Tuesday's Early Headlines
- EU Warns Europe Needs Major Economic Reforms -- European Union officials have warned that Europe will stagnate unless eurozone governments make major reforms to boost growth. EU Economy Commissioner Olli Rehn predicts that growth will not top 1.5% and the jobless rate will stay close to current highs without reforms over the next five years, the Associated Press reports. Meanwhile, The Financial Times reports that EU countries will be forced to impose an upfront levy on banks, with the proceeds to be paid into national funds to insure against future financial failures. The proposals, expected to be unveiled Wednesday, is designed to prevent future bank failures from destabilising the broader financial system and could raise billions once implemented, the FT reports. Dr. Copper and the Pessimists (Forbes)
- BP Examines New Way to Plug Oil Leak -- BP (BP) is expected in a few days to begin a so-called top kill operation in which heavy drilling fluids would be injected into the well to stem the flow of oil and gas into the Gulf of Mexico and ultimately kill the well. However, if that plan is unsuccessful, BP said it is developing a cap containment option in which it would remove the damaged riser from the top of the blow-out preventer, leaving a cleanly-cut pipe. A cap would then be connected to a riser from a drillship with the intent of capturing most of the oil and gas flowing from the well.
- North Korea Threatens Military Action Against South Korea -- The Yonhap news agency said that North Korea has threatened to retaliate against South Korea with military action after accusing the country's navy of trespassing into its waters, CNN reports. "This is a deliberate provocation aimed to spark off another military conflict in the West Sea of Korea and thus push to a war phase the present north-south relations," a North Korean military official said in a statement, according to Yonhap. Asian markets tumbled on the geopolitical tensions, with the Hang Seng dropping 3.5%, the Nikkei 225 down 3.1% and the Shanghai off 1.9%.
- Microsoft Prepping Management Shake-Up: Report -- Microsoft (MSFT) plans a shake-up of the management of its division focused on videogames, mobile phones and other devices, The Wall Street Journal reports. Microsoft may announce major organizational changes at its Entertainment & Devices Division as early as this week, the newspaper reports, citing people familiar with the matter. The division includes Microsoft's Xbox videogame business and Windows Phone.
- Spanish Regional Banks to Merge Some Operations -- An agreement between Spanish regional banks Caja de Ahorros de Mediterraneo, Cajastur, Caja de Extremadura and Caja Cantabria aims to create a joint banking group that seeks to "strengthen solvency and assets of the participating banks," the banks said in a statement. The four banks said they would remain separate entities but would merge their risk policies, treasury operations, credit evaluation, internal controls and regulatory requirements, Reuters reports.