* Emerging powers frustrated over impact of euro zone crisis* Developing countries powerless to spur euro debt solutionBy Catherine BremerPARIS, Oct 14 (Reuters) - A short-lived push by developing
economies at G20 talks to give the IMF more resources hinted at
the frustration simmering among emerging powers who are
powerless to halt a euro zone crisis that is hurting their own
prospects.Several developing countries in the Group of 20 advocated
ramping up the International Monetary Fund’s firepower as
finance deputies met in Paris, but the plan was rejected by the
United States and others.China, Brazil and India all favour bolstering the IMF’s
capital, G20 sources said, and Russian and Mexican officials
told Reuters they were open to the idea, with Mexico’s deputy
finance minister explaining that more tools and funds should be
deployed to curb the contagion spreading from Greece.The fact bigger G20 powers moved to quash the idea even
before finance chiefs sat down for their opening dinner gave a
hint of the tensions hanging over the G20 talks, as the euro
zone battles to come up with a convincing crisis resolution plan
and stem fears the world is sliding into another recession.”The atmosphere is complex. There is a sense of urgency, of
crisis,” Mexican Deputy Finance Minister Gerardo Rodriguez said.Japanese Finance Minister Jun Azumi said emerging country
G20 ministers feared the euro crisis would spur further outflows
from their economies into safe havens like the yen.”What was different from the meeting in Washington DC was
that some countries voiced concern that the European crisis
could have severe repercussions for emerging economies,” he
said. “They pointed out that retreat of capital, mainly to
Europe, could slow growth in BRICS and Asian economies.”Mexico, which has had to cut its 2012 growth outlook to 3.5
percent from 4.2 percent as economic turmoil rocks the rich
world, wants to see the euro crisis brought to a halt, he said.”We are worried about the situation because this lack of a
deep-rooted solution to the challenges that have arisen in
Europe has provoked this contamination towards other emerging
countries, including Mexico,” Rodriguez told Reuters.”It’s a concern we are obviously bringing to the table (in
Paris) with the idea that they take more concrete, more decisive
actions and succeed in halting this atmosphere of uncertainty.”RESENTMENT MOUNTSThe G20 finance talks come just over a week before an Oct.
23 European Union summit where Paris and Berlin have promised
that a plan will be endorsed to stem the euro zone debt crisis.Emerging market powers — who have a new voice in global
policymaking through the G20 but still have little ability to
spur on any euro zone action plan — are angry that while EU
leaders dither, investors are ditching high-risk assets.”Our market is suffering from pressures on the European
market,” said Russian Deputy Finance Minister Sergei Storchak”We have experienced crazy volatility,” he said. “There are
no fundamental factors in Russia behind such volatility.”Central banks from Ankara to Brasilia have come out to
defend their currencies as sell-offs in emerging market stocks,
bonds and currencies have rekindled memories of a mass flight to
safe-haven assets during the 2008-09 financial crisis.Countries like Mexico, which have battled to win investor
credibility, resent being punished by financial markets because
of a crisis of confidence in Europe, where fiscal profligacy by
peripheral euro states has now infected banks in core nations.”This is not desirable for emerging economies like Mexico
where we have very solid fundamentals, our public finances are
in order, we’re accumulated reserves and we have tried to be
responsible in public debt and the banking sector,” Rodriguez
said.The United States and other key G20 powers will also pile
pressure on EU leaders in Paris to announce a concrete solution
to the euro crisis before France’s G20 presidency wraps up with
a Nov 3-4 summit in Cannes, but they do not want new IMF funding
that could dilute their sway over the lender.U.S. Treasury Secretary Timothy Geithner said Europe had
ample resources to solve its crisis without extra IMF funds.”We need to remain focused on the Europeans solving this
crisis, and avoid focusing on non-central issues like increasing
the resources of the IMF. And not everyone agrees,” Canadian
Finance Minister Jim Flaherty said.The idea of more IMF firepower has been mooted before and on
Monday Brazilian Finance Minister Guido Mantega said the Paris
G20 would discuss it. One emerging market source said $350
billion could be an appropriate sum to inject.Indian Finance Minister Pranab Mukherjee said a “careful
assessment” should be made of the IMF’s liquidity provisions.The IMF is already weighing whether to expand its rescue
lending capacity via debt issuance or bilateral borrowing, and
one G20 source said the IMF could soon make short-term credit
lines available to healthy countries hit by liquidity crises.
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ENBD dropped 4.3 percent to a 27-week low after sinking 1.6
percent on Tuesday, while the Dubai index slipped 0.3 percent to
its lowest close since March 7.Investors said they saw little benefit from the takeover for
ENBD as it would probably have to deal with any losses
accumulated by Dubai Bank. But they also predicted the downside
would be minor.”We estimate that even in the worst case scenario, the
impact on ENBD, based on simplistic assumptions, is likely to be
limited,” EFG Hermes said in a note. “DB is a much smaller
entity compared to ENBD.”In Oman, shares fell 0.8 percent to a seven-week low,
led by weakness in bank stocks.”We saw strong selling pressure from asset managers in the
country,” said Adel Nasr, United Securities brokerage manager in
Muscat. “They started to liquidate and foreign institutionals
have their own fears over the European crisis. They want to keep
cash on the side.”Heavyweight Bank Muscat shed 0.8 percent, Bank
Dhofar slipped 0.2 percent and National Bank of Oman
declined 2.6 percent. Bank Muscat reported a 15.8
percent increase in third-quarter net profit on Wednesday,
edging ahead of analysts’ forecasts.In Kuwait, telecoms operator Zain fell 1.1
percent. Affiliate Zain Saudi reported a narrower
third quarter loss on Wednesday but the results still missed
estimates; its stock ended flat.SAUDI ARABIASaudi Arabia’s shares fell for a second day as investors
booked profits in insurance stocks. The kingdom’s benchmark
index slipped 0.2 percent while the insurance index
fell from Tuesday’s four-month high, dropping 1.6
percent.The market showed very little reaction to Washington’s
accusation that Iran backed a plot to kill the Saudi ambassador
to the United States.Investors have grown used to tensions between Saudi Arabia
and Iran and it is not yet clear if the plot accusation will
develop into a full-blown crisis. Also, foreign investment in
the Saudi market is at low levels for economic reasons, so the
market is not vulnerable to a sudden pull-out.In Egypt, foreign institutions and funds bought into
beaten-down stocks with heavyweight Orascom Construction
Industries (OCI) climbing 4.5 percent. The index
rose 0.8 percent, trimming its 2011 losses to 43.3
percent.”There is talk in the market that foreign institutions and
funds are snapping up Egyptian blue chips, which are at very low
prices,” said Osool Brokerage’s Mohamed Swefy.But a sharp rebound of the index off an intra-day low of
3,820 points in the past three days, to a close of 4,050 on
Wednesday, suggests the market may have found a fairly solid
bottom because of cheap valuations, though many analysts think
an extended rally is unlikely given political tensions.Qatar’s benchmark index bucked the regional trend and
rose 0.8 percent to a two-week high. Traders said institutions
were buying in ahead of quarterly earnings, and were attracted
by cash dividends from bank stocks at year-end.Commercial Bank of Qatar gained 2.8 percent, Qatar
National Bank rose 0.6 percent and Doha Bank
climbed 1.3 percent.WEDNESDAY’S HIGHLIGHTSDUBAI* The index slipped 0.3 percent to 1,384 points.OMAN* The index fell 0.8 percent to 5,519 points.KUWAIT* The measure declined 0.2 percent to 5,848 points.SAUDI ARABIA* The index slipped 0.2 percent to 6,105 points.EGYPT* The index rose 0.8 percent to 4,050 points.QATAR* The index advanced 0.8 percent to 8,418 points.ABU DHABI* The benchmark slipped 0.3 percent to 2,487 points.BAHRAIN* The measure fell 0.7 percent to 1,148 points.
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The latest proposals from the European Commission amend those made in 2008, following criticism that the original ideas went too far in loosening restrictions governing communications between pharmaceuticals companies and patients.John Dalli, European commissioner for health and consumer policy, said in a statement the new proposals would “further strengthen the control of authorized medicines.”The new proposals from the Commission, the executive arm of the European Union, would allow information in only certain areas, such as information on the label and on packaging leaflets, information on prices and clinical trials, and instructions for use.An earlier idea of letting drugmakers publish information about medicines on websites or in print — for example, in health supplements in newspapers — has been rejected under the new proposals, which state: “A publication in general print media will not be permitted.”The tough line may disappoint drugmakers wanting more leeway to provide information directly to consumers in Europe, which they argue is needed in part as a counterbalance to sometimes unreliable data provided on the Internet.But the Commission’s new line was welcomed by the European Public Health Alliance (EPHA), which represents healthcare professionals and patients, for keeping advertising at bay.”The previous proposal was just a disguised way of giving pharmaceutical companies enough flexibility to promote their products directly to the public, in order to boost the sector’s growth,” said Monika Kosinska, the group’s secretary general.NO U.S.-STYLE TV ADVERTSIn fact, the European pharmaceutical industry had never asked for a green light for U.S.-style direct to consumer (DTC) advertising, which some company executives anyway now view as a costly mistake.DTC advertising of prescription drugs is only permitted in the United States and New Zealand, and the practice has been widely attacked by U.S. consumer groups, especially in the wake of the 2004 withdrawal of Merck & Co’s heavily promoted painkiller Vioxx.Instead, drugmakers in Europe would like to steer a middle course between full-on television adverts and zero communication.”Those citizens seeking information on their disease or therapy should be able to access it in both user-friendly formats and in their own language,” the European Federation of Pharmaceutical Industries and Associations said on Tuesday.Consumer groups have long resisted any loosening of restrictions, arguing that drugmakers cannot be trusted to provide unbiased information.The European Consumers’ Organization BEUC said the redrafting of the plans were a first tangible effect of the decision to move competence on pharmaceuticals policy from the Commission’s industry division to the directorate responsible for health.
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