The Hellenic Radio (ERA): News in English, 08-10-02

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From: The Hellenic Radio (ERA) <www.ert.gr/>

CONTENTS

[01] Paulson Plan

02 Ïêô 2008 08:33:00 (Last updated: 02 Ïêô 2008 11:31:22)

Sources: ÁNA-ÌPA, NET 105.8, Reuters, AFP, BBC

The American Congress has approved the US$700 billion bailout plan with 74 votes to 25. Now it is the House of Representatives turn to vote anew for the plan on Thursday. The American president hailed the decision of the Congress and called on the House of the Representatives to do the same. He appeared optimistic over the new vote after the Senators amendments. Amongst others, the new bill provides for tax exemptions to 24 million middle class tax payers and for the renewable energy sources, the extension of tax exemptions to enterprises, a rise of deposits guaranteed by the Federal government to US$250.000 from US$100,000 and aid to the victims of natural disasters. Mr Bush described the bill fundamental for each Americans economic safety. Meanwhile, the European Commission is expected to present a number of proposals to tackle the economic crisis with the increase of capital of Social Insurance Funds and enterprises that taking up high risk insurance contracts.

Investors' Eyes on US Senate

US Treasurer Henry Paulson called on the Parliament to ratify the bill, in order for President Bush to sigh it later. He stated that the Senates decision sends a positive message that we are ready to protect the American economy, allowing Americans to access the necessary credits that will allow employment to be boosted in enterprises.

However, the results of the new vote in the House of Representatives appear to be uncertain, following Mondays rejection.

At the same time, Obama and McCain are supporting the plan that will allow an exit from the crisis.

However, just before the vote in the Senate, Wall Street lost ground with Dow Jones dropping by 0.18% and Nasdaq by 1.08%. The Stock Market in Tokyo also dropped with Nikkei Index going down by 1.88% to 11,154.76 points.

Financial analysts have attributed that development to the investors concerns over a potential economic recession and to their mistrust over the US plan, which they think will offer relief from the symptoms and not remedy to the problem.

The Commission to Present Proposals

The European Commission is expected to present a series of proposals regarding the Social Security Funds and enterprises' capital. It aims at allowing enterprises that take up high risk insurance contracts to have to raise their capital.

The Commission will also propose increased transparency in Banks and a bigger and more qualitative role of organizations that assess the Banks and Social Security Funds' economic data. It will also touch on the issue of the Managing Directors' salaries in credit foundations.

The proposals will be made public at the four G8 member-states meeting, as well as at the Commission's Presidents and European Central Bank meeting due to be held in Paris. The above meetings aim at preventing the American crisis to extend.

However, the Commission is not expected to propose the setting up of an intervention mechanism similar to that in question in the USA. The creation of such a mechanism would demand unanimity among the 27, something that cannot be guaranteed. Besides, for most of Commission specialists that mechanism is not necessary for the EU.

Translated by John Crystallidis

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