ECONOMY

In Brief

FYROM asks IMF for 480-mln-euro credit line SKOPJE (AP) – The Former Yugoslav Republic of Macedonia (FYROM) has requested a credit line worth 480 million euros over two years from the International Monetary Fund, the latter said yesterday – seeking a safety net in the midst of Europe’s debt crisis and bond market turmoil. IMF Managing Director Dominique Strauss-Kahn said yesterday he will «rapidly» seek approval of the request from the Fund’s executive board. FYROM’s conservative government says it will use the money to support the budget and capital investments. It expects the economy to grow 2 percent this year and 3.5 percent in 2011. The former Yugoslav republic dipped into recession in 2009 with unemployment hovering around a staggering 30 percent. The money would be offered under the IMF’s new Precautionary Credit Line arrangement, designed to act as a safety net mainly for smaller economies that are fundamentally in good shape but struggling to cope with the global financial crisis. The arrangement does not require economic austerity – contrasting with the IMF’s bailout loans to neighbor Greece, which is receiving 110 billion from the Fund and European countries after overborrowing brought it to the brink of default. «FYROM has a sustained track record of sound economic policies. Its economic fundamentals and policy framework are strong, and FYROM authorities have demonstrated a commitment to maintaining this solid record,» Strauss-Kahn said in a statement. «I therefore intend to move ahead rapidly in seeking approval by the Fund’s Executive Board of FYROM’s request for a PCL arrangement.» EU regulators drop charges against Visa BRUSSELS (Reuters) – European Union regulators have dropped antitrust charges against Visa after accepting the company’s pledge to cut its debit card fees to a lower rate for domestic and cross-border transactions across nine EU countries. Visa will apply a 0.2 percent fee to all cross-border transactions and domestic purchases in Greece, Hungary, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Malta and Sweden, which will be legally binding for four years. The European Commission, which charged the credit and debit card network in 2009 with blocking competition between banks with its debit fees, tested Visa’s proposal to cut its fees to a standard rate in May. The EU executive said Visa’s new rate would mean a reduction of between 30 and 60 percent in its current fees. The so-called interchange fees, which merchants pay to banks and processing networks like Visa and MasterCard Inc every time a customer uses a credit or debit card, are a major revenue earner for the companies. Visa Europe, the European licensee of Visa Inc, gets more than 70 percent of its payment transactions through debit cards. «Lower interbank fees will trigger real benefits for merchants and consumers whilst more transparent rules will also improve competition in the cards markets,» EU Competition Commissioner Joaquin Almunia said in a statement. The Commission said it would now close its case on the issue. Rearranging debt? Greece may choose to rearrange its debt obligations with German assistance before 2013 as its own people tire of austerity measures and donor nations grow weary of offering aid, according to Brockhouse & Cooper Inc. «More fractious mobilization of support for weak eurozone governments and a harsher German attitude towards further bailouts could very well lead Greece to voluntarily choose to restructure its debt before 2013,» strategist Pierre Lapointe and economist Alex Bellefleur wrote in an investor note received yesterday. «An orderly Greek debt workout might also lead the way for other highly indebted European sovereigns, including Ireland, to seek permanent debt relief.» Investors should be «overweight» in German equities and sovereign bonds and «underweight» in French equities and sovereign bonds, they wrote, referring to holding more or less of the securities than the industry benchmarks used to monitor performance. (Bloomberg)