— Assambleya

The Greek government has unveiled an austerity budget that aims to cut its 2011 public deficit to 7.4% of the nation’s annual economic output or GDP.

If achieved, this would mean a 5bn-euro ($6.8bn; £4.3bn) reduction on Greece’s projected 9.4% deficit for 2010.

Under the budget plans, the government will cut health and defence spending, and increase the sales tax on most retail items from 11% to 14%.

Greece had to accept a 110bn-euro ($150bn; £93bn) rescue deal in May.

This sum – which is being given to the country in three stages – has come from the European Union and International Monetary Fund.

To get the money, Greece had to agree to enforce substantial spending cuts to reduce both its public deficit and overall government debt, which are among the largest in Europe.

The country’s finance department also said that the Greek economy would contract by 4.2% this year and by a further 3% in 2011, higher than its previous estimate of a 2.6% slowdown next year.

The budget also reveals that the Greek government is to sell stakes in state-owned companies, and even four Airbus A340 planes that it owns.

The sale of organisations to be partly or fully privatised included rail operator Trainose, mining firm Larko, gas operator DEPA, and defence group Hellenic.

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Dell has reported a 144% rise in third quarter net income to $822m (£511m), thanks to falling costs and a post-recession wave of IT upgrades.

Revenues in the three months to September rose 19% from a year ago, driven by corporate orders.

In contrast, the computer manufacturer reported only a 4% rise in takings from consumer clients, as household spending on laptops and PCs remained weak.

The US firm also said profit margins widened on a drop in component prices.

‘Muted’ consumer demand

«Dell is growing in the right areas, and I’m very excited about out momentum,» said the company’s founder, chairman and chief executive, Michael Dell, commenting on the company’s third quarter results.

Regionally, revenue growth was strongest in the big emerging markets of Brazil, Russia, India and China, which together rose 30% on a year ago, led by India which was up 55%.

Dell said revenues had also been helped partly by its refusal to be drawn into price wars, claiming to have turned down some contracts that would have been insufficiently profitable.

Sales to public sector clients were buoyant – up 20% – despite a recent warning from peer Cisco that its sales to the US government sector would suffer because of fiscal cutbacks.

Dell said that it expected «to see continued strength from the ongoing client refresh among large corporate accounts and strong growth in enterprise products and services».

However, it thought that demand from consumer clients would remain «muted», and expected its full year profits to remain in the mid-range of its previously indicated 14%-19% growth forecast.

Fatter margins

The company’s share price rose 4.8% on the results in trading after the official close of the New York markets, reversing much of a 6% drop in the share price following Cisco’s warning last week.

While the strong revenue growth was actually slightly weaker than bullish market expectations, Dell also reported a surprisingly strong improvement in its operating profit margins.

The company attributed its stronger margins to lower component costs, as well as improvements in its supply chain.

Dell makes more than half of its revenues from the relatively low-margin PC sales business.

However, this area of business is expected to continue to do well as corporate clients upgrade their IT systems for Microsoft’s newest operating system, Windows 7.

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Shares in General Motors (GM) have risen 3.6% on the first day of trading following the carmaker’s record public share offering.

Shares closed at $34.19 in New York from a start of $33, although they did reach a high of $35.60 during the day.

GM raised $20.1bn through its offering, making it the largest share sale in the US to date.

President Barack Obama said the firm was on track to recover the government money spent on bailing it out.

The amount raised could rise to a world record $23.1bn if underwriters exercise an option to sell more shares.

Surprisingly strong investor demand had allowed the carmaker to lift the price of the shares on offer to $33 from the $26 it had initially hoped for.

GM is returning to the market after a $50bn government bail-out.

The Dow Jones Industrial Average closed up 173 points at 11,183, a rise of 1.6%.

Mr Obama said: «Today, one of the toughest tales of the recession took another big step toward becoming a success story.

«American taxpayers are now positioned to recover more than my administration invested in GM, and that’s a good thing.»

Canada, which pumped in $10bn and owns 12% of the stock, said it too would seek to recover some of its investment by selling part of its stake.

Different ballpark

The day’s trading began on Wall Street when GM chief executive Dan Akerson rang the opening bell on the New York Stock Exchange.

«There’s a lot of work to do, but today is the beginning of the new company,» said Mark Reuss, GM’s North American president.

Government officials said the company’s strong market debut showed they had made the right choice in rescuing the carmaker.

«This is a bit better than people had been projecting. As to a year ago, it’s not even in the same ballpark,» Ron Bloom, the Treasury official in charge of the GM investment told Reuters.

«A year ago, people said, ‘You have no exit, you have no strategy. This company is not fixed’.»

The carmaker has raised $20.1bn from the sale of the shares. However, an over-allotment option, which will be settled over the next 30 days, would add $3bn to that figure, taking GM beyond the $22.1bn raised by the Agricultural Bank of China’s market launch.

The share sale, known as an initial public offering (IPO), will allow the US government reduce its current 61% stake in the company to as low as 33%.

GM returned to profit this year for the first time since 2004. The company made $5bn during the first nine months of this year.

Scott Painter from the US car comparison site Truecar.com believes the IPO is a sign of how well the economic recovery is going.

«I think GM having a strong IPO and pricing it at the high end of the range certainly speaks well of America and confidence in America, and GM is a really good indicator of everything that we’ve been through over the last couple of years and how the recovery is working out,» he said.

© bbc.co.uk