Sunday newspaper round-up: American growth, France, RBS, Gold

11th Dec 2011 15:05

Three months ago Barack Obama was firmly in the dock over news that no net jobs were created in August. Some gloomy people even saw a double-dip recession on the way. America, it turns out, was not on the verge of recession, and it still isn't. Fears that the government might shut down on December 16th over funding disagreements are fading; Congress has passed three appropriations bills and is closing in on the remaining nine. More important, Republican leaders have indicated that they would like to extend both a 2% payroll-tax cut and the availability of up to 99 weeks of unemployment benefits, writes The Economist. Amid all the heated speculation about the European Union summit's impact on Europe's economic future and Britain's role in it, traders are asking a more mundane question: "Has it done enough to get us through to Christmas?" Their answer: probably not. (...) The muted market moves on Friday may be misleading. The euro rose against the dollar - but this may have been driven by banks repatriating assets. (...) The risk remains that the market will test Mr Draghi's resolve by attacking a peripheral country's debt in the two weeks before Christmas - particularly if a rating agency provides an excuse, says the FT Weekend's John Authers. The release on Monday of the long-awaited report into the collapse of Royal Bank of Scotland is set to become the centre of an increasingly fraught debate over how the Bank of England is run. (...) Bank officials are understood to be prepared to make concessions. However, one source said Sir Mervyn King, the Governor of the Bank, was "fighting like an alley cat" against some of the more sweeping changes. A draft of the Financial Services Bill is set to be published as early as this week and the RBS report will be seen as an important piece of evidence for those who say the new regulations must include tougher provisions to ensure that bodies such as the Bank and the new Financial Conduct Authority are held accountable for their actions, The Telegraph says. The battle heats up for control of Europe's biggest reserves as precious metal prices and demand from developing countries continue to soar. The battle for European Goldfields intensified this weekend when another suitor approached the £1.4bn firm about a takeover. Centerra Gold, listed in Canada, has made an offer for the company, which owns the rights to three sites in northeast Greece. European Goldfields became a takeover target in July after receiving approval from Athens to develop the deposits, which promise to make the company the Continent's largest gold producer. Centerra's interest emerged after Eldorado, another Canadian group, had made a preliminary approach, according to The Times.The eurozone crisis has been a testing time for stock-pickers. (...) One theme worth thinking about, however, is the prospect of a strong recovery in America. Even if a US resurgence does not rescue the euro by increasing global growth and making debts easier to manage, betting on stocks with American exposure could provide some protection if Europe falls into recession. (...) Investment bank Goldman Sachs estimates the American economy will grow by 1.5% next year - not stellar, but faster than Britain, where it says the economy will grow by only 0.7%, and the Continent, where it sees a 0.8% fall. News from industrial equipment hire firm Ashtead last week might also make investors think. Its shares rose 14% after it lifted profits expectations - 95% of its turnover and profits from America, The Financial Mail on Sunday holds. Vodafone has hired Michael Joseph, the father of mobile payments, to spearhead the global roll-out of its own m-payments business - and has also warned that Three is endangering Britain's position in the burgeoning market. Mr Joseph, who spent a decade as chief executive of Safaricom, the Kenyan mobile operator, is credited with the phenomenal success of the M Pesa mobile payments system which has helped Kenya to leapfrog a stage of development and kickstart its rural economy (...) but has now joined Vodafone as director of mobile payments, to drive M Pesa in India, and Vodafone's African markets such as Mozambique, Ghana and Egypt, The Telegraph reports. The new Italian Prime Minister may have pleased markets with his new austerity measures but may have also spooked people. The budget includes more deficit-reduction measures to add to those previously imposed by Silvio Berlusconi's government. But Mr Monti also began to do something his predecessor had lamentably failed at: promote growth in sluggish Italy. Nonetheless, there were two main criticisms of the budget. First of all, economists decried its reliance on tax increases ?around €18 billion of the total. In second place, there are those who criticize that too much was being expected of the poor. There were measures aimed at the rich: a levy on investments and taxes on private boats, aircraft and luxury cars. But the government also scrapped full inflation-proofing next year for all but the smallest pensions, The Economist reports. Deutsche Flugsicherung (DFS), Germany's state-owned air traffic service, is planning an audacious bid for the British government's stake in Nats, which could be worth more than £500m. Nats is the part-privatised company that runs Britain's air traffic control service. It was part-privatised in a controversial sale a decade ago. After a rebellion by MPs and peers, the deal was pushed through only when the Labour government agreed to keep a 49% stake. The private investors, which named themselves the Airline Group, include British Airways, Easyjet, Virgin Atlantic and other leading airlines. They own 42%. BAA, the owner of Heathrow, owns 4%. Staff hold the remaining 5%, The Times reports. Fears are mounting that France could lose its AAA credit rating this week, putting the latest eurozone rescue plan in jeopardy. Standard & Poor's has placed 15 of the 17 members of the single currency on "negative watch", with France singled out for particular attention. The lack of a large-scale intervention from the European Central Bank (ECB) to shore up Europe's bond markets could be enough to downgrade the ratings, a briefing paper from the agency suggested last week. Although a new agreement on eurozone reform was reached at last week's European Union summit, Mario Draghi, ECB president, was reluctant to commit publicly to intervention in the bond markets. Commentators with a more optimistic position on the rescue package believe that Draghi is bluffing. Marchel Alexandrovich, European economist at Jefferies, the investment bank, said: "The ECB is gearing up to do [quantitative easing] once interest rates hit the floor early next year," The Times explains. Cinven, the private equity house behind Pizza Express, is assessing a £150m-plus takeover of Mothercare, the ailing mother-and-baby chain. The fund is understood to be most interested in the international potential for the brand, following well publicised franchising success in countries as diverse as Greece and Iraq. However, it is thought to also feel that its position in the UK market - despite disappointing sales trends of late - could be revived under the right management. One source, however, stressed that the assessment is in its early phases, and that there can be no certainty of a takeover, according to The Telegraph.AB