uk calls for probe into vw scandal as merkel seeks 'transparency' - as it happened _...
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22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
http://www.theguardian.com/business/live/2015/sep/22/alexistsiprasformsgreekcabinetvwemissionsbusinesslive 1/32
UK calls for probe into VW scandal asMerkel seeks 'transparency' - as it happenedGerman automaker admits 11 million cars affected by emissions scandal, and sets aside €6.5bn tocover the costs
Updated 1h agoGraeme Wearden and Nick Fletcher (now)
Key events2h ago17:03European markets tumble4h ago15:50VW chief executive Martin Winterkorn apologises but won't quit5h ago14:57Wall Street opens sharply lower5h ago14:48UK calls for EU investigation into emissions scandal5h ago14:39VW: the crisis deepens5h ago14:09Merkel calls for 'full transparency' over Volkswagen scandal6h ago13:31Bernstein: Diesel is doomed
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Tuesday 22 September 2015 18.22 BST
1h ago18:22
VW chief executive Martin Winterkorn has not resigned despite the pressure on himafter the emissions scandal, but his fate will be decided when the car maker’s board meeton Wednesday.
And as we reported earlier, workers representatives on the supervisory board are keenthat there are “personnel consequences” and not just among the rank and file. So despitehis profuse apologies, Winterkorn may yet be one of those “consequences.”
On that note, it’s time to close up for the evening. Thanks for all your comments, and we’llbe back tomorrow.
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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2h ago17:47
US state attorneys general are forming a committee to probe Volkswagen over theemmissions scandal, Reuters reports quoting the New York attorney general EricSchneiderman.
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2h ago17:35
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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Helena Smith
Away from VW for the moment, and over in Greece it looks like former finance ministerEuclid Tsakalotos will take that post in the new cabinet, set to be announced later,despite suggestions earlier he may have been reluctant. Helena Smith reports:
The Oxford-educated academic will head the ministry; Giorgos Stathakis who was also atthe national economy ministry will return to his post. But perhaps the toughest job will fallto another British-trained academic, the current interim finance minister GiorgosHouliarakis. Houliarakis will be elevated to the top post of a new ministry created with theexpress purpose of coordinating all the government departments that will be enforcing theinternationally mandated fiscal consolidation policies and structural reforms.
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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The state-run TV channel said at least six other ministers would return to their previousposts, including the foreign minister Nikos Kotzias, the health minister PanagiotisKouromblis, the justice minister Nikos Paraskeuopoulos and Panos Kammenos who is alsohead of the leftists’ junior partner in government, the small right-wing, nationalistIndependent Greeks party.
Yiannis Mouzalas is expected to be reappointed as migration minister.
Updated at 5.39pm BST
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2h ago17:03
European markets tumble
Volkswagen shares have closed down 19.82% at €106, meaning some €26bn or so hasbeen wiped off the value of the German carmaker this week.
The weakness in the motor sector came as investors feared the emissions scandal couldspread beyond VW, and was one factor in a worldwide market slump.
But it was commodity companies which were the main reason behind the global falls, asbase metal, coal and oil prices continued to weaken on fears of slowing worldwidedemand, particularly in China. So the final scores showed:
On Wall Street the Dow Jones Industrial Average is currently nearly 270 points or 1.6%lower.
Updated at 5.17pm BST
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The FTSE 100 fell 172.87 points or 2.83% to 5935.84, its lowest level since 24 AugustGermany’s Dax dropped 3.8% to 9570.66France’s Cac closed down 3.42% at4428.51Italy’s FTSE MIB finished down 3.33% at 21,031.8Spain’s Ibex ended 3.11% lower at 9550.2In Greece, the Athens market lost 2.32% to 677.47
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
http://www.theguardian.com/business/live/2015/sep/22/alexistsiprasformsgreekcabinetvwemissionsbusinesslive 5/32
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3h ago16:54
Professor David Bailey of Aston Business School says it is “seriously dumb” to try andcheat a regulator and discusses whether Volkswagen could also be cheating in Europe:
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3h ago16:42
Here’s Winterkorn’s statement, courtesy of Die Welt and Google Translate:
“Ladies and gentlemen, the irregularities in diesel engines of our group contradicteverything which Volkswagen stands for. Also I have not yet got the answers to all thesequestions at the moment. But we are about to uncover the background relentlessly. Inaddition at this time we will put everything on the table - as quickly, thoroughly andtransparently as possible. And we will continue to work closely with the relevant stateagencies and authorities. This quick and comprehensive information is a top priority. Weowe that to our customers, our employees and the public. And to put it bluntly:manipulation at Volkswagen must never happen again.
Ladies and gentlemen, many millions of people around the world trust our brands, our carsand our technologies. I’m so sorry that we have broken this trust. I apologize to ourcustomers... and the general public for the misconduct. Please believe me, we will doeverything possible to make amends for any damage. And we will do everything to regainyour confidence step by step.
In our group, more than 600,000 people are working to build the best cars for ourcustomers. To our employees, I say, I know with how much effort and great real sinceritythey do their work day after day. I am well aware that much is now questioned. Iunderstand that. But it would be wrong if the hard and honest work of 600,000 peoplecomes general suspicion because of the bad mistakes of a few. Our team does not deservethis. So we ask, I ask for your trust on our journey....We are working intensively on thenecessary technical solutions, and we will do everything possible to prevent harm to ourcustomers and employees. I give you my word, in all of this, we will proceed with the utmostopenness and transparency. “
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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3h ago16:00
Winterkorn said he was sorry “we betrayed the trust” of millions of people. He added:“Swift and comprehensive clarification has now the utmost priority. To make it veryclear: manipulation at VW must never happen again.”
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4h ago15:50
VW chief executive Martin Winterkorn apologises but won't quit
VW chief executive Martin Winterkorn has apologised for the company’s misconduct, inhis video statement which is now on the company’s website.
But it appears he intends to fight to keep his job.
Updated at 4.11pm BST
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4h ago15:40
Workers’ representatives on Volkswagen’s supervisory board will push for managementchanges after the emissions scandal, council chief Bernd Osterloh told employees.
In a letter obtained by German newspaper Bild and reported by Reuters, he said:
I can assure you that we will do everything possible in the supervisory board meetings thisweek to ensure the matter is cleared up quickly and that personnel consequences are drawn.
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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And that will not just affect the rank and file, I can assure you.
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4h ago15:27
Germany’s transport ministry is sending a fact-finding committee to Volkswagen thisweek to investigate the emissions scandal, Reuters is reporting. In a statement theministry said:
Our committee will examine whether the vehicles in question were built and testedaccording to Germany and European rules, and whether that was done in accordance withvehicle registrations.
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4h ago15:18
Volkswagen has said it will post a video statement by chief executive Martin Winterkornon its website at 15.00 GMT (16.00 BST).
Earlier the company denied reports he would be replaced by Porsche’s Matthias Müller.
Updated at 3.30pm BST
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4h ago15:13
Eurozone consumer confidence has come in worse than expected for September at 7.1,compared to the 6.8 than analysts had been forecasting.
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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And that is even before the Volkswagen scandal had emerged.
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5h ago14:57
Wall Street opens sharply lower
US markets have joined in the general rout, with falling commodity prices and the VWscandal sending investors heading for the exits.
The Dow Jones Industrial Average has dropped more than 200 points in early trading.
In the S&P 500, which is down 1%, Ford has lost 2.8% and General Motors is down 2.9%.
In Europe, Germany’s Dax is now down 2.7% with Volkswagen off 17.5%. France’s Cac iscurrently down 2.8% while the FTSE 100 has fallen 2%.
Updated at 2.57pm BST
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5h ago14:48
UK calls for EU investigation into emissions scandal
UK Transport Secretary, Patrick McLoughlin, has confirmed that he’s calling for an EU-wide investigation.
Here’s the official statement:
“We are closely monitoring the situation and have been pushing for action at a Europeanlevel for more accurate tests that reflect driving on the road.
It’s vital that the public has confidence in vehicle emissions tests and I am calling for theEuropean Commission to investigate this issue as a matter of urgency.”
Earlier today, a Commission spokesman said it was “premature to comment” on whether
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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the EC should launch a probe.
“Investigations are ongoing within Volkswagen as well as in the U.S. and in Germany.
Therefore, it is premature to comment on whether any specific immediate surveillancemeasures are also necessary in Europe and whether vehicles sold by Volkswagen inEuropeare also affected.
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5h ago14:44
The fallout from the VW scandal continues. Johnson Matthey, which makes catalyticconverters, has fallen nearly 7%, while US-Italian carmaker Fiat Chrysler has said it doesnot use any defeat devices in its vehicles.
Fiat Chrysler says it is working closely with the US authorities to make sure its vehiclesare compliant with the appropriate requirements.
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5h ago14:44
Volkswagen is currently down nearly 19%, mining group Glencore is down 12% at 104pand well below the 125p level of last week’s fundraising as the commodity sell-offcontinues. And Sainsbury is 0.5% lower.
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5h ago14:43
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
http://www.theguardian.com/business/live/2015/sep/22/alexistsiprasformsgreekcabinetvwemissionsbusinesslive 10/32
The economics editor of German newspaper Die Welt has warned that Volkswagen isnow under attack from all sides, and asked whether the emissions crisis could bringdown the company.
Nikolaus Doll says that the scandal has reached a dimension that could threaten theexistence of the automaker, given the costs and penalties ahead.
He cites the huge cost of replacing software in the cars affected, and the threat of classactions from customers affected. More here.
Updated at 2.58pm BST
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5h ago14:39
VW: the crisis deepens
Here’s a quick recap of how the crisis gripping Volkswagen has deepened today.
VW has admitted that 11m vehicles worldwide have been fitted with a defeat devicedesigned to cheat emissions tests.
It has set aside €6.5bn (£4.7bn) to deal with the potential costs of the crisis, the firstestimate of the financial cost, but this could increase as the investigation continues.
VW’s share price has tumbled again today, currently down 19%, and the cost of insuringits debt against default has jumped.
The German government is now taking a close interest, with chancellor Angela Merkeldemanding transparency.
The company has denied reports that CEO Martin Winterhorn will be forced out thisweek, to be replaced by Porsche’s boss Matthias Müller.
Saxo Bank has warned that the full scale of the crisis is impossible to quantify.
And City firm Bernstein has predicted that the scandal could scupper the diesel carindustry.
Here’s our latest story:
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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5h ago14:09
Merkel calls for 'full transparency' over Volkswagen scandal
Angela Merkel has demanded full answers to what went wrong at the country’s largestcarmaker.
Speaking in Berlin, the German chancellor called for full transparency in clearing up thesituation of how Volkswagen rigged emission tests.
Merkel, who met with Finland’s PM Juha Sipila today, told reporters:
“Given the difficult situation, this is about showing complete transparency, clearing up theentire case.
The Transport Minister is in close contact with the company, Volkswagen. And I hope thatthe facts will be put on the table as quickly as possible.”
Volkswagen is a totem of German industry, having been created in the 1930s to build anaffordable family car for the people.
Today, it employes more than half a million people worldwide, across divisionsincluding Audi, Bentley, Seat and Lamborghini as well as the VW marque.
Updated at 2.13pm BST
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5h ago14:05
This Reuters graphic explains how VW’s software detected whether a car was beingtested, and changed the level of nitrogen oxide gases pumped out.
Updated at 2.25pm BST
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6h ago13:42
Bernstein’s Max Warburton also believes that Volkswagen management changes areinevitable.
Any attempt to pin the blame on junior staff will flounder, he says. The buck must stopwith CEO Martin Winterkorn.
Warburton writes:
VW’s press release and comments since have suggested they may end up trying to blamesomeone at the operational and engineering level – all this talk of “not tolerating” thisbehaviour and hiring external investigators suggests as much.
Perhaps it is credible that some engineers came up with a solution and senior managementwas not aware of it. VW has over 450,000 employees – it’s not possible to track their actionsclosely. I have enough trouble tracking what my small team of associates is up to. I’ve noidea what my kids are up to right now (it may involve writing computer code too).
So we probably need to give VW management a bit of a break, Warburton continues. Butif any CEO should have spotted this scandal, it’s Martin Winterkorn ...
Winterkorn’s personal brand has been built on being “the engineer’s engineer” and the“detail main”. There are wonderful stories of him personally pulling apart the gearbox ofan Audi car at Le Mans after it broke and figuring out personally what went wrong (source:Allan McNish, racing driver). We are not talking about the CEO of a French OEM, schooledat ENA. We are not talking about a US executive with an MBA and great smile.
This is an engineer, who theoretically should have asked questions about how VW suddenlyimproved its NOx emissions to meet Californian standards. But then we probably shouldhave asked the question too…
Here’s a summary of Warburton’s research note:
1. Might VW have been doing something similar in Europe – YES, possibly – but we wouldNOT expect fines, only scrutiny and tighter regulations2. Will other manufacturers be affected in Europe – YES, no fines but tighter regulations, 3. Are other manufacturers using similar tricks in the US – NO, but it’s still a risk,
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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Updated at 1.51pm BST
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6h ago13:31
Bernstein: Diesel is doomed
City firm Bernstein has predicted that the Volkswagen crisis will end the era of dieselcars in Europe.
Analyst Max Warburton argues that European regulators had already begun to backtrackafter promoting diesel in the 1990s. This week’s revelations will spur them on.
Future emissions standards in Europe were already set to tighten the rules on NOx andparticulate emissions and even though diesel could theoretically hit these standards, thecosts of compliance (due to additional hardware and tech) was going to make dieseluncompetitive in small cars with low price points.
That’s good news for petrol and electric vehicles, Warburton adds.
The move against VW is going to act as a catalyst to speed up the fall in diesel market sharein Europe and halt it in the US. In fact, regulators will now be much more conservativeabout what they permit and much tougher real world tests may prove either too difficult –or too expensive – for diesel to meet.
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6h ago13:19
4. Could VW be affected in China too – NO, 5. Could the US problem extend to more than 482,000 VW vehicles- YES, but numberssmall, low risk, 6. Does this signal the end of diesel – YES, 7. Do you believe management change at VW is now inevitable – YES; and 8. Is the share price move excessive, would you buy it here – YES, with caveats.
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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Volkswagen’s denial is short and to the point.
Over to Reuters:
Volkswagen denied a media report that said Chief Executive Martin Winterkorn was to bereplaced amid an emissions scandal that has rocked the company.
“Nonsense,” a spokesman at the company’s headquarters in Wolfsburg said on Tuesdaywhen asked whether the report byGerman Tagesspiegel was true.
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6h ago13:16
The UK government is pushing for a full European inquiry into vehicle emissions,reports the BBC’s business editor Kamal Ahmed.
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6h ago13:08
A Volkswagen spokesperson has denied that CEO Martin Winterkorn is about to bereplaced by Porsche’s Matthias Müller.
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6h ago13:00
German media: VW boss to be replaced on Friday
German newspaper Tagesspiegel is reporting that Volkswagen boss Martin Winterkornwill be replaced at Friday’s board meeting.
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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Their sources say he will be succeeded by Porsche CEO Matthias Müller, with Winterkornpaying the price for VW using illicit software to trick regulators.
Here’s their story.
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7h ago12:46
Speculation is growing that this scandal could potentially bring down Volkswagen’s CEO,Martin Winterkorn.
Volkswagen board is due to meet on Friday will decide whether to extend Winterkorn’scontract until end-2018.
Supervisory board member Olaf Lies told German radio station Deutschlandfunk onTuesday that:
“I am sure that there will be personnel consequences in the end, there is no question aboutit”.
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7h ago12:38
Volkswagen’s shares are slumping because there is no precedent for such a scandal, saysPeter Garnry, head of equity strategy at Saxo Bank.
Emissions rigging is a new area, so investors don’t know how badly VW could bepenalised. It’s not like a financial scandal, where there’s a well-trodden path to theregulators’ door.
Garnry says:
If an automaker violates the Clean Air Act it costs $37,500 per vehicle. Given the number ofdiesel cars sold [in the US] , this brings the potential fine to $20 billion. However news outthis morning states that other governments such as Australia will now look into the matter
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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and see if their emission standards have been violated by Volkswagen.
In plain language, this may not be an isolated case so the tail risk is just much bigger.
In the worst-case scenario, Volkswagen will be banned from selling diesel vehicles in the USfor a certain period such as [French bank] BNP Paribas was banned from conductingcertain US dollar transactions for a year, on top of a $9 billion fine due to the French bank’sinvolvement in helping Sudan, Cuba and Iran perform said transactions.
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7h ago12:26
Shares in the major European carmakers have all fallen today.
VW is leading the fallers on the German DAX index, followed by Daimler and BMW.
In France, Peugeot and Renault are among the biggest fallers on the Paris market, afterfinance minister Michel Sapin called for a Europe-wide investigation.
Updated at 12.28pm BST
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7h ago12:13
Volkswagen: 11m cars affected worldwide
Volkswagen has revealed for the first time today that 11 million vehicles were fitted withsoftware that tricked regulators into under-recording noxious emissions.
Before today, VW has admitted to fitting half a million diesel cars with the code --something the FT called a ‘monumental blunder’.
But VW has now explained that the code has been installed in other vehicles. And thatmeans 11 million cars with its Type EA 189 engines would show false emission rateswhen tested.
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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Here’s the key part of the statement:
Further internal investigations conducted to date have established that the relevant enginemanagement software is also installed in other Volkswagen Group vehicles with dieselengines. For the majority of these engines the software does not have any effect.
Discrepancies relate to vehicles with Type EA 189 engines, involving some eleven millionvehicles worldwide. A noticeable deviation between bench test results and actual road usewas established solely for this type of engine. Volkswagen is working intensely to eliminatethese deviations through technical measures.
You can read the full statement here
Updated at 12.17pm BST
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7h ago12:02
The Economist argues that Volkswagen was already struggling, before being shunted bythe revelations surrounding emission tests.
Investors have also been spooked by its other problems, which the latest scandal havemade worse, it says:
VW has been aiming to build more than 10m cars a year, in order to take advantage of thebig economies of scale that exist in the industry. But its efforts to grow appear to havefaltered. Its market share in America—which at 2.2% last year is less than Subaru’s—is nowshrinking, along with its turnover in China.
Even the sales it is making are not particularly profitable.
Most of its profits are now made by non-VW brands, with margins on its Audis more thansix times higher per vehicle than its VW-badged ones. And there may be more trouble left inthe wings. Experts say that the recall of 500,000 cars sold in America as a result of cheatingthe emissions test may grow in size in the weeks and months to come.
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8h ago11:58
A string of commentators are suggesting that the emissions scandal could be the autoequivalent of the interest rate-fixing perpetrated by the banking sector.
Many of our largest banks were fined billions of dollars each for their role in fixing Libor -the official measure of borrowing costs between banks.
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8h ago11:47
The cost of insuring Volkswagen’s corporate debt against default has jumped this today.
That indicates concerns that the scandal could cause extremely serious damage:
This ‘annotated’ chart from fastFT shows how the cost of VW credit default swaps hasjumped. They would pay out if the carmaker defaulted.
Updated at 11.47am BST
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8h ago11:45
The Society of Motor Manufacturers and Traders (SMMT) has insisted there was noevidence that manufacturers in the UK attempt to mislead emission testers.
The trade association’s chief executive, Mike Hawes, said (via PA).
The EU operates a fundamentally different system to the US - with all European testsperformed in strict conditions as required by EU law and witnessed by a government-appointed independent approval agency.
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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“There is no evidence that manufacturers cheat the cycle. Vehicles are removed from theproduction line randomly and must be standard production models, certified by therelevant authority - the UK body being the Vehicle Certification Agency, which isresponsible to the Department for Transport.
Hawes also conceded that the current test method is “outdated” - echoing MEPCatherine Bearder’s concerns (see earlier)
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8h ago11:40
Updated at 11.40am BST
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8h ago11:35
By my reckoning, around €28bn has been wiped off the value of Volkswagen this week.
Shares were trading at €162 each on Friday afternoon, valuing the company at €78.5bn.
They have now slumped as low as €101.5 meaning VW is now worth under just €50bn.
Updated at 11.40am BST
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8h ago11:31
Could diesel cars be recalled?
Campaign group Transport & Environment (T&E) has warned that millions of diesel cars
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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could be recalled, if the practice of fiddling emission tests is widespread.
T&E’s diesel expert Jos Dings has called for EU regulators to “take their job seriously”,and examine if cars on the road are pumping out more harmful emissions than istolerable.
I’ve taken the quotes from the Press Association:
All the evidence points to exactly the same thing going on in Europe and potentially evenworse.
“Diesel cars in Europe operate with worse technology on average than the US.
“We are the diesel market but they have dug it up because they take law enforcementseriously.”
T&E has claimed that other carmakers also used technology that means diesel carsrelease fewer smog-causing pollutants during tests than in real-world driving conditions.
No other manufacturer has come forward and confirmed this, though.
Updated at 11.35am BST
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8h ago11:23
The escalating crisis at Volkswagen is sending shivers through the Frankfurt stockmarket, where the DAX index has lost 2.7%.
The scandal risks denting the reputation of Germany’s manufacturing sector, warnspolitical writer Andrew Lilico.
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8h ago11:17
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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Liberal Democrat MEP Catherine Bearder has warned that European regulators are failingto enforce emission standards.
Bearder says:
“Manufacturers in the US have been caught out, but we know that pollution limits are alsobeing breached in Europe.
“We need to tighten EU emission standards and make sure they are properly enforced.Unless we take action, thousands of lives will continue to be tragically cut short by airpollution.”
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8h ago11:12
VW: 11 million cars affected.
Volkswagen has also revealed that around 11 million diesel vehicles worldwide werefitted with the software at the centre of the US emissions scandal.
It also pledged to work “intensely to eliminate these deviations through technicalmeasures.”
Updated at 11.14am BST
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8h ago11:02
Wow. VW shares have crashed by another 20% today, as traders digest this profitswarning.
Updated at 11.04am BST
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9h ago10:55
Volkswagen issues profit warning, shares hammered
Breaking news: Volkswagen has just announced that it will set aside €6.5bn to cover thecosts of the investigation into how its diesel cars cheated emission tests, sending itsshares slumping.
The move will make a significant hit in its earnings this quarter, as the German carmakerwrestles with the impact of the scandal.
In a statement, the German carmaker says that it will not tolerate any legal violation, andis committed to winning back customers’ lost trust
And it also warns that that the €6.5bn could be revised, as the investigation continues.
VW shares have crashed by 10% today, on top of yesterday’s 20% slump.
It’s another dramatic day for Volkswagen, with its US boss admitting the company“totally screwed up” (video).
And with France’s finance minister calling for a EU-wide inquiry, the crisis couldescalate.
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9h ago10:35
Over in Greece, state run TV has just announced that prime minister Alexis Tsipras’ newcabinet will be sworn in Wednesday morning, our correspondent Helena Smith reports.
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9h ago10:33
Being Greece’s finance minister is one of the roughest jobs in European politics, so wecan’t blame Euclid Tsakalotos if he turns it down....
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9h ago10:30
Greek media are reporting that Euclid Tsakalotos, is reluctant to become financeminister again.
As we mentioned in yesterday’s blog, Tsakalotos is a member of the Group of 53 -- SyrizaMPs who oppose austerity, but remain loyal to Tsipras.
As such, Tsakalotos might not fancy implementing the bailout package of toughspending cuts and tax rises.
Kathimerini explains:
If Tsakalotos was not appointed finance minister he could still lead negotiations with theeurozone, which has agreed an €86bn ($96 billion) bailout with Greece in exchange for deepeconomic reforms.
Tsipras’s alternative would be Giorgos Houliarakis, who has been finance minister in thecaretaker government put in place during Greece’s election campaign.
Updated at 10.33am BST
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9h ago10:28
Britain’s slow progress reducing its budget deficit means the UK is vulnerable toeconomic shocks, warns Ross Campbell, ICAEW Director for Public Sector Policy.
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Here’s his take on today’s figures:
Sorting our public finances depends on robust tax receipts, so it is disappointing to seecorporation and income tax revenues decrease. The weakening global economy could alsohave a significant impact on tax receipts in the coming months, which would only make thesituation worse.
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9h ago10:12
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9h ago10:11
Back in the eurozone, Italy’s prime minister finance minister has waded into UK politicawith an attack on Labour’s leader, Jeremy Corbyn.
Matteo Renzi has been dubbed Italy’s Tony Blair. And he probably spoke for the formerPM when he told lawmakers that the MP for Islington North wasn’t a winner.
Renzi said:
“After what happened with Corbyn, I think [David] Cameron is the happiest of all aboutCorbyn’s win....
“It’s not a question of being Blairite or anti-Blairite, it’s a matter of ‘Do you want to go toelections like you go to the Olympics, to win or to participate’?”
Labour members, though, weren’t convinced by the argument that they needed a morecentrist leader - and the voters haven’t had their say yet either.
Renzi also told MPs that Greece’s former finance minister, Yanis Varoufakis, had been“got rid of”.
Varoufakis has promptly hit back, declaring that he’s “alive and kicking” politically-
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speaking.
Updated at 10.14am BST
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9h ago10:03
Today’s public finance figures also show that Britain is heading towards a deficit ofaround £70bn this year.
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10h ago09:53
UK public finances miss forecasts
Britain had to borrow £12bn to balance the books in August, around £3bn more thanexpected. But it’s not a reason to panic.
This is the largest monthly deficit since August 2012, due to unusually weak income taxreceipts. According to the ONS, more people paid income tax bills in July, so last monthsuffered a shortfall.
So far this year, public sector net borrowing is around 10% lower than a year ago,meaning the government is on track to cut the deficit in 2015-16 (but not eliminate, ofcourse).
Updated at 9.54am BST
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10h ago09:37
France’s finance minister has called for a “Europe-wide” probe to address therevelations that Volkswagen evaded US pollution tests.
AFP has the details:
Michel Sapin told French radio that in order to “reassure” the public, it seemed “necessary”to carry out checks on cars manufactured by other European carmakers.
“We are in a European market, with European rules that need to be respected,” Sapin toldEurope 1 radio.
“Even if it’s just to reassure people, it seems necessary to me that (checks should be carriedout) also on French carmakers,” he said, adding he had no “particular reason” to suspectwrongdoing.
Updated at 9.58am BST
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10h ago09:34
The FTSE 100 index of blue-chip shares has now shed 111 points, as the selloff picks up.
Pharmaceutical stocks are also falling, as US presidential candidate Hillary Clintonvowed to tackle price-gouging in the sector. She waded in after an entrepreneur hikedthe price of a life-saving drug by more than 50 times.
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10h ago09:28
Over in Frankfurt, VW’s share price has now lost almost 5%.
Other car makers are also leading the DAX fallers, as the revelations that emissions data
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have been falsified continue to rock the sector.
Conner Campbell of SpreadEx explains:
News that South Korea, as well as the US, would be investigating the company’s diesel carstook the stock over 4% lower (and counting) immediately after the bell, pushing VW to afurther 3 year low (and continuing to have a nasty knock on effect for majority shareholderPorsche and the rest of the auto-sector).
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10h ago09:15
A selloff in the mining sector is helping to pull Europe’s stock markets down thismorning.
The FTSE 100 is leading the selloff, down 1%.
In London, commodity trader Glencore has slumped by 10% to 108p. That’s a blow toshareholders who bought shares at 125p in last week’s fundraising.
Mining stocks are vulnerable to worries over global economic growth; today the coalprices has continued to slump, with demand looking lighter.
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11h ago08:57
Our Q&A explains why the Volkswagen emissions scandal is so serious, and what mighthappen next:
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11h ago08:37
Volkswagen shares fall again
Graham Ruddick
Volkswagen shares are sliding again, down 3.4% in early trading after slumping by a fifthon Monday.
The selloff comes after the German automaker’s US chief executive admitted thecompany has “totally screwed up” over the emissions scandal that has rocked theautomotive industry.
Michael Horn admitted at an event in Brooklyn, New York, on Monday night that VWhad been “dishonest” with regulators and the public.
The world’s second-biggest carmaker could face a fine of up to $18bn (£11.6bn),criminal charges for its executives, and legal action from customers and shareholdersdue to US claims it used a defeat device to falsify emissions data.
Here’s the full story:
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11h ago08:21
Osborne quizzed on interest rates
George Osborne is now fielding questions about his trip to China, on Radio 4’s todayprogramme.
He’s defending his decision to build closer ties with Beijing.
Tens of thousands of jobs depend on our relations with China, and it’s an importantpartner in the battle against climate change, the chancellor argues.
And what about issues such as human rights?
It’s better to engage and talk on issues we disagree on....rather than standing on thesidelines and engaging in megaphone diplomacy.
The Bank of England chief economist has warned that interest rates could be cut, so how
22/09/2015 UK calls for probe into VW scandal as Merkel seeks 'transparency' as it happened | Business | The Guardian
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worried should we be about the UK economy?
Osborne: Both the problems in China, and the decisions that the Bank of England and theFederal Reserve are wrestling with, are problems of success.
Governor Mark Carney has signalled pretty clear the direction that interest rates areheading (ie, up).
Updated at 8.24am BST
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11h ago08:13
George Osborne’s calming words went down well with Chinese traders. The Shanghaiindex just closed, up almost 1%.
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11h ago08:09
Osborne: Don't run away from China
UK chancellor George Osborne has called for Britain and China to build a Golden Decadetogether.
And he used a trip to China’s main stock market to do it.
Osborne told an audience in Shanghai that:
“I very deliberately chose to come here, to the Shanghai Stock Exchange, to the epicentre ofthe volatility in financial markets this summer, to say this:
“Whatever the headlines, regardless of the challenges, we shouldn’t be running away fromChina.”
He added:
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“Let’s stick together and make Britain China’s best partner in the West. Let’s stick togetherand create a golden decade for both of our countries.”
And here’s a short video of Osborne’s speech:
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11h ago08:01
Alexis Tsipras will keep some familiar faces in the top jobs in his cabinet, predicts theGreek newspaper Kathimerini.
But he may also create some new roles, to help implement the measures he signed up tothis summer.
Kathimerini says:
It is expected that Euclid Tsakalotos will continue as finance minister and that GiorgosStathakis will also keep his role at the Economy Ministry.
However, Tsipras is said to want to create a position at the level of deputy minister that willcarry the responsibility for coordinating the government’s actions in relation to thedemands of the third bailout. It is expected that caretaker finance minister GiorgosHouliarakis, who also led Greece’s negotiating team in Brussels over recent months, willtake on this role.
SYRIZA stalwart Yiannis Dragasakis is expected to continue in his role as deputy primeminister. It was rumored that he was being lined up to become the next parliamentaryspeaker but it seems that this role is likely to go to Nikos Voutsis.
Sources said that Yiannis Panousis is unlikely to be recalled as citizens’ protection minister.Also, the current caretaker minister for immigration policy, Yiannis Mouzalas, may be kepton by the new government.
More here:
Tsipras returns as PM, cabinet due to follow swiftly
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12h ago07:52
The Agenda: Greek cabinet, VW emissions scandal deepens
Good morning, and welcome to our rolling coverage of the world economy, the financialmarkets, the eurozone and business.
Having been sworn in as prime minister last night, Alexis Tsipras will be getting to workthis morning creating a new cabinet. His eurozone allies are watching closely, to see ifthe left-winger can now deliver the challenging programme of tax rises and reformsdemanded by lenders.
As Tsipras sets off on his journey, his former finance minister, Yanis Varoufakis, ispredicting he will fall short. Writing in the Guardian, Varoufakis explains why Tsipraswill fail:
Tsipras must now implement a fiscal consolidation and reform programme that wasdesigned to fail. Illiquid small businesses, with no access to capital markets, have to nowpre-pay next year’s tax on their projected 2016 profits.
Households will need to fork out outrageous property taxes on non-performing apartmentsand shops, which they can’t even sell. VAT rate hikes will boost VAT evasion.
Week in week out, the troika will be demanding more recessionary, antisocial policies:pension cuts, lower child benefits, more foreclosures.
Other problems are surfacing in Europe, though. Among them, the Volkswagenemissions scandal.
Overnight, South Korea has announced it will start an investigation into Volkswagen’s(VW) diesel cars after the automaker admitted to rigging emissions tests in the US.
How much damage will the unfolding crisis cause to the German car maker, and will therest of the European car industry be hurt too?
And as the UK prime minister is buffeted by a revengeful Lord Ashcroft, his chancellorGeorge Osborne is a mission to build closer ties with China. He’s in Shanghai today,speaking at the country’s stock exchange.
Here’s the economic agenda:
9.30am BST: The UK public finances for August, expected to show a deficit of £8.8bn
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TopicsEurozone crisisEconomicsEuroFinancial crisisVolkswagen (VW)Alexis Tsipras
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European stock markets are expected to inch higher this morning.
We’ll be tracking all the main events through the day....
Updated at 9.31am BST
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3pm: Eurozone consumer confidence for September, expected to broadly unchanged
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