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Wednesday newspaper round-up: Syria, FTT, Lloyds

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Obama addresses US on Syria; EU lawyers say financial transaction tax is illegal; Lloyds shares hit three-year high amid sale talk.

Barack Obama has asked Congress to delay a vote authorising a strike on Syria while the US and its allies pursue a diplomatic initiative with Russia at the UN to force Damascus to give up its chemical weapons. In a nationally televised address from the White House, the US president said the initiative, first proposed publicly by Moscow on Monday, “had the potential to remove chemical weapons without the use of force,” the Financial Times says.

Vince Cable has criticised a growing “complacency” towards the economy, in a calculated swipe at George Osborne before the Liberal Democrat conference. The Liberal Democrat Business Secretary will suggest today that Britain is not seeing “the kind of growth we want” despite the Chancellor claiming on Monday that the economy is “turning a corner,” The Times says.

Spain’s borrowing costs have fallen below Italy’s for the first time in more than a year as favourable market conditions spur Madrid to examine breaking new ground by issuing ultra-long 50-year bonds. Yields on Spanish 10-year government bonds, which move inversely to prices, dropped to 4.51% on Tuesday – compared with the yield of 4.53% on the Italian equivalents, writes the Financial Times.

Royal Dutch Shell is likely to face questions over the future of its operations in China after sources claimed an £8.3bn project in the country had been quietly shelved. The tie-up with China National Petroleum Corp (CNPC), the country’s largest energy producer, and Qatar Petroleum to build a refinery and petrochemical plant is believed to have been suspended after losing political support, The Daily Telegraph reports

European efforts to impose a financial transaction tax (FTT) have been plunged into further chaos after Brussels’ own lawyers concluded that the levy is unlawful. A leaked opinion from the European Union’s legal service contains warnings that the flagship policy is “not compatible” with existing laws and is also “discriminatory”. The 14-page document, dated September 6th, said the levy “exceeds Member States’ jurisdiction for taxation” and “infringes upon the taxing competences” of states that have refused to adopt it, The Daily Telegraph writes.

Shares in taxpayer-backed Lloyds Banking Group soared to a five-year high yesterday amid speculation the Government is poised to start selling its stake. A source close to the situation said it was ‘entirely possible’ that the share sale could begin this month – and possibly within the next seven to ten days. It is thought George Osborne is keen to start offloading the Government’s 39% stake before the Conservative’s party conference begins on September 29th, The Daily Mail explains.

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