of a carbon tax, but this was offset by a surprise 0.5% reduction in the VAT rate and a 20% reduction in excise duty on alcohol.
The Government is committed to a series of adjustments that will eliminate the primary structural budget deficit (that part of the deficit not influenced by the economic cycle), currently estimated at 7.2%, by 2014. The first, and probably most politically difficult part of that process, has now been introduced. With the extension of the time given to Ireland to get the deficit below 3% of GDP by the European Commission, the adjustment in 2011 and 2012 has been reduced from €4bn to €3bn in each year. Ireland is one of the few countries that has decided to take early remedial action to reduce its budget deficit. In the short-term, this will mean that the Irish economy will remain weak, but the recent rise in bond yields looks unjustified to us in light of the credible action that has been taken. For the time being, investors are worried about sovereign risks and have responded with a flight to safety. That is outside Ireland’s control, but Budget 2010, while painful, shows a real will to sort out the problems which are inside Ireland’s control."
Goodbody's Eamonn Hughes comments: Irish Financials; Moodys comments on mortgage arrears in Ireland - -"Moodys appears to have updated some commentary on latest mortgage arrears trends. It is showing that arrears in RMBS’s issued by the Irish financials have risen from 1.34% a year ago to 2.9% currently, which is no surprise really. Redemptions have halved yoy to 6.4%, which again is no surprise and compares to recent comments from a few of the mortgage banks that arrears were running at the low to mid single digit levels. Interestingly, Moodys indicates that there is a risk that the current delayed foreclosure process whereby lenders are supporting borrowers in default would lead to higher losses in Irish RMBS in the mid-term. Note that the banks have been providing generic provisions to date, but Moodys added that the performance of mortgages “may not yet fully reflect the depth of the current recession”, which broadly supports our own held view that the mortgage credit cycle could be elongated as unemployment will remain elevated for a while and rising interest rates will be a headwind in 2011. Our models incorporate c2% losses on prime mortgage and 3.5-4.0% on buy to let."
Davy chief economist, Rossa White, comments: Irish Budget 2010: strong Budget tackles public spending and limits structural deficit - - "The Irish government introduced a €4bn fiscal consolidation for 2010. It will reduce the deficit from 13.5% of GDP, if no action had been taken, to 11.6% in 2010, based on the government's estimates. We expect the deficit to come in lower than that ultimately as the economy stabilises. The estimated deficit for 2009 is 11.7% of GDP. The plan consists of difficult spending cuts of €4bn; taxes were not raised. The decisive and brave action taken is likely to be well received by overseas observers.
Expenditure reductions focused on the public pay bill, social welfare and other non-pay cost reductions in government programmes. Excluding the tax loss from spending cuts, the net consolidation is €3.2bn or 2% of GDP. Capital spending was also reduced by almost €1bn, or 0.6% of GDP, but that had been flagged in April 2009. Falling tender prices mean that government investment will not drop in real terms and Ireland's spending on infrastructure remains above the European average.
Net tax increases amount to €17m, or as close to zero as makes no difference. Crucially, income tax was left unchanged. That is vital, as rising marginal rates of tax in previous Budgets threatened investment in Ireland. Moreover, the government reiterated its commitment to retaining the 12.5% corporation tax rate indefinitely. Absent tax hikes, this may turn out to be an expansionary fiscal consolidation as consumer saving begins to ease (the Ricardian effects may override the initial deflationary impulse of spending cuts).
Note that the government has slashed its unemployment forecast to 13.2% on average in 2010; it is now in line with ours which has been well below consensus in recent months."