In Brief
Will Ireland be the next EU state to seek a bailout? DUBLIN (AP) – Ireland’s financial troubles loomed large yesterday as investors – betting that the country soon could join Greece in seeking a bailout from the European Union – drove the interest rate on the country’s 10-year borrowing to a new high. The yield, or interest rate, on 10-year bonds rose above 8 percent for the first time since the launch of the euro, the European Union’s common currency, 11 years ago. Bond traders increasingly believe that Ireland soon will be forced to tap Europe’s emergency fund for eurozone nations facing the threat of bankruptcy. The 16 nations of the eurozone created that 750-billion-euro backstop in May as the EU and International Monetary Fund provided an emergency 110-billion-euro loan to Greece. Another bailout would send more shock waves through the currency union, which has struggled to find ways to keep individual governments from overspending and threatening the currency’s value. Flaring financial tensions have driven the euro off recent six-month highs of $1.428 versus the dollar. The euro was trading yesterday at $1.3760, down from its opening of $1.3773. The cost of funding Irish debt has risen steadily since September, when the government admitted its bailout of five banks would cost at least 45 billion euros, equivalent to 10,000 euros for every man, woman and child in Ireland. That gargantuan bill, in turn, has made the projected 2010 deficit rise to 32 percent of gross domestic product, the highest in postwar Europe. The yield on 10-year Irish notes rose steadily from 7.94 percent and passed 8.4 percent in afternoon trade. No sign of recovery in Greek construction sector Greek construction activity, measured by the number of new building permits, fell 5.5 percent year-on-year in August, showing no sign of recovery for the hard-hit sector. Construction, a key driver for Greece’s economy, dropped 14.2 percent last year, contributing to the country’s first recession since 1993. Statistics service data released yesterday showed building permits fell 10.4 percent year-on-year in the first eight months of 2010. Data on volume and surface of space being built showed respective drops of 26 and 21.2 percent in the period. Greece’s economy is expected to shrink 4.0 percent this year as belt-tightening measures, needed to secure eurozone and International Monetary Fund emergency funding and avert a debt default, take their toll. (Reuters) Dispute settled Greek drugmaker Alapis Holdings SA announced its plans to distribute an eye medication in eight countries after it won a patent dispute at the European Patent Office. «This decision allows Alapis and other companies to launch an affordable generic product in the form of latanoprost eye drops,» Stelios Kimparidis, Alapis vice chairman and chief executive officer, said in an e-mailed statement from the Athens-based company yesterday. Alapis has obtained licenses to circulate a generic version of latanoprost in the UK, Spain, Italy, Greece and Bulgaria, the statement said. Permits are still pending for Croatia, Switzerland and Serbia, according to the e-mail. The EPO decided to revoke the patent from Pfizer Health AB on October 5 after five companies complained, the e-mail said. (Bloomberg) Supermarket sales Delhaize Group SA, the owner of Food Lion supermarkets in the US, reported a 9.4 percent increase in third-quarter profit and confirmed its forecast for 2010 as the decline in US comparable store sales slowed. Net income climbed to 140 million euros ($193 million) from 128 million a year earlier, Brussels-based Delhaize said in a statement yesterday. That compares with the 125.8-million-euro average of 13 analyst estimates compiled by Bloomberg. Revenues rose 8.6 percent to 5.31 billion euros. Sales at US stores open at least a year fell 1.8 percent in the third quarter, compared with a 3.6 percent decline in the second quarter, helped by improving revenue trends in the southeast as the retailer stepped up promotions at Food Lion. The US represents about 70 percent of Delhaize’s revenue. «The positive trend in the US combined with strong performances in Belgium and Greece enables us to generate a healthy and stable operating margin,» CEO Pierre-Olivier Beckers said in the statement. (Bloomberg)
