US trade deficit up: Trade gap levelling off, however
Washington DC: The US Census Bureau has said in a report yesterday that the country's trade deficit edged up slightly in May, mainly on the back of higher oil prices. It also said that a surge in American exports has however helped keep the imbalance between exports and imports in check

The Census Bureau said that the country's trade gap grew to $63.8 billion in May, about $500 million more than in April. Though the deficit was not quite as large as forecast by many economists, it was still 13 per cent larger than the $56.6 billion recorded in May 2005.

Disregarding energy prices, which, economists say, exaggerate the overall deficit figure, the trade imbalance report was not as grim as it appeared at first glance. In fact, US exports have reached a record high, and if energy prices were to be disregarded from the trade gap calculation then statistics imply that the country's trade imbalance is actually levelling off.

The surge in oil prices, which recorded their largest month-to-month increase in May, overshadowed a healthy gain in American exports, which reached a record level of $118.7 billion.

Exports of industrial materials like metals and plastics rose, as did exports of civilian aircraft, a sector that contributes heavily to trade figures.

The Census Bureau report also showed that the trade deficit with China grew by 4 per cent in May, reaching $17.7 billion. China on Monday reported an overall trade surplus of $14.5 billion for June, its largest on record.
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European Commission fines Microsoft $357 million
Brussels: The European Commission fined Microsoft $357 million on Wednesday for failing to comply with an antitrust order. The fine penalises the company for not sharing technical information about its dominant Windows operating system with competitors, as it was ordered to in a European antitrust ruling in 2004.

This is the first time a company has been fined for not obeying a European antitrust order.

Neelie Kroes, Europe's competition commissioner, said the fine was imposed as over the last two years Microsoft had failed to supply information in a way that would allow rival software makers to make their programs work smoothly with Windows.

The information-sharing order in the European antitrust ruling was meant to ensure fair competition in the market for data-serving software that powers Internet applications and corporate data centres, where Microsoft's server software competes with offerings from I.B.M., Oracle, Sun Microsystems, Red Hat and other companies.

Microsoft has repeatedly said it made good-faith efforts to comply with the order. But in March, the commission's independent monitor called Microsoft's work "incomplete, inaccurate and unusable." Microsoft now says that it plans to hand over the last of the requested documents and specifications on July 18.

The fine announced on Wednesday was the daily total from Dec.16 last year to June 30. Microsoft is appealing the fine, as also the 2004 antitrust ruling in Europe, and the much larger fine of more than $600 million that was part of that ruling.

Microsoft's rivals in the market for server software allege that the company has played a stalling game by design, gaining market share all the while by unfairly leveraging its dominance of PC desktops. According to these companies, for a company sitting on $35 billion in cash, the fines are little more than a nuisance.
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P5+1 to refer Iran to the security council
Paris: The on-and-off international confrontation over Iran's nuclear programme spurted back into prominence yesterday after Russia and China agreed to back a US-led move to refer Tehran to the UN security council. The move could lead to the imposition of punitive sanctions on Iran by the international body and lead to a sharp escalation of the crisis.

Foreign ministers of the five permanent members of the security council - the US, Britain, France, Russia and China - plus Germany agreed to the referral at a meeting in Paris ahead of this weekend's Group of Eight summit in St Petersburg.

Philippe Douste-Blazy, the French foreign minister, said that the permanent members of the security council had no choice but to return to the security council and continue the process suspended two months ago, as the Iranians had given no indication at all that they were prepared to engage seriously on the substance of the proposals submitted to them.

The decision by the group of countries, known as the P5+1, followed inconclusive talks in Brussels on Tuesday between Javier Solana, the EU's foreign policy chief, and Ali Larijani, Iran's top nuclear negotiator and chairman of the country's supreme national security council.

According to reports, at the meeting Larijani reiterated Iran's previously stated position that it would not offer a formal response to a package of incentives proffered by the West until it was ready, and possibly not before August 22. Western countries had demanded an answer before the G8 summit.

The western package, which is understood to include technological and economic incentives, is dependent on Iran agreeing to suspend all its uranium enrichment activities indefinitely. The US and other countries believe Iran is pursuing enrichment in order to gain the capability to manufacture nuclear weapons. Tehran flatly denies the charge, saying it wants nuclear technology solely for civil power generation purposes.
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Record revenues spur LSE's determination to remain independent
London: Driven by record electronic trading, the London Stock Exchange (LSE) has reported a 25% surge in its revenues to £84.3 million over the first quarter. The results have prompted the exchange to say that it was determined to retain its independence after a series of abortive takeover approaches in the past 18 months.

Speaking to shareholders at the annual meeting, LSE chairman Chris Gibson-Smith said the strong performance "validates" the board's decision to go it alone. Gibson-Smith said the LSE had raised over £21bn on its markets this year, more than double the previous year's total. Of the new companies, 104 were international flotations, nearly four times the number listing in the US.

"London attracted more than two-thirds of all the IPOs in western Europe, with our nearest European rival, Euronext, attracting just 10%," he said.

He stressed that the LSE's "unique strategic position" must be protected: "What happens to the Exchange matters deeply to London's international financial market ... our futures are inextricably intertwined.

"London's stakeholders do not want a combination of exchanges that might lead to the erosion of these attributes through the import of unsuitable regulations and incompatible market models."

Nasdaq has built a 25% stake in the LSE and may bid again.
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