Article first published as French President Woos India Against the United States on Blogcritics.
France President Nikolas Sarkozy is now on India tour along with his wife Carla Bruni for four days from November 4 to November 7. The US president Barack Obama began his India visit with India’s business hub Mumbai. Sarkozy chose India’s technology hub to start his India tour. He brought 50 member business community and top cabinet officials including Economy minister Christine Lagarde along with him. Sarkozy seems to have come on a top mission along with signing some business contracts.
Strategic and Business Goals
During his speeches on November 4 and his interview to Times of India newspaper, Sarkozy outlined his top political and trade related priorities on global arena of his India tour. Very important offers extended to and requirements sought from India are as follows:
Supporting France’s G20 agenda to reform global monetary system during its G20 presidency in 2011
Improvements in global governance
Help maintain greater stability in commodity prices
In return, to the help in achieving the above-mentioned France’s goals, Sarkozy offered following package.
Helping Rupee to become one of the major currencies in the world
Support India’s long standing demand of securing permanent seat in UN Security Council
Some business contracts will be concluded during Sarkozy’s visit. Major one is a memorandum of understanding signed between a French nuclear group Areva and India’s Nuclear Power Corporation of India Limited (NPCIL) to supply at least two water-pressurised reactors worth 7 billion euros ($9.4 billion or Rs 43,240 Cr). France is competing with the US company Boeing to supply 126 fighter jets. France’s defence electronics group Thales is hoping to gain a contract to modernise 51 mirage 2000 planes.
BBC News | Friday, 11 June 2010 | 09:42 GMT
Japan is at "risk of collapse" under its huge debt mountain, the country’s new prime minister has said. Naoto Kan, in his first major speech since taking over, said Japan needed a financial restructuring to avert a Greece-style crisis. "Our country’s outstanding public debt is huge… our public finances have become the worst of any developed country," he said. After years of borrowing, Japan’s debt is twice its gross domestic product. "It is difficult to continue our fiscal policies by heavily relying on the issuance of government bonds," said Mr Kan, Japan’s former finance minister. "Like the confusion in the eurozone triggered by Greece, there is a risk of collapse if we leave the increase of the public debt untouched and then lose the trust of the bond markets," he said.
Mr Kan did not detail the fiscal changes he may impose to revive Japan’s economy after years to stagnation. But in the past he has advocated increasing Japan’s sales tax, a move that would be unpopular. He said: "It is unavoidable to launch a full reform of the tax system. If we maintain the current level of issuance of new bonds, outstanding debt will surpass 200% of GDP in a few years. "It’s been 20 years since the collapse of the bubble economy in the early 1990s. Because the Japanese economy had been in the doldrums, people have lost the trust they had and fear the uncertainty of the future," he said.
Roland Buerk, BBC News, Tokyo
Pessimists have long warned that rising debt and a falling population mean Japan is headed for a point of no return. For 20 years the government has been borrowing to spend, hoping to revive the stagnant economy,
BBC NEWS | 2010/01/29 | 12:17:23 GMT
Japanese consumer prices fell at a record pace in December, according to the latest official figures. Prices fell by 1.2% in the month, the biggest drop since the current consumer price index began in 1970. Japan’s finance minister has urged the Bank of Japan to move in step with the government to fight the problem of deflation. But the governor of the Bank of Japan, Masaaki Shirakawa, said his current strategy was appropriate for now. The price falls are measured by the so-called “core-core” consumer price index, which strips out the effect of volatile food and energy costs. Separately, data showed that the unemployment rate in Japan fell from 5.2% to 5.1%.
Japan’s Prime Minister, Yukio Hatoyama, also called for co-operation from the central bank. He told parliament that the government will work with it to overcome falls in prices. “I expect the BOJ to support the economy by guiding monetary policy appropriately and flexibly, while keeping close contact with the government, in a way that is consistent with government efforts,” he said. Japan’s national debt is now about Continue reading
Bloomberg | January 7, 2010 | 09:33 EST
Stocks fell around the world, with the MSCI Emerging Markets Index falling the most in three weeks, and metals dropped as China moved to curb lending. The yen slid after Japan’s finance minister said he would welcome a weaker currency, while a rising dollar extended losses in commodities. The MSCI emerging markets gauge declined 0.8 percent at 9:32 a.m. in New York, led by China as the Shanghai Composite Index plunged 1.9 percent, the biggest decrease among major benchmark indexes tracked by Bloomberg. The Standard & Poor’s 500 Index lost 0.3 percent, retreating from its highest level since October 2008. Copper declined from a 16-month high and oil snapped its longest rally since 1996. The yen weakened against all of the 16 most-traded currencies, while the dollar climbed against 14 of 16.
Central bankers in China, the engine of the global economic recovery, sold three-month bills at a higher interest rate for the first time in 19 weeks after saying their 2010 focus is controlling record loan growth. The Federal Reserve said in the minutes of its latest meeting that the U.S. economic recovery might require additional stimulus measures to be sustained. “Growth will probably slow this year as tight credit will damp the demand side,” said Zhang Ling, who helps oversee $7.2 billion at ICBC Credit Suisse Asset Management Co. in Beijing. “That will dash investors’ hope of another year of fast growth.” The MSCI World Index of 23 developed nations’ stocks slipped 0.2 percent. European and Asian stocks declined from the highest levels in more than 15 months. Continue reading
Reuters | TOKYO | Mon Dec 28, 2009 | 12:38pm IST
Japan’s industrial output rose for the ninth consecutive month in November, driven by strong exports and domestic subsidies, but swelling inventories and falling wages threaten to end the longest climb in more than 12 years. Demand from the United States and Asia contributed much to last month’s 2.6 percent rise, government data showed on Monday, supporting the Bank of Japan’s view that the world’s second-largest economy will continue its moderate recovery next year. Economists say overseas demand should prevent a return to recession next year. However, declining wages and weak labour market may outweigh the effect of government subsidies on energy efficient goods, forcing manufacturers to curb output and start selling down inventories built up in anticipation of better sales.
“The latest data shows that Japanese makers of automobiles and home electrical appliances are still hiking their output thanks to the continuing effect of government stimulus as well as strong exports to Asia,” said Seiji Shiraishi, chief economist at HSBC Securities in Tokyo. “But a slowdown is still expected early next year as the effect of stimulus will likely fade.” Japan’s wages fell for the 18th consecutive month in November from a year earlier, in a sign that deflation, or persistently falling prices and incomes, was entrenched. This exposes the central bank to more pressure from the government to ease monetary policy further. Continue reading
Reuters | Tokyo | Sun Dec 27, 2009 | 8:30am IST
Japanese National Strategy Minister Naoto Kan said on Sunday the country’s economy can avoid a double-dip recession thanks to economic recovery abroad, fiscal stimulus by the government and better market conditions. Japan’s economy is in deflation and the three-month old Democratic Party-led government fears a return to a recession next year, especially ahead of an upper house election in mid-2010, although a recent rise in Japanese exports have eased such worries. Still, analysts expect the world’s No. 2 economy to grow very slowly in the first half of next year.
“Economies in Asia and the world have rebounded, and our fiscal spending … is expected to boost demand,” Kan said on a TV Asahi talk show programme. “The yen is weaker and share prices have recovered to above 10,000 yen levels. I think we can avoid a double-dip recession.” Japan’s government approved on Friday a record 92.3 trillion yen ($1 trillion) budget for the next fiscal year starting from April 1, achieving its self-imposed cap on new bond issues amid investor worries about a bulging public debt. Continue reading
Reuters | TOKYO | Thu Dec 24, 2009 | 4:33pm IST
Japan’s government is likely to cut spending plans pledged in its election campaign as it scrambles to keep next year’s budget under control, putting more burden on the central bank to avert a deflation-led downturn next year. Bank of Japan Governor Masaaki Shirakawa offered few clues on Thursday on his policy options, although he promised that the central bank would act promptly and decisively if financial markets were to become unstable. The government and the BOJ have clashed over how to deal with deflation, which the central bank forecasts will last at least three years, as policymakers fret it could drag down the economy just as it is emerging from the global financial crisis.
The BOJ buckled earlier this month, calling an emergency meeting to announce a new short-term funding facility and last week underlined its deflation-fighting credentials by declaring it would tolerate nothing but price growth. Now, with the government cutting its spending plans to appease worried investors and keep a ratings downgrade at bay, the onus may swing once again to the BOJ. “The BOJ will most likely face Continue reading