1 UK ‘political earthquake’ rocks EU (Katya Adler on
BBC) The words "political earthquake" have been translated into
numerous European languages today, making front page news across the continent.
The mood is possibly best summed up in the Le Monde headline: Triumph for
Cameron. Concern for Europe.
While Britons now examine the domestic minutiae of
the election result, here in mainland Europe the vote means one thing - a
referendum on Britain's membership of the EU. And that has the potential to
create an earthquake of its own. The guardian of the EU treaties Mr Cameron
wants to change. But real change must be approved by EU countries rather than
institutions.
A source close to the German government told me
that, although Chancellor Merkel and David Cameron have a good relationship and
she has often repeated that she wants Britain to stay in the EU, there is no
appetite in Berlin to be the chief negotiator. Soon after the British election
results were known, French President Francois Hollande invited David Cameron to
Paris to talk, he said, about the EU, among other things.
David Cameron's timetable of 2017 for a UK
referendum on the EU also clashes with parliamentary elections in Germany. So
the countdown starts now. 2017 is not far off and Brussels is hardly known for
speedy decision-making.
Expect quite some flexibility. Few countries want to
see the UK's buoyant economy leave the fold. But there will be limits. Freedom
of movement - European citizens' right to live and work wherever they want in
the EU - has often been flagged up as a red line. This could cause
complications for David Cameron with immigration such a hot issue within his
own party.
European federalists are also concerned. They worry
that Britain's desire for "less Brussels" will now be echoed
elsewhere, leading possibly to an unravelling of the EU as they know it or
dream it could and should be.
2 US jobless at 7-year low (Rupert Neate in The
Guardian) US unemployment has fallen to its lowest since 2008 after the economy
added 223,000 jobs in April taking the unemployment rate down to 5.4% – close
to the rate the Federal Reserve considers to be effective full employment.
The jobless rate fell from 5.5% to 5.4%,in a signal
that companies are confident about the strength of the US economy. The Labor
Department said 223,000 people joined the workforce in April, slightly lower
than expectations of 225,000 but much higher than the 85,000 job gain in March
– which was the smallest increase since June 2012.
The drop in the unemployment rate takes it close to
the 5.0-5.2% raises the prospect that the Fed may increase interest rates later
this year. The US central bank has kept interest rates near zero since December
2008. Rob Carnell, chief international economist at ING, said the jobs figures
were good but wage increases were disappointing which makes the chances of June
interest rate hike very unlikely.
3 Toyota profit at record $18bn (Khaleej Times) Toyota
had said its annual profit accelerated 19 percent to a record $18.1 billion as
the world’s biggest automaker capitalised on a weak yen and strong demand in
North America, despite being sideswiped by a series of recalls. The maker of
the Corolla and Prius hybrid beat its earlier forecasts with the 2.17 trillion
yen net profit in the fiscal year to March, driving past earnings of 1.82
trillion yen a year ago.
Revenues rose six per cent to 27.23 trillion yen,
while the Japanese giant predicted it would book an even bigger 2.25 trillion
yen net profit in the current business year. Toyota’s operating profit rose 20
per cent — largely owing to cost cuts and a sharp decline in the yen, which
inflates the value of exporters’ repatriated profits — even as total vehicle
sales edged lower to 8.97 million units.
President Akio Toyoda put the jump in operating
income down to “favourable foreign exchange rates and cost reduction efforts
that more than offset negative factors such as decreased vehicle sales and
increased expenses, including the investments to enhance our future
competitiveness”. Toyota has been focusing more attention on squeezing out
productivity gains and better using existing plants — it put on hold the
building of new factories for several years.
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