2011年6月27日星期一

Greek power company seeks court ruling on strike (AP)

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ATHENS, Greece – The country's power company says it has filed a suit in an Athens court for the 48-hour rolling strikes by its workers to be declared illegal.

Electricity company employees object to the company's privatization — part of a euro50 billion privatization drive and new austerity measures essential for Greece to continue receiving international rescue loans that are preventing it from defaulting on its debts.

The power company said Friday it had filed a legal request for the strike to be declared illegal — a move which would force the employees back to work.

The strike has led to power cuts across the country, and consumers have been asked to limit their use of electricity and exercise caution when using elevators.


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Chinese prime minister offers support for euro (AP)

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在 ServiceModel 客户端配置部分中,找不到引用协定“TranslatorService.LanguageService”的默认终结点元素。这可能是因为未找到应用程序的配置文件,或者是因为客户端元素中找不到与此协定匹配的终结点元素。

BUDAPEST, Hungary – Chinese Prime Minister Wen Jiabao has offered his country's support for Europe and its common currency amid the eurozone's debt crisis.

Wen says China is a long-term investor in the European sovereign debt market and has purchased a "not small" amount of euro-denominated bonds in the past years.

Wen says China will offer "consistent support for Europe and the euro."

Wen, on a five-day tour of Hungary, Britain and Germany just as Europe hammers out a plan to battle the eurozone debt crisis, met Saturday in Budapest with Hungarian Prime Minister Viktor Orban.

Wen says China is also willing to purchase bonds issued by Hungary, which does not yet use the euro, and offered Hungary a loan of 1 billion euros ($1.4 billion).


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G-20 announces measures to stabilize food prices (AP)

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PARIS – The largest economies in the world agreed Thursday to a series of measures to stabilize world food prices after recent fluctuations caused global instability, especially in poorer countries.

French Agriculture Minister Bruno Le Maire said the G-20 summit of agriculture ministers had agreed to calm the world market by establishing a transparent system to track global supplies, set up emergency food reserves, engage in more research into new wheat strains and create a rapid response mechanism to deal with drought in producer countries.

"It is a tour de force for the international community that lets you still believe in the power of solidarity and working together to address the big questions facing the planet, like the future of world agriculture," Le Maire told journalists.

Non-government organizations working on food issues, however, slammed the accord as too timid, saying it did not address the controversial issue of biofuels, which take up land that could be used to grow food, and doesn't focus enough on building up emergency stocks.

"Fixing the global food system and ending the food price crisis requires major surgery, yet the G-20 produced little more than a sticking plaster," said Jean-Cyril Dagorn of Oxfam, adding that measures needed to be taken to stop the prices rising in the first place.

Their criticisms were seconded by the international alliance of Catholic development agencies and the Action Aid international poverty organization.

The accord was still, however, a rare case of international agreement in the area of food and agriculture, where countries have long been at loggerheads because of divergent interests.

International farm groups have also called for more regulation in the market, but that has been resisted by more free market-oriented governments like Britain.

The gravity of the situation, however, was driven home when rising energy prices prompted a spike in food prices in 2008 that sparked riots in almost two dozen nations over three continents.

Last week, David Nabarro, the U.N. special representative on food security and nutrition, said that a repeat of 2008 is very likely and shortages of food, water and power are bound to create social anxiety and political instability in the future.

A recent U.N. study also predicted that prices will be 20 percent higher for cereals and up to 30 percent higher for meat in the coming decade compared to the past ten years.

With the global population expected to increase from 6.9 billion to 9 billion by 2050, the problem of feeding the world put food security at the top of G-20 summit's agenda.

"We all recognize the necessity of putting in place on the market of agricultural products new rules and regulations," Le Maire said, reflecting the new consensus that food prices had to be protected, especially from financial speculation in commodity markets.

Several dozen French farmers dressed as livestock and ears of corn demonstrated near the Paris bourse on Wednesday, protesting the role of financial markets in the food crisis.

The largest organization of European farmers, the COPA-COGECA, however, welcomed the agreement, especially the setting up of a mechanism to ensure transparency in the market.

World Bank President Robert Zoellick appeared at the ministers' side during the news conference to express his support for the new measures and the seriousness of price swings.

"We are not going to be able to stop food prices from going up and down, but we can smooth out the swings and we can protect the poor whether they are small farmers or consumers," he said.

One of the key aspects of the new accord is the Agricultural Market Information System that would stave off panic food speculation by making instantly available to all countries the state of world food stocks, production and consumption, Zoellick explained.

"What we saw when prices started to surge in 2008 was that the lack of information on stocks and availability can lead to panic in markets and panic is what leads to price hikes," said Zoellick. "Uncertainty leads to volatility."

The new "action plan on food price volatility and agriculture" also called for the institution of emergency food reserves to offset humanitarian crises.

Banks and international agencies were also urged to draw up risk management plans for developing countries financial tools to offset price fluctuations.

"Financial engineering has been associated with the 'dark side.' This initiative helps bring it into the light," said Zoellick. "These tools that are widely and commonly used in developed countries, we can now make them available to farmers in developing countries."

The plan also called for ending export bans by producer nations, such as when Russia banned grain exports following forest fires, causing a spike in wheat prices.

Le Maire emphasized that the plan sets down concrete and ambitious proposals that will be put in place immediately.

"The plan takes place as of today," he said.


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Wall Street sinks on Europe's debt misery (Reuters)

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NEW YORK (Reuters) – Wall Street dropped for a third day on Friday on worries about the Italian banking sector and Greece's debt crisis, but the S&P 500 managed to hold its 200-day moving average in a sign buyers still see value.

The Dow industrials and the S&P 500 fell for their seventh week in the last eight. The benchmark S&P 500 is down 7 percent from its 2011 closing high at the end of April.

Investors are fearful that Greece's government may fail to pass an austerity plan next week, which could force a default on its debt repayments. The government faces an electorate vehemently opposed to the austerity measures.

"They (politicians) may not believe that financial markets are as sensitive to their decisions as they actually are, and there is a worry that somewhere along the line, some political vote goes against the market," said Nicholas Colas, chief market strategist of the ConvergEx Group in New York.

The S&P 500 remained within striking distance of its 200-day moving average -- a line that has been tested twice in recent trading and has so far acted as a springboard for stocks. The level was at 1,263.47.

"Every time you test a resistance or support level, you make it weaker," Colas said. "It's almost like a piece of metal. Every time you hit it, it grows more fragile and that's why people are really worried the third or fourth time."

Problems in the euro zone appeared to intensify as shares of Italian banks UniCredit SpA (CRDI.MI) and Intesa Sanpaolo (ISP.MI) fell sharply on concerns about their capital positions. Trading in their shares was briefly suspended.

The CBOE Volatility Index (.VIX) or VIX, Wall Street's barometer of investor anxiety, rose 9.4 percent to 21.10. Some analysts say fear needs to rise further before the market reaches a bottom.

The Dow Jones industrial average (.DJI) dropped 115.42 points, or 0.96 percent, to 11,934.58 at the close. The Standard & Poor's 500 Index (.SPX) fell 15.05 points, or 1.17 percent, to 1,268.45. The Nasdaq Composite Index (.IXIC) lost 33.86 points, or 1.26 percent, to 2,652.89.

For the week, the Dow fell 0.58 percent and the S&P 500 shed 0.24 percent, while the Nasdaq gained 1.39 percent.

Bank stocks fell on concerns about the economic outlook. The KBW Banks Index (.BKX) lost 1 percent and the S&P Financial Sector Index (.GSPF) shed 0.7 percent. The sector has been the worst-performing this year, falling around 8 percent.

On Thursday, the market welcomed Greece's agreement to a five-year austerity plan.

The euro declined against the dollar for a third straight session on worries Greece's parliament might not pass austerity measures needed for the country to secure more bailout funds.

In the latest economic data, new orders for long-lasting U.S. manufactured products, known as durable goods, increased 1.9 percent in May after dropping 2.7 percent in April as bookings for transportation equipment rebounded strongly.

Oracle Corp (ORCL.O) fell 4.1 percent percent to $31.14 (.NDX) a day after the world's No. 3 software maker posted disappointing results, especially in hardware sales. Oracle's results sparked concerns about a bigger slowdown in technology spending.

Micron Technology Inc (MU.O) tumbled 14.5 percent to $7.21 after the memory chipmaker recorded results below expectations late Thursday.

About 9.26 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq -- well above the daily average so far this year of around 7.57 billion. Analysts said Friday's volume was much higher than average due in part to the rebalancing of the Russell 2000 Index (.TOY).

Declining stocks outnumbered advancing ones on the New York Stock Exchange by a ratio of 19 to 11. On the Nasdaq, about three stocks fell for every two that rose.

(Reporting by Edward Krudy; Editing by Jan Paschal)


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EU leaders appoint Draghi as next ECB president (AP)

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By GABRIELE STEINHAUSER, AP Business Writer Gabriele Steinhauser, Ap Business Writer – Fri?Jun?24, 11:04?am?ET

BRUSSELS – European Union leaders appointed Italy's Mario Draghi as the next president of the European Central Bank on Friday — a move that gives investors much-needed certainty over who will lead the institution in its pivotal role in the fight against the crippling debt crisis.

The head of Italy's central bank, Draghi is expected to adopt his predecessor's tough stand on inflation when he takes over the helm of the ECB on Nov. 1, a day after the term of President Jean-Claude Trichet expires.

"Mr. Draghi will exercise a strong and independent leadership of the ECB," said EU President Herman Van Rompuy. "This is essential in normal times, and indispensable in difficult times."

The timing of Draghi's appointment had come under doubt as fellow Italian executive board member Lorenzo Bini Smaghi had until Friday refused to leave his post.

With Bini Smaghi staying on the executive board, France would not have a representative on the six-person board once Trichet departs on Oct. 31. The French had previously implied they would only support Draghi if a French man or woman takes Bini Smaghi's spot.

On Friday, French President Nicolas Sarkozy said Bini Smaghi had informed him and EU President Van Rompuy that he would step down by the end of the year. He did not say what French candidate would take Bini Smaghi's spot.

German Chancellor Angela Merkel, meanwhile, rejected the claim that pressure applied on Bini Smaghi to resign his post by the Italian government had endangered the independence of the ECB.

"I believe that the independence of the European Central Bank, as regards its ability to perform its tasks, has been preserved entirely," she told reporters.

No resignation was announced Friday by the ECB, and a bank spokesman said that since board members are appointed for eight years under the EU treaty, "Mr. Bini Smaghi will take any future decision in full independence."

The European Parliament and the ECB board had already given their approve to Draghi's appointment.

Delaying his appointment until their next summit in September would have underlined divisions among EU leaders, who have already struggled to find a common line on debt-stricken Greece and the best way of containing the financial crisis that has also pushed Ireland and Portugal into needing massive bailouts.

The ECB has played a central role during the debt crisis that has afflicted the 17-country eurozone over the past 18 months or so. For example, Trichet overrode criticism from some of the more hawkish officials at the bank when he backed a multibillion euro (dollar) bond-buying program intended to ease the pressure on the more indebted countries.

More recently, the ECB has found itself in the difficult position of raising interest rates to keep a lid on above-target inflation levels even though the weaker eurozone economies are still struggling.

The 63-year-old Draghi will start his eight-year term at the ECB on Nov. 1. The former managing director at U.S. investment bank Goldman Sachs also runs the Financial Stability Board, an international organization that seeks to head off risks for the global financial system.

The decision on Draghi came a day after EU leaders gave their clearest sign yet that Greece will get a second bailout in the coming weeks, on top of last year's euro110 billion ($156 billion).

"We agreed that there will be a new program for Greece," said German Chancellor Angela Merkel.

The stronger language on aid for Greece was also made possible after debt inspectors from the EU and the International Monetary Fund reached a final deal Thursday with the government in Athens on euro28 billion worth of new austerity measures.

The measures have to be passed by the Greek Parliament next week for the bailout funds to be released. If lawmakers fail to back the package, then Greece will likely be staring at a default on its debts.

Even if it gets a second bailout, many economists think that Greece will have to restructure its debts in some shape or form in the coming years, especially if the economy shrinks further.

However, Greek Prime Minister George Papandreou once again ruled out default as an option.

"In case of default the health sector will collapse, ... the pension system will collapse by 80 percent and we won't be able to pay salaries in the public sector," he said after the summit, adding that the new bailout package being negotiated will give Greece the time necessary to get its economy back on track.

"What we are doing is changing Greece," Papandreou said. "We're not asking for money to stay the same."

___

David McHugh in Frankfurt and Raf Casert and Angela Charlton contributed to this story.


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"Probably inevitable" a country will exit euro: Soros (Reuters)

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VIENNA (Reuters) – Billionaire investor George Soros thinks a country will eventually exit the euro zone and urged policymakers on Sunday to come up with a "plan B" that could rescue the European Union from looming economic collapse.

Soros, famous for making $1 billion by betting against the British pound in 1992, did not name any country he thought might exit the currency, but speculation is mounting about the fate of Greece as its politicians struggle to agree more austerity measures demanded by international lenders as the price for staving off bankruptcy.

Soros reiterated his view in a panel discussion in Vienna that the euro had a basic flaw from the start in that the currency was not backed by political union or a joint treasury.

"The euro had no provision for correction. There was no arrangement for any country leaving the euro, which in the current circumstances is probably inevitable," he said.

While he called survival of the European Union a "vital interest to all," he said the EU needed structural changes to halt a process of disintegration.

"There is no plan B at the moment. That is why the authorities are sticking to the status quo and insisting on preserving the existing arrangements instead of recognizing there are fundamental flaws that need to be corrected."

With a debt crisis in some peripheral members testing the EU's cohesiveness at a time of popular disquiet in wealthier countries over bailouts, he said leaders had to adopt measures now to remedy the situation.

"Let's face it: we are on the verge of an economic collapse which starts, let's say, in Greece but could easily spread. The financial system remains extremely vulnerable...

"We are on the edge of collapse and that is the time to recognize the need for change."

Some steps the EU could adopt included creating a larger central budget; directing some of the income from value-added tax or a levy on financial transactions to Brussels; having a European institution guarantee banks, and tripling the size of its bailout fund by topping it up with tax revenue, he said.

(Reporting by Michael Shields; editing by Sophie Walker)


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German business sentiment rises unexpectedly (AP)

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FRANKFURT, Germany – Business optimism rose unexpectedly in Germany during June in a fresh indication that the country's recovery remains strong despite a steady drumbeat of bad news about Greece's debt crisis.

The Ifo institute said Friday its index rose to 114.5 from 114.2 in May. The rise was unexpected — the consensus in the markets was for a modest decline.

Germany is enjoying a strong economic recovery, based on strong exports and increasing investment in machinery and equipment at home as businesses expand. Upbeat reports from the manufacturing, wholesale and construction sectors offset a slight decline in retailing.

"The Germany economy is enjoying a robust upswing," the institute said in a statement.

The 7,000 business executives surveyed remained upbeat despite constant headlines about Greece's financial troubles. EU leaders are working on a second bailout to keep Athens from defaulting on its debts after last year's euro110 billion ($160 billion) rescue did not put the country back on its feet financially.

Most of the eurozone's economy is doing well despite financial crises in three smaller countries — Greece, Portugal and Ireland. Together they make up only about 6 percent of eurozone gross domestic product, which means their troubles have so far not held the overall economy back much. Still, a debt default could spread turmoil through the financial system.


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Brent falls as euro zone woes, dollar pressure (Reuters)

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NEW YORK (Reuters) – Brent crude prices fell 2 percent on Friday as Europe's debt problems and a dollar index rebound extended oil's decline a day after consuming nations announced they were tapping strategic reserves.

Dropping 7 percent for the week, Brent's premium to U.S. crude fell below $14 a barrel intraday, from above $19 on Wednesday, the day before the International Energy Agency made a surprise announcement to release oil from strategic reserves. The premium has contracted from its record $23.34 reached on June 15.

U.S. crude ended slightly higher on Friday, after seesawing and briefly dipping below $90 a barrel, finding support above Thursday's low trade.

The euro fell versus the dollar as investors worried that Greece's parliament may not pass austerity measures needed for the country to secure more bailout funds.

"The strengthening of the dollar index is helping pressure oil and we're seeing an unwinding of the Brent-WTI spread because of the release of the strategic reserves," said Phil Flynn, analyst at PFGBest Research in Chicago.

"The Brent-WTI spread coming in indicates that the release was justified," he added.

ICE Brent crude for August fell $2.14 to settle at $105.12 a barrel, after swinging between $103.62 and $108.70 after the previous session's nearly 6 percent slide. It was a second straight weekly loss for the contract.

Brent trading volumes were heavy, eclipsing U.S. crude for a second straight day, after hitting a record over 1.2 million lots on Thursday.

The consuming nations' reserves release sent Brent into contango, with front-month Brent ending at a 19-cent discount to the September contract, after closing Thursday at a 21-cent premium to the second month.

U.S. August crude edged up 14 cents to settle at $91.16 a barrel, but front-month crude posted a third straight weekly loss, down 2 percent.

Money managers slashed their net-long U.S. crude futures and options positions in both New York and London in the week to June 21, the Commodity Futures Trading Commision said on Friday.

The relative strength index for both Brent and U.S. crude approached the 30-point mark, a signal that a contract has been oversold, following the sell off IEA announcement, although WTI edged up slightly up after the late day price rally.

U.S. gasoline futures settled lower, losing 2.1 percent, with heating oil, the distillate benchmark, ending 1.1 percent lower.

U.S. refined products prices had been reacting to pricier Brent crude futures in recent months.

IEA RESERVE RELEASE IMPACT

The International Energy Agency (IEA) announced on Thursday a release of 60 million barrels of government-held stocks over the next 30 days.

Leading commodities banks JP Morgan and Goldman Sachs cut their oil price forecasts following the IEA announcement, but Bank of America Merrill Lynch kept its forecast for the second half unchanged at $102 a barrel.

Saudi Arabia, the world's leading crude oil exporter, has yet to make any comment on the release.

The IEA move came after the Organization of the Petroleum Exporting Countries last month could not reach agreement on a boost to production targets. But Saudi Arabia had pledged to increase output to meet demand.

"Saudi Arabia will be crucial -- will it stick to its promise to increase its output to 10 million barrels a day or not?" said Carsten Fritsch, an analyst at Commerzbank in Frankfurt.

"If they don't, then the IEA decision will have backfired. Maybe they will scale back production in July after this stock release."

U.S. Treasury Secretary Timothy Geithner said on Friday that the IEA's decision was "sensible policy."

"It will provide some modest help and relief" to the U.S. economy, Geithner told reporters after meeting local business leaders in Manchester, New Hampshire. "It was a prudent use of existing reserves."

Better-than-expected U.S. durable goods data provided support to U.S. crude futures in the early going on Friday.

New orders for U.S. manufactured goods in May increased 1.9 percent after dropping 2.7 percent in April, the Commerce Department said.

But concerns about euro zone debt problems continued to weigh on markets. U.S. stocks headed for three days of losses as worries about the Italian banking sector added to the uncertainty over the passage of a Greek austerity plan. (.N)

(Additional reporting by Gene Ramos in New York, Claire Milhench and Ikuko Kurahone in London and Alejandro Barbajosa in Singapore; Editing by Lisa Shumaker and David Gregorio)


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Diplomats draw up plans for post-Gadhafi Libya (AP)

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LONDON – International officials and Libya's opposition have drawn up detailed plans to rebuild the North African nation's economy and society following the removal of Moammar Gadhafi, British diplomats said Friday.

Preparations for maintaining law and order, resuming oil production and the potential deployment of U.N. peacekeepers as cease-fire monitors have all been drafted during talks over the last month, which have also discussed how officials currently tied to Gadhafi's regime could be integrated into an interim administration.

A senior British diplomat, who demanded anonymity to discuss the work, said Friday that a team of officials from the U.K., United States, Italy, Turkey, Denmark and other nations has spent several weeks in eastern Libya discussing scenarios with opposition leaders.

"We are planning carefully and comprehensively for the days, weeks and months after Gadhafi has gone," the diplomat said.

The plans, which are expected to be completed next week, include a proposed timetable for resuming oil production in Libya's east. Officials believe there is little serious damage there to hamper production and predict work could begin again three to four weeks after Gadhafi leaves office.

The team also has discussed developing Libya's civil society institutions.

Draft proposals "will inform the international effort, led by the U.N., in response to the requirements expressed by the Libyan people," the diplomat said.

Libya's Transitional National Council intends to run the country until parliamentary and presidential elections can take place — a process that is expected to take many months to prepare for.

The British diplomat acknowledged officials have been mindful of recent failures in post-conflict planning. The U.S. and Britain have been sharply criticized over preparations in Iraq for the fall of Saddam Hussein.

"We have learned the lessons of previous conflicts, this is precisely why the U.K. has been at the forefront of supporting the Libyan people's preparations," the diplomat said.

British Prime Minister David Cameron said he had faith in the ability of the Libyan opposition to guide the country toward democratic elections.

"I believe we need to show real support for the Transitional National Council, who I believe are demonstrating they are not extremists, they are not Islamists, they are not tribal. They want a united Libya, but a more democratic Libya," he said, speaking at a European Union summit in Brussels.

Military officials and diplomats in Britain insisted that Gadhafi is being eased out of power, despite his refusal to quit so far.

British military spokesman Maj. Gen. Nick Pope told reporters that a meeting on Tuesday in London of the nations involved in the air campaign in Libya had underscored their resolve. The talks had illustrated the "determination to carry the operation through to a successful conclusion," Pope said.

Attack helicopters and fighter jets have flown 12,000 sorties and struck about 2,400 targets since the campaign began on March 19, he said.

The British diplomat insisted that pressure would soon force Gadhafi to step down. "The anger against him is simmering. The question is not if he will go, but when," he said.

Meanwhile, at the European Union summit on Friday, French President Nicolas Sarkozy derided the low U.S. profile in the international campaign in Libya, saying that France and Britain are carrying most of the burden and will stay until Gadhafi leaves.

While other European leaders pushed for a political solution in Libya, the French leader strongly defended the NATO-led military operation — and NATO itself. He rebutted comments by U.S. Defense Minister Robert Gates that the alliance's future could be in doubt because of European reluctance to exercise military might.

"I wouldn't say that the bulk of the work in Libya is being done by our American friends," Sarkozy told reporters at the summit. "The French and English and their allies are doing the work."

The United States has insisted on a backseat role in Libya. It led the initial coalition airstrikes in March, but in April withdrew U.S. forces from the direct combat role, limiting them to battlefield surveillance, aerial tanking and other support roles.

Seven NATO members are now participating in air strikes: Britain, France, Belgium, Canada, Norway, Denmark and Italy. But, as Gates said, most of NATO's 28 members, including Germany, have refused to join the strike mission in Libya.

Sarkozy wouldn't give a timeline for an eventual end to the 3-month-old air campaign, saying that would play into Gadhafi's hands and "I don't think that would be constructive."

"Things are progressing. I would have liked them to progress more quickly, but they are progressing," he said. "We must continue until Mr. Gadhafi leaves."

There has been mounting frustration in European capitals over the rising costs of NATO's military campaign at a time of severe financial austerity, and over the alliance's failure to deal a knockout blow to Gadhafi's forces, despite an overwhelming advantage in firepower.

After Sarkozy and Cameron briefed the other EU leaders on the Libya campaign, other EU leaders were keen to stress political solutions.

____

Angela Charlton and Slobodan Lekic contributed to this report from the EU summit in Brussels.


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2011年6月26日星期日

Italian banks hit by Moody's downgrade threat (AP)

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MILAN – Italian banks were down sharply on the Milan stock exchange Friday after ratings agency Moody's said it was considering downgrading their credit worthiness.

Shares in Unicredit, the country's largest bank, were down 8 percent in late-morning trading on Friday. Intesa Sanpaolo, Italy's second-largest bank, and Monte Paschi were also down.

In a report published late Thursday, Moody's Investors Service placed the long-term debt and deposit ratings of 16 Italian banks and two Italian government-related financial institutions on review for possible downgrade.

The rating agency also changed the outlook to negative from stable on the long-term debt and deposit ratings of a further 13 Italian banks,

The move comes after Moody's put Italy's public debt on review for possible downgrade over concerns about low growth and high public debt, which at around 120 percent of GDP is one of the biggest in Europe.

Moody's dealt Italy another blow recently, placing several Italian-government related issuers on review for possible downgrade. These included energy companies Enel SpA and Eni SpA, engineering and construction company Finmeccanica SpA and Poste Italiane SpA, the nationwide postal service.

It's not alone in voicing concerns about Italy. Standard and Poor's recently cut its rating outlook for Italy's debt from stable to negative.

Italy's financial system has come under further scrutiny on fears of contagion from the Greek crisis.


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Greek opposition leader star target at EU summit (AP)

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By ANGELA CHARLTON and DEREK GATOPOULOS, Associated Press Angela Charlton And Derek Gatopoulos, Associated Press – Thu?Jun?23, 6:27?pm?ET

BRUSSELS – Greece's opposition leader wasn't invited to Thursday's European Union summit but he became its hapless star.

Antonis Samaras wants to block spending cuts, tax increases and economic reforms that Greece has to approve to win more loans next month and avoid what some fear would be economic catastrophe.

Samaras came to Brussels for a meeting on the sidelines of the summit and pushed other European conservative leaders to back a "corrected" version of the plan.

But he swiftly came under fire from the leaders of Germany, Netherlands and Sweden — in an unusual case of collective meddling by EU leaders in a member country's domestic politics.

EU leaders have been struggling for more than a year to keep Greece's debt woes from bringing the rest of the eurozone down, and some appear to be losing patience.

Germany's Angela Merkel said Samaras' conservative party — which was in power for years before rival Socialists took over and acknowledged crushing debt problems — should take its "historical responsibility."

Sweden's Prime Minister Fredrik Reinfeldt said: "It is very important that no Greek political leader tells the Greek people that they have a shortcut."

Samaras acknowledged that he came under pressure Thursday by other European conservative leaders to lift his objections to the bailout agreement. But it's unclear how much they chipped away at his resolve.

"European leaders listen to our view. Some agreed with our position, but most stuck to their own positions," Samaras told Greek state-run NET television. "I explained to them that we cannot give our backing to a mistake."

Samaras, a U.S.-educated economist, is a controversial figure in Greek politics, too.

He spent years in political exile after forming a breakaway party in the early 1990s that caused a damaging split in the conservative electorate.

A few months after he was elected leader of the New Democracy party, he expelled his predecessor after she voted for last year's international rescue package for Greece.

Without the next euro12 billion ($17 billion) installment of its existing euro110 billion bailout, Greece will default on its massive debt my mid-July. The country is also negotiating a second rescue package as it remains stuck in recession and locked out of international debt markets.

Samaras' party has stubbornly refused to back Socialist Prime Minister George Papandreou over the bailout program, arguing that its excessive reliance of tax hikes is counterproductive and locking Greece's economy in recession.

Surprise talks with Papandreou this month to form a grand coalition government collapsed. Samaras' party recently took a slim lead in opinion polls, after trailing for three years.

As a result, Samaras is demanding early elections.

___

Gatopoulos reported from Athens.


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European stocks, euro rebound on Greece progress (AFP)

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LONDON (AFP) – European stocks rebounded and the euro recovered against the dollar on Friday as investors cheered a breakthrough in the eurozone's bid to resolve Greece's debt crisis, analysts said.

World markets had slumped on Thursday as weak US and Chinese data dented confidence in the global economic outlook and as Greece's problems dragged on.

However they swiftly recovered on Friday after Greece, the EU and the IMF agreed on the final details of a 28-billion-euro ($40-billion) savings plan which Athens must implement over five years to obtain cash to pay its immediate debts.

In late morning deals, London's benchmark FTSE 100 index of top shares jumped 1.27 percent to 5,746.33 points. Frankfurt's DAX 30 climbed 1.12 percent to 7,229.37 points and in Paris the CAC 40 gained 0.46 percent to 3,805.30.

The euro climbed to $1.4293 from $1.4257 late on Thursday in New York. The dollar fell to 80.16 yen from 80.52 yen.

Oil prices meanwhile steadied after plunging one day earlier when the International Energy Agency decided to tap emergency crude reserves to make up for lost Libyan supplies.

But in Italy, leading bank shares slumped up to 8.0 percent.

Markets recovered on Friday "after positive sentiment coming out of Europe as EU ministers say they will do 'anything it takes' in relation to Greece," said Spreadex trader Simon Furlong.

"However, we are not out of the woods yet. With disappointing jobs figures in the US, (Federal Reserve chairman) Ben Bernanke downgrading US growth output and a large opposition to austerity measures within Greece's parliament, the light at the end of the tunnel is very dim indeed."

The European Commission said the deal among international backers on the ground in Athens now has to be "translated into concrete legislative measures" by Greece. Prime Minister George Papandreou is hoping that parliament will next week approve his austerity measures.

Meanwhile worries about the global economy were stoked after the US Labor Department on Thursday reported an unexpected increase in initial jobless claims, by 9,000 to 429,000 in the week to June 18. Elsewhere, the Commerce Department said new-home sales fell 2.1 percent in May.

Ahead of the data, Bernanke had on Wednesday warned of economic headwinds that could persist for longer than expected.

US stocks ended mixed on Thursday after steep initial losses spurred by the series of gloomy economic reports from the United States, Europe and China.

Tokyo's benchmark Nikkei-225 index closed up 0.85 percent at 9,678.71 points on Friday.

"The financial markets have stabilised," noted Derek Halpenny, European head of currency research at The Bank of Tokyo-Mitsubishi UFJ.

"Concerns over a number of factors remained elevated however, and next week brings the crucial austerity votes that appear to require not just a win but a win that signifies some degree of unity in Greece in favour of the austerity program."


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Summary Box: G-20 aims to stabilize food prices (AP)

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FOOD PRICES: A group of the largest economies in the world have agreed on measures aimed at stabilizing food prices in the wake of recent fluctuations that caused global instability, especially in poorer nations.

AGREEMENT: The G-20 summit of agriculture ministers agreed to establish a transparent system to track global supplies and set up emergency food reserves, among other initiatives.

DOUBTERS: Non-government organizations working on food issues criticized the accord, saying it does not address biofuels, which take up land that could be used to grow food, and doesn't focus enough on building up emergency stocks.


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Europe worried about Spain not Ireland: Irish finance minister (Reuters)

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DUBLIN (Reuters) – Europe is more concerned about the fallout on Spain and other large euro zone economies from the Greek financial crisis than on Ireland and Portugal, which are already receiving emergency funding, the Irish finance minister said on Sunday.

Investors pushed Irish and Portuguese borrowing costs to fresh euro-era highs last week amid uncertainty over how Greece can avoid default but contagion concerns have heaped pressure on Spanish and Italian yields.

"The European authorities are more worried about countries like Spain than they are about Ireland and Portugal," Michael Noonan told state broadcaster RTE.

"The authorities that I have spoken to believe they can prevent contagion spreading to Ireland and Portugal but they have some concerns about the bigger European countries, and they are going to draw the line there."

"I presume they will bring other policy instruments forward as necessary," he said without elaborating what those measures would be.

Greece's government must win a parliamentary vote on austerity measures this week if it is to avoid default and Noonan said he believed Prime Minister George Papandreou would prevail.

But he said it was unclear whether Athens would be able to generate the additional revenues earmarked in the austerity package.

"I would be more worried about Greek failure to implement what they have agreed to in the autumn because with the best will in the world their administration doesn't seem to be very effective.

"Tax in Greece and their collection system doesn't seem to be very good and it's a matter of speculation as to whether they can fulfill the commitments they are making or not."

Ireland's government has said it will make a tentative return to debt markets in the second half of next year but it has also insisted it has enough funds from its existing 85 billion euros EU-IMF bailout to see it through to the middle of 2013.

Noonan said the savings Ireland was making on imposing losses on junior bondholders in the country's banks could help fund the sovereign till the end of 2013.

"We have sufficient money under the bailout program in all eventualities to mid-2013 but there is the possibility of having extra money for the second half of 2013."

Irish consumer demand dropped 1.9 percent in the first quarter, on a seasonally adjusted basis, data last week showed but Noonan said he was hoping anecdotal evidence of a rise in tourism would help revive domestic demand.

"We think that there will be growth on the retail side through tourism."

(Created by Carmel Crimmins; editing by Sophie Walker)


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Greece in deal with EU/IMF on austerity plan (Reuters)

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ATHENS/BRUSSELS (Reuters) – European Union leaders promised more money to help Greece stave off looming bankruptcy, provided its parliament enacts an austerity plan finalized in fraught last-minute talks with international lenders.

Greek Prime Minister George Papandreou promised to push through radical economic reform after his new finance minister clinched agreement with EU and IMF inspectors on extra tax rises and spending cuts to plug a 3.8 billion euro funding gap.

"A comprehensive reform package... and adoption by the Greek parliament of the key laws on the fiscal strategy and privatization must be finalized as a matter of urgency in the coming days," EU leaders said in a summit statement.

"This will provide the basis for setting up the main parameters of a new program jointly supported by its euro area partners and the IMF and allow disbursement in time to meet Greece's financing needs in July," the 27 leaders said.

The euro rebounded against the dollar and U.S. stocks pared losses on news of the agreement in Athens.

Greece needs 12 billion euros in European and IMF aid to avoid a default on its debt mountain in mid-July that could spread contagion across the euro currency area and send shock waves around the world economy.

"Greece is committed, strongly committed, to continue a very important program for major changes, radical changes, to make our economy viable," Papandreou told reporters.

The EU leaders also exhorted conservative Greek opposition leader Antonis Samaras to rally behind the austerity program, but he stuck to his refusal to vote for the entire plan, saying he would support the spending cuts but not tax increases.

German Chancellor Angela Merkel, who has taken perhaps the toughest line on Greece, urged the Greek opposition to do what was necessary and get behind the package. "In such a situation, everyone must stand together in a country," she said.

Euro zone governments are meanwhile talking to banks and insurance companies to convince them voluntarily to maintain their exposure to Greek debt when their bonds mature, as part of a second rescue package for Athens.

RESCUE FUNDS APPROVED

The leaders also approved the creation of a permanent euro zone bailout fund from June 2013 as well a strengthening of the existing temporary rescue fund.

European Council President Herman Van Rompuy, who chaired the summit, said they would decide on Friday on the appointment of Italy's Mario Draghi to succeed Jean-Claude Trichet as head of the European Central Bank.

Van Rompuy sidestepped questions about French demands that the existing Italian member of the ECB's executive board, must step down to make way for a Frenchman.

The Greek crisis dominated debate at the summit, the fourth EU leaders have held this year as they grope for a solution to debt woes that have forced Greece, Portugal and Ireland to seek bailouts and roiled global financial markets.

Investors remain skeptical. Five-year credit default swaps on Greek government debt rose 138 basis points to 2,025 bps on Thursday, according to data monitor Markit, implying a more than 80 percent probability of default over that period.

A Greek default would force European banks and governments to take big losses, undermine the creditworthiness of other stressed euro zone sovereigns and potentially plunge the economy of the world's biggest trading bloc, already slowing, back into recession.

Economists say even a second bailout plan for Greece may buy its government only a few months' respite and most expect Athens will have to default or write down its debt eventually.

Greece accepted a package of 110 billion euros of EU/IMF loans in May 2010 and now needs a second bailout of a similar size to meet its financial obligations until the end of 2014, when it hopes to return to capital markets for funding.

Euro zone member states, led by Germany, insist any second aid package must involve the private sector. But credit rating agencies have said they would treat even a voluntary debt rollover as a selective default.

At meetings this week, banks and insurers in Germany, France, Spain, Belgium and the Netherlands were asked by national financial authorities to roll over their holdings of Greek debt when the bonds mature.

(Additional reporting by Noah Barkin, Luke Baker, Jan Strupczewski, Keith Weir and David Brunnstrom in Brussels, Renee Maltezou, George Georgiopoulos, Dan Flynn and Lefteris Papadimas in Athens; Writing by Paul Taylor, editing by Alistair Lyon)


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Portugal's PM eyes tougher austerity measures (AP)

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LISBON, Portugal – Portugal's new prime minister says his coalition government is preparing to accelerate and possibly broaden austerity measures the country promised in return for a euro78 billion ($110 billion) bailout.

Pedro Passos Coelho, who took office earlier this week at the head of a center-right administration, says he is also considering a swifter reorganization of loss-making state companies.

Passos Coelho said after a European Union summit Friday in Brussels that he will announce details of his plans next week.

Portugal, like Greece and Ireland, had to ask for financial rescue after its debt levels pushed it close to bankruptcy and aggravated Europe's sovereign debt crisis.

The austerity program is expected to deepen Portugal's economic recession and worsen unemployment.


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FTSE closes lower on poor US jobs data (AFP)

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LONDON (AFP) – Share prices in London closed sharply lower on Thursday on poor US jobs data and continued eurozone debt worries.

The benchmark FTSE 100 index fell 1.71 percent to close ar 5,674.38 points.

Lloyds Banking Group (LBG) was the most widely traded stock, with 158 million shares changing hands, followed by Royal Bank of Scotland (RBS), which saw 125 million units switch ownership.

International Consolidated Airlines was the best blue-chip performer, rising 0.78 percent -- or 1.9 pence -- to finish at 244.4, followed by cruise liner firm Carnival, which rose 0.69 percent -- or 16 pence -- at 2,334.

London-listed mining stocks bore the brunt of the negative sentiment with Vedanta Resources was the biggest faller of the day, shedding 6.86 percent -- or 135 pence -- to close at 1,832.

It was followed by Eurasian Natural Resources, which slipped 5.05 percent -- or 37 pence -- to finish at 695.5

On the currency markets, a pound was worth 1.5986 dollars at 17:03 BST, down from 1.6125 at the same time Wednesday, while it stood at 1.1281 euros, up from 1.1207 over the same period.


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Europe pledges new Greek bailout as deal struck on cuts (AFP)

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BRUSSELS (AFP) – Europe pledged Thursday to fix a new bailout for Greece by early July, provided Athens rallies parliamentary support for sweeping new cuts amid mounting global pressure to shield the euro on markets.

As negotiators for the EU and the IMF struck agreement with the Greek government on implementing 28 billion euros of cuts and bringing in tens of billions from the sale of state holdings, Athens formally requested financial aid during a two-day summit in Brussels.

Greek lawmakers must pass the new austerity plan before June is out, the European Union said, allowing eurozone finance ministers "to complete work on outstanding elements to allow the necessary decisions to be taken by early July."

With the bloc under US pressure to avert financial market contagion from the euro debt crisis, Greek Prime Minister George Papandreou said on leaving the summit for the night: "We've got the support of our partners and I think this is not only a green light but also a positive sign for the future of Greece."

EU president Herman Van Rompuy said the finished design of the new rescue demanded by the International Monetary Fund and worried international partners should allow initial "disbursement in time to meet Greece's financing needs in July."

That can be taken to refer to a 12-billion-euro tranche of loans from last year's 110-billion euro bailout ($156 billion), which Greece needs to avert default in July and which was blocked pending next week's vote in the Greek parliament.

The EU leaders called on "all political parties in Greece to support the programme's main objectives," saying "national unity is a prerequisite for success."

Papandreou has a slim, five-seat majority in the Greek assembly and on Thursday Greek unions announced a general strike timed to coincide with the vote.

Greek authorities settled their new plan for the cuts during negotiations in Athens with the European Commission, the European Central Bank and the IMF, with Papandreou vowing "radical changes to make our economy viable."

He added: "This is a fight for the Greek people, this is a fight for Greece, for our country, but it's also a fight for a common European currency and a common Europe."

The commission said the parallel deal in Athens to close the fiscal gap for the years 2011-2014, and raise tens of billions of euros from selling off state holdings, now has to be "translated into concrete legislative measures."

Finance ministers from the 17-nation eurozone meet again on Sunday July 3 -- days ahead of a deadline for Greece to repay maturing debt or face default.

Greek opposition leader Antonis Samaras said beforehand he opposed "more taxes in an economy in unprecedented depression," but German Chancellor Angela Merkel urged his party "to accept its historic responsibility."

Warning that Europe must act swiftly to avoid damaging contagion, US Federal Reserve chief Ben Bernanke had warned that failure to find agreement "would pose threats to the European financial systems, the global financial system and to European political unity."

Those remarks followed scathing comments from US Treasury Secretary Timothy Geithner and IMF fears of "large global spillovers."

Commission chief Jose Manuel Barroso said the EU had to act in the face of such criticism.

"When our partners ask: Europe, be more coherent, be stronger, take decisions quicker... that's something I take seriously," he said.

The second bailout of Athens in just over a year is set to also involve banks agreeing to lend the Greeks more money in the form of a rollover of bonds due for redemption over the summer.

In the latest sign of knock-on effects from that approach, Moody's ratings agency said on Thursday it had put the ratings of 16 Italian banks on review for possible downgrade.

However, the euro stemmed earlier losses by 2100 GMT as the latest deal took shape, reaching 1,4257 dollars against 1,4349 late on Wednesday.


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Euro leaders order new Greek bailout for 'early July': draft (AFP)

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BRUSSELS (AFP) – Euro leaders Thursday ordered the "implementation by early July" of a new Greek bailout and pledged to do "whatever necessary" to maintain currency stability, in a draft declaration drawn up at an EU crisis summit.

"The euro area heads of state and government call on finance ministers to complete work on all these elements to allow their implementation by early July," the document said, referring to "additional funding" over and above last year's 110-billion-euro rescue ($156 billion).

The declaration, which can still change over late-night talks, spells out that a second bailout, again expected to top 100 billion euros, will draw on a combination of "official" or taxpayer monies, and "private sources."

It says the finished design of a rescue demanded by regular backer the IMF and worried international partner, the United States, should also allow "disbursement in time to meet Greece's financing needs in July."

That can be taken to refer to a 12-billion-euro tranche of loans from the first bailout that euro finance ministers refused to agree to hand over in talks this week, opting instead to await the outcome of a pending Greek parliamentary vote on massive new austerity cuts and sell-offs scheduled by June 30.

The leaders said Greek lawmakers must pass 28 billion euros of budget cuts over the next five years, and up to 50 billion in privatised state holdings, "as a matter of urgency in the coming days."

They called on "all political parties in Greece to support the programme's main objectives," saying "national unity is a prerequisite for success."

Greek authorities hammered out the make-up of those cuts during negotiations with the European Commission, the European Central Bank and the International Monetary Fund in Athens on Thursday.

Asked in Athens whether Greece had asked for additional financing, IMF spokesman David Hawley said it had "not received a request for a new arrangement from Greece" so far.

"I believe that if there's a strong commitment from the European Union, there will be a strong commitment from Greece at the same time," Prime Minister George Papandreou had said on entering the summit.

Athens is "strongly committed to continue a very difficult but important programme for major changes, radical changes to make our economy viable," he added.

"The Greek people have shown tremendous commitment, strength and effort. This is a fight for the Greek people, this is a fight for Greece, for our country, but it's also a fight for a common European currency and a common Europe."

The socialist leader said that with the creation by the EU of an "efficient framework to deal with this crisis, and also deal with a number of the systemic problems ... then we can be optimistic that we're on a different path."


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Summary Box: Saab runs out of cash for wages (AP)

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OUT OF CASH: Saab moved closer to bankruptcy Thursday after it conceded that it didn't have any money to pay workers' wages. After months of production stoppages and problems with paying suppliers, the Swedish car company said the situation is so dire that it won't be able to pay its 3,700 employees, raising doubts over how long the brand can survive.

HOW DID IT GET HERE?: Saab has been fighting for its survival since Spyker, a small luxury sports car maker, brought it out of liquidation. Skeptics questioned how Spyker could turn around a car maker that posted loss after loss when it was owned by General Motors.

WHAT'S NEXT?: Swedish Automobile, the name that Spyker adopted this month, is in talks with various parties to solve the financial problems, but warned that there can be "no assurance that these discussions will be successful, or that the necessary funding will be obtained." If Saab doesn't find a solution, its employees could ask a court to declare the company bankrupt in order to activate a government salary guarantee.


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