- - Wednesday, May 16, 2012


FRANKFURT — The European Central Bank would like Greece to stay in the eurozone, its president, Mario Draghi, said Wednesday, amid continued political uncertainty that threatens to force it out of the bloc.

“Our strong preference is that Greece will continue to stay in the euro area,” Mr. Draghi told a conference here, adding that it was not up to the central bank to decide the fate of the Greeks.

“Since the [EU] treaty does not foresee anything on exit, this is not a matter for the ECB to decide.”

He reiterated that the bank’s sole duty was “keeping price stability over the medium term in line with treaty provisions” and “preserving the integrity of our balance sheet.”

Greece’s inability to form a government since inconclusive elections in May has threatened to force it out of the eurozone, as the country goes to the polls a second time June 17, according to the Athens News Agency.

For the European Central Bank, keeping the 17-nation bloc intact has always been sacrosanct, but this latest round of Greek turmoil has seemingly reduced its attachment to the debt-wracked nation.

Belgian central bank chief Luc Coene has recently talked of an “amicable divorce” in the Financial Times.

And Irish central bank governor Patrick Honohan has said that a Greek departure from the eurozone “isn’t necessarily fatal” and could “technically” be managed.

Mr. Draghi hailed the “difficult and significant reforms” carried out by several eurozone countries to tackle the crisis while urging them to do even more.


Poland seeks competitive edge through new technology

WARSAW — Poland, which is expected to post the European Union’s highest growth this year, is hoping to further boost its competitive edge by investing in new information technology, the country’s e-government czar said Wednesday.

“In competitiveness rankings, [IT] infrastructure is part of what has for years now lowered our position,” said Michal Boni, Poland’s digital affairs minister in charge of ushering the country into the digital age, at a forum Wednesday.

Speakers at the Central and Eastern European Competitiveness Forum held in Warsaw focused on how ex-communist countries in the region could harness technology to improve their competitiveness.

Poland placed 41st out of 142 on the World Economic Forum’s 2011-2012 Global Competitiveness Index, while Estonia, the region’s top-scoring nation, came in 33rd.

Mr. Boni cited Estonia as a model for the kind of e-government Poland hoped to introduce in the coming years to boost its efficiency.

Estonia, a Baltic state of 1.3 million people which earned the nickname “E-Stonia” for being one of the world’s most wired nations, became the first country to use online voting in parliamentary elections in 2007.

Mr. Boni added that Poland wants to hone its residents’ computer skills and give them more reason to go online, as Poles of all ages now access the Internet much more frequently at home rather than at work, school or elsewhere.

And 15 percent of Polish households, or 2.4 million, stay offline not due to financial constraints, but because they simply see no need to go on the Internet.


Officials: Skechers deceived consumers with shoe ads

The government wants you to know that simply sporting a pair of Skechers’ fitness shoes is not going to get you Kim Kardashian’s curves or Brooke Burke’s toned tush.

Skechers USA Inc. will pay $40 million to settle charges by the Federal Trade Commission that the footwear company made unfounded claims that its Shape-ups shoes would help people lose weight and strengthen their butt, leg and stomach muscles. Celebrities endorsed the shoes in ads.

The settlement, announced Wednesday, also involves the company’s Resistance Runner, Toners, and Tone-ups shoes. Skechers made deceptive claims about those shoes, too, says the agency.

Consumers who bought the shoes will be eligible for refunds.

The commission settled similar charges with Reebok last year over its EasyTone walking shoes and RunTone running shoes. That $25 million agreement also provided customer refunds.

Skechers billed its Shape-ups as a fitness tool designed to promote weight loss and tone muscles with the shoe’s curved “rocker” or rolling bottom, saying it provides natural instability and causes the consumer to “use more energy with every step.” Shape-ups cost about $100.

Ads for the Resistance Runner shoes claimed people who wear them could increase “muscle activation” by up to 85 percent for posture-related muscles and 71 percent for one of the muscles in the buttocks, the FTC said.


Legg Mason to buy back debt, shares

BALTIMORE — Shares of asset management company Legg Mason Inc. jumped Wednesday after the company said it will buy back $1.25 billion in debt held by a private equity firm and got authority to buy back up to $1 billion of its shares.

Legg Mason said it has drawn about $250 million from a revolving credit facility, and plans to use other debt and cash to buy back the $1.25 billion of convertible senior notes that private equity firm Kohlberg Kravis Roberts & Co. holds.

The company said the plan will cut its overall debt. It plans to take a noncash accounting charge between about $70 million and $80 million during its first fiscal quarter to pay off the senior notes.

As part of the transaction, KKR executive Scott C. Nuttall will step down from Legg Mason’s board. Mr. Nuttall is head of KKR’s global capital and asset management group, according to the company’s website.

Jefferies Group analyst Daniel Fannon said the capital plan should give Legg Mason more financial flexibility, and should start adding to its profits by 2013.

He said the deal removes “a major concern for investors,” regarding the company’s capital deployment.

“In our view, this removes some of the uncertainty around the ‘story’ and will allow investors to get back to focusing on fundamentals, which have been improving modestly in recent periods,” Mr. Fannon said in a note to clients.

• From wire dispatches and staff reports

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