In Brief
Capital gains tax takes edge off competitiveness Greece’s move to tax capital gains and dividends from January as part of measures to plug its budget hole will end up hurting its stock market as they strip it of a key competitive advantage, brokers said yesterday. Scrambling to shore up weak revenues and keep the fiscal gap below the European Union’s 3 percent cap, Greece’s conservative government opted for last-minute measures including a 10 percent tax on capital gains and dividends, effective from January 2009. For years, capital gains in Greece’s stock market were not taxed, an advantage that helped attract foreign investment flows. «These measures will end up turning funds away from Greece’s capital market,» said Alexander Moraitakis, who heads the Athens stock exchange member brokers’ association SMEHA. «The question is whether these taxes will bring serious income to state coffers, which is doubtful, or end up costing in terms of growth, jobs and the equal treatment of all investors,» he said. (Reuters) Investment bank takes part of collapsed group Straumur-Burdaras Investment Bank hf, the Icelandic investment bank that lent money to XL Leisure Group Plc, has acquired the French and German units of the collapsed UK tour operator. Straumur has a «current exposure» to XL Leisure of 45 million euros ($63 million) and it is not clear what can be recovered, the Reykjavik-based bank said in a statement yesterday. The bank has committed «significant additional funds» to the company in recent weeks to try to solve XL’s difficulties, Straumur said. XL Airways Germany, the tour operator’s German unit, carried 200,000 passengers on behalf of German tour operators to destinations in Turkey, Greece and Spain last year. It has seven aircraft. The unit made a profit last year and forecast another in 2008. (Bloomberg) Unemployment up Romania’s unemployment rate rose to 3.9 percent in August from the previous month, but was unchanged from August 2007, data from the employment agency’s website (www.anofm.ro) showed yesterday. Yet Romania is struggling with a growing shortage of workers in construction and manufacturing, as workers seek better pay abroad. More than one in 10 Romanians has left the country since the fall of communism in 1989. Low unemployment and a race to catch up with Western standards have put pressure on Romania’s labor market, forcing employers into double-digit wage hikes in recent years, fueling inflationary pressures. In July, the centrist government hiked the minimum monthly wage by 40 lei to 540 lei ($209). Analysts say many people who are unemployed are not reflected in the official figures because of long-term structural unemployment. (Reuters) Inflation eases Bulgarian inflation dropped to 11.2 percent in August due to a fall in food prices and the fading impact of high price growth a year earlier, data showed yesterday. Consumer price inflation fell back from 14.5 percent year-on-year a month earlier, despite prices edging up 0.1 percent in August compared with a 1.5 percent increase the previous month, statistics office data showed. Food prices, the main driver behind the Balkan country’s double-digit inflation in the past year, declined by 0.4 percent in August for a second month in a row. (Reuters)
