Spain’s in trouble and philanthropists are on the warpath but there’s sunshine from the high street, and hopes of cheaper energy bills, plus Scotland’s Panda ad gets the chop.
THE FINANCIAL TIMES
Spanish bailout fears hit markets
By David Oakley in London, Victor Mallet in Madrid, and Michael Mackenzie in New York
Market turbulence returned to the eurozone on Tuesday as Spanish and Italian bonds and equities fell sharply on renewed concerns about the health of the European economy and investor fears that Spain could become the fourth member country to need emergency rescue loans. Spanish 10-year bond yields, which have an inverse relationship with prices, jumped above 6 per cent for the first time since the European Central Bank began flooding the region’s banks with €1tr in cheap loans in December. Spanish stocks dropped 3 per cent to the lowest levels since March 2009. Italian equities dropped 5 per cent and the country’s 10-year bond yields rose about a quarter of a percentage point to 5.68 per cent, a similar jump to Spanish bonds. Shares of Italy’s two biggest banks UniCredit and Intesa Sanpaolo fell 8 per cent. The falling markets in Europe undermined US stocks, which fell to their lowest level in a month. The S&P 500 was heading for its fifth successive decline by midday in New York, its longest losing streak since November.
THE GUARDIAN
European stock markets rocked by panic selling as debt crisis reignites
By Heather Stewart, Larry Elliott and Giles Tremlett
Europe's sovereign debt crisis exploded back into life on Tuesday, with markets across the continent rocked by a wave of panic selling amid renewed fears about the impact of savage austerity measures in Spain and Italy. The mood of uneasy calm seen across Europe since the Greek bailout in February was shattered as financial markets took fright at evidence of a double-dip recession and growing popular opposition to welfare cuts and tax increases. Italy and Spain, the eurozone's third and fourth biggest economies, were at the centre of the market turmoil, with investors demanding an increasingly high premium for holding their bonds. "Spain is right in the centre of a European storm," admitted finance minister Luis de Guindos, who declined to rule out an eventual bailout but insisted it could be avoided.
DAILY MAIL
Give it back, George! 800 furious charities say Osborne's budget will lose them millions as wealthy donors are branded tax dodgers
By Tim Shipman and Gerri Peev
Charities went to war with Downing Street last night after wealthy donors were branded tax dodgers. No 10 said many are giving money to bogus charities, some of them abroad, to claim income tax relief and wipe out their liabilities. But furious charities said the accusations – for which Downing Street has produced no evidence – were a desperate attempt to justify George Osborne’s plan to cap tax relief on donations. More than 800 charities, including Cancer Research UK and Macmillan Cancer Care, have signed up to a campaign called ‘Give it Back George’ to persuade the Chancellor to drop his plans, outlined in the Budget. They warned that the cap, set at 25 per cent of a donor’s income if he or she is giving more than £50,000, will hurt already struggling charities.
THE INDEPENDENT
Who are you calling tax dodgers? Philanthropists enraged by slur
By Nigel Morris
The acrimony between the Government and charity leaders intensified last night after David Cameron and George Osborne claimed philanthropists were giving money to good causes as a way of dodging tax. The charge brought angry protests from multimillionaire supporters of charities, arts organisations and medical researchers. One accused the Government of a "disgusting" slur. The Chancellor's decision to limit, from next April, the amount of tax relief wealthy donors can claim on philanthropic gifts – a move that critics claim will cost charities millions of pounds a year – has provoked outrage. A former Philanthropist of the Year, Richard Ross, whose parents founded the Rosetrees Trust funding medical research, joined the attack on Mr Osborne's "perverse" scheme. Mr Ross, an accountant who has given away £33m in recent years, told The Independent: "You want to encourage people to be more philanthropic, not limit them. [This decision] can only harm the country. They are using a sledgehammer to crack a nut. They are penalising everybody."
THE SUN
Insurance bombshell for Thomas Cook
By Steve Hawkes, Business Editor
An insurance giant has dealt a hammer blow to Thomas Cook — by refusing to cover suppliers to the cash-strapped holiday company. Euler Hermes regards the firm as such a risk that it will refuse to stand by companies doing business with the tour operator. The shock move threatens to shatter Thomas Cook’s relationships with holiday providers such as Virgin and Royal Caribbean cruises. Both sell deals through Thomas Cook — which is the official “short break” sponsor of the 2012 Olympics. Credit insurers such as Euler Hermes provide cover to suppliers that pay out when a customer goes bust.
THE TIMES
Ray of sunshine on high street
By Kathryn Hopkins
Retailers received a boost last month as warm weather encouraged Britons to splash out on summer clothes and gardening tools.
The British Retail Consortium said that like-for-like sales were up by 1.3 per cent in the year to March, while total sales, which included those made in new stores, rose by 3.6 per cent. “The unusually warm weather in March brought some welcome sunshine into the lives of non-food retailers,” Stephen Robertson, the body’s director-general, said. “The early signs of summer got people buying clothes and shoes for the new season. Gardening items and outdoor leisure also saw a lift.”
However, Mr Robertson warned that the picture could be distorted by the timing of Easter. “It’s worth remembering the sales comparison is against the weakest month of last year, largely caused by the movement of Easter in the calendar, and we’ll have to see whether this is additional spending or just shopping earlier than usual,” he said.
DAILY EXPRESS
Energy bills to be slashed: major suppliers ordered to help cut family costs
By Mark Reynolds
Millions of families could see their energy bills slashed by at least £100 a year under a deal to be announced today. After years of complaints alleging over-charging, the big six energy companies will have to write to customers every year to tell them of the best tariff and how to get it. Vulnerable customers – those assisted by the Warm Home Discount scheme – will be alerted twice a year to give them extra help. The Government claims the agreement struck with suppliers EDF, E.on, British Gas, Southern, Scottish Power and NPower, who provide 99 per cent of British homes, will see most household energy bills slashed. Families will see savings of up to £100 a year and even larger gains are hoped for as people are warned to shop around.
THE FINANCIAL TIMES
ABI warns over Barclays’ pay deals
By Patrick Jenkins, Banking Editor
Shareholder unease about the pay deals granted to bosses at Barclays intensified on Tuesday as a leading group of big UK institutional investors flagged its concerns about the bank’s pay policy ahead of its annual meeting in a fortnight. The Association of British Insurers warned its members in an “amber top” alert that there was a possible breach of best practice that investors needed to examine carefully. The alert is one step down from the organisation’s “red top” notice, its most serious warning of breaches in good governance. The ABI, which represents more than 300 groups holding about 17 per cent of the UK stock market, said it had concerns about the level of bonuses paid to Bob Diamond, chief executive, and Chris Lucas, finance director, for 2011. On top of a salary of £1.35m for Mr Diamond and £800,000 for Mr Lucas, both men were granted annual bonuses worth close to the maximum 250 per cent of annual salary built into their contracts in spite weakening profitability and a slumping share price.
THE TELEGRAPH
Best Buy chief Brian Dunn quits amid probe into 'personal conduct'
By Richard Blackden
“Certain issues were brought to the board’s attention regarding Mr Dunn’s personal conduct, unrelated to the company’s operations or financial controls, and an audit committee investigation was initiated,” the company said in a statement. “Prior to the completion of the investigation, Mr Dunn chose to resign.” Mr Dunn, who had been at the helm for close to three years, had been criticised for not recognising the scale of the challenge that Best Buy faces from internet retailers such as Amazon, discount chains including Wal-Mart, and from the rise of Apple stores. Best Buy, which built its success around the creation of huge shops, slumped to its first annual loss in more than two decades in 2011 as customers migrated online. Although Best Buy's online sales are climbing, its large stores have become an increasing financial burden to a company struggling to lift revenue. Sales climbed less than 1pc last year.
FINANCIAL TIMES
Unilever ends stand-off over pensions
By Louise Lucas, Consumer Industries Editor
Unilever has struck a deal with two of the biggest unions representing its employes to cut pension benefits after a seven-month stand-off with workers that saw the Anglo-Dutch multinational suffer its first nationwide strikes. The move comes after the maker of Dove shampoo and Flora margarine sweetened terms during last-ditch talks with unions last month.
THE GUARDIAN
IMF: governments should help with mortgages to avoid prolonged slump
By Heather Stewart
Governments should step in to help struggling households write off part of their mortgages in the wake of a financial crisis to avoid the risk of a prolonged economic slump, according to new research by the International Monetary Fund. In a chapter of the spring edition of its World Economic Outlook, the rest of which will be published next week, the IMF's economists find that a rapid buildup of household debt during a boom leads to a deeper downturn when the bubble bursts. "Housing busts preceded by larger run-ups in gross household debt are associated with deeper slumps, weaker recoveries, and more pronounced household deleveraging," they find.
THE SCOTSMAN
Watchdog bans advert that suggested Edinburgh Zoo pandas were a ‘gift’
By Andrew Whitaker
A Scottish Government advert that suggested the two giant pandas currently residing at Edinburgh Zoo were a gift to Scotland has been banned by the UK’s advertising watchdog for misleading the public. The Advertising Standards Authority (ASA) has ruled that the advert “must not appear again in its current form” or imply in future that the pandas were “provided without payment”, when in fact Edinburgh Zoo is paying £600,000 a year to the Chinese government for the next ten years as part of a loan deal. The Scottish Government’s newspaper advert claimed that China had “gifted” the pandas – male Yang Guang and female Tian Tian – to the zoo in a “symbolic gesture of friendship” between Scotland and the Beijing government. Following a complaint from the animal rights group Scotland for Animals, which claimed that the advert wrongly portrayed the pandas as a free gift, the ASA ruled yesterday that the panda loan was a “commercial arrangement”.
