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tv   Business Briefing  BBC News  November 21, 2018 5:30am-5:46am GMT

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welcome back. this is the business briefing. i'm samantha simmonds. another deadline in the impasse over italy's budget. this time, the european union has to respond to italy's refusal to budge over it's debt. but is the italian government really just trying to gain more votes at home and call a new election? the chairman of trump's council of economic advisers, kevin hassett, tells the bbc that china has misbehaved sincejoining the world trade organisation and evicting the asian economic powerhouse from the wto is an option. and on the markets, it is pretty red all around, as you can see, after big falls on wall street. oil and technology stocks particullarly hard hit, with apple falling almost 5%. another deadline looms today, as the european commission mulls over how it will respond to italy's defiance on its 2019 budget. the proposed italian budget has
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a target deficit of 2.4% for 2019, despite promises from the previous government to reduce borrowing. the italian coalition says this deficit is needed for public spending in italy. but the european commission says this budget will push the italian deficit to 3.1% by 2020, which will breach the commission's limit of 3%, and then could trigger the so—called excessive deficit procedure, meaning massive fines for italy. and yet, polling from monday shows the right—wing league party of matteo salvini, who is leadin the fight for this budget, currently have around 33% of italian voters — and that's up from i7% in march. so is this budget more about economics or politics? let's get more on this story. nicola borri is an italy economist at luiss university in rome and joins me now. welcome to you, good morning. let me
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pose that question to you. is this more about politics and economics? are the government trying to force another election by pushing the eu into making some tough decisions?” think this is a good way to read what is going on in italy right now. the italian voters are very upset with european institutions for reasons related to, for example, immigration orfiscal reasons related to, for example, immigration or fiscal austerity during the big recession of 2010 and 2012, and salvini and the five star movement are trying to appeal to these voters, picking up a fight against european institutions. this is what is going on because the government is basically refusing to find any sort of agreement with the european commission. they are
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arguing that they need to spend their way out of the mental crisis that the country is in. is there any other option in terms of trying to get the economy moving? —— financial. well, the problems of italy come from a long time, so italian productivity has been declining since at least 2000. so what italy needs first are some big structural reforms, then it is possible that for example, additional public spending, for example on infrastructure, might boost growth. but the draft budget that has been proposed by this government is not contain any of this, so the main new expenditures come from income, which according to most economies, would likely not really help people in need, but create new problems in the labour market because it would push workers that are, with the low wages from
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the open economy to the black economy. and second, there is reform of the pension system, that is very generous with the current people that are close to retire, and that creates a big burden on the younger italians, the future generation, who are the real losers in this last budget. to the european commission is threatening sanctions if italy for cheeses to forge ahead with this budget. just how damaging with those sanctions be? i do not think this threat would be the big damage to italy, the threat that italy is already facing is the threat that investors, foreign and domestic investors, foreign and domestic investors, and not going to be willing to refinance the italians used at a low rate is, so we have been observing the last months, since the government took office, there is a slow but aggressive
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increase in the cost the government ta kes to increase in the cost the government takes to finance its debt. a few days ago, there was the option of italian government debt that was tailored to small investors, and for the first time, even domestic, small investors were reluctant to buy italian debt. so this is a warning sign, it is a red flag, and i think that this is going to be something that this is going to be something that will scare even most foreign investors, so this is the real threats, more than the fear, the fine that the european commission might levy on italy's. 0k, thank you very much for your thoughts this morning and your analysis of the situation in italy with its budget. —— and italy. 0f situation in italy with its budget. —— and italy. of course, we will get the full reaction when we get it on the full reaction when we get it on the budget in italy. to india now, where china's smartphone maker xiaomi is setting up 5,000 stores
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in rural areas across the country by the end of next year. sameer hashmi is our reporter in mumbai. sameer, that's an awful lot of stores. welcome. well, that is right, and the reason for that is that xiaomi right now is number one player in the smartphone category in india. if you look at the indian smartphone market, it is the fastest growing market, it is the fastest growing market in the world. about 400 million smartphone users in the country right now but those numbers are expected to reach about 600 to 650 million in the next three years, thatis 650 million in the next three years, that is what xiaomi is looking to tap, that segment, because so far what you have seen is that the group has essentially come from the big cities in india. —— growth. another next wave of growth is expected to come from small towns and villages. there are about 700 million mobile phone users in india by now but less than half are actually using smart phones, and that is why the big push towards smart phones will come from
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these small towns and cities and thatis these small towns and cities and that is what xiaomi is looking out. the other thing is that so far xiaomi has stuck to a business model selling phones online. that worked very well in indian cities because people are using internet in a big way but as they moved deep into small towns, people are still not using the internet so frequently and thatis using the internet so frequently and that is why they are setting up 5000 brick and mortar stores to increase their sales in the years to come. 0k, their sales in the years to come. ok, for now i'll, thank you. —— for now. president trump's approach to international trade has been controversial. new tariffs on steel, aluminium and a vast swathe of chinese goods. he's renegotiated trade agreements and made it difficult for the world trade organisation to arbitrate in disputes. kevin hassett, chairman of trump's council of economic advisers, spoke to our economics correspondent andrew walker, and he said china had misbehaved since joining the wto and said the us could consider evicting china from the trade group. the state of the world that
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president trump came in was that the us had agreed overtime, in part because we are trying to recruit countries out from the soviet umbrella, to opening up our market is kind of no questions i asked, and when countries joined the sort of western coalition, then we did not ask them to remove their trade barriers on mars or even open up their markets, it is just reopened their markets, it is just reopened the us market to them. president trump came in with a really powerful strategy but i think it is clearly working, we have got a new nafta deal and we are in new negotiations are virtually all of our trading partners right now and that is showing progress. some countries see the us has been very disruptive, resisting the rules that make the system work. does the wto have any role in the financial world in your the future, in your opinion?” role in the financial world in your the future, in your opinion? i feel that the wto has played an important
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role, but i also feel that it has failed us in many ways. and yet if china still as intellectual property from the us and them complain about it and somebody dumped stuff in the us to try and put our industry out of business, then we take up at wto case but it takes five or six years and then the damage is done. to the wto was good for the past but not so good for the future? well, i think maybe the wto we never really envisioned that a country with enter the wto in the way china has. they have, it is very well documented, their intellectual property theft is a major concern to the uk, eu, the we estimated three $500 billion per year theft from the us. that is kind ofa year theft from the us. that is kind of a new thing from the wto, to have a member that is misbehaving so much. i think the question is, can we fix that with the bilateral negotiation and china ? we fix that with the bilateral negotiation and china? if not, can
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we fix that with reforms to wto? if not, shall be pursue evicting china from the wto? these are all things that are being studied and considered. now let's brief you on some other business stories. this that's it for the business briefing this hour, but before we go, here are the markets. the dowjones the dow jones down the dowjones down 2.21%. the dow jones down 2.21%. do stay with us, we have got the news briefing coming up or you shortly. goodbye for now. survivors of terror attacks will travel to downing street today, to hand over a report that says victims are being let down by a crisis in mental
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health services. the survivors against terror says 270 people responded to its survey, with three—quarters claiming the mental health support they received was inadequate. 0ur correspondent lauren moss has all the details. terror attacks have killed, wounded and left many with permanent injuries. there is always a rush to save those caught up in the horror. afterwards, some of the scars that remain are not physical. 15—year—old natalie and her mother valerie were at manchester arena last year. both have struggled to receive counselling from the nhs. people like me had been put on a waiting list for a counsellor for ages, and they have still not received the support that they need 18 months and, and that just support that they need 18 months and, and thatjust shows how people can't get the support they need when they need it. please don't hesitate to call us again if you need is...
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survey by the campaign group survivors against terror has praised the charity sector for providing help and identified what it has called a profound crisis in nhs mental health support. staff say services are stretched. we have got to balance the needs of victims of terror attacks against victims of sexual assault and car traffic collisions, et cetera. so there is a limited resorts, so it is about how we train use it most effectively. the government admits more needs to be done to provide support. later, campaigners will hand a copy of the report in an open letter into downing street. those who have been left with invisible, lasting injuries say they want to prevent others from experiencing the same struggles. this is the briefing from bbc news.
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the latest headlines: the un envoy to yemen is expected to hold talks with leaders of the houthi rebel movement later on wednesday. his mission has coincided with an upsurge of fighting in the rebel—held coastal city of hodeida. donald trump has said his administration will remain a steadfast ally of saudi arabia, even though the saudi crown prince "could very well" have had prior knowledge of the murder of the saudi journalist, jamal khashoggi. mr trump's lawyer says the president has submitted written answers to the special counsel robert mueller, who's investigating allegations that moscow helped his election campaign in 2016. rudy guiliani once again called for the inquiry to end. now it's time to look at the stories that are making the headlines in the media across the world. to begin with the spanish newspaper covering brexit. it says the go to overthrow theresa may failed to take off but it points out the gibraltar could be a threat to her plans. the
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city am from london has a story about stock slide in the us saying apple is that the court. the guardian has carried out what it calls a groundbreaking study saying that one in four europeans vote for populist parties. and that online small retailers are allowed by google to list stock and prices. and another question about retiring at 30- another question about retiring at 30 — you could do it but you need to do or serious sacrifices. with me is fiona cincotta, senior market analyst at city index. welcome back. let's start with love and guardian and rex. ‘s first it has an analysis of what happened to theresa may, saying she could be on her way out at downing street although she is the cue for now. she has been brought back from the
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brink. looking at the end of last weekend it really was on the edge, she could stay or she could go. and this is interesting because it brings up the question of gibraltar which has not been a huge discussion point so far. the focus has been on the irish border. the problem was gibraltar, they want more clarity and more clarity over the future relationship. and while spain are expressing concerns they cannot actually stop the deal going through. what this gets based on in europe, 20 from 27 countries need to vote for it. so


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