Political tensions over the proposed merger of BAE Systems and EADS have been laid bare after Tom Enders came under pressure in the German parliament over the terms of the deal. Hans-Joachim Otto, Germany’s deputy economy minister, said it was “not just a question of how but whether” the £30bn tie-up should go ahead. Mr Otto is a member of the Bundestag economic affairs committee that questioned Mr Enders, the chief executive of EADS, about the deal. Particular concerns were raised about the proposed 60:40 ratio between EADS and BAE, the threat of German technology leaking from the country, and the nature of Germany’s “golden share” in the enlarged company. Mr Enders claimed the 60:40 ratio was “very fair” and also pledged that “what is in Germany, stays in Germany” in reference to EADS businesses already based in the country, such as defence division Cassidian, The Telegraph explains.
Wildcat strikes have halted operations at another South African miner as militant action spreads through the mineral-rich Bushveld region. AngloGold Ashanti, a gold miner listed in Johannesburg and New York, said a strike that started at one of its mines nearly a week ago has now engulfed two others, putting all of its operations in the country offline. South Africa accounts for a third of its production. The striking workers have yet to present any demands, however, and, like the strike at Lonmin’s mine that ended recently after the deaths of 45 people, it is not taking place through formal unions. It is the latest indication that the agreement with strikers at Lonmin has changed the rules of the game for collective bargaining between companies and workers in South Africa, The Times says.
Carl Emmerson, deputy director at the Institute for Fiscal Studies (IFS), warned that the Government’s official forecaster was likely to rule in December that George Osborne would miss his goal of having national debt falling as a proportion of GDP by 2016. Instead of trying to meet the target by piling on even more austerity, Mr Osborne “should drop the supplementary target in his autumn statement”, Mr Emmerson said. “Rather than rushing to announce a replacement, the Chancellor should instead announce a consultation on the design of a new target to conclude in time for next year’s Budget.” A recent survey by Bloomberg also laid to rest concerns that bondholders would crucify the UK economy by pushing up the cost of government borrowing if the debt rule were missed, The Telegraph says.
Mariano Rajoy will on Thursday attempt to stave off a backlash from financial markets by announcing budget plans for next year, as the Spanish prime minister faces the most testing 48 hours of his nine-month-old tenure.As protesters descended on Spain’s parliament for a second night, Mr Rajoy called on Spaniards to ignore “short-term interests”. His government is also preparing to unveil a new reform programme and the results of a banking stress test. The political turmoil in Spain triggered a sell-off of European shares, as investor concerns mounted about the eurozone’s fourth-largest economy. Spain’s Ibex share index, which had rallied over the summer, ended down 3.9% and the FTSE Eurofirst 300 index dropped 1.7%. The euro gave up its gains over the past two weeks, falling to $1.28. The financial pressures on Mr Rajoy’s government have been intensified by a constitutional crisis brewing over the Catalonia region, which called snap elections this week that could hasten a move toward independence.
The mood of optimism in the City and Wall Street is a little scary (predictably the markets fell as soon as I pressed publish). Has it been forgotten that the eurozone is still in a mess, the global economic recovery sluggish, China slowing and that there is the prospect of another acrimonious stand-off over the US debt ceiling before the year is out? Well, no (as the market reaction has shown today), but the view seems to be growing that we can at least stop worrying so much about some of these troubles – for a few months at least. After years of blanket black news you can’t help but feel a little nervous, but it would be churlish to deny that something seems to be afoot, writes The Times.
