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European Business News (EBN), 97-03-17
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From: The European Business News Server at <http://www.ebn.co.uk/>
Page last updated March 17 1530 CET
 Major chooses Thursday 1st May as date for the UK electionPrime Minister John Major has called a general election for May 1, proclaiming ' we'll win' to the nation
Major's Conservative party, in power for 18 years, is far behind a revitalized Labour party in opinion polls. The announcement signaled the start of a six-week campaign which is likely to include the first broadcast debates between leaders of the major parties.
Despite presiding over a growing economy, the government has suffered from rancorous divisions over European policy, a ban on beef exports because of mad cow disease, and public concerns about crime, education and health care. The government's majority in the House of Commons, which was 21 after the election in 1992, has evaporated - and the government's five-year term ends on May 22 anyway.
Tony Blair, leader of the opposition Labour party, was visiting a school in London as Major made his announcement. 'Britain can be better than this,' Blair said. 'I don't say everything in the last 18 years has been a disaster ... (but) there's a big amount for the Labour Party to do in government.' Labour, which was beaten by Margaret Thatcher in 1979, has moved well to the right in recent years. Like the Conservatives, Blair advocates tight control on spending and inflation, and tough policies against crime. He says he has no plans to reverse the curbs on union power enacted by the Conservatives.
But Labour has promised to make significant changes, including abolishing the vote of hereditary aristocrats in the House of Lords, and creating regional parliaments for Scotland and Wales. 'I think we'll win this election,' Major told reporters outside his officials resident at 10 Downing St. 'I remember being asked that on the doorstep of Downing Street in 1992, and I'm still here in 1997, and I expect to be here after this election,' said Major, who succeeded Thatcher in 1990.
Labour has held big leads in opinion polls for more than two years. The most recent poll, by NOP for The Sunday Times, put Labour on 52 percent support, the Conservatives 27 percent, and the Liberal Democratic Party 13 percent. NOP interviewed 1,596 voters Thursday. The error margin was three percent either way. A survey of 248 business executives showed support evenly divided between Labour, the traditional party of the unions, and the Conservatives. Forty-four percents of the executives said they wanted the Conservatives to win, 39 percent back Labour and another 10 percent hoped for a Labour government which depended for support on the small Liberal Democratic party.
Before making his public announcement, Major went to Buckingham Palace to inform Queen Elizabeth II. The new Parliament would open on May 7, and the government would lay out its program a week later in a formal speech delivered by the queen, Major said.
In Britain's parliamentary system, voters can only choose a local member of Parliament. The leader of the party which wins a majority of the 659 seats at stake in the House of Commons becomes prime minister. If no party wins a majority, the prime minister is likely to be the leader of the largest party in the coalition.
 Pearson results down after $160 million Penguin chargePearson new chief executive Marjorie Scardino unveiled the company's 1996 results and confirmed that her immediate priority was to improve the financial performance of the British media and leisure group.
Pearson announced a 1996 operating profit of 281 million pounds ($451 million) before taking a 100 million pound charge for improper accounting at its Penguin USA trade book publishing subsidiary.
'The major immediate changes under new management at Pearson will be the ones of style and focus on performance. As time goes on, we may change the business we're in too, as we work toward being first in a few important markets,' said Scardino, who took over the post in January.
'But we won't be selling things just to be tidy. We'll be selling things where the move will make the company more valuable for our shareholders - of today and tomorrow.'
Scardino said greater emphasis would be based on performance measures. She also said that running the company as an integrated media group would create considerable scope to increase revenues and reduce costs.
 Waigel says that keeping to the Maastrict treaty criteria is more important than keeping to the strict timetableGerman finance minister Theo Waigel was quoted in the mass circulation daily newspaper Bild as saying that fulfilling the criteria for European monetary union was more important than sticking to a strict timetable.
'There won't be any soft Euro with me. The important thing is: criteria have precedence over timetable ... We shall in the next nine months do all we can to fulfil the Maastricht stability criteria,' Waigel was quoted as saying
European union finance ministers are meeting in Brussels on Monday to discuss among other things Germany's preparations for monetary union and whether greater cost-savings are needed for it to fulfill deficit criteria.
Germany has said that it will be able to meet a criterion specifying that budget deficits must be below three percent of gross domestic product by the end of this year, the time by which nations aiming to start with the single currency in 1999 must meet the Maastricht conditions.
Over the weekend, a government spokesman denied a report in the weekly magazine Der Spiegel that said the government had nonetheless made internal calculations in which the budget deficit could climb up to 4.15 percent of GDP this year. The decision on which countries will be able to join the first wave of EMU is due to be made early next year.
 Flextech joins the BBC for digital subscription television ventureFlextech has announced that it is forming two joint ventures with BBC Worldwide to develop and launch principally digital subscription television channels.
The UK satellite cable broadcaster said as part of the deals it would issue 34.95 million shares to media groups Pearson, Cox Communications Group and BBC Worldwide worth about £269.9 million. Flextech also reported flat annual pre-tax and pre-exceptional losses of £16.8 million pounds ($26.9 millions).
Flextech, which is majority-owned by America's biggest cable television group Tele-Communications International Inc, announced in September that it would link up with the BBC to create pay television channels in Britain. Under the deal, Flextech will buy the equity share capital of British pay- television channels UK Gold and UK Living that it does not already own -- 75 percent and 68.75 percent respectively.
After completion of the acquisitions, Flextech said it would sell on the 65 percent share capital of UK Gold. On completion, subject to shareholder approval, Flextech will own 50 percent of the equity share capital of each joint venture and 100 percent of UK Living.
In return, US-based cable company Cox Communications, Pearson and BBC Worldwide will own 13.3 percent, 5.6 percent and 3.5 percent respectively of Flextech.
 Japan's trade surplus rises for the first time in two yearsDriven by a boom in exports, Japan's merchandise trade surplus expanded in February for the first time in more than two years.
The surplus, which measures goods passing through customs and is not adjusted for seasonal factors, amounted to 687 billion yen (dlrs 5.6 billion) in February, up 6.5 percent from the same month last year.
Japan's politically sensitive trade surplus with the United States jumped 12.3 percent to 407 billion yen (dlrs 3.3 billion) compared with the same month last year. But that was still considerably below January's year-on- year gain of 82 percent.
The Japanese yen's weakness against the dollar fueled exports, which increased for the 19th month in a row, overshadowing the 34th straight month of increased imports, the ministry said.
A weak yen helps exports by making them cheaper abroad. Auto shipments jumped 15 percent in February to 529 billion yen (dlrs 4.3 billion), accounting for 13 percent of the country's overall exports.
Analysts said the February figures could represent a reversal in the recent general decline of Japan's trade surplus, and some expected the surplus to grow in coming months. 'We certainly think this signals a change in the trend,' said Matthew Poggi, economist at Lehman Brothers Japan.
The increase in February's surplus marked the first year-on-year rise since November 1994. Exports to Japan's three major trading areas - the United States, the European Union and Asia - all increased from last year. A Finance Ministry official, briefing reporters on customary condition of anonymity, acknowledged that the speed of the decline in Japan's trade surplus is slowing.
His comment represented a departure from the ministry's long-held stance that the surplus continues on a downward trend. Japan's trade surplus has been declining steadily over the past two years as imports continue to grow faster than exports. The trend has helped reduce tension Japan and the United States, which in recent years have several times gone to the brink of a trade war.
 Tyco agrees to buy burglar alarm company ADT for $5.6 billionTyco International has an agreement to buy ADT, the United States' biggest burglar-alarm company, for $5.6 billion in a deal would block a hostile bid from Western Resources Inc.
Tyco said the deal, represents a continuation of its effort to expand in the service sector. The diversified manufacturer will pay stock for ADT, which has already rejected an offer from Western Resources, a big utility that is its largest shareholder.
Michael A. Ashcroft, ADT's chairman and CEO, said the combination 'will enhance ADT's ability to continue its growth, not only in North America and the United Kingdom, but in all parts of the world utilizing Tyco's established infrastructure.'
ADT has been the recipient of significant takeover interest. The Western offer, first launched on Dec. 18, followed by less than three months the breakup of an ADT buyout by Republic Industries Inc. 'We believe that the combined operations of ADT and Tyco's Fire and Safety Services group will greatly enhance our ability to serve our industrial and commercial customers,' said L. Dennis Kozlowski, chairman and chief executive of Tyco.
The electronic security business is in wide demand as it offers an entry into consumers' households, where companies can sell other products. Western Resources saw similar advantages.
Tyco, which has no relationship to Tyco Toys Inc., makes a variety of products including disposable medical goods, packaging materials and electronic components. Once the deal is completed, Tyco shareholders will own 64 percent of the combined company.
 CeBIT '97: What's happening at the world's biggest computer and telecoms fairMannesmann Mobilfunk said it has signed an agreement with U.S. carrier Omnipoint Communications that will allow its D2 mobile phone network customers to telephone from parts of the U.S. The Omnipoint network is in operation in the greater New York area, and will soon expand to cover New Jersey, Vermont, Connecticut and other states in its license area.
Debis T&M, the Japan-based unit of Germany's Daimler-Benz Interservices, is planning a telematics, or transportation information technology, joint venture with the Tokyo police force and and Japan's largest telecommunications company Nippon Telegraph & Telephone Corp. The joint venture will offer 'dynamic' auto navigation systems and personal traffic information. 'All system participants will be directed to the quickest route through the greater Tokyo area based on the traffic situation at the time,' Debis said at the CeBit electronics trade fair in Hanover.
Nokia, the giant Finnish maker of telecommunications gear, has unveiled a 2.1-ounce 'cellular card phone' that essentially transforms a laptop computer into a traveling office. With it, a laptop-wielding user can make phone calls, zap faxes, check electronic mail or even download files stored in distant computers.
Siemens said it continued to post 'solid growth' in its telecommunications businesses in the first five months of its fiscal year ending Sept. 31, 1997. It attributed the projected growth to its broad range of telecommunications products offered in a market that is showing strong growth.
Siemens Nixdorf Informationssysteme, the computer division of Germany's Siemens, said its unadjusted sales rose 11% to DM5.7 billion in the first five months of the current fiscal year ending Sept. 31. Adjusted for changes in the company's consolidation, sales rose 13% in the first five months, the company said. Over the five months, new orders rose an unadjusted 13% to DM6.0 billion, the company said. On an adjusted basis, new orders were up 14%.
Mannesmann Mobilfunk said it signed an agreement with Omnipoint Communications that will allow its D2 mobile phone network customers to telephone from parts of the U.S. The Omnipoint network is in operation in the greater New York area, and will soon expand to cover New Jersey, Vermont, Connecticut and other states in its license area, the Mannesmann Mobilfunk mobile telecommunications unit of industrial company Mannesmann said at a press conference. Separately, Mannesmann Mobilfunk said it will introduce six-month tryout tariffs for first-time customers in April. First- time D2 users won't have to pay a connection or basic monthly fee for a six- month period, as long as the monthly telephone bill totals at least DM29.95.
Mannesmann management board member and Mannesmann Arcor Chairman Peter Mihatsch Wednesday called on the German government to speed up its appointment of a telecommunications market regulatory body for when the market is liberalized on Jan. 1, 1998. 'The names of those responsible for regulation have not yet been finally decided,' he said, adding that the body should acutally be up and running by now. 'We're active in the market, we have invested and will invest a lot more - we expect encouragement from the policy-makers not handicaps,' he said.
Thyssen Telecom said its corporate network unit PLUSNET has signed a cooperation agreement with Danish carrier Tele Danmark. The agreement is aimed at expanding the companies' international telephone operations, in preparation for the liberalization of the German telecommunications market on Jan. 1, 1998, said Stefan Baustert, a member of Thyssen Telecom management board. In addition, Baustert announced new measures for Thyssen Telecom's fixed network operations which will make the company less dependent on national carrier Deutsche Telekom.
Start-up losses at Viag's telecommunications operations last year weren't as high as market speculation, but will surge in coming years, a company official said. Viag management board member Maximilian Adelt said ''In response to rumors about our startup losses in the telecommunications business, Viag Interkom and Bayernwerk Netkom posted a start-up loss of just DM100 million in 1996.'' That was between 40% and 50% lower than planned, Adelt said, adding that the cost will ''jump considerably'' this year to above DM300 million.
Microsoft and Intel released the NetPC reference specification for broad industry review. Intel said the NetPC is a new class of personal computers for business designed to reduce ownership costs by delivering new manageability advances. NetPC product announcements from many personal- computer manufacturers are expected over the next 90 days, the company said. NetPC systems will offer the performance and flexibility of traditional personal computers and will be compatible with existing investments in hardware, software and training. Compaq Computer, Dell Computer Corp., and Hewlett-Packard Co. helped develop the reference specification for the NetPC.
Deutsche Telekom announced details of its strategic Internet cooperation with Microsoft. 'The two companies have agreed on common marketing strategies for T-Online and the Microsoft Network, as well as cooperation on security solutions for online banking and the marketing of Microsoft's Internet and Intranet solutions,' Telekom said. T-Online is Telekom's Internet access service.
Sales at Siemens' three communciations units will rise by about 10% in the fiscal year ending Sept. 31, and earnings will rise 'at about the same rate,' a member of the company's management board. Volker Jung, who is responsible for Public Network Communications Systems, Private Network Communications Systems, and Defense Electronics, said the divisions' sales rose by a total of 18% in the first five months of the fiscal year, which was a greater increase than planned.
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