ECONOMY

In Brief

Medicine prices may drop due to tighter spending Greece’s demand that drugmakers cut prices by as much as 27 percent threatens to leave the country with fewer medicines and may slow development of new treatments, Europe’s largest pharmaceutical association said yesterday. Reducing prices will encourage companies to buy medicines in Greece only to sell them elsewhere for more, said Colin MacKay, a spokesman for the European Federation of Pharmaceutical Industries & Associations (EFPIA) in Brussels. Other countries also may take their cue from Greece and lower prices, making less revenue available to drugmakers for research and development, he said. Greece last month ordered drugmakers to cut prices by 3 percent to 27 percent as part of an array of measures to rescue its economy. The cuts are effective through August 31, when the country is expected to release a new price list, officials said. «EFPIA understands the economic challenges that Greece faces,» MacKay said in an e-mail. «However, a price reduction of 27 percent on pharmaceuticals understandably causes the industry considerable concern.» (Bloomberg) European trade unions to join forces in September BRUSSELS (Reuters) – European trade unions announced plans yesterday to hold a «European Day of Action» on September 29, including a rally in Brussels, to protest against spending cuts across the region. The rally is timed to coincide with a meeting of European Union finance ministers, and unions may also organize strikes or protests in other countries, the European Trade Union Confederation (ETUC) said after a meeting of its executive committee. «As European governments move collectively to slash public expenditure, including jobs, pay and pensions, while the European economy is fragile and vulnerable to renewed recession, the ETUC is to mobilize a collective trade union response,» it said in a statement. The organizers expect at least 100,000 people from the 27 EU countries to take part in the Brussels rally on September 29, an ETUC official said, adding that unions would decide locally what other action could be taken. «This can include protest stoppages, demonstrations, meetings with government finance ministers,» said the ETUC, which represents 82 trade union organizations in 36 countries. Short selling ban Germany’s cabinet yesterday approved a draft law expanding a ban on naked short selling which angered its international partners to include all stocks traded in Germany, officials told AFP. The ban «concerns securities that are registered on a regulated German market,» a Finance Ministry spokesman said. It also encompasses certain trades on currencies that are not used for hedging purposes, although this can be implemented in times of crisis, not as a permanent measure – a slight watering-down of the original proposals. A previous version of the draft law had envisaged a complete ban on short selling currency derivatives. Last month, Germany rocked its European partners and roiled markets worldwide by unveiling, out of the blue, a ban on naked short selling of sovereign bonds and credit default swaps. The surprise move, by Germany’s financial regulator, was introduced unilaterally and without informing other G20 countries. (AFP) Romanian forecast Romania’s economy will remain weak after a swelling budget deficit forced the government to step up its austerity program, Morgan Stanley said. The economy may contract this year again, after shrinking 7.1 percent in 2009, as measures such as public sector job and wage cuts will dent consumer confidence, London-based Morgan Stanley economist Pasquale Diana wrote in an e-mailed note. Concerns about capital withdrawal by Greek parent banks from Romania, though, appear «somewhat overstated,» Diana wrote. (Bloomberg) Credit ratings The European Commission proposed improved supervision of credit rating companies and also started a debate on corporate governance in financial institutions, it said on its website today. The Brussels-based agency said last week it was planning to propose a single regulator for credit ratings companies and was seeking views on ways to better manage risk in financial institutions. The Commission said the deadline for comments on corporate governance is September 1. (Bloomberg)