Greece Gets Some Relief on Credit Rating

Greece won some respite from financial market pressure Tuesday as ratings agency Standard & Poor's took the country off credit watch for a possible downgrade — a day after eurozone governments laid out a vague blueprint for possible loans to help the indebted country.

S&P's announcement that it was no longer considering a downgrade of Greece's credit rating after it made bigger budget cuts is the strongest sign yet that markets may see less chance of the country failing to repay its debts.

A Greek default would be a serious blow for Europe's currency union, showing that eurozone countries are unable or unwilling to lend their own money to one of their members. That's why markets and many economists expect that European government would step in and stop it with a financial backstop of some sort.

To read the full story click here.

Britain rules out stronger deficit cuts

BRUSSELS -- British Treasury chief Alistair Darling on Tuesday hit back at European Union calls for more aggressive deficit cuts, saying such moves would risk tipping Britain back into recession.

Responding to reports that the European Commission will tomorrow recommend that Britain move more quickly to reduce its ballooning budget deficit, he said the EU's recommendation would take 25 billion pounds out of the British economy.

It would also risk "seriously derailing the economy and tipping our economy back into recession," Darling said after a meeting of European finance ministers.

To read the full story click here.

Geithner sees 'durable' signs of stability

PARIS – U.S. Treasury Secretary Timothy Geithner said Thursday he saw "durable, very important signs" of recovery in the financial system — but he warned against repeating the mistakes of the 1930s and withdrawing stimulus too soon.
Geithner, in Paris on the last leg of a tour that has taken him from London to Saudi Arabia and the United Arab Emirates, acknowledged he was keeping up pressure on foreign governments not to slacken in their efforts to resuscitate the global economy.
"Probably why I'm doing this (tour) is to make sure we keep working with governments around the world to continue to provide enough support to lift this global economy back to a sustained pattern of growth," he told reporters.
To see the full story clik here.

French President calls for global talks on dollar's role as world currency

L'AQUILA, Italy (AP) -- French President Nicolas Sarkozy called for a revamp of the global currency system, saying Thursday that the dollar's supremacy is outdated.
"We need to ask the question: shouldn't a world that is politically multi-polar correspond to a multi-monetary world economically?" he said in a news conference during a summit of world leaders in L'Aquila, Italy.
Sarkozy compared an overhaul of the global currency system to the enlargement of the Group of Eight structure to encompass fast-growing emerging economies, which were invited to join the Italian summit.
He said the supremacy of the dollar belongs to the post-Second World War era when America was the predominant world power both economically and politically.
To see the full story click here.

Channel Tunnel marks 15th anniversary — in black

UNDER THE ENGLISH CHANNEL – After three years of sweat and toil, Philippe Cozette tunneled into history one wintry day in 1990, using a compressed air drill to power through the last chunk of chalk marl separating undersea tubes extending from the shores of Calais in France to the white cliffs of Dover in England.

When the Frenchman reached through the hole to shake hands with his English colleague Robert Graham Fagg on the other side, the two countries were physically linked for the first time since the last Ice Age.

"Welcome to France," Cozette said in English. "Bonjour, mon ami," responded Fagg, before exclaiming in a distinctly English accent: "Vive la France!"

To read the full story, click here.

OECD cautiously predicts 'policy-induced' global recovery next year as stimulus spending flows

Haunted perhaps by the ghost of Herbert Hoover, global leaders have steered the world away from a 1930s-style Great Depression by a "very, very, high level of awareness" of the policy errors of his era, a top international economist said as he released an OECD study of efforts to save the world economy.
Klaus Schmidt-Hebbel, chief economist for the Organization for Economic Cooperation and Development, spoke to The Associated Press as he slashed forecasts for growth in the 30 rich countries that make up its membership, predicting the economies of the OECD countries will shrink by 4.3 percent this year, and by 0.1 percent next year.
The new forecasts released Tuesday compare with a November forecast that the OECD economy would shrink by 0.4 percent this year and grow by 1.5 percent in 2010.
It would have been worse without government stimulus plans, which will add 0.5 percent to the OECD economy this year and next, according to the Paris based organization. The new spending is a sharp contrast with Hoover-era policy, which saw protectionism and efforts to balance budgets and raise interest rates.
To read the full story click here.

Europe’s grand plans for new Bretton Woods on hold

Washington: It was no Bretton Woods 2.
European leaders had great hopes for the emergency summit that they persuaded lame-duck President George W. Bush to host—with some comparing it to the 1944 wartime conference at Bretton Woods, New Hampshire, when 44 nations created the International Monetary Fund and the World Bank.

Even though French President Nicolas Sarkozy and British Prime Minister Gordon Brown hailed Saturday’s meeting of global leaders as “historic,” they didn’t get what they wanted in terms of establishing a new brand of capitalism, dethroning the US dollar in a shake up of the world’s currency systems, or a quick-fix overhaul of the financial system.

To read the full story click here.

Bush resists European calls for state intervention

French President Nicolas Sarkozy has used the financial crisis and the absence of leadership in the United States during the presidential elections to claim a role for himself as a savior of the financial system.

Despite strong efforts to improve relations with the United States, however, he's unlikely to find much support in America for European leadership of the global capital order, nor for the new brand of capitalism he has been peddling.

To see the full story click here