Quotes of the Day

Gimme Shelter
Life just got tougher for tax cheats. Last week the E.U. finally made good on a 14-year effort to stop savings-account tax evasion by Europeans. Under the compromise, most governments will share information about nonresident savings, allowing home countries to tax Europeans who shelter money in low-tax havens such as Luxembourg. (The deal went through after Italy lifted its veto in exchange for a reprieve for Italian dairy farmers who exceeded E.U. milk quotas.) It's especially significant in countries like Germany, where an estimated €300 billion has left for tax havens. There are exceptions for states with traditions of banking secrecy, like Austria, which will keep information

INDICATORS Cracks In The China U.K. manufacturing took another hit as Wedgwood, the symbol of all things British for tea-sipping grannies everywhere, said it would slash 1,000 jobs in England and shift them to Asia. The Swiss Miss Switzerland slid into recession, joining Italy, the Netherlands and Germany — its largest trading partner. Europe's seventh-largest economy shrank 0.7% in the last quarter of 2002 and 1% in the first quarter of this year. Demolition Derby Battered by a race to the bottom in U.S. auto prices, DaimlerChrysler said its American division would post a $1.17 billion second-quarter loss. It will now seek $1 billion in new cost cuts.

private but levy a 15% tax on nonresident savings in 2005, rising to 35% in 2010. Even Switzerland — finally — vowed to levy the tax. But the E.U. still promises to go further to end banking secrecy. "The Swiss might think they got off the hook," says a Commission official, "but they have not heard the end of the story. There will be renewed efforts to force their hand next year." Let's give it another 14. — Reported by Joe Kirwin/Brussels

Finding The Lie Of The Rand
There are, famously, three types of falsehood: lies, damn lies, and statistics. South Africans rediscovered that adage late last month when the government statistics agency admitted it had used outdated data to calculate inflation. South Africans had thought inflation was stuck well above 10%. But the real figure turns out to be 8.5%. No big deal? Well, the revision had the markets — and South Africans — doing backflips last week. The rand, which had shot to a 30-month high of just over seven rand to the U.S. dollar last month, dropped below eight rand to the dollar before hitting three-month lows. South Africa's Reserve Bank, which is mandated to keep inflation between 3% and 6% and is due to meet this week, is under pressure to cut interest rates immediately by up to two percentage points. And angry consumers, hit by higher phone, power and postal charges this year — fee rises for utilities are pegged to the inflation rate — asked for a refund. Says Darren Pearlman, a Johannesburg accountant and exporter: "When the government comes out with wrong numbers, that just adds to the volatility and makes it harder to plan ahead. It's crazy." — By Simon Robinson/Johannesburg

Softwarriors
Germany's SAP, the world's top application software business, got a new No. 2 competitor as PeopleSoft said it would buy rival JD Edwards for $1.6 billion. Not to be outdone in the quickening software shakeout, former No. 2 Oracle then launched a $5.1 billion hostile bid ... for PeopleSoft.

The Bottom Line
	—What you hope is that management make the best bet at the time. We all make mistakes
		RICHARD LAPTHORNE, chairman of the U.K.'s C&W, on former CEO Graham Wallace, whose disastrous strategies led to a €9 billion loss

• BLAINE GRETEMAN
• Tax Haven Changes, Lie of the Rand, Cracks In The China