Friday newspaper round-up: Eurozone, GDP, IAG

23rd Dec 2011 23:05

The Financial Times (FT) leads with an appeal from European Central Bank (ECB) board member, Lorenzo Smaghi, for quantative easing if the Eurozone is threatened by deflation. His comments are controversial as Germany believes such measures are dangerous and contrary to the treaties which underpin the ECB. Smaghi is due to leave the ECB at the end of this year.The FT's second story is a report on the up-swing on stock markets following the beginning of the ECB's new long-term loan facility. Markets in both the US and Europe showed strong gains on Thursday in an apparent response to nearly half a trillion euros in loans going to European banks.The Times's business section has a revealing interview with the French Foreign Minister Alain Juppe who asks for an end to hostilities between France and the UK.Senior politicians from both sides have made disparaging remarks in the wake of the failed EU summit two weeks ago. Juppe makes clear he still believes France and Britain have a strong relationship but equally that there will be no concessions to Britain in the disagreement over financial regulation.The Times worries that yesterday's UK gross domestic product (GDP) figures for the third quarter of this year may be an anomaly as we head into a very difficult period, in the shadow of the euro crisis. It points out that the comparison over second quarter looks strong because of the royal wedding and the Japanese tsunami.The Telegraph leads with a warning from the Governor of the Bank of England, Mervyn King, that the Eurozone debt crisis is leading to a "dependence on central banks". This is being read by the Telegraph as a disapproval of the European Central Bank's policy of providing unlimited loans for up to three years to Europe's struggling banks.The Telegraph also looks at the takeover of BMI by International Airlines Group, the company which also owns British Airways. Unsurprisingly, Virgin Atlantic has said it will fight the deal which will give IAG 56 landing slots at Heathrow, taking its total for Britain's busiest airport from 44% to 53%.The Daily Mail makes the point that the vendor of BMI, Lufthansa, bought the firm back in 2009 for £223m and is now selling out for £172.5m ... so perhaps not the best piece of business in the German carrier's long history.The Independent highlights a hitch in Sainsbury's delivery systems which it claims has led to some customers' online orders being cancelled.The Guardian leads with the positive movements in world stock markets, attributing some of the sentiment to the new Italian Prime Minister, Mario Monti, surviving a confidence vote in the country's upper house of parliament. It warns, however, that there are renewed riots in Greece. BS