A group of 172 leading economists have written an open letter to Angela Merkel warning her that her decision to agree to allow Eurozone bail-out funds to support sinner states was "wrong". The economists, who included Hans-Werner Sinn, head of Ifo, the influential think tank, argued that the German chancellor had taken a dangerous step towards a "banking union". More specifically, in the letter, published by the German daily Frankfurter Allgemeine Zeitung, the economists said: "Banks' debts are nearly three times higher than government debts . . . the taxpayers, retirees and savers in the so-far solid countries of Europe must not be made liable for backing these debts, particularly since gigantic losses are foreseeable from financing the southern countries' inflationary economic bubbles." They added that they viewed the "step toward a banking union, which means collective liability for the debts of the banks of the eurosystem, with great concern", The Telegraph says.
Barclays was last night preparing for a showdown with former chief executive Bob Diamond over his potential £25m pay-off. The bank's board called a late meeting to review the terms of his contract and decide the bank's legal position in regard to Mr Diamond's £18m of unvested share options and £4m-plus of benefits. He is also due more than £2m in lieu of a year's salary and pension after being ejected from the bank on the direction of the Bank of England Governor over the Libor scandal. A source close to the board said: "Barclays needs to establish where it stands legally with regards to Bob's contract and entitlements. The bank is fully aware of the high emotions around this and the need for there not to be any false moves," The Telegraph writes.
The Kremlin has taken revenge on the oligarchs who wrecked BP's Arctic alliance with the Russian oil group Rosneft, according to analysts. Recent developments could even pave the way for President Putin to assume control of TNK-BP, the Russian joint venture that BP owns with AAR, the oligarchs' consortium, they said. Rosneftegaz, a state-run company whose assets include the Russian Government's 75% stake in Rosneft and part of the gas group Gazprom, has revealed that last year it transferred £480m of deposits it held with Alfa Bank, which is part of the AAR empire, to the state-owned Gazprombank. The transfer was made after AAR had broken up BP's proposed alliance with Rosneft to explore the Arctic, unveiled in January last year. The oligarchs claimed that the tie-up broke the shareholder agreement between TNK and BP and secured a High Court injunction to block it weeks later, The Times explains.
Google plans to release its much-hyped new tablet computer in Britain without access to music, television shows and magazines, in a major blow to the company's pretensions of taking on Apple's iPad. The new device, called the Nexus 7, has been pitched as a smaller, cheaper alternative to Apple's bestselling tablet computer. But it appears Google has not been able to close deals with broadcasters and publishers in time to launch the device in Britain with the same suite of media that is available to American customers. The device, Google's first own-brand tablet, comes with a 7in screen, starts at £159 and goes on sale in the UK on July 19. When it was first unveiled, experts lauded the Nexus 7 as a cheaper and more portable alternative to the iPad, as Apple's device comes with a 9.7in screen and starts at £399, The Times says.
Ryanair, under threat of High Court action from the Office of Fair Trading, has agreed to act over its hidden credit card charges. The budget airline, under threat of High Court action from the Office of Fair Trading, has agreed to act over its hidden credit card charges one of the biggest running sores among the numerous complaints levelled against it. The budget airline has promised to withdraw the charges for online transactions, which are added as a final insult on top of taxes, flight fees and the added costs of baggage, insurance, seat reservations and priority boarding. The move has prompted the OFT to issue a blanket industry ruling that all debit card charges, even if they are dressed up as administration or handling fees, will have to be disclosed upfront by airlines operating out of the UK, The Times reports.
The North Sea oil and gas industry was last year hit by its biggest ever fall in production with another slide in output forecast for 2012. A further fall would be a blow to the UK government as lower oil and gas production took its toll on industrial output in the first three months of the year, and was one of the reasons why the economy entered "double-dip" territory. Industry figures yesterday revealed that output plunged by 19% in 2011 to 656m barrels of oil equivalent (boe) - half the rate of production in 2005. It equates to some 1.8m barrels per day, according to Oil & Gas UK's latest economic report. The fall in production has been primarily blamed on a combination of platform shutdowns to address safety and maintenance issues with ageing infrastructure, and a slowdown in bringing new fields on stream. Industry leaders warned yesterday that production is again struggling this year and could fall further, The Scotsman reports.