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Financial Focus

George Osborne, the chancellor, was forced into another embarrassing
U-turn last night as he watered down his controversial “pasty tax”. The
chancellor was accused of hiking the price of affordable lunches at a time
when consumers were already being squeezed.

FOUR Greek banks have received €18bn (£14.4bn) in a bid to recapitalise
the stricken sector. The funds will be divided between National Bank,
Alpha, Eurobank and Piraeus Bank. The money has been released by the
European Financial Stability Fund to the Greek body in charge of
distributing the funds.

SHARES in bust lender Bankia plunged 13.4% yesterday after details
emerged of a controversial bailout plan that will see the Spanish
government take a 90% ownership stake in the bank. Markets are also
worried about the form the bailout will take. It emerged over the weekend
that Madrid is considering an unusual plan that would see it inject capital
using its own bonds rather than cash.

THE EUROZONE crisis has forced pension funds out of risky equity
markets, an industry study showed yesterday, but the funds are also trying
to avoid safe haven bonds because of the low yields on offer.

IRISH voters are set to approve the Eurozone’s fiscal compact in Thursday’s referendum, according to a range of opinion polls,
although other European leaders are already pushing to change the treaty. The compact, which seeks to impose limits on
government budget deficits to reassure markets and prevent a re-run of the current sovereign debt crisis, needs to be approved
by each government before they can be bound by it.

MARKETS:
ASIAN stocks inched up on hopes for China’s policy easing to boost the slowing economy, despite concerns that Europe’s debt
crisis may worsen.

INVESTORS remained cautious amid concerns about Spain’s banking sector, after 10-year Spanish bond yields surged 6.45%
yesterday. Spanish Prime Minister Mariano Rajoy struggled to finance a bailout of its third-biggest lender without tapping
markets. “Systemic risk is on the rise, and the problems have increasingly become circular, with banks themselves large holders
of government debt. Spain has become another problem child for the European Union,” ANZ Research analysts said in a note.

CURRENCIES:
THE EURO was poised for the biggest monthly decline since September, before a sale of Italian debt tomorrow and data this
week forecast to confirm that the prolonged debt crisis is hurting the region’s economy. The 17-nation currency was 0.2% from
the lowest since July 2010 after yield premiums on Spain’s securities over Germany’s rose to the most in 17 years.

ENERGY:
OIL rose for a third day in New York as speculation that economic growth will boost fuel demand in the U.S. and China, the
world’s biggest crude consumers, countered concern Europe’s debt crisis will worsen.

COMMODITIES:
THE FIRST drop in platinum mine supply in four years and record car sales, the biggest source of demand, are reducing a
surplus of the metal and shoring up prices on the brink of a bear market. Output will drop 4% to 6.14 million ounces this year as
labour strikes and safety concerns disrupt mining in South Africa, the biggest producer, Barclays Plc estimates. That will
diminish the annual glut by 90% to 37,000 ounces, the bank predicts.

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