Business

Morning business round-up: Indonesia in growth surge

What made the business news in Asia and Europe this morning? Here's our daily business round-up:

Indonesia's economy grew more than expected in the second quarter as domestic consumption helped offset a decline in demand for exports.

In the three months to June, South East Asia's largest economy expanded by 6.4% from a year earlier. Analysts had expected growth of 6.1%.

Economists said low interest rates, stable consumer price growth and strong consumer and business confidence had helped boost domestic demand.

Elsewhere in Asia, Taiwan Semiconductor Manufacturing Company, the world's biggest contract chipmaker, has agreed to invest 1.1bn euros ($1.4bn; £850m) in one of its key equipment suppliers in a bid to cut costs.

Under the deal, it will invest 276m euros in Dutch firm ASML to develop tools to make smaller, more cost-effective chips.

This comes just weeks after Intel signed a similar agreement with ASML.

In other company news, troubled UK-based music, films and games retailer HMV has announced the departure of group finance director David Wolffe.

The move comes just days after the group's chief executive, Simon Fox, announced his intention to leave the company next month.

HMV said Mr Wolffe would stay in his post until a successor was found.

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On the markets, European shares have been buoyant, despite a weekend during which the troubles of the eurozone were very much on display.

In an interview with Germany's Der Spiegel magazine on Sunday, Italy's Prime Minister Mario Monti warned of a "psychological break-up" of Europe that had to be contained.

He said the eurozone crisis was creating national resentments that could damage the EU.

Separately, the head of Italy's central bank, Ignazio Visco, insisted his country did not yet need a bailout.

Meanwhile, negotiations between Greece and its rescue lenders made "good progress" and will resume in September.

In the UK, a graduate has lost her High Court bid to challenge a government scheme which she says forces people to work without being paid.

Cait Reilly, a University of Birmingham geology graduate, had argued that making her work unpaid at a Poundland store for two weeks or risk losing her benefits was a breach of human rights.

But a judge rejected her assertion, saying it was "a long way from contemporary thinking" to call the scheme slavery or forced labour.

The decision means that the British government is spared the prospect of having all back-to-work schemes declared invalid.

The latest Business Daily podcast from the BBC World Service ponders the question: did strong eurozone nations such as Germany help cause the crisis by lending too much to the weak ones?

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