What's Important in the Financial World (9/27/2012)
Spain Seeks Budget Cuts
The search for solutions to Spain's financial trouble continues and becomes more complicated by the moment. It has not been determined whether Spain can cut its own budget before it asks for help as it attempts to avoid having forms of austerity forced on it by outsiders. It also is not clear whether Spain can avoid aid if its borrowing costs drop. Recently, rates have gone the other way. Spanish Prime Minister Mariano Rajoy will gather with other national leaders in an attempt to decide which government costs can be cut. Even if Spain can go to the European Union and International Monetary Fund with a reasonable plan, there is word that the two organizations have been in a battle over which one will have primary authority on matters that determine all bailout rules. According to Reuters:
Officials from Greece and the "troika" of European Union, European Central Bank and International Monetary Fund (explain this) have told Reuters tensions have risen in recent weeks as negotiators wrangle over further budget cuts, with the IMF adamant that Greece reduce its debt further.
Greece is likely to set a precedent for Spain.
German Unemployment Rises
The German Federal Labor Agency announced an increase in unemployment, which is likely to put a strain on Angela Merkel's hold on the country and her efforts to use German money to help with bailouts of weaker nations. According to Dow Jones:
The number of German jobless claims increased for a sixth straight month in September, indicating that slowing growth in Europe's largest economy is taking a toll on the labor market.
The unemployment claims figure rose by 9,000 in September, although the jobless rate remained at 6.8%. While this rate is among the lowest in the developed nations, Germans continue to worry that the economic collapse of the eurozone eventually will spread rapidly to their country, which relies heavily on exports to its neighbors. Add to that the sentiment that their tax dollars have gone, in part, and will go in the future to help countries that Germans think created their own problems and should solve them on their own.
Microsoft Antitrust Charges
The European Union is about to decide whether Microsoft (NASDAQ: MSFT) broke any of the provisions of its 2009 antitrust settlement. If so, there could be years of court challenges, much as their were prior to 2009. According to Dow Jones:
The European Commission is considering whether to declare U.S. software maker Microsoft Corp. in breach of a 2009 ruling ordering the company to offer users a choice of Internet browsers, the European Union's antitrust chief said Thursday.
"Microsoft has not kept its promises. We will have to consider taking the next step in this case," Joaquin Almunia said. "The next step is to open a procedure to determine a breach to our settlement. Since Microsoft has admitted it, I hope it will not take long."
The EU reached a settlement with Microsoft in 2009 after more than a decade of investigations that included 1.64 billion euros ($2.14 billion) in fines. Microsoft said in July it hadn't included a browser-choice screen due to a technical error and that it was taking steps to fix the problem.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Market Open Tagged: MSFT