European Union leaders have struck an in-principle deal on tougher fiscal rules to tackle the region’s continuing financial woes, although the details of the agreement still need to be worked out.
According to reports, EU leaders at a summit in Brussels have agreed on what is being called a “fiscal compact” that would enshrine rules about fiscal discipline and budgeting in the national laws of euro zone countries.
However, diplomats have “not yet discussed the legal form” that these rules should take.
According to a draft statement by the leaders of the 17 euro zone countries at the summit which was obtained by Agence France-Presse, countries that break the rule that budget deficits must be under 3% of GDP would face “automatic consequences” unless a large number of countries objected.
“General government budgets shall in principle be balanced,” the draft said.
Germany is pushing for the new pact to be enshrined in a treaty, but there is some opposition to this.
It’s been another tough morning for investors, with Australia’s benchmark ASX/S&P 200 index sliding 1.5% in morning trade after a similar sized fall on Wall Street overnight.
Persistent concerns about the European crisis saw the Dow Jones fall 1.6% to 11997.70 points. The ASX-S&P 200 Index had fallen 61 points or 1.43% to be at 4219.70 points at 12:10 AEDST.
Westpac and ANZ were both down more than 2% in morning trade after cutting their mortgage rates yesterday, while BHP Billiton was off almost 3%.
The Australian dollar was still above parity at $US1.01.
The competition regulator says it still has concerns about Telstra’s structural separation undertaking.
The Australian Competition and Consumer Commission says although it welcomes the “substantial revisions and additional commitments” in Telstra’s revised undertaking, there are “outstanding regulatory concerns in relation to wholesale ADSL services”.
The ACCC says it is now giving “urgent consideration to initiating a public inquiry into declaration of wholesale ADSL under part XIC of the Competition and Consumer Act 2010.”
Releasing its revised plan to separate the company’s wholesale and retail division to make way for the National Broadband Network, Telstra chief David Thodey said the telco had “taken on board” feedback.
The ACCC says it will consult through January and intends to make its final decision about Telstra’s undertaking in February.
Ten tips tough trading conditions to persist
Ten Network says it expects tough trading conditions to persist in the near-term, describing its growth projections as “modest.”
Chairman Brian Long says although the media company is “optimistic about the future, revenue success will be largely influenced by consumer confidence.”
“Our projections for growth are modest and in line with analyst views.”
For the 12 months to August 31, Ten reported a 90.5% slide in net profit to $14.18 million, on the back of $85.4 million in restructuring costs.
Former Seven Network chief sales and digital officer James Warburton will take on the top job in 2012. Lachlan Murdoch has led the company through 2011.
The comments at Ten’s annual general meeting coincide with a report saying media mogul Kerry Stokes has nabbed a small stake in Ten, joining James Packer, Gina Rinehart, Bruce Gordon and Murdoch as big-hitters on the register.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
Comments