document.writeln("

Italy faces credit downgrade as finance minister resigns
Rome: Just days before unveiling the new budget, Italian finance minister, Domenico Siniscalco resigned yesterday, protesting that he was "scandalised" by the conduct of his own government. Italy now faces the risk of further credit downgrades.

A Cambridge economist and technocrat recruited to tackle the country's dire finances, Siniscalco said he was throwing in the towel after 14 months because it was impossible to get anything done.

He said the last straw was his failure to unseat Italy's central bank governor, Antonio Fazio, caught on police surveillance tapes conspiring with private bankers to block a Dutch take-over of Italy's Banca Antonveneta.

Siniscalco called the governor an "institutional monster" clinging to his job despite the detrimental effect on the country's reputation. He also launched a blistering attack on the economic dilettantism of premier Silvio Berlusconi, who faces re-election within months.

Fitch credit rating agency said it now feared a "budget blow-out" as Rome moved into electoral mode, putting the country's AA rating at risk. It has been on negative watch since June. Fitch said the national debt is already forecast to rise from 106.9pc of GDP last year to 109pc in 2006, but could now start galloping upwards on a dangerous trajectory.

The IMF warned this week that the deficit is likely to reach 5.1pc next year, with growth of just 1.4pc after zero in 2005.
Back to News Review index page  

Sony to slash 10,000 jobs worldwide
Tokyo: Sony Corp. announced Thursday it will slash 10,000 employees, or about 7 percent of its global workforce, and close 11 production facilities as part of a sweeping restructuring plan in a bid to revive its fortunes. The plan is aimed at cutting costs by 200 billion yen by the end of March 2008, Sony said.

CEO Howard Stringer said the company will focus its resources on "champion products," including the PlayStation, LCD TVs, Walkmans and camcorders, and withdraw from 15 business categories, which he declined to name.

Thursday's announcement was watched closely as it is the first test for Stringer, who assumed the top position in June, to attempt to turn around the consumer electronics giant, which has grown quite unwieldy in the rapidly changing digital era.

Stringer said Sony will continue to pursue growth in its consumer electronics and entertainment segment, noting electronics, games and entertainment are its core trio.

Stringer said revitalizing the electronics business was the firm's priority. Sony has been slow to ride the digital wave. Dragged down by its TV unit, Sony's consumer-electronics business posted losses for two straight years, with management expecting another loss for the current fiscal year.

President Ryoji Chubachi, who heads the consumer-electronics division, said Sony's fragmented organization has resulted in stretched out resources and redundant products. He said the firm will reorganize and have a centralized chain of command.

Under the plan, Sony will reduce the number of products by 20 percent.
Back to News Review index page