1 Greece’s red lines blur and bend (Phillip Inman in
The Guardian) Like a husband forgiven for countless infidelities, Greek leader
Alexis Tsipras is back in Brussels with a wink and a smile and, yes, another
kiss and make-up proposal. Only this time, it looks like the marriage is saved.
What his partners want is simple, if difficult to
achieve without further sacrifices. They want to close a funding gap in this
year’s budget that most analysts estimate at €2bn. It would appear that the
leader of the leftist Syriza government has done enough to keep alive his
country’s hope of staying inside the euro. The question for his supporters at
home will be, has he ditched his principled stand against further austerity, and
if he has, do they care?
Tackling the towering cost of the Greek pension
system was once considered a no-go area. Already cut by his predecessors,
Tsipras had ruled out shaving anymore from the bill. Likewise VAT was off the
agenda. Now it seems he is prepared to compromise on both issues. On pensions,
Athens appears to have conceded that the government’s coffers must be shielded
from a wave of early retirements.
According to documents supplied by Tsipras’s finance
minister, Yanis Varoufakis, there are 400,000 Greeks looking to retire this
year who qualify for a state pension, most of them under the existing early
retirement rules.
Greek economy minister George Stathakis has put
forward an increase on tax surcharges that middle and high-income earners pay,
together with an extra levy on companies with annual net income of more than
€500,000 and a hike in corporation tax from 26% to 29%.
The troika of European Commission, ECB and IMF is
now expected to pull out all the stops and wave through the last €7.2bn of
funds due under the existing bailout programme. With that, Greece can limp on.
But this remains an unhappy relationship.
2 Facebook worth more than Walmart on stock market
(San Francisco Chronicle) Facebook is now bigger than Wal-Mart, at least when
it comes to its value on the stock market. While the switch is mostly symbolic
it signals investors' insatiable appetite for successful tech stocks. Apple,
Microsoft and Google top the list of the highest-valued companies in the US,
and Facebook looks to be on its way to joining them.
A company's market value is calculated by
multiplying the number of shares of stock it has in circulation by the current
price of one share. Facebook Inc. was valued at $238 billion on Tuesday. Wal-Mart
Stores Inc. was valued at $234 billion.
Comparing the two companies' financial results,
though, shows just how much Wall Street is investing in growth and potential —
Facebook — versus existing size and might — Wal-Mart. In the first three months
of this year, Facebook's total revenue of $3.54 billion amounted to just a little
more than Wal-Mart's total profit for its fiscal first quarter of $3.34
billion. But while Facebook saw revenue grow 42 percent in the same period,
Wal-Mart's declined slightly.
That said, none of the nine companies that follow
Apple in the top 10 come even close to the mighty iPhone and Mac maker, whose
market capitalization is about $735 billion.
3 Bumpy ride for Brazil’s bio-fuel business (Daniel
Gallas on BBC) In the last three years, low petrol prices in Brazil have
plunged Brazil’s bio-fuel business into a crisis. Brazil is known for having
one of the world's most advanced green transport programmes. It has the world's
largest fleet of flex-fuel cars. In the past decade, much of its economy
embraced sugarcane-based ethanol as an energy source.
It is widely available in gas stations across the
country. The majority of new cars are able to run on either petrol or
sugarcane-based ethanol. But in recent years, as Brazil's economy slowed down,
ethanol was one of the hardest hit sectors. While oil prices were high
globally, petrol was kept artificially cheap for consumers in Brazil by the
state run oil company Petrobras.
Fossil fuels received incentives, as Brazil's
government moved to tackle another issue: inflation. Paulo Furquim de Azevedo,
an Economics professor at Sao Paulo's Insper business school, says Brazil's
government did not act deliberately to hurt its ethanol industry, but its
economic policy ended up damaging the sector. "The government did whatever
it could to decrease the price of gasoline, which is very important in its
inflation index."
This policy plunged the town of Sertaozinho into its
worst crisis in 30 years. Three out of seven major biofuel plants went bankrupt
and now once again the town's producers are having to change tack. Top biofuel
producers have started investing in food again. Building biofuel-based power
plants is also in decline.
But perhaps local producers have more to look
forward to in the coming months. Brazil has overhauled its economic policy
again this year, and ethanol is once again a priority. The mandatory mix of
ethanol in petrol has increased - from 25% to 27.5%, and the levy on fossil
fuel has been reinstated. More importantly, subsidies to petrol have been
terminated. Government incentives and Brazil's weak currency are helping to
keep ethanol more competitive than petrol. And ethanol sales are up again this
year.
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