Angela Merkel, the German chancellor, has stamped her seal of approval on Greece’s austerity plan and vowed to stand by the country as “partner and friend”, signalling almost certain approval for the next tranche of EU-IMF Troika aid. The German leader – protected by 6,000 police – braved hostile crowds in Syntagma Square and Nazi insults in the Greek press as she made her first visit to Athens since the debt crisis erupted three years ago. The Frankfurter Allgemeine newspaper said Chancellor Konrad Adenauer had an easier time visiting Greece in 1954, just a decade after Wehrmacht occupation, according to The Telegraph.
Russian president Vladimir Putin backs BP’s plan to sell its 50% stake in TNK-BP to the state oil group Rosneft and use some of the proceeds to buy Rosneft shares, a close presidential ally said in an interview. Igor Sechin, Rosneft’s chief executive, told the Financial Times that Mr Putin endorsed the idea at a meeting in Russia last month with BP’s top brass, which Mr Sechin also attended. “[Rosneft] will have the opportunity to acquire a strategic investor,” he said, “so we do support this, and the president also spoke in support of this.” But Mr Putin stressed that it was ultimately “up to BP shareholders” to decide, he said.
Capital and liquidity rules for the biggest UK banks have been quietly relaxed in an effort to stimulate lending, a move that puts Britain at the forefront of a global experiment to use bank regulation to moderate the economic cycle. The Financial Services Authority recently informed banks that they will not be required to hold any extra capital against new UK loans they make that qualify for a “funding for lending” scheme targeted at increasing money for corporate borrowers. London regulators have also stepped back from tough overall capital rules they imposed after the Basel III reform package was adopted. No longer will UK banks be required to achieve and maintain a core ratio equal to 10% of their assets, adjusted for risk by the end of next year, The Financial Times reports.
Royal Bank of Scotland last night narrowed the price range on Direct Line shares to between 170p and 177.5p as stockbrokers reported strong interest in the flotation from small-time investors. The deadline for those wanting to take part in the insurer’s float passed at 12pm yesterday and retail investors seemed to have ignored warnings from some analysts and investment advisers to steer clear of the listing. Royal Bank of Scotland was forced by politicians in Brussels to offload the insurance subsidiary, which also owns Churchill, as a condition of receiving a £45bn bailout from taxpayers during the financial crisis. Richard Hunter, the head of equities at Hargreaves Lansdown, said that applications had “run into the thousands”, while rival broker the Share Centre said demand had soared over the weekend, The Independent explains.
The UK has pulled out of its double-dip recession at a rapid growth rate of 0.8%, says respected forecaster NIESR, but it warns that progress will be slower without one-off boosts. The Olympics helped the UK economy grow at its fastest pace in five years in the last quarter, taking the country out of double-dip recession, according to a leading forecaster. In the quarter to the end of September, the economy grew 0.8%, the National Institute of Economic and Social Research estimated. “Unless output turns down again, the recession is over,” NIESR said. However, the think tank cautioned that the underlying rate of growth was weaker, at close to 0.2% or 0.3%, The Telegraph says.
Ryanair has pulled out of the £1bn battle to buy Stansted amid accusations it has been excluded from the sale process by the airport’s owners. The low-cost carrier, which is Stansted’s biggest customer, had been seeking to take a 25% stake in the Essex airport as part of a consortium. The airline said on Tuesday it had been forced to withdraw from the race “having been advised by BAA Stansted’s owner, Ferrovial, that it will exclude Ryanair [and any Ryanair related consortium] from the Stansted sale process”. Michael O’Leary, the carrier’s chief executive, has held talks with a number of potential partners but the airline said it had decided to no longer pursue a minority stake as it “does not wish to prejudice other potential investors” in the airport, The Telegraph explains.
The £28bn merger between BAE Systems and EADS was teetering last night as the chief executive of the British group flew into Toulouse ahead of an expected plea for more time to thrash out a deal. The creation of the world’s largest aerospace and defence company was on a knife edge as it entered the last 24 hours before a deadline of 5pm this evening to come up with substantive merger proposals. The deadline was set 28 days ago by the Takeover Panel under its “put up or shut up” rule, under which companies making a bid must clarify their intentions with a firm offer announcement or say that they have no intention of carrying on. Sources close to the negotiations last night indicated that the companies could ask for an extension of at least a fortnight to the panel’s initial deadline as they were not yet in a position to put up but neither do they want to walk away The Times holds.
About 220 staff are to lose their jobs as part of a head office shake-up at B&Q. Britain’s biggest DIY chain, owned by Kingfisher, said that an overhaul, which is intended to eliminate duplication, would make it more agile and better equipped to integrate its online and store presences. The restructuring means that about 15% of B&Q’s head office workforce will be made redundant after a 90-day consultation period. The company will also create 100 jobs at its headquarters in Eastleigh, Hampshire, The Times reports.
The shake-up at Thomas Cook gathered pace yesterday as the embattled travel group announced a further 430 job losses at its British airline operation.The decision to shed another four of its 35 aircraft comes less than two weeks after Harriet Green, the new chief executive, warned employees to expect big changes as she set about “removing some of the walls, silos and barriers” that permeate the business. The cuts come on top of the recent shedding of six aircraft with the loss of 300 jobs and news that an administrative centre in Bradford will close in March with a further 468 redundancies. The group is also in the middle of a two-year programme to close 200 high street travel agencies, costing an estimated 1,000 jobs, writes The Times.