BUSINESS BRIEFS
France acting to curb spending
Advertiser Staff and News Services
| |||
 |
|
||
PARIS — France, its prime minister says, is bankrupt.
The head of the European Central Bank, Frenchman Jean-Claude Trichet, is no less damning, scolding his nation as Europe's "No. 1 spender."
That the country has been living beyond its means is hardly news — the last time France balanced its books was 1974. But now, President Nicolas Sarkozy's government insists, the extravagant spending has to stop.
As eyes turn toward his first budget, to be announced tomorrow, economists predict the job of righting the nation's finances may be more difficult than the president expects.
Ahead of the overall budget announcement, the social security budget was unveiled yesterday, showing a record deficit for 2007 of around 12 billion euros ($16.7 billion) instead of the 8 billion euros ($11.1 billion) previously forecast.
In a bid to cut that to less than 9 million euros ($12.7 million) in 2008, the government said patients will have to pay more for their healthcare next year.
Sarkozy is planning other cutbacks in public services.
DOLLAR DROPS TO LOW AGAINST EURO
NEW YORK — The dollar failed to rally yesterday, dropping to a new record low against the euro and a 15-year low against five other major currencies as investors continued to act on last week's larger-than-expected interest rate cut and economic data on August consumer spending and home sales expected this week.
The 13-nation euro rose as high as $1.4130 yesterday, its highest level since its debut in 1999, before drifting back to $1.4087 in late New York trading. That compared with a previous peak of $1.4119 on Friday, and the $1.4083 it bought in New York late that day. In other trading yesterday, the British pound edged higher to $2.0214 from $2.0200.
The Federal Reserve's half-point interest rate cut last week to 4.75 percent came in response to market turbulence in the U.S. and elsewhere amid the subprime mortgage crisis. Investors this week will be looking for signs that U.S. inflation is under control.
DELL HAS RETAIL DEAL WITH CHINA
BEIJING — Dell Inc. announced a deal yesterday to launch a retail presence in China by selling computers through the country's biggest chain of electronics stores as it struggles to capture a bigger share of the booming market.
The deal extends Dell's strategy of expanding beyond its traditional Internet- and phone-based sales model into retail to cope with competition from Hewlett-Packard Co. and other rivals. Dell also has targeted China with a low-cost PC unveiled in March and aimed at rural customers.
Sales will start in 50 Gome Group stores next month and expand to more stores early next year, said Michael Tatelman, vice president of marketing and sales for Dell's global consumer business.
ENERGY FUTURES SLIP AFTER STORM
NEW YORK — Energy futures fell yesterday after a tropical depression that moved through the Gulf of Mexico late last week turned out to be a dud, and investors tried to determine if oil futures' recent record-setting advance above $80 a barrel had run its course.
Many analysts believe much of oil's recent run can be attributed to speculators buying and selling crude futures contracts with no intention of taking delivery. That speculative frenzy received a shot in the arm last week when the Federal Reserve cut interest rates. Falling interest rates have driven the dollar lower against other global currencies, which makes commodities priced in dollars cheaper for overseas investors.
Data released Friday by the Commodity Futures Trading Commission showed speculators increased their crude futures positions by 22 percent in the week ended Sept. 18, according to Addison Armstrong, an analyst with TFS Energy Futures LLC in Stamford, Conn. Investors sometimes view increases in speculative positions as a sign that the market is overbought and ripe for a decline.
NRG APPLIES FOR NUCLEAR REACTOR
WASHINGTON — Power producer NRG Energy Inc. will submit the first application for a new nuclear reactor in the U.S. in nearly 30 years, the company's chief executive said yesterday.
Nuclear regulators expect this morning to receive NRG's application for two new units at its facility in Bay City, Texas, about 90 miles southwest of Houston. It will be the first complete construction and operating license submission the government has processed since before the Three Mile Island accident in Pennsylvania in 1979.
Constellation Energy Group Inc. has filed a partial application with the Nuclear Regulatory Commission, which expects up to six more requests this year from Duke Energy Corp., Dominion Resources Inc. and others. Constellation's proposed new reactor would be located in Lusby, Md.
Utilities see in nuclear plants an opportunity to affordably meet demand for electricity, which the Energy Information Administration is forecasting will grow by 42 percent by 2030. High natural gas prices and the prospect of taxes or constraints on greenhouse gases are making gas- or coal-fired plants less attractive.
