Sunday newspaper round-up: Falklands, Spain, Horizon

1st Apr 2012 16:00

A group of British and American banks have been threatened with legal action by the Argentine government for advising and writing research reports about companies involved in the Falkland Islands' £1.6bn oil industry. Argentina has warned those banks - understood to include the Royal Bank of Scotland, Barclays Capital and Goldman Sachs - that they face criminal and civil action in the Argentine courts. The threats were made in a series of letters sent to as many as 15 banks by the Argentine embassy in London over the last ten days. The letter, a copy of which has been seen by The Sunday Telegraph, warns the institutions that even merely writing research notes on exploration companies involved in the Falklands constitutes "a violation of the applicable domestic and international rules".Diageo has instructed Goldman Sachs to close ongoing talks about taking a stake in Jose Cuervo, which will value the Mexican tequila brand in the region of $3bn (£1.88bn). However The Sunday Telegraph understands that despite Mr Walsh's publicly stated desire to take a controlling share in Jose Cuervo, that now looks increasingly unlikely. Instead it is thought more likely that Diageo will be able to buy a minority share - in return for shares in Diageo - plus an agreement to renegotiate the deal in a few years time to permit an eventual route to control.George Osborne is to tell the Indian government that its decision not to choose the BAE-backed Typhoon Euro¬fighter as its new strike plane is a mistake as the Typhoon is a more cost-effective option. In a trip to India this week, the Chancellor will say that the Eurofighter is superior militarily and is therefore a "better deal" for the country. Earlier this year, India announced that it had chosen France's Dassault as the preferred bidder to fulfil the $11bn (£7bn) contract. Ian King, the chief executive of BAE has since said that it was consulting with its Eurofighter partners in Italy and Germany to see if cost reductions were possible, according to The Telegraph.British financial authorities are drawing up emergency plans to cope with the fallout from the Spanish financial crisis as fears over Madrid's ability to curb its debts grow this weekend. The Treasury, the Financial Services Authority and the Bank of England have been discussing the risks to public confidence here posed by the strong financial links between Spain and Britain. Senior City figures feel certain that Britain's banks are more than capable of dealing with a Spanish crisis. But the authorities are not ignoring the risk of public alarm, which is likely to be magnified as a result of the significant banking links with Spain, the large British expatriate community and the high level of British holiday property ownership, The Financial Mail on Sunday says. Britain's manufacturers have slashed their profits in order to rebuild overseas markets, figures on Thursday are expected to show. Exporters have been criticised for years for pocketing the proceeds of any fall in the value of sterling, but now it seems they are preferring to grab business from foreign competitors, even when this means smaller profit margins. Taiwan, Indonesia, South Korea and China are understood to be among the new markets where British companies are registering double-digit annual export growth, albeit from a low base, The Daily Mail explains.More than 3,000 jobs will be saved by a deal to rescue part of stricken Game Group by an investment firm planning to keep its stores on the High Street. Investment group Opcapita is set to announce that it is buying a substantial part of the computer games chain, keeping open 333 shops and saving 3,100 jobs, according to the BBC. Game went into administration last Monday, shutting the doors of 277 shops and making 2,104 employees redundant, The Financial Mail on Sunday reports. A Eurozone agreement to raise its firewall to €800bn was marred by a walkout by Jean-Claude Juncker, the group's chairman, bringing an abrupt end to yesterday's meeting of finance ministers before key items could be discussed. The 17 euro-area ministers agreed to roll over a large chunk of their temporary rescue fund when the permanent €500bn European Stability Mechanism comes into force in July, in the hope that a combined force of $1 trillion will soothe international doubters. But Mr Juncker was apparently upset that the announcement, seen by some as a landmark after months of bickering, was made by Maria Fekter, the Austrian Finance Minister, before he could hold his press conference, says The Times. Tough contract negotiations with private sector suppliers and a demand that they must cut contract costs will save the Government more than £5bn this year, Francis Maude has revealed. The Cabinet Office minister said ties with many of the top 20 government suppliers had strengthened because of the deals, however a number unwilling to offer savings were now unlikely to see their contracts renewed, writes The Telegraph.EDF, the French energy giant planning to build two nuclear plants in Britain, has ruled out buying a stake in Horizon, the German-backed venture that last week pulled the plug on its own British nuclear ambitions. Ministers had hoped EDF would come to the rescue of its shattered nuclear energy policy by buying Horizon. But EDF has decided it has enough on its plate without taking on Horizon, which planned to build plants at Wylfa on Anglesey and Oldbury-on-Severn, Gloucestershire. Francois Hollande, the socialist candidate for next month's French presidential election, is committed to a dramatic contraction of the country's nuclear industry. This would land EDF with a costly decommissioning and closure bill, The Financial Mail on Sunday says. AB