Morning business round-up: Eurozone fund launched
- 8 October 2012
- From the section Business
What made the business news in Asia and Europe this morning? Here's our daily business round-up:
The eurozone's new permanent fund to bail out struggling economies and banks will be launched later at a meeting of finance ministers.
The European Stability Mechanism (ESM) will have a full lending capacity of 500bn euros (£400bn; $650bn) by 2014.
It will initially run alongside, and then eventually replace, the European Financial Stability Facility (EFSF).
Europe's largest economy, Germany, will make the biggest contribution to the fund, about 27% of its total.
Finance ministers from the eurozone will meet later in Luxembourg for its official launch, with countries making their first payments into the fund this week.
Chinese telecom firms Huawei and ZTE pose a security threat to the US, a congressional panel has warned after an investigation into the two companies.
Both firms should be barred from any mergers and acquisitions in the US, the panel has recommended in its report, set to be released later on Monday.
It said the firms had failed to allay fears about their association with the Chinese government and military.
The two are among the world's biggest makers of telecom networking equipment.
The World Bank has lowered its growth forecast for China, citing weak demand for its exports and lower investment growth.
The bank said it expected China's economy to grow by 7.7% this year, down from its projection of 8.2% in May.
China's exports have been hurt by economic problems in the eurozone and the US, two of its biggest markets.
In addition, policymakers have found it tough to boost domestic demand enough to offset the decline in foreign sales.
The largest investor in BAE Systems has said it has "significant reservations" over the defence firm's planned merger with Franco-German group EADS.
Invesco Perpetual, which owns 13.3% of the UK company, said in a statement that it "does not understand the strategic logic" of the deal.
Invesco added that it was "very concerned" about the level of state shareholding in a combined group.
Prime Minister David Cameron has said he would veto a new European Union budget "if necessary".
The EU is beginning negotiations on its next budget for 2014 to 2020.
Mr Cameron also told the BBC that in the longer term the EU should have two different budgets - one for countries in the eurozone and one for those outside the single currency.
Last year, Mr Cameron vetoed an EU-wide treaty to co-ordinate budget policies and impose penalties on rule-breakers.
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