ECONOMY

In Brief

EU warns Slovakia of breaching commitments BRUSSELS (AFP) – European Union officials accused Slovakian lawmakers yesterday of being in «breach» of legal commitments to lend money to Greece under a joint EU-IMF bailout. Permanent Brussels officials said they were puzzled after Slovakia’s new center-right government secured a majority among lawmakers to overturn a decision by the previous leftist government. The Slovak Parliament had nevertheless approved a potentially greater framework agreement on a 440-billion-euro loan mechanism designed to shore up other member states that may need help. «It is somehow surprising because the underlying principle for both (mechanisms) is exactly the same,» said a spokesman for European Union Economic Affairs Commissioner Olli Rehn. The spokesman said the decision was a «breach» because undertakings given by ministers from member states in council are binding under laws governing the EU’s functioning. Rehn said in a statement released late on Wednesday that the decision was a «breach of solidarity» and that finance ministers from the 16 euro countries and all 27 EU members would «return to the matter in their next meeting» on September 6 and 7. He nevertheless stated that the Slovak decision «will not have any negative implication for the disbursement of the installments of the loan» to Athens. Bratislava’s share in the 110-billion-euro ($146 billion) Greek bailout amounts to some 800 million euros. Slovakia, a former communist central European country, joined the EU in 2004 and adopted the euro in 2009. Alfa-Beta Vassilopoulos says profit almost halved Alfa-Beta Vassilopoulos SA, the Greek supermarket chain acquired by Belgium’s Delhaize Group, said first-half profits fell almost 47 percent after the government imposed a one-time tax on Greece’s biggest companies. Net income fell to 5.6 million euros ($7.2 million) from 10.5 million euros a year earlier, according to an Athens bourse filing yesterday. Sales rose 7.2 percent to 765.8 million euros, boosted by an acquisition last year. Vassilopoulous added 888 workers over the past year and invested 29 million euros to open new outlets, the company said. The chain plans to add as many as eight stores to its 219 existing outlets by the end of the year, Vassilopoulous said. (Bloomberg) Bulgarian inflation Bulgarian consumer price inflation quickened to 2.4 percent year-on-year in July from 1.4 percent a month earlier, mainly due to a hike in cigarette and fuel prices, the statistics office said yesterday. The government sees inflation reaching 4.1 percent at the end of the year as the economy recovers. Its energy regulator raised natural gas and power prices in July and soaring global wheat prices also pose a concern due to severe drought and torrential rains in the major grain-growing region around the Black Sea. High inflation used to be the major obstacle to Bulgaria’s plan to join the eurozone but its main issue is now a series of fiscal deficits anticipated through 2013. On a monthly basis, consumer prices rose to 0.4 percent in July compared with a 0.9 percent fall in June, the data showed. Prices of services increased 1.5 percent in July from June, while food and nonfood prices were unchanged. Under the EU-harmonized consumer price index, which gives nonfood prices a bigger weighting, annual inflation was 3.2 percent and prices edged up 0.5 percent on the month. (Reuters) Ford plans Ford Motor Company plans to produce 225,000 vehicles in Romania in 2013, according to John Fleming, an executive vice president for global manufacturing. Fleming told reporters in Bucharest yesterday that the carmaker will launch a new small-car model that will be «unique to our portfolio.» Ford expects to produce 150,000 of the small cars a year and has invested more than 200 million euros ($258 million) in Romania so far. Ford’s new European chief, Stephen Odell, said July was a «tough month» across the region, predicting a pickup in demand in the first or second quarter of 2011. Odell reiterated Dearborn, Michigan-based Ford’s forecast for a European market of at least 14.5 million cars this year. «July is a tough month across Europe because a lot of Europe goes on vacation,» Odell said in an interview. (Bloomberg)