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Monday, January 30, 2012

World stocks fall ahead of latest EU summit

The eurozone crisis will dominate an EU summit on Monday, with an emphasis on growth and "smart" budget discipline.
The EU has more than 23 million unemployed people and there are fears that wide-ranging budget cuts will harm enterprise and training.
Cuts need to be "smart" - well-targeted - to allow room for future growth, the European Commission says.
Most member states - and not the UK - are expected to sign up to a new budget treaty, or "fiscal compact".
The goal is much closer co-ordination of budget policy in the 17-nation eurozone.
Diplomatic wrangling continues over the influence of non-eurozone countries in the new institutional set-up.
The UK opted out, in a blaze of publicity last month, but did secure observer status in the discussions.
Poland is insisting that it and other countries preparing to join the euro should be fully involved in the eurozone negotiations.
World stock markets fell Monday as uncertainty about a tentative deal to resolve Greece's debt crisis weighed on investor sentiment ahead of a summit of European leaders.
The leaders gathering in Brussels hope to focus on how to stimulate economic growth and create jobs at a time when huge government spending cuts threaten to push many countries back into recession.
The latest data showed Spain was one step closer to recession, technically defined as two consecutive quarters of economic contraction — after its economy shrank in the last three months of 2011.
Experts say Europe's efforts to cut its high levels of debt will be for nothing if its economies remain uncompetitive. The leaders will also discuss a new treaty on tightening budget controls and setting up a permanent bailout fund.
But the meeting will be dominated by another topic that is not officially for discussion — Greece's debt problem.
The official summit agenda is growth and job creation, and it will be discussed in some detail. Unemployment will be perhaps the big issue in the French presidential election, and there are now more than five million people out of work in Spain - without reversing that trend the eurozone crisis isn't going to ease.
World stock markets fell Monday, with uncertainty about a tentative deal to resolve Greece's debt crisis weighing on investor sentiment ahead of a summit of European leaders.
Benchmark oil slipped to near $99 per barrel while the dollar rose against the euro but fell against the yen.
Stock markets opened lower in Europe, where leaders gathering in Brussels for a summit on taming the continent's financial crisis were met by a nationwide strike that hobbled trains and other public transportation.
Britain's FTSE 100 fell 0.5 percent to 5,707.50 and Germany's DAX lost 0.6 percent to 6,470.18. France's CAC-40 shed 0.6 percent to 3,298.07. Wall Street was also headed for a lower open, with Dow Jones industrial futures falling 0.4 percent to 12,559 and S&P 500 futures down 0.5 percent to 1,305.50.  
Japan's Nikkei 225 index shed 0.5 percent to close at 8,793.05. South Korea's Kospi was 1.2 percent lower at 1,940.55 and Hong Kong's Hang Seng dropped 1.7 percent to 20,160.41. Australia's S&P/ASX 200 lost 0.4 percent at 4,272.70.
European leaders were to meet later Monday in Brussels to discuss austerity and belt-tightening measures as well as a tentative deal reached Saturday between Greece and its private investors that could avert a disastrous Greek default on its debt.
Leaders will also try to finalise the text of the new fiscal treaty which all EU countries except Britain say they intend to sign. There are still some issues to be resolved - Poland worries about being shut out of future eurozone summits, and there's political pressure in Germany to make the budget rules and penalties in the treaty a little tougher.
World stock markets fell Monday as uncertainty about a tentative deal to resolve Greece's debt crisis weighed on investor sentiment ahead of a summit of European leaders.
Experts say Europe's efforts to cut its high levels of debt will be for nothing if its economies remain uncompetitive. The leaders will also discuss a new treaty on tightening budget controls and setting up a permanent bailout fund.
Richer countries like Germany, however, are losing patience with giving Athens loans, saying the Greek government is not implementing reforms and austerity cuts quickly enough.
Despite progress in Greece's debt talks with private creditors, the continued uncertainty over its finances pushed markets lower Monday.
A German official even proposed to have an EU official directly oversee Athens' government spending. The idea was quickly rejected, however, by both the European Commission and Greek leaders