The Global Economy and Business

Week of Haute couture has opened in Paris. In the first day of Haute couture week participants discussed clothes of a season shown on a podium “spring-summer of 2010″ less often, then they discussed who from known designers would fall as a victim of a global economic crisis. Most likely, the French design house Cristian Lacroix, which recently declared bankruptcy and feverishly searches for the buyer, woun’t be able to go through the present financial shock.

“Collections of 1990 and 2000th years which differed refinement, individuality and staginess, have ended, - Quotes fashion designer Stefana Rolanda Reuters, - I am afraid, that now haute couture for designers is, first of all commercial success and quickly making profit clothes “.

Unequivocally, that crisis and the fallen lack of money forces fashion designers to create more often not truly exclusive and extravagant things, but clothes which will be in demand at potential buyers.
Already during display of Christian Dior’s collection many experts have paid attention that designer John Galjano use inexpensive and accessible materials, and there were no any revolutionary ideas.
Instead of extravagant dresses he has presented a mix from clothes and underwear. Silk blouses with shorts and stockings and magnificent skirts with leather belts and gloves - such haute couture is in this season from Christian. As a matter of fact, all clothes from a podium will not shock, if it appears in the street of a real city.

The general director of the House Sydni Toledano has declared to journalists:
The key element of a survival in present uneasy economic conditions is accurate and constant interaction between designers and managers of sales.

Toledano also has expressed hope, that despite the numerous difficulties, the conducting houses of haute couture will successfully go through crisis and remain in business.

According to experts, such weeks of a fashion are first of all excellent advertising for leading design brands. Not a secret, that the basic profit of company Dior and Giorgio Armani receive not from designers clothing collections, but from perfume and various accessories. In this connection some designers have already declared end of an era of creativity.

“In this sense it is possible to say, that there is no more any place to the art couturier. Now haute couture overall objective is to sell perfume, cosmetics, footwear and bags“, - the designer Franc Sorbier speaks Regretfully.

As to company Cristian Lacroix which has extremely strongly suffered from sharp decrease in sales from the beginning of June it is under six-monthly protection against creditors.
Whether the known French brand remain or not it will be clear by the end of July when term for giving of demands for acquisition of the fashionable house expires.

Two large power companies have been fined for the sum exceeding billion euro : the Eurocommission has submitted an invoice to German power company E.ON and French GDF at a rate of 553 million euro each one. Both companies are contesting this decision.

The European competition authorities found out that in 1975 these companies agreed not to compete with each other in the national markets that is an infringement of the antimonopoly law of the European Union.

The competition commissioner of EU Neelie Kroes has explained: “the transaction of giants has struck first of all on consumers, we do not have other alternative than to impose high fines”.
This fine becomes the largest for all history of similar sanctions.

The Eurocommission has begun investigation above the German and French gas companies in 2007. They were accused of agreement about division national gas markets when they jointly built a pipeline to import Russian gas: in particular that E.ON will not sell gas in France, and GDF – in Germany. This is an infringement of the law of EU about fair competition.

The European Central Bank has started the emission with the purpose of repayment of eurobonds for a total sum of 60 billion euro and became the fifth large Central Bank, which resorted to this measure. Before this way of economy support was selected by the Fed of the USA, national banks of Japan, England and the Swiss Central Bank. Thus, the European regulator has reconsidered the former rigid monetary position according to which inflation was considered the main enemy of the eurozone.
The repayment of eurobonds for a total sum of 60 billion euro has been announced by the chairman of ECB Jean-Claude Trishe. The fact that the started emission of euro is uncovered does not cause doubts as total gross national product of the European Union falls. According to forecasts, by the end of the current year it will be reduced almost on 2 %.

Experts also mark, that the declared issue with the purpose of the repayment of Eurobonds is a step which is necessary first of all to reassure investors.

« Now such monetary policy is perceived as necessity, — explains the deputy chief of analytical management of ” Renaissance-capital ” company Alexey Moiseyev..-sixty billions for the European economy which is more, than American, is, certainly, anything. The emission should be 10 or 20 times more to play any role. ». Let’s note, that Fed of the USA from the beginning of the year has printed more than billion dollars.

However, such policy still has opponents on both sides. « Recently the head of the European Central Bank mister Trishe has declared, that there are no opportunities for the weakening of monetary policy. But only the statement and the practical actions of ECB differ, — comments the head of the department of research of Forecast Australia — So here we deal with the certain divergences between word and business. Within the nearest year the European Central Bank is going to print and throw out on the market 350 billion euro or even more. It is easy to understand, that such things can badly affect the trust to euro ».

And still it’s too early to confirm, that ECB has completely handed over its positions, in fact its base rate continues to remain the highest among the developed economy — 1 %.

Leaders of the G8 reached some agreements on climate, international security and the global economy.

Gary Samore, the White House point man, has noticed that the basic area of disagreement is that the U.S. push for a missile defense system in Poland and the Czech Republic.

Russia considers that this is a direct challenge to its own defense.

Obama’s speech:
“I know Russia opposes the planned configuration for missile defense in Europe. And my administration is reviewing these plans to enhance the security of America, Europe and the world. And I’ve made it clear that this system is directed at preventing a potential attack from Iran. It has nothing to do with Russia. In fact, I want to work together with Russia on a missile defense architecture that makes us all safer. But if the threat from Iran’s nuclear and ballistic missile programs is eliminated, the driving force for missile defense in Europe will be eliminated, and that is in our mutual interest”.

Russian politicians think U.S. officials are lying saying that planned missile shield installations in Eastern Europe are meant to defend against possible Iranian attack. Russia considers that a direct challenge to its own defense. Obama has so far stayed noncommittal; here, he hints at using the planned bases as a bargaining chip. If you don’t want radar and interceptors near your border, Obama tells the Russians, you’d better get a lot more helpful with Iran.

Obama is reproaching Moscow on several points: for its war last year with Georgia; for insisting that Georgia’s breakaway republics, South Ossetia and Abkhazia, are independent nations; and for interfering in Ukrainian politics. Moscow dismisses the American criticism. The response is the following: Where was your interest in state sovereignty when you recognized the independence of Kosovo from Serbia last year? And how can you tell us about secure borders after invading Iraq and Afghanistan, and while you are still occupying those lands? Moscow argues that the United States is pursuing its own goals in Ukraine and Georgia, trying to break down the two countries’ historical ties to Moscow in order to undermine and contain Russian power.

In spite of the fact that many questions remained opened, the contract between Russia And the USA has given something to both sides.

On 7th of July President Obama and Russian President Dmitry Medvedev agreed to reduce their nations’ nuclear arsenals. According to the new contract, the maximum number of warheads will be reduced to 1 500 - 1 675 for each party, and also new pact would set a limit of between 500 and 1,100 devices that can deliver the warheads, while earlier this number was 1,600. But the Russians have only about 800 delivery systems.

The general director of Irish airline Ryanair Michael O’Leary has developed a new scheme which will allow to make flights cheaper.

Ryanair has already hold negotiations with the American aviamanufacturer Boeing for creation of a new plane with standing interior. Now Ryanair negotiates with the Irish administration of air transport about an opportunity of installation this standing places on planes. If the permit will be received, the Irish air carrier is planning to place an order for purchase of liners with standing places, tickets on which will cost cheaper, than on usual sitting places. For standing passengers Ryanair is going to provide seat belts clasped around waist.

The idea of standing places O’Leary has borrowed from Chinese air carrier Spring Airlines, which first-ever has decided to transport passengers standing. Due to installing of standing places on flights Spring Airlines hopes to increase spaciousness of liners on 50 percent and to lower cost of flight on 20 percent.

It is necessary to note, that in the majority of countries there are no legislative restrictions on installation of standing places in planes. For example rules of carriage of passengers of the USA stipulate only, that the passenger should be fasten with a seat belt during rise and landing.
Based in 1985 Ryanair is a type of original “fashion-maker” among low-budget airlines, projecting innovations directed on optimization of charges and maintenance on a low level the tariffs of tickets. The airline has already entered a separate payment for registration of passengers at the airport, tallage for bags and suitcases send into luggage, and not so long ago even proposed to enter a symbolical payment for the use of toilets onboard planes.

Now Ryanair has park from more than 180 planes and carries out flights in 143 cities of the Europe. The main bases of airline are the airport of Dublin and London . In 2008 the airline has transported 57,7 million passengers.

Today analysts of the various countries recognize China as the candidate on capture of world leadership in the post crisis world. China - unique from large powers with rather stable economic growth. It is expected, that gross national product of China will increase by 8 % in 2009.

The country successfully realizes an anti-recessionary package (16 % from gross national product within two years), stimulating internal demand. And this package is already recognized as one of the best and effective in the world. Industrial production grows in China the fourth month. Value of an index of managers of purchases has grown to 53,2 points in June with 53,1 in May (above 50 - growth). Volume of export orders has grown In June in comparison with May.

China is the largest investor of the USA market of state papers. China continues interventions to the market of the American state papers, despite doubts concerning stability of the USA economy. It does not have other choice, except to continue massed injections to the American economy through purchase of state papers because in the conditions of world crisis it is the unique large market with sufficient liquidity which corresponds to scope of the Chinese investments. About a quarter of an external state debt of the USA belongs to China, according to the American Ministry of Finance.

The exact structure of state investments of China is the state secret, however, by estimations of different sources, the share of dollar actives in them makes an order of 70 % at total amount $1,953 bln.

China has got stuck in “a dollar trap”, mark both western and Chinese analysts. The current policy of the American authorities can lead to a collapse of dollar and world inflation. One of the basic fears of the Chinese authorities is called by attempts of the USA to overcome a present economic crisis by means of flooding economy with money that can lead to inflation and reduction of cost of the American actives that will extremely negatively be reflected at economy of China. On the one hand, China is not interested in dollar crisis, therefore continues injections in economy of the USA, on the other - the authorities of China are interested in stability of the USA economy more and more. In this connection China has once again brought up a question about creation of new international reserve currency. Many analysts consider, that recent falling of dollar is connected with this.

“It is necessary to create new reserve currency, which will not be adhered to economy of its emitter to prevent lacks of such currency”, - is spoken in the economy review for 2008, let out by National bank of the Peoples Republic of China. The head of the Central Bank of China Chjou Siaochuan has suggested the world states to create new reserve currency and to expand powers of the International currency fund (IMF) in this sphere. “The special rights of loan” of IMF or gold can play the role of international currency.

However, a number of experts underlines, that in immediate prospects dollar has nothing to be afraid. There are more sceptically adjusted experts concerning dollar, but also they recognize, that the importance of dollar cannot be changed for one day. “We can see additional reserve currencies” though this event “is not going to occur this night” the professor of economy of New York university Nuriel Rubini has noted.

The world economic crisis systematically beats on all manufacture. But one of the most suffering branches has become a car industry: American, European, Russian. The confident development in present conditions is shown only by the Indian and Chinese concerns.

With the help of accessible credits machines have transformed from means of transportation into a type of hobby: it’s a usual fact to have more than one car in a family from two adults now. People were getting a new model when they haven’t already paid the previous credit. To this they were also pushed by the increase in number of modifications of popular models.

The collapse of bank system has made difficult to get a consumer credit. But not everyone is ready to pay off own money for the car now: people are not assured of tomorrow when everybody can be dismissed.

And the situation at autoconcerns becomes only more complicated from this. Warehouses have accumulated a lot of finished goods which the dealers, who don’t know how to sell their own stocks, refuse to take.

Now leading world concerns speak about 25-35% decrease in sales volumes in comparison with the similar period of 2008. For example sales of vehicles of GM in June were on 33 % below, than one year ago, Chrysler Group - on 42 % (68 297 machines), Toyota - on 32 % (131 654). Experts suppose, that in the Russian market the decrease of sales can reach 50 % or 1,3 million cars for current year.

In these conditions a unique variant of rescue for most of car factories became an appeal to the government for the national assistance.