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Takata defies US regulators over air bag recall

Japanese air bag maker Takata has rejected a demand by US authorities to expand a recall of faulty air bags to the whole of the United States. The company claims the problem was limited to high-humidity areas. During a US Congress subcommittee hearing in Washington Wednesday, Takata Senior Vice President Hiroshi Shimizu rejected regulators' demand for a nationwide recall, setting up a possible legal showdown over the company's faulty airbags. Shimizu told US lawmakers that there was "not enough scientific evidence" to change from a regional recall to a national recall. "Ongoing tests have not shown any ruptures in inflators retrieved from vehicles outside the areas of high absolute humidity," he said. Over the past 6 years, airbag supplier Takata and 10 auto makers issued a series of recalls covering 8 million cars in the United States, mostly in high-humidity areas such as the Gulf coast, Hawaii, American Samoa and the Virgin Islands. At issue are malfunctioning inflators in Takata air bags which cause them to explode, spraying metal fragments into the passenger compartment. Five deaths have been linked to the problem. After incidents in California and North Carolina, the US National Highway Traffic Safety Administration (NHTSA) has begun pressing for the recall of an additional 8 million vehicles from coast to coast. NHTSA Deputy Administrator David Friedman told the US Congress committee that the problem evidently wasn't limited to "areas of absolute, high-humidity" and that a regional recall was "no longer appropriate." The judgment was flatly rejected by Takata's Hiroshi Shimizu "Based on the data currently available and our best engineering judgment, Takata continues to believe that the public safety is best served if the identified areas of high absolute humidity remain the priority for the replacement of suspect inflators," he said. Carmakers act as penalties loom Japanese carmaker Honda, which is Takata's biggest customer, said it would be expanding its recall in line with the NHTSA request. The move was followed by Ford and Chrysler later on Wednesday, as well as by the world's biggest car manufacturer Toyota on Thursday. Toyota said it would recall 185,000 vehicles across 19 models including the Corolla and Alphard in Japan, and 5,000 in China, as a preventative measure. German premium carmaker BMW, which also uses Takata air bags, said it was evaluating the situation. Following the US Congress hearing, the NHTSA warned that both the company and auto makers were now facing legal action, including fines of up to $35 million (28 million euros), if they do not address the problem. "If Takata and the automakers continue to refuse to act, we are going to have to take them to court," the NHTSA Deputy Administrator said.

Japanese air bag maker Takata has rejected a demand by US authorities to expand a recall of faulty air bags to the whole of the United States. The company claims the problem was limited to high-humidity areas. During a US Congress subcommittee hearing in Washington Wednesday, Takata Senior Vice President Hiroshi Shimizu rejected regulators’ demand for a nationwide recall, setting ... Read More »

Italian prime minister shakes up jobs market

Matteo Renzi has received the go-ahead to push on with controversial labor reforms meant to pull the country from the brink of another recession. 'Italy is really changing,' Renzi said after the confidence vote. Italy looks headed for one of the biggest labor market shake-ups in years, after Prime Minister Matteo Renzi on Wednesday won parliamentary approval to press on with sweeping reforms. The so-called Jobs Act is part of the 10-month-old government's ambitious push to jumpstart an economy that's all but ground to a halt and is veering towards its third recession in six years. "The Jobs Act will become law. Italy is really changing," Renzi tweeted after the confidence vote passed with 166 yeas, 112 nays and one abstention. Under pressure Renzi is facing strong pressure at home and in Brussels to breathe new life into an economy that has shrunk by nearly 9 percent since 2007. Stuck at 13.2 percent, the eurozone's third-largest economy is battling with its highest unemployment rate on record. Youth unemployment is more than three times that, standing at a crushing 44.2 percent. To change this, the Prime Minister wants to make it easier to hire and fire workers, cut the number of temporary contracts and extend jobless benefits to more people, which he said would also help attract investment. Staunch opposition While many details remain vague, Renzi's proposed reform plans have already pitted many members of his own Democratic Party against him and angered trade unions. Critics claim that watering down employment protection rights would pull the rug from under new entries to an already wobbly job market. The nation's biggest union, the CGIL, has threatened nationwide demonstrations and said it is planning to hold a general strike over the Jobs Act. The USB trade union association also vowed to fight to block the reform. In October, hundreds of thousands swept the streets of Rome in protest against the law. Last week, the European Commission bought Renzi some much-needed time to make good on his promise to put his country on the road to recovery, when it announced it would hold off judgment on Italy's 2015 budget until March.

Matteo Renzi has received the go-ahead to push on with controversial labor reforms meant to pull the country from the brink of another recession. ‘Italy is really changing,’ Renzi said after the confidence vote. Italy looks headed for one of the biggest labor market shake-ups in years, after Prime Minister Matteo Renzi on Wednesday won parliamentary approval to press on ... Read More »

Russia axes South Stream project

روسی صدر ولادیمیر پوٹن نے جنوبی یورپ میں اربوں ڈالر مالیت کے گیس پائپ لائن منصوبے کو آئندہ منسوخ کرنے کا اعلان کرتے ہوئے کہا ہے کہ ماسکو حکومت اب ترکی اور یونان کے درمیان سرحدی علاقے کو گیس کا مرکز بنانے پر توجہ دے گی۔ روسی صدر ولادیمیر پوٹن نے پیر کے دن اپنے دورہ ترکی کے دوران اعلان کیا کہ ان کی حکومت جنوبی یورپ کے لیے ’ساؤتھ اسٹریم پائپ لائن‘ نامی منصوبے کو آگے نہیں بڑھائے گی بلکہ توانائی کے شعبے میں ترکی کے ساتھ تعاون بڑھانے پر غور کیا جائے گا۔ پوٹن نے اس موقع پر یورپی ممالک پر الزام عائد کیا کہ دراصل وہ اس منصوبے پر کام کرنے کے حق میں نہیں ہیں۔ یوکرائن کے تنازعے کی وجہ سے روس اور یورپی ممالک میں تناؤ کی کیفیت برقرار ہے اور اس تازہ پیشرفت کو ابھی تناظر میں دیکھا جا رہا ہے۔ روسی حکام کا کہنا ہے کہ یورپی کمیشن دراصل سیاسی مقاصد کی بنیاد پر اس پائپ لائن منصوبے کی مخالفت کر رہا ہے جبکہ کمیشن کے مطابق اس منصوبے سے شاید یورپی یونین میں مسابقت کے قوانین کی خلاف ورزی ہو سکتی ہے۔ ساؤتھ اسٹریم منصوبے کے تحت 930 کلو میٹر طویل پائپ لائن تعمیر کی جانا تھی۔ یہ منصوبہ اکتوبر 2013ء میں بلغاریہ میں شروع ہوا تھا لیکن رواں برس جون میں یورپی کمیشن نے اس پر اعتراض کر دیا تھا، جس کی وجہ سے یہ تعطل کا شکار ہو چکا ہے۔ روسی صدر پوٹن نے انقرہ میں صحافیوں سے گفتگو کرتے ہوئے کہا، ’’حقائق کو دیکھا جائے تو ہمیں ابھی تک بلغاریہ سے کوئی اجازت نہیں ملی۔ ہمیں یقین ہے کہ موجودہ صورتحال میں روس اس منصوبے پر کام جاری نہیں رکھ سکتا۔‘‘ انہوں نے مزید کہا کہ اگر یورپ اس منصوبے پر کام نہیں چاہتا تو اس پر کام نہیں ہوگا۔ یہ امر اہم ہے کہ ترکی اور روس کے مابین شام اور یوکرائن کے تنازعات پر اختلافات پائے جاتے ہیں تاہم روسی صدر پوٹن نے اپنے ترک ہم منصب رجب طیب ایردوآن سے ملاقات میں باہمی تجارتی امور پر توجہ مرکوز رکھی۔ ان دونوں رہنماؤں نے گیس سپلائی، سیاحت اور تعمیراتی منصوبہ جات میں تعاون کو بڑھانے پر اتفاق رائے بھی کیا۔ بتایا گیا ہے کہ دونوں ممالک 2020ء تک باہمی تجارت کا حجم سو بلین یورو تک کرنے کے خواہاں ہیں جبکہ اس وقت یہ 33 بلین یورو سالانہ بنتا ہے۔ ترکی کی گیس کی ضروریات کو پورے کرنے والے ملک روس نے انقرہ حکومت کو یہ یقین بھی دلایا ہے کہ وہ وہاں پہلا جوہری پلانٹ تعمیر کرے گا جبکہ گیس کی قیمتوں میں چھ فیصد تک کمی بھی کرے گا۔ روسی صدر کے دورہ ترکی کے دوران ایک بڑا تجارتی وفد بھی ان کے ہمراہ تھا۔ یہ بات قابل ذکر ہے کہ یوکرائن کے بحران میں ملوث ہونے پر امریکا اور یورپی یونین روس پر سخت اقتصادی پابندیاں عائد کر چکے ہیں۔ انقرہ حکومت بھی یوکرائن کی خود مختاری اور سالمیت کے حق میں ہے لیکن روسی صدر کے ساتھ ملاقات میں ایردوآن نے یوکرائن کے تنازعے پر کوئی بات نہ کی۔ اس تناظر میں انقرہ کی مڈل ایسٹ ٹیکنیکل یونیورسٹی سے وابستہ پروفیسر حسین باچی نے روئٹرز سے گفتگو کرتے ہوئے کہا، ترکی اور روس بہت سے معاملات پر اختلاف رائے رکھتے ہیں، بالخصوص شام کے تنازعے پر۔ لیکن ترکی اپنی توانائی کی ضروریات پوری کرنے کے لیے روس سے گیس خریدنے کا عمل جاری رکھے گا۔

Russia has called off a major project to supply southern Europe with natural gas. The collapse of South Stream marks the latest casualty in Moscow’s worsening relations with the West. Russia cancelled construction of the South Stream gas pipeline on Monday, citing European obstructionism as the reason for halting the project, which was meant to supply southern Europe with natural ... Read More »

Ebola breaks backs of West Africa economies

The World Bank warns that Ebola is wreaking economic havoc on the West African countries worst hit by the pandemic. In a new report, the bank is calling for swift international action to mitigate the damage. While it's impossible to put a price on the nearly 6,000 lives already lost to Ebola, the World Bank on Tuesday published an estimate of the measurable economic impact of the outbreak. In a new report, it warned that the outbreak could cost the three worst-hit countries - Guinea, Liberia and Sierra Leone - more than $2 billion (1.61 billion euros) in lost income over the 2014-15 period. The new report paints a decisively bleaker picture of the economic calamity facing the region if the virus is not contained soon, than the cautiously optimistic analysis the bank released only two months ago. " [If] the epidemic spreads into neighboring countries, some of which have much larger economies, the cumulative two-year impact could reach US$32.6 billion by the end of 2015—almost 2.5 times the combined 2013 GDP of the core three countries," Negative growth The World Bank lowered its 2014 growth forecast across the board: Growth in Guinea was adjusted to 0.5 percent, compared with 2.4 percent in October and 4.5 percent pre-crisis; Liberia's GDP was expected to fall to 2.2 percent compared with 2.5 percent in October and 5.9 percent pre-Ebola; and Sierra Leone was now projected at 4 percent, half of October estimates and down from 11.3 percent before the outbreak. The World Bank also said it expected negative or slower economic growth next year, downgrading forecasts for Guinea to minus 0.2 percent, compared with October's 2 percent estimate and pre-crisis forecast of 4.3. In Sierra Leone, projected growth was negative at minus 2 percent, down from 7.7 percent in October and 8.9 pre-pandemic. "In Liberia, where there are signs of progress in containing the epidemic and some increasing economic activity, the updated 2015 growth estimate is 3.0 percent, an increase from 1.0 percent in October, but still less than half the pre-crisis estimate of 6.8 percent," the report said. International action Exacerbating the crisis are pullbacks by foreign investors, as well as a breakdown of tourism, adding to detrimental cutbacks to government spending. The bank warned that the outbreak had triggered a devastating chain reaction: Forgone output, higher fiscal deficits, rising prices, lower real household incomes and greater poverty. The report called on the international community to double down on efforts to help pull back Guinea, Liberia and Sierra Leone from the brink of economic collapse. "The swift and coordinated actions of the international community may help limit the impact of this Ebola crisis to an interruption in that trajectory of sustained economic growth rather than a lengthy detour." The report comes as World Bank President Kim Yong Kim embarked on a two-day trip to the affected region to discuss ways to combat Ebola. "While there are signs of progress, as long as the epidemic continues, the human and economic impact will only grow more devastating," he said.

The World Bank warns that Ebola is wreaking economic havoc on the West African countries worst hit by the pandemic. In a new report, the bank is calling for swift international action to mitigate the damage. While it’s impossible to put a price on the nearly 6,000 lives already lost to Ebola, the World Bank on Tuesday published an estimate ... Read More »

Deutsche Bahn sues airlines over price-fixing

German rail operator Deutsche Bahn (DB) is filing a billion-euro lawsuit against more than a dozen airlines over allegations of running a 'global cargo cartel.' Germany's Lufthansa is reportedly the main target. DB's cargo unit said on Sunday that it was claiming damages of nearly 2 billion euros from at least 13 airlines, including Lufthansa, Air France-KLM, and British Airways. The state-run railway operator is accusing the carriers of conspiring to push up airfreight fees. A spokesman for Deutsche Bahn told German business weekly Wirtschaftswoche that the company was seeking 1.76 billion euros ($2.19 billion) in compensation for the damages sustained by its cargo subsidiary Schenker from 1999-2006. The price-fixing scheme could amount to one of the "biggest cartels in business history," he said, He said DB would file the suit to the regional court in the western German city of Cologne, home of the Lufthansa headquarters. The company already announced in August that it was filing a similar suit in New York. DB won't let Lufthansa off the hook The price-fixing scandal first blew up seven years ago, and in 2010 Europe's competition watchdog fined 11 airlines, including Air France-KLM and British Airways, nearly 800 million euros for coordinating their action on fuel and security fees. However, the ruling also allowed victims of the cartel to file separate claims, which is why Deutsche Bahn is now revisiting the lawsuit. It is seeking the lion's share of the compensation from Lufthansa, which was let off the hook four years ago, because it reported the practice to the authorities. Deutsche Bahn operates in more than 130 countries and transports nearly 400 million tons of cargo annually by land, rail, sea and air.

German rail operator Deutsche Bahn (DB) is filing a billion-euro lawsuit against more than a dozen airlines over allegations of running a ‘global cargo cartel.’ Germany’s Lufthansa is reportedly the main target. DB’s cargo unit said on Sunday that it was claiming damages of nearly 2 billion euros from at least 13 airlines, including Lufthansa, Air France-KLM, and British Airways. ... Read More »

German energy giant E.ON to focus on renewables

Germany's largest power supplier E.ON is quitting conventional energy to focus entirely on renewables. The overhaul comes amid mounting debt and as Germany gears up to phase out nuclear energy by 2022. The energy giant announced plans to spin off its nuclear, oil, coal and gas operations - a move that will include selling its businesses in Spain and Portugal to Australian investment firm Macquarie for 2.5 billion euros ($ 3.11 billion). E.ON said its trimmed-down operation would allow it to focus on green energy, distribution networks and customer solutions. "We are convinced that it's necessary to respond to dramatically altered global energy markets," the company's CEO Johannes Teyssen said in a statement late Sunday. "E.ON's existing broad business model can no longer properly address these new challenges," he added. "Two separate, distinctly focused companies offer the best prospects for the future." Germany goes green The overhaul comes as Germany plans to wean itself off nuclear power and shift to renewable energy sources by 2022. The country's Economy Minister Sigmar Gabriel welcomed the announcement, hailing E.ON as the "first company to draw the consequences of a dramatic change in the field of energy supplies," according to German daily Rheinische Post. "This definitely creates new opportunities," Gabriel said. Germany's benchmark DAX share index jumped at the news, reflecting hopes that the new strategy could pump new life into the company, which is currently staring at a jarring 31-billion-euro mountain of debt. The price slump on the wholesale electricity market has added to the misery, with E.ON bracing itself for fourth-quarter impairment charges of 4.5 billion euros on its operations in southern Europe. 'Bad Bank' Critics worry that the company is now trying to offload its bad assets and that the new offshoot won't be able to generate enough revenue in the green energy environment to finance the phase-out and demolition of its nuclear plants. "I fear that E.ON is creating a 'bad bank' for its seven nuclear plants, which will have to be bailed out by the German taxpayer," said Bärbel Höhn of the Greens and chairwoman of the parliamentary committee on environment, nature conservation and nuclear safety. However, E.ON's Teyssen rejected the criticism, saying that "it's not clear which will be more successful in five years - E.ON or the new company." He added that the new business would enter the market debt-free and with the 14.5-billion-provision that the company has currently reserved for the 2022 exit. E.ON shareholders would continue to own a majority stake in both companies and are expected to sign off on the deal, which is scheduled to take effect in 2016.

Germany’s largest power supplier E.ON is quitting conventional energy to focus entirely on renewables. The overhaul comes amid mounting debt and as Germany gears up to phase out nuclear energy by 2022. The energy giant announced plans to spin off its nuclear, oil, coal and gas operations – a move that will include selling its businesses in Spain and Portugal ... Read More »

Merkel bets on BlackBerry to beat cyberspies

Berlin has signed an anti-spying deal with BlackBerry, allowing the Canadian phone maker to take over Germany's Secusmart. The encryption software maker outfits government phones, including that of Chancellor Merkel. The German Economics Ministry said Friday it had approved of the takeover of German software firm Secusmart by Canadian mobile phone maker BlackBerry. In a statement the ministry said it had "thoroughly scrutinized" the transaction to see if it violated "essential security concerns." The German government uses about 2,500 BlackBerry devices outfitted with Secusmart encryption software. The handsets incorporate a Secusmart microSD that acts as a separate hard drive for confidential information which can't be accessed by hackers. No-spy deal According to German media reports, BlackBerry had accepted far-reaching control powers for the German government in exchange for the Secusmart takeover to go ahead. BlackBerry reportedly agreed to give Germany's cyber security agency BSI full insight into the source code of BlackBerry's operating system and immediately report security problems to BSI. In addition, the deal included a binding obligation for BlackBerry not to pass on confidential information to foreign intelligence agencies, the German media said. The German Economics Ministry didn't confirm details of the deal, saying only that a contract had been signed to protect essential "security interests." In 2013, Germany was scandalized by revelations from the Snowden files that Chancellor Angela Merkel's cell phone had allegedly been tapped by United States' intelligence agency NSA. The takeover of Secusmart by BlackBerry raised concerns among German lawmakers as Canadian officials are known to be working closely together with US-based spy agencies.

Berlin has signed an anti-spying deal with BlackBerry, allowing the Canadian phone maker to take over Germany’s Secusmart. The encryption software maker outfits government phones, including that of Chancellor Merkel. The German Economics Ministry said Friday it had approved of the takeover of German software firm Secusmart by Canadian mobile phone maker BlackBerry. In a statement the ministry said it ... Read More »

European Union grants budget laggards more time to meet deficit rules

The European Commission has said it will refrain from punishing eurozone nations not able to bring their budget plans in line with deficit rules. Some will get three extra months to make adjustments. France, Italy and Belgium have been be granted until March of next year to bring their 2015 budgets in line with EU rules, the European Commission said Friday. Brussels had been assessing the eurozone nation's draft budgets under a new system meant to spot financial trouble early on. Only Greece and Cyprus were not scrutinized as the two nations were still undergoing international bailout programs. Following the assessments, the EU executive could have decided on immediate punitive and disciplinary action against eurozone nations not getting their act together. Heterogeneous picture "But I made the choice not to sanction," Commission President Jean-Claude Juncker said in a statement. "It would have been easy to punish the countries which do not respect the rules of the Stability and Growth Pact - we only needed to apply the foreseen procedures. But I chose to let them talk, and to listen." France and Italy had faced particular pressure in recent months as analysts expected their budgets to run afoul of EU rules. Other countries also found at risk of overspending included Malta, Austria and Portugal. By contrast, the budgets of Germany, Ireland, Luxembourg, the Netherlands and Slovakia were all given the green light.

The European Commission has said it will refrain from punishing eurozone nations not able to bring their budget plans in line with deficit rules. Some will get three extra months to make adjustments. France, Italy and Belgium have been be granted until March of next year to bring their 2015 budgets in line with EU rules, the European Commission said ... Read More »

German retail sales rebound

German retailers have been able to increase their sales volumes lately, leaving behind a marked drop earlier in the year. The latest figures suggested pre-Christmas shopping could add to making retailers even happier. A closely watched measure of household confidence, German retail sales rose by 1.9 percent in October month-on-month, the Federal Statisitcal Office (Destatis) reported Friday. On a 12-month basis, business increased by 1.7 percent. The rebound was stronger than most analysts had expected, following a 2.8 percent decline in sales in September. Statisticians said the pickup in October was primarily due to stronger sales of food items, beverages and tobacco plus books and jewelry, while clothing and shoes didn't sell well because of a protracted spell of warm weather in the country. Rosy outlook In the first 10 months of 2014, retail sales rose by 1.3 percent, Destatis said. Retailers are now looking ahead to what they believe will be a very lucrative pre-Christmas business. The HDE business association had said it expected a record 85.5 billion euros ($106.3 billion) in seasonal income, a 1.2 percent improvement over 2013 levels. The organization also said people seemed willing to spend more money on big-ticket items as the domestic labor market remained robust and many people had more in their pockets because of recent pay hikes in many industries.

German retailers have been able to increase their sales volumes lately, leaving behind a marked drop earlier in the year. The latest figures suggested pre-Christmas shopping could add to making retailers even happier. A closely watched measure of household confidence, German retail sales rose by 1.9 percent in October month-on-month, the Federal Statisitcal Office (Destatis) reported Friday. On a 12-month ... Read More »

Foreigners no burden on German welfare system

A fresh study by a leading German economic think tank has shown that foreigners living in Germany are no financial burden on the nation's welfare system, sharply contradicting popular belief. A survey released by the Mannheim-based Center for European Economic Research (ZEW) Thursday says foreigners living in Germany contribute a net profit to the country's welfare system. The study - compiled on behalf of the Bertelsmann Foundation - adds that Germany's 6.6 million foreigners, defined as people not holding a German passport, account for a social welfare fund surplus of 22 billion euros ($27.4 billion) yearly, with every individual in that group contributing an average 3,000 euros more in taxes and premiums than they get in terms of state support. The findings are in stark contrast to popular belief, with roughly two two-thirds of native Germans insisting that migration poses a huge burden on the welfare state. Foreigners a budget factor The ZEW survey adds that back in 2004, each foreigner already contributed an average 2,000 euros to the social systems network, while ensuing improvements are attributed to favorable developments on the domestic labor market. The study's author, Holger Bonin, says it's no secret, though, that highly qualified people contribute more than people with low or no skills. Bertelsmann Foundation chief Jörg Dräger argues foreigners' contribution to the welfare system could increase through a better education and qualification policy. But he said German is not yet attractive enough to lure enough foreign skilled workers from countries outside the European Union. "A good education policy is the best integration policy," he said. "The global stream of talent is still passing us by."

A fresh study by a leading German economic think tank has shown that foreigners living in Germany are no financial burden on the nation’s welfare system, sharply contradicting popular belief. A survey released by the Mannheim-based Center for European Economic Research (ZEW) Thursday says foreigners living in Germany contribute a net profit to the country’s welfare system. The study – ... Read More »

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