ECONOMY

In Brief

Puma says hit by fraud at Greek joint venture FRANKFURT/MUNICH (Reuters) – German sporting goods maker Puma said it would bring criminal charges against its partners in a Greek joint venture after discovering a swindle that could cost it as much as 130 million euros. Puma said yesterday it suspected that its «Greek joint-venture partner, along with members of the Greek local management, has committed a series of criminal acts» based on the preliminary findings of an audit. «This is about systematic evasion and embezzlement,» Puma CEO Jochen Zeitz told Reuters in an interview. He said it was not yet clear how much Puma would seek in damages from its partners, brothers Georgios and Antonios Glou, who own 15 percent each of the Puma Hellas venture. Officials at Glou, a nonlisted Greek clothing retailer, declined to comment. The two brothers did not immediately return a phone call to their office seeking comment. Greece is one of Puma’s 10 biggest European markets, with annual sales in the tens of millions of euros. Cyprus pensions and salaries could be cut NICOSIA (Reuters) – Cyprus must urgently trim widening public-sector deficits to safeguard a nascent economic recovery and avert more dramatic cost cutting, which could slash salaries and pensions, Central Bank Governor Athanasios Orphanides said yesterday. He said government estimates of a 6 percent deficit in 2010 – twice the ceiling recommended by the European Union – could prove to be overly optimistic, and it could hit 7 percent of gross domestic product next year, well above a target set by Brussels. Orphanides, a governing council member of the European Central Bank, said delays in cutting spending would amplify the impact of any fiscal consolidation package, and said it could hit pensions and the state payroll. He also said a taxation option, one of several mulled by authorities to wrestle down a deficit seen hitting 6 percent this year, was not a solution. «The passage of time will make any required measures more painful. As the deficit widens, so do solutions that require a higher cost,» Orphanides told parliament’s finance committee. Bulgaria debt Bulgaria’s gross foreign debt inched down 1.1 percent year-on-year in August to 36.5 billion euros due to a fall in commercial banks’ debt, the central bank said yesterday. That was a slightly faster decline than a 0.7 percent year-on-year fall in foreign debt in July. Bulgaria, which was hit hard by the economic crisis, expects its 2010 deficit to expand to 4.6 percent of gross domestic product (GDP) due to shrinking revenues and hidden deficits accumulated by the previous Socialist-led government. In 2011 it aims to almost halve the deficit to 2.5 percent of GDP, betting its economy will grow 3.6 percent next year. External debt fell 0.9 percent in August from the previous month, following a drop in bank borrowing as economic recession has made banks more cautious about extending credit. (Reuters) Albanian bond Albania is reviving plans to sell its first bonds in euros as demand for emerging-market debt pushes the borrowing costs of the poorest nation in the Balkans lower than that of neighboring Greece. The country is seeking to sell 300 to 400 million euros of five-year bonds that may be priced to yield about 7.5 percent, according to two people with knowledge of the sale. The yield on Greece’s note due August 2015 fell one basis point to 9.68 percent at 1.13 p.m. yesterday in Athens. Greece is rated BB+, the highest noninvestment grade, by Standard & Poor’s, and Albania is rated three steps lower at B+. (Bloomberg) Cypriot bookbuilding Cyprus launched bookbuilding for a five-year bond yesterday, a source with one of the lead managers told IFR, a Reuters news service. The lead managers for the deal for the eurozone member are Barclays, Bank of Cyprus and Societe Generale. (Reuters)