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Weekend news roundup: BAE Systems contract loss, British Airways strike, Greek debt crisis

14th Mar 2010, 11:43 am Weekend news roundup: BAE Systems contract loss, British Airways strike, Greek debt crisis

Political uncertainty will likely be hovering over the markets again as recent polls have shown that the gap between the Conservatives and Labour has narrowed to make a hung parliament seem like a likely outcome of the upcoming election. According to the Sunday Times, the Conservative Party is now leading Labour 37% to 31%, while a research by the Sunday Telegraph now puts the Conservatives’ lead at 38% to 31%.

British Prime Minister Gordon Brown has held talks with French President Nicolas Sarkozy during the latter’s visit to London at the end of this week with both leaders backing the idea of a global bank levy and claiming there was support in other countries as well. The two leaders, however, failed to reach common ground on the EU’s proposed rules to regulate hedge funds with Brown calling for protection for offshore-registered London-based hedge funds, though British Prime Minister said a solution would be reached within the next few days.

US defence contractor General Dynamics (NYSE: GD) has secured a £1 billion deal to build Scout armoured reconnaissance vehicles for the British army, delivering a huge blow to domestic defence and aerospace systems manufacturer and FTSE 100 constituent BAE Systems (LSE: BA), which also bid for the deal. According to the Sunday Sun, the loss could result in some 650 jobs lost at BAE’s Scotswood Road site in Newcastle.

The European Union is reportedly nearing a deal that would offer Greece a €20-25 billion bailout package, which will be discussed during a meeting of eurozone financial ministers that is set to kick off on Monday. The aid would have to come in the form of loan guarantees as EU regulations prohibit bailouts. Last week, Greece raised €5 billion in an oversubscribed bond issue to meet its near term commitments and introduced a fresh package of economic austerity measures to save it another €4.8 billion, aiming to meet the UE target of reducing its budget deficit by 4% this year.

It has been estimated that Greece will need to secure about €50 billion this year to avoid a default. The EU is currently trying to prevent the debt crisis from spreading into other countries of the 16-state eurozone.

British Airways’ (LSE: BAY) union has announced that cabin crew members will go on a three day strike starting March 20 and a four day walkout on March 27 after talks over cost cuts failed.

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