ECONOMY

In Brief

Ikea slashes prices in Greece due to downturn Ikea slashed the price of its Billy bookshelves in Greece by 22 percent, underlining the impact of the country’s austerity drive and sovereign-debt crisis on consumer purchasing power. Greek outlets of the world’s biggest home furnishings retailer now sell the signature bookshelf for 35 euros ($44.95), down from the 45 euros it was listed at a year ago. The average price of the item in 37 countries dropped 7.6 percent to $55.54, according to figures on the Netherlands-based company’s website. The data suggest sluggish demand is containing prices across Europe. An index compiled by Bloomberg News showed the price of Billy shelves declined in all 13 euro-area countries served by Ikea relative to a global average. The 10-euro drop in Greece, where Prime Minister George Papandreou’s government has cut wages and raised taxes following a bailout, is the region’s biggest along with that of neighboring Cyprus. (Bloomberg) Athens on track, needs to keep up reforms Greece is on track and «it is indispensable and crucial that Greece maintain this strong drive of reforms,» EU Economic and Monetary Affairs Commissioner Olli Rehn told the European Parliament’s Economic and Monetary Affairs Committee in Brussels yesterday. «It is essential to realize that it takes time to restore and enforce confidence after such a crisis, but the essential thing is that Greece is now on track,» Rehn said. (Bloomberg) Bulgarian bourse Bulgaria raised the state’s stake in the Balkan country’s stock exchange as it prepares to sell its majority to an industry investor and offer the rest to the public, said Ivan Takev, the bourse’s executive director. The government bought 715,000 shares at 1 lev apiece, raising its stake by 6 percent to 50 percent plus one share, Takev said in an interview in Sofia yesterday. The move guarantees the government will have control over the sale, probably next year. Since 2008, the stock exchange has traded on Deutsche Borse’s Xetra platform under a contract that expires in 2012. Bulgaria has discussed ways to sell its bourse stake over the past decade with Sweden’s OMX AG and exchanges in Austria, Greece and Poland to boost interest in local stocks and make trading more transparent. «A technology provider doesn’t necessarily have to be the strategic investor, but it is a certain advantage,» Takev said. (Bloomberg) Derivative controls The European Union’s executive body unveiled a blueprint yesterday to curb or ban short-selling and tighten controls on derivatives in one of its most ambitious financial reforms since the economic crisis unfolded. The shake-up tackles two of the most opaque sectors of financial services, seen by many politicians as the hunting ground for speculators seeking quick profits. It gives unprecedented powers to a new pan-European agency to impose three-month bans on short-selling – the sale of a security the seller does not have, often betting that the stock price will fall. The two laws, set to come into force in 2012, also lay the foundation for the overhaul of the $600 trillion-plus derivatives market as well as imposing strict curbs on «naked» short-selling. «No financial market can afford to remain a Wild West territory,» said Michel Barnier, the EU commissioner in charge of financial services reform. «We have to limit risks of hyper-speculation.» Derivatives, once described by billionaire investor Warren Buffett as «financial weapons of mass destruction,» were blamed for triggering panic after the collapse of Lehman Brothers two years ago, while some politicians say short-selling exacerbated Greece’s problems as it grappled with heavy debt. (Reuters) Serbian inflation The Serbian central bank expects two recent interest rate increases to have an effect on inflation only in early 2011, prompting price concerns in the months ahead, central bank Governor Dejan Soskic said. The inflation rate harmonized to European Union norms will probably be 7.2 percent at the end of this month, up from 6.6 percent in August, and above the target the bank set for the month, Soskic said at a press conference yesterday in Belgrade. (Bloomberg)