Hello. Welcome to todays edition of worldwide exchange. Im ross westgate. And im kelly evans. Here are your headlines from around the world. Spains gdp contracts for a sixth straight quarter, down more than initially expected as its most troubled lender posts the countrys biggest ever loss. And the finance minister raises taxes on top earners rather than cut spending in an election year. And the eu moves to clamp down on big paychecks in the Banking Sector, looking to cap bonuses on a bankers salary as early as next year. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. Okay. Were back. Youre mobiled up and we have some data. Yes. Its such a mobile world, isnt it, in many ways. Lets first talk about whats happening with the german unemployment figures. We were waiting on these. It turns out 6. 9 , that is the unemployment level for germany in january. The unadjusted figure is 7. 4 . Its higher than expected. You can see the forecast was for 6. 8 . The prior month was revised higher. The rate itself was unchanged. Thats a right i think here in london or certainly in the u. S. They wouldnt mind seeing at this point. Weve created a million private sector jobs. In britain . Yeah. Well, congratulations. There you go. That is the great conundrum, right . Its true. The different between well, and even with germany. The liesh market Social Security holding up, despite the sharp contraction in the Fourth Quarter. Although this will probably add to the sense that the German Economy bottomed during that period. Did i see any i havent seen any, no. I think thats out a little later. Plenty to get through on todays program. Its good to be back, by the way. Biggest take away from the mobile World Congress . Whats the one thing you saw that you thought, oh, that is really cool. I go to a conference like this and i think, machine res taking over the world. Thats the thing we talk about. I dont like those machine peps. Exactly. So 50 billion connectedm devic. Thats a figure thatjs some y the point is, it isnt just about you and i talking to each other on a mobile phone. We are well beyond that. We dont need a mobile phone. Were here, we sit next yeah, you see, theres less and less of this happening. I find it a little sad. There were a little of really cool goojts, its just that i havent been much of a gadget head. Nor me. Were talk to germany, talk about the risks of volatility. And bar a lastminute miracle, the sequester in the u. S. Kicks in tomorrow. Well get the views from the washington elite about the impact of those pending cuts. Well be in dublin at the ibco conference. Is the celtic tiger ready to start roaring again . Well hear from the irish leader within the hour. Dont miss out on that. Its budget day in india. The finance minister has unveiled a plan calling for tough choices and increased spending. How are investors reacting . Well watch markets and get a view on that in particular. Plus, in japan, abes government has selected a flock of dove to head up the bank of japan. Sixuan has more details for us in asia. Hi, sixuan. I thank you, ross. Yes, its official. The japanese government has nominated Harihiko Kuroda as the bank of japan chief. But the appointment is still subject to approval, but lawmakers in both the lower and upper houses. Kuroda will ask for nominees. They will get their testimony in parliament in the coming days. This is good news for equity investors. Kuroda has been pegged as an advocate of radical easing and a tough deflation fighter. He has been pushing for more aggressive bond buying and has the boj will be able to meet the 2 inflation target in just two years. The nikkei 225 opened up 1 at the getgo with the market fully accepting these nomination peps it finished the day up a solid 2. 7 . Back to you. Okay, sixuan, thanks for that. Joining us now is masuki kitchikawa. Thanks very much for joining us. With this appointment, what happens now . Well, actually, the nomination of mr. Kuroda is a best of choice in my view because hes a very strong performer for more aggressive monetary easing. But as a former minister in finance in charge of international finance, he has a very deep understanding of International Financial markets, including frank change. Also, he has a strong skill to manage the strong bureaucratic institution like boj. Hes a best choice as the next governor. Does this mean its more likely we might change the bank of japan law, as well . Well, yes. The nomination was a kind of surprise and he haas has been a kind of proponent for revising the boj low. If the boj turned out to be slow to change, even after the new governor is inaugurated, i think that the Prime Minister abe would become more serious about changing boj low. So nomination is kind of message from the cabinet to the boj people. The market has priced in a lot. The nikkei has gone to more than 11,600. The yen from 78 up to 95 against the dollar. Weve moved a lot on asset prices. Im just wondering whether, you know, even mr. Kuroda can meet the expectations that have been priced in. Well, i think, you know, under mr. Kurodas leadership, he would accelerate the spupdent as well as lengthening the maturities it would hold. It would have much more impact on the exchange rate. The yen could resume weakening to some extent. 10 exchange. Exchange rate would lead to a 5 change in cpi. If mr. Kuroda is able to sustain the japanese yen, it would affect the inflation from next year. And what prospect is there from the bank of japan to buy foreign assets here . Direct involvement by the boj is very unlikely because it is very dangerous. Regarding a kind of sobering wealth fund type of scheme, to fit boj with supply and fund, there is some possibility of that. But probably trying adoption. All right. Thanks very much, indeed, for that. Now, speaking of weakness, the spanish economy has shrunk more than expected in the Fourth Quarter. The final reading of gdp shows 0. 9 year on year basis. Its the steepest drop on domestic product since 2009. Bankia has contracted worse than estimated in the Fourth Quarter. Stephane is in madrid following this story for us. Good to see you again. And its amazing that a company with a share price this low can still turn in a loss this large. Yes. And there are still some discussions to fix the new price for the bankia shares because it has to take into account the impacts of the recapitalization and the bailout of the bank. Madrid would like to set a new price at 10 cents per share, but the European Commission according to some sources would like only one cent, whatever the scenario. Its true that the initial investor who both their shares one year ago will face a significant or heavy loss, their initial staple will be dilute d as 97 . So theyre going to face a significant loss. The numbers out this morning is the record loss ever posted by the spanish company. 90. 2 billion euros. It was affected last year by some significant charge. One of them was due to the transfer of their toxic assets to the spanish bank, nearly 12 billion euros of charge. The bank took some to cover its potential losses. It was hit by 26. 8 billion euros in exceptional items. The bank plans to return to profits this year and its targeting a net profit of 1. 2 billion euros for 2015. It says that the confidence is coming back, that the deposit, for instance, have been proved by 975 Million Euros in the Fourth Quarter and the bank announced this morning that its forming loan ratio was up 13 at the end of december, up from 13. 3 at the end of the third quarter. Of course, its still a very, very high level for the nonconforming loans, but the trend is there. Stephane, just away from bankia, we just got the latest current account deficit figures so that the december current account deficit, 4. 87 billion euros, this is from the bank of spain were now hearing. That means a 2012 current account deficit, 8. 3 billion. It was 37. 5 billion since 2011. They have made progress on that. Their challenge, as weve seen, will be still hitting their deficit targets for this year. And theres no way that spain will manage to reach its deficit target without any economic growth. Kelly just mentioned the gdp number for the Fourth Quarter, 078 . That was even steeper than the flashes, the worst quarterly performance since 2009 and last year the spanish economy shrank by 1. 4 . Its the worst performer ever since the country returned in 1975. And, of course, with the economy in recession, theres no way the country can improve its labor market. Theres no way the country could improve its deficit. Thats the reason why maraano rajoy is asking for more time. The European Commission was ready to give more time, but spain will have to give more austerity measures, meaning less economic activity, less gdp growth means more unemployment. That vicious circle is going to make it difficult to go out of this cycle. Stephane, thank you for that. Well catch you a little later. The dutch super market operator rhold saw margins rise both in its hold market and in the u. S. Where it runs the giant stop and shop retail chains. Its catchy, that. I spent a lot of time there in connecticut growing up. Okay. Well take you there some day. Take me to the local stop and shop in connecticut. The company has decided to buy back 500 million worth of shares and raise its dividends 44 cents a share. Which is interesting because we know grocery chains have not been the friendliest environment for them. Well have more on this later on in the program. And we spoke to a ceo a little earlier in what prompted these moves. Clearly on our free cash flow, we delivered record high 1. 2 billion over last year. So that is why we were looking at Share Buyback to our performance of the last year and our performance cea divestments. Does it work . I think its working. It certainly improves the extra share. So both sides, of course, we do the right things. Carolin did ask him about buying harris teeter. He wouldnt comment but said they were looking at way toes deploy cash. Well take a look at these numbers later on in the program at about 11 10 Central European time. Ross. Thanks very much indeed for that, kelly. Right. Here we are. Six to three advancers outpacing decliners on the Dow Jones Stoxx 600. European markets are up at the session low. The xetra dax up 31, the ibex up 24 points. The ftse mib down 0. 4 . Lets show where you we stand with italian bond yields. Post that well received auction, weve lowered on yields this morning, 4. 768 . Spanish yields slightly lower, as well. Here is the one i was talking about, gilt yields. Hosts that downgrades are low. 2. 1497. Were up on the day. We were down around 9. 145 during the program yesterday. Currency markets, euro dollar, we hit that low, 1. 3018 on tuesday. Just above it at the moment at 1. 3118. Not much yen reaction to mr. Kurodas nomination to the bank of japan governor. 92. 31 is where we stand. Relatively unchanged as is sterling dollar. Off its recent lows of 1. 51. 71. Thats where we stand in europe. Now more back to sixuan for more on that asian session. Thank you, ross. Its a relief rally here in asia as investors pick solace ask drag its comments on the eurozone. The nikkei jumped a stunning 2. 7 . The nomination of the boj chief boosted sentiment. Exporter stocks rebounded on bargain hunting. Komatsu shares added 3. 7 today. Also a strong session for the shanghai composite up over 2 . This despite the pboc raining from its liquidity operations on thursday after draining from the markets this week. Property developers rallied after the countrys largest bank posted a 30 jump in its 2012 net profit as shares gained a whooping 6 . In hong kong, the hang seng chopped up a 2 gain helped by financials and energy plays. Property counters lent support after final end posted an 80 jump in its first half underlying profit. The kospi gained over 1 . Meanwhile, australias asx 200 had its best day in seven months as resources continued to shine. That index had rallied 4. 6 in february and its a 10 gain yeartodate. Indias sensex, down about 0. 8 while the country unveiled a bigger than expected outlay in this years budget. Back to you. Sixuan, catch you later. Back to you. Now, were going to take a quick break. Investors appeared to be running away from safety into the far reaches of the risk spectrum. Highyield bonds which by extension are in the lowest quality are in the midst of a record year with 62 billion hitting the u. S. Market according to recent reports. How long can the rush last . See what experts have to say at cnbc. Com. Also, following a decade of hugely successful gadgets like at this phone and ipad, apple could be facing an innovation crisis, much more profund than simply needing a new device. Apparently china is partly to blame. Find out why at cnbc. Com. 75, ross . Why stop there . Right . I mean, keep going is what i say. The wait is over for one of indias more highly anticipated budgets. Well be going over to mumbai right after this. With the threat of a credit downgrade hanging over him, indias finance minister has pulled the wraps off a new budget saying changes have to be made. He ames to trim the deficit and raise tax on top income earners and having profits on large companies. But the budget boosts spending by 16 in a bid to boost growth. Rindell has more from us live from mumbai. Hi, rema. Hi. Thanks so much for that. Largely, the union budget this time around has turned out to be a nonevent. In context to global markets, for this time around, the budget is not in including any big reformist ideas. Why would their expectations that there could be . Its presented by what was called the dream budget. Expectations were running high and markets were betting on the man to alleviate the growth in india and come out with big bang reform. Secondly, there is also some concern that there could be down to investments coming through the ruse. The Tax Residency or the drc is necessary, but not a sufficient condition for the ddea benefits. So there is a bit of concern coming out of the tax side with respect to more issues. So be watching out for that. But apart from that, he has met the target but this year its time for the 5. 2 next year. 4. 8 . Planned expenditure has gone up by 30 on a year on year basis. Hes gone ahead and, taed the super rich, as well. There is a 10 surcharge on annual income earners of over 1 clod. Largely, its a nonevent. On that note, its back to you. Okay. Rema, thanks very much. Lets pick up now with rahol bojoria. Rahul, its been said in the past indias consolidation during this near term boost. Do you still feel that way . The budget was pretty pragmatic in terms of laying out the agenda on whats of need right now. There has been some fiscal consolidatio consolidation, but expenditure has not been cut. In fact, it has gone up significantly in order to boost growth. At the same time, consumption of luxury items is the one which has basically suffered and it seems that the numbers overall look pretty credible. Pretty credible, i guess the question, though, becomes just how much fiscal wiggle room the government has here. Is it the best approach in your view to go to the wealth tax, increased spending route here . Well, i think that was part of the calibrated populism ahead of the very Important National election. However, its not going to boost revenue specifically. I think the revenue uptick is essentially going to come through things like divestments which the government has set a very aggressive target for. If theyre able to meet that target in the next six months of the fiscal year, i think the credibility of the current numbers will rise even further. Its not just revenue, they need to boost growth. Its higher taxes on the rich and on large companies, is it a way to boost growth . I think the finance minister has made it clear that this is going to be a one off tax. This is not the way to finance the fiscal deficit. I think, again, the symbolism is more to try and boost revenues. Just to ensure that the Credit Outlook of the company itself does not deteriorate. At the same time, they have given out some concessions to boost the domestic economy. So i think overall, its been a fairly pragmatic, fairly balanced budget, although the gross pouring numbers did surprise the markets on the up side and theyre taking it negatively. I was just going to say, were seeing the sensex now down almost 1 . Despite what youre laying out here, theres clearly some investor concern about what this means for india. Well, i think given the 10 surcharge on corporation, there has to be a technical increase in stocks. Payments have to be paid back. Beyond that, i think it really the tendency has been to basically take off budget measure toes try and boost sentiment. Thats been the modum operan did i of the current government. Because, again, the government has to meet its divestment targets and for that, it needs a buoyant equity market. Presumably, were going to have high Gross Borrowing and high spending. That will be inflationary. How will the rbi respond . Well, i think the rbi has been doing a good job in sort of managing the liquidity and at the same time ensuring that it does not send out any negative signals in terms of monetization of debt itself. I think the rbi will probably look at the current budget with a pinch of salt, but still sort of probably take some comfort from the fact that its not a populist budget as far as expenditure is concerned and that may ally some of the inflationary concerns. Rahul, thanks for that. Plenty more still to come on the program. Thats right. Well get analysis on the german jobless numbers. They were worse than expected, at least on the headline figure there. Stalling for europes largest economy. Plus, in a first on cnbc interview, well speak to the irish leader live from the ibec conference about the countrys plans to reenter the capital market. Japan has declared it wants kuroda to be the next bank of japan chief. Indias finance minister chooses to tame the deficit by raising taxes on selfearners rather than cut spending in an election year. And the eu moves to clamp down on big paychecks in the Banking Sector striking a controversial deal to cap levels of salaries as early as next year. European equity markets today, slightly firmer. Not by much. The ftse 100 up 0. 5 . We are down 0. 5 for the ftse mib. Nevertheless yield, kelly, in italy and spain have been higher. And here is the question