The IMF said the EU’s €500bn bail-out machinery was not enough to cope with the magnitude of the threat as Spain and even Italy start to come under pressure, writes the Telegraph.
Dominique Strauss-Kahn, the head of the IMF, will present the report on the economy of the 16 countries using the euro at a meeting of euro zone finance ministers and European Central Bank President Jean-Claude Trichet on Monday.
The fund said the ECB’s bond purchases should be “expanded” to restore calm. The ECB bought Portuguese and Irish bond markets last week, forcing down spreads dramatically in a “short squeeze” against speculators in small illiquid markets. This merely buys time.
Gordon Brown predicts a decade of decline
Former Prime Minister Gordon Brown has warned the next decade could be remembered as the “decline of the west” if it fails to grapple with the challenge of the rising Asian powers, writes the Guardian.
In an interview ahead of the publication of an exclusive extract from his forthcoming book in today’s Guardian, Brown was critical of public spending cuts which he said could rob western governments of the firepower needed to win business in China and India.
He said western governments had ten years to overhaul their economies, invest in hi-tech equipment and promote high-quality education.
Tax clampdown could net £2bn for Treasury
The government will publish plans to close corporation tax loopholes today, which could help raise an extra £2bn for the exchequer over the next five years.
A series of measures are expected from Treasury minister David Gauke as part of government efforts to boost revenues by clamping down on tax avoidance, reports the Independent. The plans will raise £2bn and protect another £5bn that was expected to be lost through avoidance, Mr Gauke will tell Parliament.
The move comes as savage public spending cuts are turning a spotlight on corporate taxation. The retail magnate Sir Philip Green was targeted at the weekend when activists picketed branches of the Top Shop chain – owned by his Arcadia Group – to protest against the company’s payment of a £1.2bn dividend to Sir Philip’s wife, a resident of Monaco, five years ago. In Brighton, Sussex Police have charged one man in connection with the protests.
UK manufacturers end year on a high
Manufacturing survey by EEF finds boom in trade and new orders with record number taking on new staff but fears for 2011.
British manufacturers are continuing to enjoy a boom in trade with a record number taking on new staff at the end of the year, according to a new survey, reports the Guardian.
A balance of 23% of companies surveyed said they were hiring new workers in the last three months of the year, the third successive quarter that more firms said they were adding to and not cutting their headcount.
The proportion of companies expecting higher new orders and output was also largely unchanged from the third quarter, at a positive balance of about 32% and 33% respectively, the highest rates since records began in 1995, according to a survey from the Engineering Employers’ Federation (EEF) and accountancy firm BDO.