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Commission to investigate German bank aid
- The European Commission yesterday (27 February) launched in-depth investigations into German government aid to two regional banks, IKB and SachsenLB, to see if it complies with EU state aid rules. The German government provided risk insurance worth Û9 billion to IKB and Û17bn in liquidity assistance to SachsenLB in the summer of 2007 after the two institutions were affected by problems in subprime mortgage lending market in the US. The Commission will assess whether this assistance constituted state aid and whether it meets EU rules on ensuring the long-term viability of the banks and reducing distortions of competition.
Acer-Packard Bell
- Taiwanese personal computer-maker Acer was cleared by the European Commission yesterday to buy Dutch PC manufacturer Packard Bell. The Commission found that there would be still sufficient competition on the market for desktop and laptop PCs after the merger because of a large number of other suppliers.
Hungary floats forint
- Hungary on Tuesday (on 26 February) allowed its currency, the forint, to float free of the euro as part of efforts to control inflation which is expected to reach 5.9% this year. The forint rose against the euro on international currency markets. The head of Hungary's central bank said the decision would help Hungary's efforts to join the eurozone by allowing the currency to find the appropriate exchange rate against the euro.
Eurozone's economic growth to slow down
- Economic growth in the eurozone is forecast to slow to 1.8% this year, according to predictions from the Commission, published on 21 February. Growth is expected to be 2.0% in the EU as a whole. This represents a 0.4% cut in forecasts for both regions compared to the autumn estimates for 2008. The Commission attributes the lower growth to the ongoing financial turmoil, the economic slowdown in the US and higher commodity prices. Inflation is estimated to be 2.6% in the eurozone and 2.9% in the EU, 0.5% higher than the earlier forecast.
Guidelines for SWFs
- The Commission yesterday published draft guidelines for sovereign wealth funds, or state-owned investment funds. The Commission said that a planned code of conduct for these funds, being worked on by the International Monetary Fund, should include transparency requirements but stressed that such funds had proved to be responsible investors and provided much-needed capital to international banks struggling in the wake of the financial market turmoil.
Parmesan ruling
- The European Court of Justice has ruled that only the crumbly cheese made near the Italian town of Parma can claim the name 'Parmesan', a decision spelling defeat for German companies who had argued that the name was generic. Giving its verdict on Tuesday, the EU's highest court ruled that the cheese was protected under EU law on "protected designation of origin" (PDO). More than 800 food and drinks, from Champagne to sauerkraut, have this status.
European engineering and manufacturing companies have welcomed a package of measures agreed by MEPs and EU governments, which would improve safety controls on imported products and strengthen the role of national authorities over product safety.
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