French President Nicolas Sarkozy meeting members of the Diplomatic Corps at the Élysée Palace, Jan 22, 2010 -- in an national television Monday evening, Sarkozy told French voters that he would maintain the country's generous welfare model and that a pickup in job creation was in sight. He said he would try to fix the country's state-run pension system, which is suffering as the population ages and posted an €11 billion deficit in 2009. But he pledged to keep intact the basic model under which employees help pay the pensions of retirees.

Global recovery

The global economy, battered by two years of crisis, is recovering faster than previously anticipated, with world growth bouncing back from negative territory in 2009 to a forecast 3.9 percent in 2010 and 4.3 percent in 2011, the International Monetary Fund (IMF) said in its latest forecast, published today.

IMF revises up global forecast to near 4% for 2010

Ratings cut on Irish banks

Ratings agency Standard & Poor's today cut the ratings on several Irish banks, saying that it has concluded that their asset quality and earnings will likely remain under significant pressure over the medium term.

The Banking Industry Country Risk Assessment was cut to ‘Group 4’ from ‘Group 3,’ the agency said in a statement issued in London. Countries with similar ratings include Korea, the Czech Republic and Slovakia, it said.

S&P has lowered its rating on AIB, Bank of Ireland, Ulster Bank, Anglo Irish Bank while Irish Life and Permanent's rating remains unchanged.

It said it was downgrading them because of the impact of the still challenging economic environment, and the expectation of major regulatory change and greater State involvement in the banking sector.

“The economic environment for the Republic of Ireland remains difficult for the banking sector”and is“likely to remain so into 2011,” the ratings company said in the statement. This will “continue to exert pressure on the performance of all loan classes.”

S&P raised its forecast for “potential problem loans” at Ireland’s banks to between 15% and 30% of total loans from 10% to 20% previously.

It said a reversing the cut in the risk assessment level to Group 4 is “unlikely for the foreseeable future.” Another reduction would “most likely occur if the economic downturn is even deeper or more prolonged than expected, leading to persistent earnings challenges and weaker investor support for the banks,” it said.

S&P also predicted that loan losses will likely rise between 2009-2011 and will likely peak this year, while wholesale funding conditions are likely to remain under pressure with strong competition for retail deposits.

"We expect the Government to remain supportive of systemically important, domestically-owned institutions," S&P added.

S&P said it was cutting AIB to 'A-/A-2' from 'A/A-1'. It said it was expecting sustained high credit losses, combined with weaker pre-provision income, will continue to pressure the bank's financial profile in the coming two years. It remains on negative outlook.

The agency said it was also cutting Bank of Ireland to 'A-/A-2' from 'A/A-1' and said its outlook was stable due to the fact that it expects that the Government will remain highly supportive of the bank.

Ulster Bank's ranking has been cut from 'A+' to 'A', while it said its outlook is stable. It said the bank is now expected to be "strategically important" to Ulster Bank's parent Royal Bank of Scotland Group rather than"core."

Anglo Irish Bank has been lowered to 'BBB' from 'BBB+'. It also said it was placing the bank on Credit Watch with negative implications due to the"potentially considerable downside risks relating to the pending European Commission's restructuring decision."

The ratings on Irish Life and Permanent remain unchanged as it continues to benefit from the relative strength of the group's life assurance operations.

Tullow Oil and Uganda

Tullow Oil plc today announced that its subsidiary, Tullow Uganda Limited has entered into a Sale and Purchase agreement (SPA) with Heritage Oil & Gas Limited (HOGL) and Heritage Oil Plc (Heritage) to purchase their entire interest in Block 1 and Block 3A in Uganda. This follows Tullow exercising its right of pre-emption on 17 January 2010 and the approval of the transaction by Heritage shareholders yesterday.

The terms of the transaction include a consideration of US$1.35 billion cash and a further contingent, deferred consideration of up to US$150 million cash or an interest in a mutually agreed producing oil field independently valued at a similar amount.

The SPA contains various conditions, including the approval of Tullow Uganda as the purchaser by the Government of Uganda. Tullow will now work closely with Heritage, HOGL and the Government of Uganda to expedite the approval process which is expected to be completed in the first quarter of 2010.

In parallel with the HOGL asset purchase process, with Government support, Tullow has been running a transparent farmout process which has attracted interest from major international and national oil companies. Tullow is currently discussing preferred partners with the Government and expects to complete this transaction in parallel with the purchase from HOGL and Heritage.

The UK economy emerged from recession in the fourth quarter of 2009 with 0.1% GDP growth, according to official figures Tuesday. "We've pulled out of recession, that's the main thing," Chris Williamson from Markit told CNBC. Philip Shaw from Investec joined the discussion.