ECONOMY

In Brief

Spain cuts jobless benefit to ease debt fears MADRID (AP) – Spain will sell off a third of its national lottery business, partially privatize airports and cut both a key jobless benefit and taxes for small companies in an unexpected move announced yesterday by Prime Minister Jose Luis Rodriguez Zapatero to soothe market fears about the country’s debt crisis. Hours after making the announcement, Zapatero’s office said he was also canceling a trip later this week to Bolivia and Argentina so he can preside over a Cabinet meeting in Madrid tomorrow to approve the measures. The fresh government austerity push – particularly the politically sensitive abolition of a monthly 420-euro ($549) payment to people whose unemployment benefits have expired – show how anxious the government is to avoid a deterioration in market turmoil. «The government will approve a package of measures on Friday to favor economic investment and employment which will especially benefit small and medium-sized companies,» Zapatero said. Spain’s financial markets have been pummeled in recent weeks by investors who fear the country may need a bailout like those received by Greece and Ireland. The government insists it will not need help and the new measures appeared designed to convince investors Spain will be able to control its high deficit and support growth in the eurozone’s fourth-largest economy. Rescuing Spain would seriously test Europe’s finances. Finansbank may issue 1-billion-euro bond ISTANBUL (Reuters) – Finansbank, the Turkish lender owned by National Bank of Greece (NBG), may issue a 1-billion-lira bond ($670 million) after its planned public offering, Finansbank’s chairman told Reuters. Seeking to boost its balance sheet in the wake of the Greek debt crisis earlier this year, NBG, Greece’s largest lender, plans to sell up to 20 percent and retain a 75 percent stake in the Turkish bank. «After the public offering, we can hold a 1-billion-lira bond issue,» Omer Aras said in an interview. NBG, which has said it aims to raise 2.8 billion euros ($3.86 billion), completed a 1.8-billion-euro cash call through a rights issue in October. According to Aras, NBG had expected the Finansbank offering could raise a billion euros. Half the proceeds from the sale will go to NBG and half to Finansbank, Aras said. Turkish banks have been relatively unscathed by the global financial woes as a result of stringent policies imposed after a 2001 Turkish crisis. Aras said NBG was not launching an exit strategy from Finansbank and said that its management would not change after the sale. The public offering was targeted for the first half of February but could be delayed until the second quarter due to continuing market volatility in Europe, Aras said. Gas supplier Cyprus may pick its natural gas supplier for the next 20 years within the coming month, the head of the island’s state electricity authority said on Tuesday. Now exclusively reliant on heavy fuel, authorities are conducting negotiations with short-listed companies for natural gas to come on stream by 2014. A government-controlled company, Natural Gas Public Company (DEFA), is leading talks. «Negotiations are now in the final stage and I believe we should have more information on this before the end of the year,» said Haris Thrassou, head of the electricity authority EAC. The EAC holds a 44 percent stake in DEFA. In a parallel process to DEFA’s selection of a supplier, the EAC wants a strategic partner to participate in a liquefied natural gas (LNG) terminal project. Negotiations there have almost concluded, with the EAC in the final phase of a selection process, Energy Minister Antonis Paschalides told a news conference. The EAC and its partner will be responsible for running the terminal and regassifying gas, while DEFA will be responsible for its distribution. According to DEFA projections, Cyprus will require an estimated 0.77 million metric tons of LNG each year for electricity generation to start with in 2014, rising gradually to 1.37 million metric tons per annum in 2035. (Reuters)