Greece has “one last chance” to meet its bail-out conditions, according to Jean Claude Juncker in comments that crushed hopes for an imminent change of strategy for Athens and the Eurozone. The head of the eurogroup emerged from a highly-anticipated meeting with Antonis Samaras, Greece’s prime minister, only to signal that there would be no leniency for Greece from Brussels. “The ball is in the Greeks’ court”, said Mr Juncker, arguing that Greece’s real problem was a “credibility crisis” which could be resolved if it stuck to the bail-out terms and implemented all the planned reforms. Hours earlier Mr Samaras had pleaded for a “little room to breathe” in the form of an extension of the austerity deadlines set by Greece’s bail-out, The Telegraph reports.
A bad week for the Chancellor got even worse yesterday when the economist he appointed to the Office for Budget Responsibility warned of a straitjacket of “self-defeating” cuts. Only days after it was revealed that the public finances plunged unexpectedly into the red last month and a poll found that confidence in the Chancellor had hit at a record low, Kate Barker urged George Osborne to rethink his approach to deficit reduction. Ms Barker, a non-executive member of the OBR, argues that Mr Osborne’s insistence that there should be no deviation from the fiscal plan may be making it more difficult to respond to economic events. “There is a danger of self-defeating austerity, if some room for manoeuvre cannot be developed,” she said. “There is a risk that the fiscal mandate, rather than a useful discipline, will become a straitjacket.” Ms Barker also criticised government plans to create a Financial Policy Committee at the Bank of England and said it was delegating too much power to Threadneadle Street, The Times says.
Thousands of South African gold miners are attempting to launch a multi-million pound lawsuit against leading companies for alleged negligence that resulted in them contracting lung diseases. Lawyers say AngloGold Ashanti, Gold Fields and Harmony could face record damages if the court recognises their case as a class action. Charles Abrahams, a lawyer representing around 3,000 mostly former miners, filed papers at a regional court in Johannesburg on Tuesday. “If the certification is granted we anticipate that this may be the largest damages suit in the history of this country, in the tens of billions of rand possibly,” he said, The Guardian reports.
Labour unrest engulfing the South African platinum industry spread on Wednesday, prompting fears of a broader mining crisis in one of the main commodity-producing countries. Platinum and gold prices continued to soar as investors braced for supply disruptions after 44 people died during strikes at a pit owned by London-listed Lonmin.Anglo American Platinum, the industry leader with about 45% of global supply, said on Wednesday that a group of workers had bypassed their own unions and made a broad range of demands, including on pay, at the end of last week. Miners at Royal Bafonkeng Platinum, a black-owned, mid-tier miner, also demanded pay increases and blocked colleagues from going to work, The Financial Times explains.
Britain’s second largest lender has dealt a blow to government plans to keep borrowing costs low by raising a key mortgage rate. Up to half a million homeowners with Santander are set to see their repayments jump by an average of £300 a year from October. The bank blamed higher costs for the decision but the move is sure to irritate ministers as they desperately seek plans to boost the flagging economy. The increase comes only a month after the Treasury and Bank of England sought to boost lending and lower borrowing costs by offering banks £80bn of cheap funding. Justin Urquhart Stewart, of Seven Investment Management, the wealth manager, said: “Santander’s decision flies straight in the wind of what the Government and the Bank of England are trying to achieve with the Funding for Lending Scheme, which is intended to lower borrowing costs and make it easier to get credit,” The Times reports.
The Treasury is facing criticism for its plans to relax tax rules for multinational companies. Changes going through Parliament “will incentivise multinational corporations to shift profits into tax havens”, according to MPs on the International Development Select Committee. The move will cost the Exchequer £1bn in revenue, and is being done to make Britain “more competitive”. But it is likely to cause embarrassment for the coalition, because the Liberal Democrats made tackling tax evasion and avoidance a priority. The 2012 Finance Bill is changing the rules governing Controlled Foreign Companies, ending the requirement for UK-owned corporations that report profits in jurisdictions with corporation tax lower than 23% to “make up the difference” to HM Revenue and Customs.