Tuesday, September 2, 2008
E.U. Suspends Talks With Russia
European Union governments suspended trade talks with Russia to protest the invasion of Georgia but shied away from tougher sanctions that would expose the energy-dependent E.U. to Russian retaliation. E.U. governments will walk away from the talks, underway since June, until Russia makes good on pledges to end the military occupation of parts of Georgia, French President Nicolas Sarkozy said.
Russia's status as the 27-nation bloc's main supplier of oil and gas and third-biggest trading partner shielded it from economic penalties that would damage Europe as well. Europe's lack of leverage is a blow to U.S. efforts to line up allies against Russia.
European Official Urges Action
The vice president of the European Central Bank says colleagues worldwide have not done enough to resolve the global financial crisis. Lucas Papademos says "the return to normality will require further actions" by policymakers -- suggesting that moderate interest rate adjustments may be likely.
Papademos also says banks must improve transparency, accounting and risk management practices, following $500 billion in subprime mortgage-related losses since January 2007.
The European Central Bank and Bank of England are expected to hold rates this week.U.S. Remittances to Mexico Drop
The amount of money Mexicans sent home suffered its sharpest drop on record in July as the U.S. economy slowed and the dollar fell, Mexico's central bank reported. Remittances -- Mexico's second-largest legal source of foreign income after oil -- dropped by 6.9 percent in July compared with the year before. Jesus Cervantes, director of economic measurement for Mexico's central bank, said that over 20 percent of Mexican migrants work in the U.S. construction industry, a sector hit hard by the U.S. mortgage crisis.
Mexicans who rely on money sent home are also being hit with an 8 percent drop in the value of the U.S. dollar against the Mexican peso this year.FRANCE
Renault to Cut 4,000 Jobs
Renault, France's second-largest carmaker, will cut 4,000 jobs in the country under a savings program to make up for soaring raw-material costs and flagging European auto markets. Workers were informed of a program to end 3,000 white-collar jobs through voluntary departures, the automaker said. An additional 1,000 factory jobs will be cut at a French plant that assembles the Laguna mid-size car, it said.
A Post-Olympic Quest for Gold
China's leaders are planning tax cuts and a public-works spending spree to make sure their economy's growth isn't doused along with the Olympic flame. Ten of 11 Summer Olympics host nations analyzed by Morgan Stanley economist Stephen Jen saw growth and investment slump in the year following the games; the only exception in his study, which stretches back to 1956, was the United States in 1996. China's expansion was already slowing before the Beijing Games ended last month.
China has already eased lending restrictions and halted an appreciation of the yuan that was starting to pinch exports. Now, after four straight quarters of decelerating gross domestic product growth, the government is considering a fiscal stimulus of as much as $58 billion, according to economists and Chinese news media.HONDURAS
U.S. Lifts Ban on Melon Exports
Honduran officials say the United States has lifted a more than five-month ban on cantaloupe imports from one of the country's biggest melon farmers. Agriculture Minister Hector Hernandez says the Montelibano melon company was given the green light to resume melon exports to the United States after a salmonella scare.EXECUTIVES
Gates Charity Names New CEO
Jeff Raikes, 50, a former top executive at the software giant, will be the Bill & Melinda Gates Foundation's second leader since its inception in 1997. He is replacing Patty Stonesifer, another former Microsoft exec and friend of the Gateses'. She announced in February that she would step down. Raikes starts today; the charity has denied requests for media interviews to give him 100 days of solitude to focus on his new job.
In July, Bill Gates stepped away from his daily duties at Microsoft to focus on the work of his $38 billion foundation.MERGERS & ACQUISITIONS
LVMH to Buy Yacht Maker
LVMH Moet Hennessy Louis Vuitton, the largest luxury-goods maker, agreed to buy Royal van Lent, a 160-year-old maker of custom-designed yachts, from Dutch investment company Egeria.
Royal van Lent, based in the Netherlands, designs and builds to-order yachts that are more than 165 feet long, a market that has grown 20 percent a year since 2000, Paris-based LVMH said. The companies didn't disclose financial terms.
Vivendi, the French media and telecommunications giant, said second-quarter results were little changed as higher earnings at its Canal+ pay-TV operations offset a decline in profitability at its SFR mobile telecommunications business. Adjusted net income in the three months through June rose to $1.11 billion from $1.10 billion a year earlier, Vivendi said. It did not provide a value for net profit, preferring to use a measure adjusted to exclude most nonrecurring and nonoperating items.
Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.