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European Business News (EBN), 97-07-23

European Business News (EBN) Directory - Previous Article - Next Article

From: The European Business News Server at <http://www.ebn.co.uk/>

Page last updated Wed, July 23 7:11 PM CET


CONTENTS

  • [01] European Union Commission claims victory over Boeing
  • [02] LVMH buys right to call extraordinary general meetings at Grand Met
  • [03] Nationwide members vote overwhelmingly to retain status as mutual society
  • [04] DuPont's second quarter profit jumps 14%
  • [05] Deutsche Bank posts 28% increase in first half earnings; beating analysts' expectations
  • [06] UK June retail sales rise a stronger than expected 0.6% in June; 5.4% on the year
  • [07] Euro Disney third quarter revenues rise 8% to $251 million
  • [08] British Airways is confident of resolving cabin crew dispute
  • [09] EU agrees to tougher measures to counter 'mad cow disease'
  • [10] BOC Group expects around $1.2 billion for sale of Ohmeda healthcare unit
  • [11] Alitalia returns to the black in the first half of this year
  • [12] Reuters Holdings first half profit drops 2.6%
  • [13] Lufthansa's passenger numbers rise 5.7% in the first half of this year
  • [14] Karstadt expects 1997 earnings to swing 155% to profit of $275 million
  • [15] UK to end free higher education for all but the poorest students
  • [16] British Steel criticises UK government's monetary policy
  • [17] Vereins-und Westbank's profit rises to $36 million
  • [18] Corporate and Economic Briefs
  • [19] World Briefs

  • [01] European Union Commission claims victory over Boeing

    The European Union Commission claimed it had won a war of wits with Boeing, the world's largest aircraft maker, over its proposed merger with McDonnell Douglas, but analysts say the victory had a hollow ring.

    'My view is that this has very little effect on the economics of aircraft acquisition,' said Chris Avery, analyst at Paribas Capital Markets in London. 'I remain to be convinced that any of the conditions (imposed by the E.U.) materially affect the merger of Boeing and McDonnell Douglas or the competitive situation faced by (European aircraft maker) Airbus,' he added.

    After an investigation that lasted nearly five months, the E.U. Commission gave preliminary approval to the $14 billion merger when Boeing made 11th- hour concessions to ease competition concerns.

    The breakthrough came when Boeing agreed not to enforce exclusive aircraft- supply agreements with American Airlines, Delta Air Lines and Continental Airlines, which committed the three leading U.S. airlines to buy only Boeing aircraft over the next 20 years.

    These had raised European fears that the pacts effectively squeezed Airbus out of the lucrative U.S. market. Boeing also agreed not to enter into any new exclusive contracts with commercial clients until Aug. 1, 2007.

    E.U. antitrust chief Karel Van Miert - one of the merger's most ardent opponents - claimed victory in the battle with the Seattle-based aircraft maker. 'All the exclusive elements of the deal have been removed from it,' he told a press conference. 'The Commission has managed to win the day on this.'

    Analysts were quick to throw water on Van Miert's fire, however. 'None of the major airlines will change their purchase agreements, and I expect they may not be the last carriers to purchase only from Boeing,' said Avery of Paribas.

    Sandy Morris, analyst at ABN AMRO Hoare Govett in London, agreed. 'The fact that the airlines themselves aren't in the least bit bothered whether they (the exclusivity clauses) stand shows that (the clauses) are probably not worth the paper they're written on,' he said .

    Morris said the global aviation market is likely to change so much over the next 20 years that the agreements may have become obsolete anyway. 'The odds are that although there might be exclusive 20-year agreements, the industry will change so sufficiently over that time that the prospects of these agreements lasting is very low,' he said.

    For its part, Boeing said it was too early to say how sales might be affected by the promise to drop the exclusivity clauses, but Delta, for one, said it would have very little practical effect.

    'We have committed to buy 644 planes (from Boeing) over the next 20 years,' said Corrie Shanahan, London-based Delta spokeswoman for Europe. 'This change will have very little impact, in the short term, anyway.'

    This throws up the question of whether the very public nature of the E.U.'s investigation of the merger was necessary. 'If I find the concessions to be of a limited nature materially, then the high-profile nature of the dispute has been unnecessary,' said Avery of Paribas.

    [02] LVMH buys right to call extraordinary general meetings at Grand Met

    LVMH Moet Hennessy Louis Vuitton Chairman Bernard Arnault has bought the right to call extraordinary general meetings in both Grand Metropolitan and Guinness and allow investors in the potential merger partners to vote on his alternative proposals.

    The French luxury goods group has confirmed that it has lifted its holdings in both U.K. drinks companies over 10% - the level of ownership needed to call an extraordinary meeting.

    The transactions, rumored to have been carried out by BZW, would have a net cost of around £425 million.

    LVMH now owns 11.05% of Grand Met - up from 6.37% - and has cut its stake in Guinness to 12.46% from 14.2%.

    LVMH bought around 98.5 million GrandMet shares in the market Tuesday at prices between 615 pence and 630 pence a share, costing LVMH around £617.7 million. But the company will have partly offset this by selling 32.25 million shares in Guinness at between 585 pence a share and 600 pence, raising £191.53 million.

    Arnault has been strengthening his hand against Guinness and GrandMet over the past few months and has consistently objected to the U.K. companies' merger. Instead, Arnault wants to merge all three companies' spirits and wine operations and spin off GrandMet and Guinness' food and brewing divisions.

    Earlier this week Arnault resigned from Guinness' board, where he has been a non-executive director since 1989, to concentrate on pushing his own plans.

    Arnault has also called on French arbitrators to look at distribution agreements between LVMH's drinks unit Moet Hennessy and Guinness.

    [03] Nationwide members vote overwhelmingly to retain status as mutual society

    In an overwhelming vote supporting mutual status, members of the Nationwide Building Society backed the current board in a major upset election result.

    All five rebel candidates who'd campaigned to get elected on a pledge to convert Britain's biggest mutually owned building society into a listed bank were rejected.

    Nationwide said 1.3 million of its 3.5 million members took part in the vote, the largest-ever turnout for any issue put to a society-member vote.

    'We have a clear message from our members that they wish us to stay a mutual,' Nationwide Chairman Charles Nunneley told stakeholders and reporters at a press conference in London.

    Banking and financial analysts have long said that should Nationwide convert to a bank, all remaining building societies would likely follow suit. Some analysts had also speculated that an outside bidder, another bank, for example, may step in and bid for Nationwide, putting to rest the whole matter. But Nunneley downplayed that possibility.

    'It's highly unlikely people would offer a price to make us sell out mutuality,' the chairman said of the possibility of an outside bidder. However, Nunneley did hint that Nationwide had entertained offers from outsiders, commenting that 'conversations of these kind go on all the time.'

    'This is a victory for the genuine member over the short-term greed of the carpetbagger,' said Adrian Coles, director-general of the mutual societies' trade body, the Building Societies Association.

    Of the five pro-conversion candidates who'd stood for election to the Nationwide board, none received anywhere near the number of votes garnered by existing board members who were standing for re-election. Existing board members received on average 70% of the votes cast, Nationwide said.

    [04] DuPont's second quarter profit jumps 14%

    Chemical giant DuPont reported record second-quarter profit, a 14% jump fuelled by growth in its chemicals and specialities business and continued strength in its petroleum operations. The rise was in line with analysts' expectations.

    The company, known for developing products like nylon and spandex, said the quarter's results reflected record earnings by its fibres and polymers units, combined with continued strong performance by its Conoco petroleum unit, particularly in refining and marketing.

    DuPont said its agricultural products business also had a strong quarter and was a key contributor to growth in chemicals and specialities.

    Net income hit $1.14 billion, or $1.01 per share, in the quarter ended June 30, compared with $1 billion, or 89 cents a share, in last year's second quarter. Per-share results reflected a 2-for-1 stock split that took effect May 15. Sales totalled $11.4 billion for the quarter, a 2% increase from $11.1 billion a year ago.

    For the first half of 1997, DuPont earned $2.2 billion, or $1.91 a share, compared with $1.9 billion, or $1.68 a share, last year.

    'We are well on our way to a fourth consecutive year of record earnings,' DuPont President John Krol said. 'Total return to DuPont shareholders was 36 percent for the first half of this year, exceeding industry averages.'

    [05] Deutsche Bank posts 28% increase in first half earnings; beating analysts' expectations

    Deutsche Bank, Germany's largest commercial bank, announced its net profit in the first half of 1997 rose to 1.5 billion marks ($2.73 billion), up 28% from the same period last year.

    A rounded set of figures released by the bank show the impact of extremely favourable capital market conditions.

    Deutsche registered hefty increases in net income from trading activities, which rose 48% to 2.0 billion marks, and commission income, which rose 26% to 4.1 billion marks.

    These two elements combined accounted for a greater share of Deutsche's profit than its core lending business, which improved by only 7.1% to 5.7 billion marks.

    Deutsche's figures also benefited from lower provisions against possible loan losses. Deutsche will give more details on its first-half performance at a press conference scheduled for 0800 GMT. Deutsche's shares reacted positively to the figures. At 0635 GMT, just minutes after electronic trading began, Deutsche shares were trading at 126.95 marks, up 5.95 marks, or 4.9%, from yesterday's electronic close.

    [06] UK June retail sales rise a stronger than expected 0.6% in June; 5.4% on the year

    Stronger-than-expected U.K. retail sales for June have fueled speculation that rates are set to rise once more when the Bank of England's monetary policy committee gets together again in August.

    U.K. retail sales rose a seasonally adjusted 0.6% in June from May and 5.4% on the year. Economists surveyed by Dow Jones had been expecting a 0.5% monthly rise and a 4.6% year on year rise.

    A 1.6% drop in food sales over the month was more than offset by a 2.8% rise in sales on non-food products. The Office for National Statistics said the strong set of figures provided clear evidence that consumers are spending cash windfalls received from building society conversions on retail goods. The ONS estimated that sales of household goods were £150 million ($274.35 million) higher than normal in June due to the windfalls, which have resulted from the building societies handing out shares to their deposit holders when they list as banks on the stock exchange.

    As a result, sales of household goods rose 7.5% on the month and 21% on the year, the highest monthly rise since records began in 1986.

    The three-month figure for household goods went up 6.2% on the quarter and was also a record high. Overall retail sales could have been even higher but for bad weather in June, said the ONS.

    'We had thought the bad weather would hold back consumers, but this has had little effect on the overall figures,' said James Mitchell, senior economist at Deutsche Morgan Grenfell. 'This has led to a small adjustment in the interest rate outlook and the probability of a further rate hike next month,' he claimed.

    [07] Euro Disney third quarter revenues rise 8% to $251 million

    Euro Disney, the operator of the Disneyland Paris theme park, said revenues for its third quarter ended June 30 rose 8% to 1.54 billion francs ($251.1 million) from 1.42 billion francs in the same period a year ago, helped by a rise in attendance.

    It said in a statement that sales for the first nine months of its 1996/97 fiscal year to June 30 were up 10.6% at 3.67 billion francs.

    Euro Disney said revenue growth in the third quarter was driven by growth in attendance and increased hotel occupancy, as well as a 'small increase' in average guest spending. It gave no figures.

    Euro Disney is 39% owned by U.S.-based parent, The Walt Disney Co. It was set up to build and operate a theme park and hotels near Paris.

    After posting a loss of 5.3 billion francs in fiscal 1993, Euro Disney's creditor banks and The Walt Disney Co. announced a rescue package in March 1994 that included a 6 billion franc rights issue.

    The package also aimed at cutting more than 20 billion francs in debt roughly in half and suspended Euro Disney's royalties and management fees to Walt Disney for five years.

    Saudi Prince Al-Waleed bin Talal bin Abdulaziz Al Saud participated in the rights issue, winding up with about 24% of Euro Disney, while Walt Disney's stake was reduced to 39% from 49%.

    In fiscal 1995, it reported its first profit of 114 francs million - one year ahead of schedule.

    [08] British Airways is confident of resolving cabin crew dispute

    British Airways expressed optimism that talks will lead to a resolution of the cabin crew dispute.

    Representatives of the Transport and General Workers Union and its branch union, the British Airline Stewards and Stewardesses Association, are meeting with British Airways officials, to present their proposals to cut the cabin crew budget by £42 million ($70.7 million).

    ACAS, an independent conciliation service, will also attend the meeting at Heathrow airport. The cuts are part of British Airways plans to achieve annual savings of £1.0 billion a year by March 2000.

    British Airways negotiated a pay restructuring package in March with a smaller union, Cabin Crew 89. The stewards and stewardesses association, which didn't participate in the talks, staged a 72-hour strike earlier this month to protest the deal.

    'We need time to fully evaluate the proposals,' British Airways Chief Executive Bob Ayling said. 'If they meet the £42 million target in a way that is acceptable to all parties, British Airways will seek to move matters forward as quickly as possible.'

    [09] EU agrees to tougher measures to counter 'mad cow disease'

    The European Union agreed to ban food products containing a variety of animal parts to counter the risk of 'mad cow disease.'

    Farm ministers from the 15 EU nations voted to approve the tougher measures in the early hours after a 10-hour negotiating session.

    Britain had threatened to impose restrictions on beef imports from other EU nations if they did not agree to raise beef hygiene regulations in line with British standards. 'I am extremely pleased that European consumers will now benefit from the same rigorous controls that are applied to British beef,' said British Agriculture Minister Jack Cunningham.

    The ministers voted 8-to-7 in favour of the tighter rules. Portugal swung the vote in favour of the British camp after the other nations agreed to delay application of the ban for three months until Jan. 1, 1988.

    Under the new rules the brains, eyes and spinal cords of cattle, sheep and goats over 12 months old and the spleen of all sheep and goats will be removed from the food chain. Britain introduced a ban on such offal during last year's 'mad cow crisis' when beef sales plummeted across Europe amid fears that humans could contract a fatal brain wasting ailment by eating animals infected with bovine spongiform encephalopathy, or BSE.

    Germany and Italy had opposed the introduction of the new rules, claiming that they were irrelevant in countries without BSE. Cunningham said he now push ahead with efforts to persuade other EU nations to relax the world- wide ban on British beef exports imposed in early 1996 because of the large numbers of BSE cases among British cattle.

    [10] BOC Group expects around $1.2 billion for sale of Ohmeda healthcare unit

    BOC Group said that it has instructed its adviser, J.P. Morgan, to find a buyer for its Ohmeda health care business.

    BOC Chief Executive Danny Rosenkranz said the sale of Ohmeda will allow the international chemicals group to concentrate its management and financial resources on its other businesses.

    Rozencranz said the group has already drawn up a list of potential buyers and these will now be approached by J.P. Morgan. He would not say who was on the list, but indicated that it was 'relatively wide.' The chief executive also wouldn't estimate the company's expected sale price for the unit, but analysts said the sale could fetch about £700 million ($1.2 billion).

    Rozencranz said the proceeds of a sale would be used initially to reduce debt, and played down suggestions that BOC would look to step up its acquisition programme in industrial gases. The chief executive said the group was 'always looking around' for deals in gases, but added, 'We haven't got anything in mind at this point in time.'

    Analysts said they believe BOC will look for acquisitions in Latin America and Europe, where it has low levels of exposure.

    Ohmeda manufactures anesthetics and critical care pharmaceuticals, anesthesia delivery, patient monitoring systems, disposable catheters and other vascular access and monitoring devices. The unit also produces and sells infant care, suction and oxygen therapy products.

    [11] Alitalia returns to the black in the first half of this year

    The Italian Transport Minister Claudio Burlando has confirmed that the troubled Italian flag carrier Alitalia has returned to profit in the first half of this year.

    'Alitalia made a profit of around 10 billion lire ($5.7 million),' he told reporters on the margins of a conference in Rome.

    Alitalia made a group net consolidated loss of 1.203 trillion lire in 1996, its ninth year of losses in a row.

    Commercial director Federico Nucci said last month that Alitalia could return to profit in 1997. 'This is a demonstration that our efforts to clean up the national airline are producing big results,' Burlando said.

    He declined to comment on a question about whether Dutch airline KLM was interested in taking a stake in Alitalia.

    The European Commission a week ago cleared payment of 2.75 trillion lire in state-funded aid to Alitalia, imposing various conditions in return for approval.

    The aid clearance, widely signalled in advance after the successful conclusion of negotiations between the Commission and the Rome government, included a requirement that the airline sell its holding in the Hungarian carrier Malev.

    Payment of the aid will come in three instalments of two trillion, 500 billion and 250 billion lire respectively, the first due immediately and including one trillion already paid in June 1996, the Commission said.

    The remainder is conditional on the satisfactory progress of Alitalia's restructuring plan.

    [12] Reuters Holdings first half profit drops 2.6%

    Reuters Holdings, the global information and transaction products provider, became the latest corporate casualty of sterling's continuing advance on foreign exchange markets.

    With sterling at its highest level in five years, Reuters reported pretax profit for the six months to June 30 fell 2.6% to £333 million ($562.8 million).

    Reuters said it will pursue a £200 million share buyback over the next 12 months. With the company's cash reserves near £1.2 billion, however, the limited size of the buyback is bound to disappoint many investors.

    Information products revenue, which accounts for nearly two-thirds of total sales, recorded 7% revenue growth for the first-half in constant currency terms.

    This represents slightly quickened growth from the first quarter and reflects rising revenue for the 3000 series workstation.

    Overall, Reuters operating profit margin in the first-half fell to 21.1% from 21.7% in the same period last year.

    [13] Lufthansa's passenger numbers rise 5.7% in the first half of this year

    German airline Deutsche Lufthansa AG said that passenger numbers in the first half of 1997 rose 5.7% to 20.8 million from 19.682 million in the same period last year.

    The group flew a worldwide 10.49 billion ton kilometers in the first half of this year, up 4.4% from 10.05 billion ton kilometers in the like period a year ago.

    The figures include Lufthansa's own airline activities as well as its Condor charter arm and its Lufthansa CityLine German domestic commuter airline subsidiary.

    Lufthansa also said that overall sales measured in ton kilometers increased 7.4% to 7.37 billion in the first half of 1997 from 6.86 billion in the first half of 1996.

    Lufthansa will disclose the financial details of its first-half 1997 results on August 26.

    [14] Karstadt expects 1997 earnings to swing 155% to profit of $275 million

    German retailer Karstadt said it expects earnings to swing 155% to a group net profit of around 150 million Deutsche marks ($274.3 million) for 1997.

    Results for the first half of 1997 aren't available until late August, the company said, noting, however, that so far business has developed 'as planned.'

    In 1996, Karstadt's net profit was 58.6 million marks, down from 109 million marks in 1995. Karstadt Chairman Walter Deuss said at the annual shareholder meeting he is 'optimistic Karstadt will reach its target despite the uncertainty in the next few months about Christmas season sales.'

    Karstadt is Germany's largest department store chain. Its principal operations are department and specialty stores, but it also has travel agency and mail-order subsidiaries. It acquired the Hertie retailing chain in 1994.

    [15] UK to end free higher education for all but the poorest students

    Britain is to end free higher education for all but the poor so its cash- strapped universities can take in more students.

    Education Secretary David Blunkett told parliament Britain needed to shake up its universities to keep up with its economic competitors, which were expanding higher education rapidly.

    'Our university system is in crisis,' he said in a statement that accepted the main recommendations of a year-long inquiry into the higher education system chaired by Sir Ron Dearing.

    Public funding per university student in Britain had fallen by around 25% in the last decade, hitting the quality of teaching, materials and equipment.

    But restoring the level of funding to what it was in the 1970s, while boosting participation rates toward 40 percent from 33 percent now, would cost 2 billion pounds by 2015, he said.

    'The committee recognise that we cannot afford further improvement or expansion of higher education on the basis of current funding arrangements.

    'Students should share both the investment and the advantages gained from higher education,' Blunkett said.

    He proposed a new loan scheme to cover both living costs and a contribution to tuition fees of around 1,000 pounds a year -- a quarter of the average cost of a course -- but said students from poorer families would remain exempt.

    Graduates would start to repay the loans in annual instalments once their income reaches a certain threshold.

    With an eye on the middle-class voters that helped sweep Labour to power at the May 1 election, Blunkett also said there would be no extra burden on middle-class parents, who are now expected to contribute 2,000 pounds a year for maintenance.

    Ending free university education is bound to go down badly with Labour left- wingers. But Blunkett said that change was essential and that Dearing's report laid the basis for a system that was fair and good for Britain's universities.

    'Our preferred solution securies equity, access, quality and accountability. Our proposals retain the principle that repayments should be made on the basis of future income, not present circumstances,' he said.

    [16] British Steel criticises UK government's monetary policy

    British Steel said that is is 'unrealistic' for the government to put all the pressure on interest rates to fight against inflation.

    Sir Brian Moffat, chairman of British Steel told the company's shareholders that the government's policy of using interest rates to control inflation while other European states are tending towards fiscal policy is driving sterling higher and hurting its profit.

    Moffat said sterling's rise against the Deutsche mark has led to its profit margins coming under increasing pressure.

    'Similarly, sterling's strength will be seriously impairing the competitiveness of many of our UK customers, particularly those who are significant exporters,' said Moffat.

    He said he views the current financial year with 'cautious optimism' and expects demand in the U.K. for its products to be strong and enable its plants to continue working at capacity.

    [17] Vereins-und Westbank's profit rises to $36 million

    Germany's Vereins- und Westbank's operating profit in the first half of the year rose 17.9% to 65.8 million marks ($36.1 million) while risk provisions fell 8.4% to 51.5 million marks.

    Net interest income also rose 3.8 percent to 286.4 million marks and net commission income increased 12.2% to 147.9 million marks. The bank, a unit of Bayerische Vereinsbank, also said it expected a satisfactory result for all of 1997.

    The parent bank said on Monday it would merge with Bayerische Hypotheken & Wechsel Bank, creating Germany's second largest banking group and one of the largest in Europe. Vereinsbank's firstr-half results were due on Thursday morning.

    [18] Corporate and Economic Briefs

    Austria's 1999 federal budget, to be presented, will target a deficit of 2.6% of gross domestic product, the Finance Ministry confirmed. Earlier this week, the ministry said the draft of the 1998 budget also sets 2.6% of GDP as the goal for the federal deficit. The deficits for both years are above levels included in a five-year budget program approved in September 1996. Even with the higher deficits, Austria should remain at or below the 3% standard for public deficits, including cities and states, set by the Maastricht Treaty, ministry spokesman Andreas Hoeferl said.

    Denmark's June Consumer Price Index came in 0.2% up from the previous month and up 2.4% from June of last year, according to figures released by Danmarks Statistik, the Danish national statistics agency. The monthly figure exceeded market expectations. Local analysts had predicted that inflation would show a 0.1% decline month-on-month. Analysts' estimates for the year-on-year increase ranged between an increase of 2.0% and 2.4%.

    U.K. mobile telephone operator Orange said its subscriber base has reached the 1 million customer-mark. The group's subscriber base has increased by 20,000 since the end of June, when second quarter figures were reported. Orange didn't provide an updated figure for the rate at which existing customers disconnected - known as 'churn.' The churn rate stood at 19.9% at the end of June.

    Norway's retail sales index, excluding vehicles and petrol, rose 7.6% in June from the same month a year earlier, Statistics Norway, the state statistics agency, said. According to Statistics Norway, higher sales of clothes, shoes, furniture, and electrical goods contributed to the increase in the index, as sales of these goods rose 13.7% in June this year compared with the same month the previous year.

    Russian consumer-price inflation is likely to fall to 0.7% for the month of July, from 1.15% in June, the State's Statistics Committee said. A fall is widely expected in any case, as government inflation statistics are not seasonally adjusted and typically fall with the summer months. The committee said that prices rose 0.5% during the first three weeks of the July, down from the same period in June. Prices registered what officials called a seasonal uptick in June, and the monthly inflation rate rose to 1.1% from 0.9% in May.

    U.K. chemicals group Courtaulds said pretax profits for the first quarter of the current year were 'a little below' those of the same period last year. It blamed the negative effect of the pound's strength and the mounting cost of its capital investment program. But Chairman David Lee told the group's annual shareholder meeting that, at comparable exchange rates, operating profits for the three months ended June 30, were 'running ahead of last year,' while margins 'continue to improve.' Lee estimated Courtaulds will save £12 million ($20.2 million) by paying its final dividend in the form of a foreign income dividend.

    July consumer prices in the western German state of North Rhine-Westphalia rose 0.5% from June and 2.1% from a year ago, the state statistics office in Duesseldorf said. The data are above market expectations for western Germany's July consumer price index. A survey of economists by Dow Jones Newswires prior to the release of the figures showed estimates for a 0.3% rise on the month and and a 1.6% rise on the year.

    Consumer prices in the western German state of Bavaria were up 0.5% in July from June and rose 1.7% from July 1996, the state statistics office said.

    Consumer prices in the western German state of Hesse rose 0.5% in July from June and 1.6% from the year-ago period, the state statistics agency in Wiesbaden reported. That compares with year-on-year increases of 1.5% in June and 1.2% in May, the statistics agency said.

    [19] World Briefs

    President Sali Berisha has announced his resignation, fulfilling a pre- election promise and clearing the way for his Socialist opponents to try to end Albania's anarchy. Berisha announced his long-expected resignation in a radio broadcast just over an hour before a new Socialist-dominated parliament convened. 'I declare my irrevocable resignation from the post of head of state,' Berisha said.

    Opposition forces pushed closer to Afghanistan's beleaguered capital, capturing a village barely 30 kilometers (18 miles) north of Kabul, an opposition spokesman said. By midday opposition soldiers were in the deserted bazaar of Kalaqan, said Abdullah, a spokesman for opposition leader Ahmed Shah Massood. 'We are not meeting much resistance from the Taliban,' said Abdullah.

    A French TV delegation will visit Saudi Arabia to apologize for airing a pornographic movie on an Arab satellite channel, Al-Eqtisadiah newspaper said. Canal France International broadcast on Saturday 30 minutes of the movie 'Private Club in Portugal' instead of a scheduled educational program. The French channel is carried by ArabSat, which broadcasts satellite channels to 21 Arab countries.


    From the European Business News (EBN) Server at http://www.ebn.co.uk/


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