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While ECB struggles, Fed sees recovery

LONDON (Reuters) – On one side of the Atlantic they’re trying to refill the punchbowl. On the other they’re getting ready to take it away. This week, investors may get a clearer idea why.

The European Central Bank will spell out on Thursday its latest attempt to steer the euro zone away from the prospect of damaging deflation, following the latest snapshot of consumer price pressures on Tuesday.

U.S. jobs numbers on Friday will probably confirm that the fast-recovering American economy has reached the point where the Federal Reserve can finally halt its massive bond-buying stimulus.

The contrast between the U.S. and euro zone economies has grown increasingly stark, adding to the pressure on the ECB and European leaders to revive growth in their corner of the world.

U.S. Treasury Secretary Jack Lew last week laid bare Washington’s long-standing frustrations with the reluctance of European governments to increase public spending.

The risk of the euro zone sliding into deflation and deeper stagnation is adding to the drag on the global economy from a slowdown in China, where authorities are trying to rein in lending, and concerns about conflict in the Middle East.

But instead of fiscal action by European governments, it is action by the ECB that is the most likely spur for the region.

After surprising markets with an interest rate cut at its September meeting and trying to get banks to take cheap loans to boost lending, the ECB on Thursday is due to give details of its plan to unblock corporate credit by buying repackaged loans.

Marchel Alexandrovich, an economist with Jefferies in London, said investors wanted an idea of the size of the program to buy asset-backed securities and covered bonds. This would help them gauge when the ECB might start buying government bonds, a much more powerful – and controversial – form of stimulus.

Economists have widely ranging guesses as to the size of the program, and Alexandrovich said that the bigger it proved to be, the longer the ECB was likely to hold off from buying government bonds.

Reuters reported this month that initial plans for the ABS and covered bond program foresaw up to 500 billion euros ($640 billion) in purchases.

ECB President Mario Draghi has said the bank wants to push its balance sheet back up to the levels of early 2012, or about 3 trillion euros, compared with 2 trillion euros now.

Tuesday’s consumer price data is likely to underscore how close the euro zone is to succumbing to deflation. Inflation in the 18 countries sharing the currency is expected to fall to 0.3 percent in September, its lowest level in nearly five years.

Economists at Nomura saw “a clear sign that euro area policy makers are losing their grip on inflation expectations”.


In the United States, the challenge for policymakers looks very different with attention focused on when interest rates will start to rise after nearly six years at near zero.

The U.S. economy looks to be on course for growth of about 2 or 2.5 percent this year, and the Federal Reserve intends to halt its bond-buying program in October.

Data due on Friday is expected to show employers hired 219,000 people in September, a bounce-back from a surprise slip in August to 142,000.

“The message from the Fed is ‘watch the data’ which is why the numbers next week will be very closely watched, maybe much more so than in recent months,” said Gennadiy Goldberg, U.S. strategist with TD Securities.

As well as the jobs data, figures on consumer spending, manufacturing and trade are likely to show the U.S. recovery firmly on track.

Even so, earnings have failed to respond much to the pick-up in jobs growth, something pointed out by Fed Chair Janet Yellen and which could delay a first rate hike.

Goldman Sachs says that its number-crunching shows that growth in wages is becoming an increasingly reliable indicator of how much slack there is in the economy.

Noting how earnings growth lagged behind inflation in the United States, the euro zone, Britain and Japan in the second quarter, the investment bank predicted central banks would take their time to start raising record-low interest rates with the Fed only doing so in the third quarter of next year.

The Bank of England is expected to raise rates before the Fed, and upward revisions to the pace of economic growth in 2013 and the first two quarters of this year – which are expected to be announced on Tuesday – will add to the sense of an economy firing on almost all of its cylinders.

But like the Fed, the BoE has put weak growth in pay and labor costs at the heart of its thinking and has signaled a first rate hike is only likely to come in the spring of 2015.

“While estimates of recent GDP growth may be nudged up, we doubt that these revisions will have major effects on the outlook for fiscal or monetary policy,” economists at consultancy Capital Economics said in a note to clients.

(Writing by William Schomberg; additional reporting by Eva Taylor in Frankfurt; Editing by Hugh Lawson)

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Europe’s German growth locomotive on strike

PARIS (Reuters) – Europe’s growth locomotive is on strike.

With the euro zone economy stuck in a rut despite European Central Bank efforts to pump money into the system, pressure is mounting for Germany to use its healthy budget position to boost public investment, stimulate demand and spur growth.

The answer from Chancellor Angela Merkel so far is an adamant “nein”, spelled out firmly to visiting French Prime Minister Manuel Valls last week.

If her refusal is final, rather than a tactic to extract more reforms from European partners, it could dash the prospects of a three-way grand bargain sketched by ECB President Mario Draghi to revive the European economy.

That could tip the euro zone back into another recession, worsen unemployment and fuel political radicalism.

The International Monetary Fund, the ECB, the European Commission, the United States and euro zone partners are all pleading with Berlin to use what economists call its “fiscal space” to stimulate the economy through tax cuts and investment in aging road, rail, energy and telecommunications networks.

German officials acknowledge privately that the country has an investment gap, both public and private. It spends less than half as much of its economic output – just 1.6 percent – on public investment as France or Sweden, less even than Greece.

Yet the government is determined to stick to its balanced budget strategy, moving faster into surplus than planned, even though its own economy shows signs of slipping into the stagnation already gripping France and Italy.

There are political, cultural and economic reasons for the refusal to loosen the purse-strings when most economists think Germany could afford to do so.

Berlin makes three main arguments:

1) Germany is determined to set an example by meeting its fiscal targets and running the first balanced federal budget since 1969 with no borrowing. The credibility of the euro zone depends on governments sticking to their commitments.

2) Germany has less fiscal space than outsiders understand because it has an aging, shrinking population and needs to run surpluses to meet future pension and healthcare liabilities.

3) The euro zone’s economic problem is largely one of supply rather than demand. Structural reforms of labor markets, legal systems, pensions and welfare to improve competitiveness are the only way to achieve a sustainable recovery. More public spending financed by debt would ease the pressure to make those changes.

Finance Minister Wolfgang Schaeuble spelled out a stonewall response in presenting the 2015 budget to parliament on Sept. 9: “We must not allow ourselves to entertain the illusion that we can solve our problems using more and more public funds and ever higher deficits.”

Behind such public arguments, Merkel has a strong political motive for sticking to her course.

The balanced budget is written into her conservatives’ coalition pact with the Social Democrats (SPD). Any departure from it could fuel support for the right-wing anti-euro Alliance for Germany, which made big gains in state elections this month.

As so often since the start of the euro zone crisis in 2010, domestic politics is tugging Merkel in one direction and European responsibility in another.

Her usual tactic is to hang tough until others have made as many concessions as possible, then give as little ground as necessary at the last minute when Europe is on the brink.

It’s easy to imagine a trade-off now between more French and Italian reform, a German fiscal stimulus, more European public investment with new EU financial instruments leveraging joint borrowing with private sector money, and an expansion of the ECB’s easy money policies.

Olli Rehn, who was vice-president for economic and monetary affairs in the European Commission until July, calls for just such a pact to avert deflation in an article to be published in the policy journal Europe’s World in October. (

“If Germany can lift domestic demand and investment while France and Italy are embracing reforms to their labor markets, business environments and pension systems in support of their economic and industrial competitiveness, they will together do a great service to the entire euro zone,” said Rehn, now a member of the European Parliament.

A German stimulus could also help bring down the euro’s real exchange rate and make southern euro zone countries’ exports more competitive, he argued.

“The key actors – Italy and France, the ECB and Germany – need to work out the details of such a pact this autumn and then agree on it at the European Council in December.”

German leaders are not monolithic in rejecting the notion.

Deputy Labor Minister Joerg Asmussen, a Social Democrat, signed a joint article with ECB Executive Board member Benoit Coeure this month urging Berlin to use its “budgetary room for maneuver” to support investment and cut taxes on workers’ pay.

French politicians believe Vice-Chancellor Sigmar Gabriel, economy minister and SPD leader, is broadly sympathetic to their cause, despite his commitment to the balanced budget.

“This debate exists within the German government because Gabriel is a supporter of this new European investment policy,” said Philip Cordery, national secretary for European affairs in the ruling French Socialist Party.

However Paris and Berlin seem to be talking past each other.

German officials fear President Francois Hollande is too weak politically to push through far-reaching reforms to France’s protective labor laws and generous social benefits, or to take a serious axe to bloated public spending. A strike by Air France pilots that forced the airline to scrap plans for a low-cost European subsidiary highlights resistance to change.

They are only slightly more optimistic about Italian Prime Minister Matteo Renzi’s drive to loosen labor law, shake up the judicial system and streamline politics and state administration despite entrenched resistance from unions and politicians.

If Germany won’t fire up its investment engine and France won’t risk major reforms, it will be left to the ECB to carry the whole burden of refloating the economy.

Even if Draghi were able to overcome German opposition to the central bank printing money to buy government bonds, he told EU lawmakers last week that monetary policy alone cannot have a meaningful effect without structural reforms.

(Writing by Paul Taylor; editing by Tom Pfeiffer)

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Japan’s SoftBank in talks to buy DreamWorks: source

TOKYO/NEW YORK (Reuters) – Japan’s SoftBank Corp (9984.T) is in talks to acquire DreamWorks Animation SKG (DWA.O), the Hollywood studio behind the “Shrek” and “Madagascar” movie hits, a person with knowledge of the situation said.

An acquisition of DreamWorks by SoftBank would make it part of a cash-rich Japanese communications and media company that, under founder and chief executive Masayoshi Son, has shown a willingness to take big bets on combining disparate businesses.

The talks were first reported by the Hollywood Reporter, which quoted an unidentified source as saying a buyout would value DreamWorks at $3.4 billion.

The entertainment trade publication said SoftBank had offered $32 per share for DreamWorks, a substantial premium to the stock’s Friday closing price of $22.36.

Buying DreamWorks, which is headed by veteran Hollywood producer and film executive Jeffrey Katzenberg, would make SoftBank the second Japanese technology company to buy a Hollywood studio, following Sony Corp (6758.T), which bought Columbia Pictures in 1989.

SoftBank has recently cashed in on a share of its investment in Chinese e-commerce giant Alibaba and dropped its pursuit of mobile carrier T-Mobile US (TMUS.N) in the face of opposition from anti-trust regulators in the United States.

Last week, SoftBank booked a $4.6 billion gain on the share listing of Alibaba Group in New York (BABA.N). SoftBank retains a 32 percent stake, making it Alibaba’s biggest shareholder.

SoftBank has significant stakes in other large listed entities, including U.S. mobile carrier Sprint (S.N), through which it had pursued a deal for T-Mobile, internet portal Yahoo Japan (4689.T) and online games maker GungHo Online Entertainment (3765.T).

A SoftBank spokesman said the company had no comment on the reported talks with DreamWorks. A representative of DreamWorks could not be immediately reached for comment.


In July, SoftBank hired former Google (GOOGL.O) executive Nikesh Arora to run a newly created unit called SoftBank Internet and Media, reporting directly to Son, in a move that stoked speculation the telecommunications company could be considering a move to acquire content production assets.

SoftBank held the equivalent of more than $17 billion in cash and equivalents as of the end of June, its most recent reported quarter.

DreamWorks, based in Glendale, California, has seen its share price has drop 37 percent this year after two consecutive quarterly losses, a string of weak-performing releases such as “Mr. Peabody Sherman” and investor concern about the production costs of its movies.

In July, DreamWorks said the U.S. Securities and Exchange Commision was investigating a writedown it took at the end of 2013 on the animated flop “Turbo”.

Dreamworks Animation was spun off from DreamWorks Studios in 2004 as a separate listed company.

The earlier Dreamworks studio had been founded in 1994 by Steven Spielberg, David Geffen and Katzenberg, who moved with the spin-off and remains chief executive of the animation company, which also has the franchise hit “Kung Fu Panda” and owns the rights to Felix the Cat.

The move by SoftBank comes as Alibaba is also looking to expand its video content offered through a set-top box in China. In July, the company announced a partnership with Lions Gate Entertainment (LGF.N) for its titles including “The Hunger Games”.

Sony rebuffed a proposal from hedge fund Third Point to spin off its entertainment business last year in order to separate it from its loss-making electronics division.

(Editing by Paul Tait and Alex Richardson)

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Cuba sentences Canadian CEO to 15 years on financial charges

HAVANA (Reuters) – A Cuban court has sentenced Canadian executive Cy Tokmakjian to 15 years in prison for bribery and other economic charges in a case his company and Western diplomats have called a chilling development for potential foreign investors.

Two of his aides from the Tokmakjian Group received sentences of 12 and 8 years, and Cuba seized about $100 million worth of the company’s assets, the Ontario-based transportation firm said in a statement.

The Tokmakjian Group, which did an estimated $80 million in business annually with Cuba until it was shuttered in September 2011, called the case a “show trial” and a “travesty of justice.”

Fourteen Cubans were also charged. The result of their cases was unknown. Cuba has yet to comment on the verdict or sentencing. “Lack of due process doesn’t begin to describe the travesty of justice that is being suffered by foreign businessmen in Cuba,” the company statement said. The Tokmakjian Group was one of the more successful foreign companies in Cuba, mainly selling transportation, mining and construction equipment.

Then it was suddenly caught up in an investigation of Cuba’s international trading sector as part of a crackdown on corruption by President Raul Castro.

The case also strained Cuba’s relationship with Canada, and the company has pressed the Canadian government to ask Cuba for the release of the three executives. Western diplomats have called into question the charges, saying the evidence was weak, and said it would dissuade foreign investors at a time Cuba is actively seeking partners from abroad to do business on the communist-ruled island.

Lead defendant Cy Tokmakjian, 74, the company’s founder and president, has been jailed for more than three years on charges that include bribery, fraud, tax evasion, and falsifying bank documents.

Fellow Canadians Claudio Vetere and Marco Puche were sentenced to 12 and 8 years each, respectively, said Lee Hacker, the company’s spokesman and vice president for finance. They have been out of jail in Havana, their passports seized.

The Tokmakjian Group has already started fighting the charges by filing claims worth more than $200 million against Cuba through the International Chamber of Commerce in Paris and in Canada through the Ontario Superior Court.

“I wouldn’t recommend anyone go to Cuba to invest,” Hacker said. “As we said all along, we were expecting this. Everything was predetermined.”

Cuba has been touting a new foreign investment law that took effect this year, part of an overt campaign to attract foreign direct investment that is crucially needed for development.

The main feature of the law is to lower taxes. But many foreign companies have said they are more interested in the general business climate, transparency and the rule of law, especially in light of this case. The 14 Cuban defendants included Nelson Labrada, the former deputy minister of the defunct Sugar Ministry, and Ernesto Gomez, former director of the state nickel company, Ferroniquel Minera S.A.

Prosecutors were seeking a 20-year sentence for Labrada and terms of 8 to 12 years for the other Cubans.

(Reporting by Daniel Trotta; Editing by Dan Grebler)

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Clorox warns of safety concerns after Venezuelan takeover of plants

(Reuters) – U.S. cleaning products maker Clorox Co (CLX.N) said the Venezuelan government’s takeover of two of its plants after the company pulled out of the country raised “grave concerns” about the safety of workers and surrounding communities.

Venezuela announced on Friday the “temporary” takeover of the two plants owned by Clorox, which said it left the country because of difficult economic conditions.

After Clorox management’s departure, many of the firm’s 400 workers occupied two plants in the Valles del Tuy district south of Caracas and in central Carabobo district.

Clorox said the production of cleaning products, in particular bleach, was “a highly specialized and technical process.” The company said it had safely secured the plants before its exit, including removing all the chlorine.

“The Venezuelan government’s actions raise grave concerns, and Clorox and its affiliates cannot be responsible for the safety of workers and the surrounding communities or any liability or damages resulting from this occupation,” Clorox said in a statement on Friday.

The Oakland, California-based company added it was prepared to discuss with the government “prompt, adequate and effective compensation” for the takeover of the plants.

Venezuelan Vice President Jorge Arreaza visited the Valles del Tuy plant on Friday evening and said the facility would be reactivated. He gave no further details of the government’s plans for the plants.

Clorox announced its exit on Monday, saying its business was not viable and that it would sell its assets.

It is the latest sign of dissatisfaction from private businesses with President Nicolas Maduro’s running of the South American OPEC nation’s economy.

Clorox said operating restrictions imposed by the government, economic uncertainty and supply disruptions would have led to considerable operating losses.

Its share price rose on the announcement, despite the company saying it expected to incur after-tax exit costs of $60 million to $65 million, or 46 cents to 50 cents a share, in fiscal 2015.

Various multinationals, from Colgate-Palmolive Co (CL.N) to Avon Products Inc (AVP.N), have been warning of hits to their balance sheets and are scaling back operations in Venezuela, citing Byzantine currency controls and a slowing economy.

(Reporting by Eric Beech in Washington; Editing by Peter Cooney)

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Air France faces more strikes after talks with pilots reach deadlock

PARIS (Reuters) – Talks between Air France and its pilots reached an impasse on Saturday after a union request for a mediator was rejected by both the airline’s management and the French government.

Air France has been locked in negotiations with pilots over plans to create a low-cost operation, resulting in a 13-day strike which has cost it up to 20 million euros ($25 million) a day.

The company said on Saturday it would only be able to operate 45 percent of its flights on Sunday, fewer even than on Saturday, as more than half of its pilots would be on strike.

French Prime Minister Manuel Valls and Air France rejected pilot unions’ demands that an independent mediator was appointed.

“Management does not think that the appointment of a mediator is necessary,” Eric Schramm, co-head of operations at Air France, told BFM TV on Saturday.

The pilot union SNPL had said on Friday it stood ready to lift the strike as soon as a mediator was appointed.

Pilots are trying to pressure Air France to offer the same contracts to those flying on the proposed new Transavia unit as to its own pilots, a demand the airline argues is incompatible with the low-cost model it seeks to exploit.

French Prime Minister Valls put pressure on the pilots on Friday, calling for them to accept the deal put forward by the airline to end the conflict.

“This strike must end,” Valls said. “This strike is intolerable for customers, this strike is intolerable for the company, Air France, this strike is intolerable for the country’s economy.”

The government is a 16 percent shareholder in the group and sits on the board.

(1 US dollar = 0.7885 euro)

(Reporting by Astrid Wendlandt; Editing by David Holmes)

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Gross begins second act as bond guru at tiny Janus fund

NEW YORK (Reuters) – For Bill Gross, quitting Pimco’s $222 billion Total Return Fund to take over a $13 million fund at Janus Capital is like resigning the U.S. presidency to become city manager of Ashtabula, Ohio, population 18,800.

Gross stunned the investing world on Friday with his abrupt departure from Pimco, the $2 trillion asset manager he co-founded in 1971 and where he had run the Total Return Fund, the world’s biggest bond fund, for more than 27 years.

Come Monday morning, Gross will join Denver-based Janus and next month will take over its Unconstrained Bond Fund, which was only organized in May. Janus is an asset management firm once known for picking hot Internet stocks.

“For Gross, this is a new slate albeit a small one,” said Jeff Tjornehoj, senior analyst at Lipper Inc, a unit of Thomson Reuters.

Small may be overstating the Janus fund, at least in comparison with the Total Return behemoth. The relationship between the Janus Fund and the Total Return fund is the same as that of the population of Ashtabula with the population of the U.S.: 314 million.

At end of August, the Janus Unconstrained fund held only 45 debt issues with 70 percent of its assets in U.S. government debt. One Treasury issue due June 2016 alone was worth 43 percent of the fund’s total assets. Most of the bonds have short durations, with the average maturity of just over three years, indicating a generally defensive posture.

The current managers of the Janus fund are head of fixed income Gibson Smith and portfolio manager Darrell Walters. It’s billed to follow a strategy of “all-weather, credit-driven fixed income investing,” according to Janus’ website. (

By comparison, the Pimco Total Return fund holds more than 6,000 securities, ranging from plain-vanilla Treasuries to complex credit derivatives. Forty-one percent of its holdings were in U.S. government-related securities with the rest spread among riskier debt, including mortgage-backed securities and corporate bonds.


The two funds do have something in common: weak performance.

While Gross more than earned his “Bond King” moniker by outperforming rivals and the broader bond market by a wide margin for most his career, his reputation as a shrewd bond picker has taken a hit in the past year or so.

Last year, Pimco’s Total Return Fund suffered its biggest annual loss in almost 20 years, declining by a wider margin than the bond market as a whole, which was buffeted by the U.S. Federal Reserve’s plans to dial back on its stimulus program.

This year, it has delivered a total return so far of 3.59 percent. Still, that lags the wider market as measured by the benchmark Barclays U.S. Aggregate Bond index, which is up 4.19 percent. The fund is trailing 73 percent of its peers.

The Janus fund is doing even more poorly, however, stumbling out of the gate since its debut this spring. It lost 0.76 percent in the past three months compared with a 0.48 percent gain for the Barclays Agg, and lags 74 percent of its peers.

Getting this fund to grow will be a good measure of Gross’s ability to attract money, analysts said. Gross’ former Pimco colleague and Janus’ chief executive Richard Weil said on Friday he’ll look to Gross to build Janus’ new global macro fixed income business. Until now, Janus is best remembered for its focus on technology stocks during the late 1990s dot-com boom.

“He could pull in a lot of money on reputation alone,” said Tjornehoj, referring to Gross’s long-term record and his widely read monthly investment newsletter at Pimco.

At Janus, Gross will also be free of the recent distractions that have beset him and his old firm.

A public falling out between Gross, 70, and former heir-apparent Mohamed El-Erian earlier this year is credited with intensifying investors’ flight from the Total Return Fund. They have pulled $70 billion from the fund since last May.

On Wednesday, news surfaced that the Securities and Exchange Commission is investigating whether Pimco inflated the returns of its $3.6 billion Total Return exchange-traded fund.

Turning around a nascent fund might not be too tall an order, analysts said. For instance, the ETF Gross ran at Pimco had performed much better than the far-larger mutual fund, gaining 6.38 percent over the last 12 months versus 5.19 percent for the mutual fund.

Fellow bond maven Jeffrey Gundlach, head of rival firm DoubleLine Capital, often called the “King of Bonds” as opposed to Gross’ nickname of “Bond King,” told Reuters he expects Gross to perform well at Janus because he “isn’t managing a lot of money.”

Still, if the move to Janus doesn’t pan out, analysts are doubtful there’s room for yet another reincarnation for Gross.

“I don’t know if there’s a third act for him,” Lipper’s Tjornehoj said.

(Reporting by Richard Leong; Editing by Dan Burns and John Pickering)

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Commerzbank to be investigated over money laundering charges: WSJ

(Reuters) – Germany’s second-largest lender Commerzbank AG is being investigated by the Manhattan U.S. attorney for alleged violations of money-laundering laws, the Wall Street Journal reported.

After failing to land high-profile criminal cases stemming from the 2008-09 financial crisis, U.S. authorities have focused on other types of criminal activity within the financial industry, including money laundering, tax evasion and sanctions violations.

Sources told Reuters earlier this month that Commerzbank was nearing a settlement with U.S. authorities over its dealings with Iran and other countries under U.S. sanctions. One person said it was expected to pay about $650 million.

The Manhattan U.S. attorney is now investigating allegations Commerzbank had lax controls for detecting and preventing money laundering, the WSJ reported, citing unnamed sources briefed on the investigation.

It said U.S. officials were now considering whether to resolve the sanctions probe and the money laundering investigation in one settlement, which could delay a solution and add hundreds of millions of dollars to the potential penalties Commerzbank could pay.

Commerzbank declined comment.

A number of banks have already been penalized over sanctions and money laundering infringements. French bank BNP Paribas pleaded guilty earlier this year to two criminal charges and agreed to pay almost $9 billion to resolve accusations it violated U.S. sanctions against Sudan, Cuba and Iran.

(Reporting by Krishna Chaithanya in Bangalore; Additional reporting by Jonathan Gould in Frankfurt; Editing by Maria Sheahan and David Holmes)

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Raytheon links with Poland’s WB Electronics in missile shield bid

WARSAW (Reuters) – U.S. weapons maker Raytheon has signed a letter of intent with Polish military software producer WB Electronics to cooperate in bidding for a contract to build Poland’s planned anti-missile system, Polish state radio said on its website.

Under the agreement, WB Electronics is to provide software for training and tactic simulations for the system, dubbed “Shield of Poland”. The two companies would also cooperate in seeking export opportunities.

WB was not immediately available for comment.

Raytheon, which offers the Patriot missile defense system, is in the running to build Shield of Poland, competing with a consortium of Franco-Italian missile maker MBDA and France’s Thales.

The cost of the project is estimated at 26 billion zlotys ($7.9 billion). Fifteen years after its admission to NATO, Poland is stepping up military investments, particularly in light of the latest standoff between Ukraine and Russia.

Eastern Europe’s largest economy wants to raise its defense spending to 2 percent of gross domestic product (GDP) from 2016.

(1 US dollar = 3.2955 Polish zloty)

(Reporting by Adrian Krajewski; Editing by David Holmes)

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