Vocabulary

To put on “alert negative” сделать предупреждение о падении рейтинга

To offer little cause for smth давать мало оснований

Rating рейтинг

Rating agency рейтинговая компания

Sovereign credit rating независимая оценка кредитоспособности

Negative impact отрицательное воздействие

External debt внешний долг

Roll-over risk риск пролонгации кредита

Gross debt общая задолженность

Net debt чистая задолженность

Respectively соответственно

Foreign exchange receipts объем внешнеторговых поступлений страны

Adverse impact неблагоприятное воздействие

Liquid ликвидный

To denominate называть, именовать, переводить

Debt service liabilities обязательства по задолженности

By a substantial margin существенно

To raise concern вызывать озабоченность

Commodity prices цены на товары широкого потребления

To decline идти на убыль, приходить в упадок, ухудшаться

Export volume объем экспорта

To push out further подталкивать дальше

Maturity срок платежа по векселю

Exercise 17. Choose the correct explanation without using a glossary.

1. “the time at which a note, etc. becomes due” is …

a) margin

b) maturity

c) rating

2. “independent of all others” is …

a) sovereign

b) adverse

c) net

3. “the power of an event, idea, etc. to produce changes, move the feelings, etc.” is …

a) alert

b) price

c) impact

4. “the refinancing of a maturing note, etc.; the reinvesting of funds in such a way as to defer the payment of taxes” is …

a) roll-out

b) roll-over

c) liquidity

5. “remaining after certain deductions or allowances have been made, as for expenses, weight of containers or waste materials, etc” is …

a) net

b) gross

c) negative

6. “in regard to each of two or more, in the order made” is …

a) respectively

b) adversely

c) fully

7. “ a receiving or being received” is …

a) receiver

b) receptionist

c) receipt

8. “unfavorable, harmful, opposite in position” is …

a) adventurous

b) adverse

c) negative

9. “to give a specified name to; to call” is …

a) to denominate

b) to mention

c) to decline

10. “worry, anxiety, care” is …

a) respect

b) impact

c) concern

Exercise 18. Reread the article (of ex.16) more carefully and complete the sentences given below using information from the article:

1. Fitch IBCA, the rating agency, yesterday placed Australia’s sovereign credit rating on “alert negative” because ___________________________________

_______________________________________________________________

2. Gross and net external debt, at 232 per cent and 157 per cent of foreign exchange receipts respectively, was

_______________________________________________________________

_____________________________________________________________ .

3. The move also covered the State of Queensland, the Commonwealth Bank of Australia (guaranteed notes) and National Australia Bank, which are also rated at __________________________________________________________________

______________________________________________________________ .

4. In addition, the agency said external liquidity indicators offered little cause for comfort given that more than 40 per cent of Australia’s foreign currency debt has a maturity of less than ________________________________________________

____________________________________________________________ .

5. That exposed it to “roll-over risk” and exchange rate-induced sales of

____________________________________________________________________

_____________________________________________________________ .

6. Debt service liabilities exceeded liquid foreign assets by a subnational margin, raising concerns about __________________________________________

_____________________________________________________________ .

7. High external debt had translated into a widening deficit on investment income, which accounted for _____________________________________________

______________________________________________________________ .

8. Falling commodity prices and declining export volumes could push the current account deficit out further, the agency said, to ________________________

______________________________________________________________ .

Exercise 19. Single out the main facts of the article and present them in a short review.

LESSON 5

Exercise 1. Read the text that follows. Study the vocabulary given after it.

EU withholding tax would be a useless piece of bureaucracy

The European Commission is proposing a 20 per cent withholding tax on bank interest. It is not a measure the UK government should support. The UK already, in most cases, imposes a withholding tax of 20 per cent on such interest unless the recipient is able to certify that he or she is not ordinarily resident for tax purposes in the UK. If the proposal were to be adopted and the UK were required to deduct tax, this would be a useless piece of bureaucracy.

The UK has tax treaties with all the other member states of the EU that would require it to refund the tax withheld from residents of those other states, except for residents of Belgium, Italy, Portugal and Spain – who would receive different repayments of up to half of the tax withheld. Thus, from the UK perspective, the proposal gives added cost but no additional defense to counter the UK to avoid engaging in this unnecessary paper chase.

The Commission’s proposals no doubt reflect wider anxieties about what it sees as undesirable tax evasion. It may be that the remedy lies in re-visiting the domestic legislation and tax collection structures of member states affected rather than in seeking to impose requirements on other states. In particular, the special position of UK offshore islands is not something the UK government should be prepared to try to overturn without the strongest of reasons, even if it is legally and constitutionally able to do so.

The readers have already been made aware of the risks to London’s position as an international finance center caused by the proposed EU directive that seeks to impose a withholding tax on interest due to European bondholders other than institutions.

Our association’s concern is with the corporate bond issuer who could face higher capital costs, first because of the need to increase the return offered to compensate for the withholding tax just at the time when European bond markets should be expanding to offer corporates a cheaper and readier of funds, and, second, because of lower demand from investors who may migrate to other markets, for example the US.

We urge the authorities in the UK and Brussels to have second thoughts about this most damaging proposal.