ECONOMY

In Brief

Azerbaijan to ship more gas to European countries ISTANBUL (AP) – Turkey and Azerbaijan signed a deal yesterday that will provide 11 billion cubic meters (388 billion cubic feet) of Azeri natural gas a year to Turkey beginning as early as 2016. Azerbaijan turned down Turkey’s request to allow it to re-export some of those gas shipments to Europe but the energy ministers of both countries said their deal would «pave the way» for Azerbaijan to eventually provide gas to a pipeline project aimed at reducing the European Union’s reliance on Russian energy. An eventual agreement by Azerbaijan to ship gas through the proposed Nabucco pipeline is key to making it a viable rival to Russian pipelines running to Europe. European countries sealed a deal on the Nabucco project last year, but at best it would only put a dent in Moscow’s dominance, even if it finds the gas supplies. Azerbaijan’s Energy Minister Natiq Aliev said his country has supported the Nabucco pipeline project, which intends to bring natural gas from Central Asia and the Middle East to Europe to diversify the continent’s energy sources and reduce Russia’s dominance. Hungary pledges plan to control budget deficit Hungary’s government pledged to control the budget deficit and make structural changes to overhaul the economy as it further distanced itself from suggestions the country was facing a Greece-like crisis. «What we have decided is that we will do everything to be able to follow the planned deficit path,» State Secretary Mihaly Varga said today in Lovasbereny, Hungary. The European Union and International Monetary Fund set a deficit ceiling of 3.8 percent of gross domestic product after leading a 20-billion-euro ($24 billion) bailout in 2008, when the global recession engulfed Hungary. Hungary’s domestic politics roiled global markets last week as officials in Prime Minister Viktor Orban’s week-old government compared the country to Greece while claiming the previous administration lied about public finances. The comments were flashed around the world by news media, feeding concerns Europe’s sovereign debt crisis was spreading, triggering a 4.8 percent two-day drop in the forint and pushing the euro to its lowest level in four years. The cabinet, which is holding emergency sessions to develop plans for meeting its budget goals, is discussing a possible tax on bank profits and changing to a flat income tax rate of 16 percent, 19 percent or 20 percent, Varga said. Pensions and the pension system weren’t on the agenda, he said. Investors are waiting for the government to say how it can cut taxes and the budget deficit at the same time, said Lars Christensen, chief emerging markets analyst at Danske Bank A/S. (Bloomberg) Banks cleared Bulgaria’s anti-trust watchdog closed a probe into the country’s banking system yesterday, saying there was no evidence that it operated a cartel that fixed interest rates and market share distributions. «There is no indisputable evidence for influence over the autonomous market behavior of the members of the Association of Banks in Bulgaria [ABB],» the commission for protection of competition said in a statement. Last July, the watchdog raided the office of ABB, whose members are all banks that operate in Bulgaria, and confiscated documents to check whether commercial banks conspired to fix interest rates on both deposits and credits. About 80 percent of the 30 commercial banks operating in the European Union’s poorest member are foreign-owned, with the biggest lenders run by Italy’s UniCredit, Hungary’s OTP, Greece’s National Bank of Greece and Austria’s Raiffeisen. (Reuters) No double dip Templeton Asset Management Ltd’s Mark Mobius said the global economy will avoid a «double dip» recession and falling stock prices have created buying opportunities in Eastern European countries including Hungary. «Globally there will not be a double dip,» Mobius, who oversees about $34 billion in emerging markets as Templeton Asset Management’s Singapore-based chairman, said in an interview yesterday on Bloomberg Television. In Hungary, «we’ve seen falls of 20 percent or more and in that kind of scenario there are great opportunities to buy from a longer-range point of view,» Mobius said. «Their numbers are not as bad as Greece.» Global equities have retreated since mid-April, with the MSCI All-Country World Index falling 15 percent on concern Greece’s debt crisis will spread and jeopardize economic expansion around the world. (Bloomberg)