17/07/2025

BIZ & FINANCE THURSDAY | JULY 17, 2025

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Reeves vows to lift ‘boot on the neck’ off business

French premier proposes cutting national holidays to reduce debt PARIS: Prime Minister Francois Bayrou said on Tuesday he wanted to reduce the number of public holidays in France as part of a bid to tackle what he called the “curse” of his country’s debt. Presenting 2026 budget proposals, Bayrou said two out of France’s 11 national holidays could go, suggesting Easter Monday and May 8, a day that commemorates the end of World War II in Europe. Such a measure would bring France into line with Germany’s nine national holidays – although federal states can add their own – and take it well below Italy’s 12 days. After years of overspending, France is on notice to control its public deficit and cut its sprawling debt, as required under EU rules. Bayrou said France had to borrow each month to pay pensions and the salaries of civil servants, a state of affairs he called “a curse with no way out”. Losing two public holidays would add “several billions of euros” to the state’s coffers, Bayrou said. But the proposed measure sparked an immediate protest from Jordan Bardella, leader of the far-right National Rally. He said abolishing two holidays, “especially ones as filled with meaning as Easter Monday and May 8 is a direct attack on our history, our roots and on labour in France”. The party’s parliamentary leader, Marine Le Pen, warned that“if Francois Bayrou does not revise his plan, we will vote for a no-confidence motion”. Leftist firebrand Jean-Luc Melenchon of the France Unbowed party called for Bayrou’s resignation, saying “these injustices cannot be tolerated any longer”. Bayrou had said previously that France’s budgetary position needed to be improved by €40 billion (RM197 billion) next year. But this figure has risen after President Emmanuel Macron said at the weekend he wanted €3.5 billion of extra military spending next year. France has a defence budget of €50.5 billion for 2025. Bayrou said the budget deficit would be cut to 4.6% next year, from an estimated 5.4% this year, and would fall below the 3% required by EU rules by 2029. To achieve this, other measures would include a general freeze on spending increases except for debt servicing and the defence sector, Bayrou said. France’s debt stands at 114% of GDP – compared to 60% allowed under EU rules. – AFP VELDHOVEN: ASML, the world’s biggest supplier of computer chip-making equipment, warned yesterday that it may not achieve growth in 2026, even after its second-quarter bookings beat market expectations. Analysts had hoped that the quarter would provide some reassurance over its outlook for 2026. However, the company warned that geopolitical uncertainty

strong demand from artificial intelligence related chipmakers. ASML’s EUV lithography machines, the world’s most advanced chip circuit printing system, is the key enabling technology behind leading-edge chips like those used in Nvidia’s GPUs, or Apple’s Macs and iPhones. Chinese demand also remained elevated, representing 27% of all machine sales in the last three quarters. – Reuters firms, investors, and consumers”. Britain has the lowest level of retail investment among the Group of Seven rich countries, the finance ministry said, and the government has been looking for levers to get more money into stocks. From April 2026, the Financial Conduct Authority – a regulator – will allow banks to alert customers about specific investment opportunities so they can consider shifting money from low-return current accounts. Before then, banks will run an advertising campaign to promote share investments. Regulators will review the risk warnings given for different financial investments. The government stopped short of reducing tax incentives for savers using cash-only Individual Savings Accounts to aid investment in shares, but Reeves said she would consider further changes. As well as consumers, the finance minister has targeted British pension funds. Reeves said she was “confident” she would not need to use new powers to force funds to invest in a wider range of assets, although the new pension bill reserves that right. As well as long-term reform, greater “near-term incentives” were needed to unlock more pension fund money, Anne Glover, CEO of venture capital investor Amadeus Capital Partners, said following Reeves’ speech. Other changes announced on Tuesday included reforming how the Financial Ombudsman Service resolves consumer complaints and for the FCA to review the impact of its consumer duty policy. The Senior Managers and Certification Regime – set up after the 2008 financial crisis – will be streamlined, Reeves said. Prospectus requirements for listing companies issuing new shares will be scrapped. New rules to support a more competitive captive insurance sector were proposed while the FCA said it would accelerate the process for authorising new companies. – Reuters

Aureus, said he was not worried about the upcoming year, noting that the quarter pointed to solid demand. The Dutch group’s net bookings, the most closely watched figure in the industry, were €5.54 billion (RM27 billion). That was ahead of analysts’ consensus estimate of €4.44 billion, according to researcher Visible Alpha. “The second quarter beats from top to bottom,” analyst Michael Roeg of Degroof Petercam said. Roeg cited confirmed an easing of access to mortgages. “In too many areas, regulation still acts as a boot on the neck of businesses choking off the enterprise and innovation that is the lifeblood of growth,” she told an audience of financial executives at the City of London’s annual “Mansion House” dinner. She described her package of reforms as the most wide-ranging in a decade for financial services, and said she wanted to slash red tape much more widely too. “Regulators in other sectors must take up the call I make this evening not to bend to the temptation of excessive caution,” she said. Financial executives have welcomed Reeves’ promises – including at her last Mansion House speech – to reduce red tape and encourage risk-taking. But her pitch to the City comes with the industry worried about a stuttering economy and about rival financial centres stealing market share. While the FTSE 100 index hit a record high on Tuesday, fundraising from companies listing on the London Stock Exchange has sunk to its lowest in decades. With Reeves and Prime Minister Keir Starmer’s promise to speed up Britain’s economy largely elusive, fears are mounting that taxes will rise further to balance public finances. The government last month announced a 10-year industrial strategy that included the financial services sector. On Tuesday, Reeves backed changes announced by the Bank of England to help banks free up capital, including a delay to the implementation of part of the Basel banking reforms, and an easing in capital requirements for mid-sized lenders. Barclays chief executive C.S. Venkatakrishnan, who was at the Mansion House dinner with Reeves, said the regulatory changes would support UK financial sector competitiveness. Karim Haji, KPMG’s global and UK head of financial services, said the critical test for reforms “will be in their execution and how quickly these proposals can translate into real, measurable benefits for

o UK finance minister seeks to ease more rules, encourage savers to invest in stocks

LONDON: British Chancellor of the Exchequer Rachel Reeves pledged on Tuesday to ease regulation further and announced measures to boost the finance sector, including reforming requirements for banks to separate retail and investment banking activities and a plan to get more savers investing in stocks. Under pressure to get lacklustre economic growth going, Reeves doubled down on her message

since Labour came to power last year: that post-financial crisis regulation is stifling growth and needs to be pared back. The chancellor promised “meaningful reform” of bank ring-fencing – rules designed to shield depositors from volatile investment banking. She also pledged simpler regulatory approvals for smaller financial companies and

Reeves delivering a speech, as Lord Mayor of London Alastair King sits, during the annual Mansion House dinner in London. – REUTERSPIC

ASML warns it may not achieve growth in 2026

Roger Dassen said in the interview, adding ASML was working with its supply chain to mitigate any impact. “While we still prepare for growth in 2026, we cannot confirm it at this stage,” Fouquet said in a statement. If it materialised, 2026 would be the first flat year in over a decade of uninterrupted revenue growth since 2012. ASML investor Han Dieperink, chief investment officer at investment firm

continued to cloud its prospects. Shares sank as much as 7.3% in early trading. “The level of uncertainty is increasing, mostly due to macroeconomic and geopolitical consideration. And that includes, of course, tariffs,” ASML’s chief executive Christophe Fouquet said in an internal interview on the company’s website. The direct and indirect impact of tariffs are still very uncertain, CFO