ECONOMY

In Brief

BoC drops plans to up Banca Transilvania stake NICOSIA (Reuters) – Bank of Cyprus (BoC) has withdrawn an application to raise its stake in Romanian Banca Transilvania to up to 20 percent, it said yesterday. The Cypriot bank cited «other priorities» for its decision to withdraw its request from the Romanian Central Bank. On May 17, BoC said it had received an initial approval from the Central Bank of Cyprus to raise its 10 percent stake in Banca Transilvania to 20 percent, while any increase would be subject to regulatory approval in Romania. Bank of Cyprus acquired a 9.99 percent stake in Banca Transilvania in December for about 60 million euros ($74 million). Banca Transilvania, with more than 500 branches, holds an estimated 8.5 percent share of Romania’s deposit market. Fitch sees remote risk of eurozone breakup PARIS (Reuters) – Credit rating agency Fitch sees the breakup of the eurozone as a «remote risk» and not one of its most likely scenarios, a Fitch director said yesterday. «It’s not our central view, it’s still a remote risk,» Brian Coulton, managing director and head of EMEA sovereigns and global economics, told a conference in Paris. Fears that Greece’s debt crisis could spill over into neighboring European countries have rocked financial markets in recent weeks and caused a fall in the euro currency. The European Commission yesterday denied a newspaper report that the European Union, the IMF and the US Treasury were drawing up a liquidity plan for Spain, including a credit line of up to 250 billion euros. Coulton said he did not expect a voluntary exit from the eurozone from countries under pressure due to debt problems. Spanish shake-up Spain embarked on shaking up its economy yesterday with labor market reforms designed to encourage companies to hire, enacting long-awaited structural changes as it struggles to reassure markets and investors who are worried over its public finances and pushing Spanish borrowing costs to new highs. The package won approval at a rare midweek cabinet meeting, allowing Prime Minister Jose Luis Rodriguez Zapatero to take it with him to an EU summit today in Brussels and show the bloc he is acting resolutely to deal with Spain’s part of a crisis that has dragged down the euro. The reforms take effect almost immediately but eventually need parliament’s approval, which is not a given. Deputy Prime Minister Maria Teresa Fernandez de la Vega denied the latest in a series of media reports that the country is headed for some kind of bailout. Spain has only just crawled out of nearly two years of recession after a boom fueled by construction and free-flowing credit, and its public coffers have been drained by spending to cope with a jobless rate that now stands at a eurozone high of 20 percent and economic stimulus measures. (AP) Pension changes French President Nicolas Sarkozy’s government said it will raise the retirement age and increase taxes on capital, seeking to stem losses in the pension system and safeguard the nation’s top credit rating. The retirement age will rise gradually to 62 by 2018 from 60, Labor Minister Eric Woerth said at a press conference in Paris yesterday. The government will increase taxes on stock options, dividends and capital gains, and will raise the top income tax rate one percentage point. «There is no trick,» Woerth said in the nationally televised briefing. «We can’t promise to work less, raise pensions and erase deficits.» (Bloomberg) Arms sale Russia hopes to sell Turkey surface-to-air missile systems, state-run news agency RIA cited the head of Russia’s arms export company as saying yesterday. «The Turkish army has a great need to acquire S-300 and S-400 missile systems,» RIA quoted Rosoboronexport director Anatoly Isaikin as saying, referring to two Russian missiles. Isaikin, speaking in Paris, said Russia had told Turkey it was prepared to participate in a tender for the supply of missile systems, RIA reported. (Reuters)