The reductions will cost the user-owned and governed group £11m a year.Comparable prices for Clearstream, the settlement business owned by Deutsche B? and Euroclear's arch-rival, were not available as the German exchange bundles prices for trading, clearing and settlement together. A source familiar with the matter said: "It does throw the spotlight on Clearstream's tariff policy. Clearstream has not reduced tariffs, despite being asked to."Crest's move comes after Deutsche B?, led by Werner Seifert, and Euronext outlined rival proposals to buy the LSE.The LSE's users' concerns have centred on clearing and settlement; in particular, they are worried about Deutsche B?'s "vertical silo" structure, which combines trading platforms with clearing and settlement operations, giving it extra pricing power.The London Investment Banking Association, which represents many of the users, is concerned that a takeover by Deutsche B? would drive up tariffs and said trading platforms and clearing and settlement operations should be owned separately.Euronext, for its part, owns 41 per cent of the clearing house LCH.Clearnet. Deutsche B? and Euronext have said they would continue to use Crest for settling UK share trades. But while the German exchange said it would seek to cut clearing and settling costs if it buys the LSE, Euronext has remained silent on the issue of tariff reductions. Both also offer to cut trading costs by 10 per cent.Tim May, the chief executive of Crest, said the group was able to make the tariff cuts because clearing volumes had gone up and looked to be sustainable, and the cost of building its system had been recouped.
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He stressed that the reductions were not in any way related to the LSE takeover battle, but added: "Once users get these sort of charges, it's important that everyone looks again at what it means for the situation."The LSE welcomed Crest's tariff reductions and said they would increase the attractiveness of its trading services. "The exchange continues to work on solutions that will reduce trading related costs even more," it said.. Europe's finance ministers agreed yesterday to study plans for taxing aviation fuel or slapping a levy on airline tickets, despite the opposition of air carriers and deep divisions among EU governments. Last year he suggested that a tax on intra-EU flights would satisfy that criteria because it would create a level playing field.Aviation fuel is exempt from tax - one reason why Germany and France, backed by the Luxembourg presidency of the EU, have identified it as a potential source of development revenue for the Third World. But European airlines argue that any move to introduce one would play into the hands of competitors who can purchase fuel outside the EU.Most diplomats are highly sceptical about reaching an agreement on a tax or levy among all 25 member states.
That analysis was reinforced yesterday when 10 countries, including Spain, Greece and Finland, registered reservations of some sort, including fears that a tax would disadvantage European airlines, hit regional airports or deter tourism. Britain and Ireland have yet to take a position.Germany's Finance minister, Hans Eichel, said "something has to be done" about cheap flights when a taxi ride from the centre of Berlin to the main airport can cost more than a plane ticket.The European Low Fares Airline Association argued yesterday that the link between aviation and development aid is highly questionable.. European health regulators yesterday warned doctors not to prescribe certain controversial painkillers made by the pharmaceuticals giants Pfizer and Merck to patients with a history of heart disease. The regulators also advised doctors to use the lowest effective dose for shortest time possible. The agency will complete its review of the painkillers in April. Cox-2s are also the subject of a separate high-profile three-day summit in America, during which the US's Food and Drug Administration is considering whether these painkillers are safe enough to continue to be sold, and whether they should carry a stronger risk about potentially highly dangerous side effects.David Graham, a prominent scientist at the FDA, gave evidence to the meeting, saying the benefits of Cox-2s were not justified by the risks.Emphasising that each drug should still be considered individually, Dr Graham said he nevertheless saw a "class effect" of heart risk from the Cox-2 inhibitors, which appeared greater with higher doses. "The bottom line conclusion I came to is there really doesn't appear to be a need for Cox-2s," Dr Graham told the FDA advisory panel.Dr Graham was drawing on findings from an unpublished study, which he included in his testimony at the last minute after saying the FDA had tried to prevent him from quoting the work.
