A look at economic developments and activity in major stock markets around the world Tuesday:

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REYKJAVIK, Iceland _ Iceland's president blocked a bill to pay Britain and the Netherlands $5.7 billion for losses from the collapse of one of its banks, potentially undermining the nation's attempts to repair international relations.

Olafur Ragnar Grimsson vetoed the legislation, which was passed last month by the country's parliament, after receiving a petition signed by a quarter of Iceland's population of 320,000.

The Icelandic government said it would review the decision but added that it remained "fully committed" to implementing the bilateral loan agreements, stressing they are an "integral part" of the country's economic program as it struggles to recover from collapse.

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ATHENS, Greece _ Greece promised to speed up ambitious targets to reduce its massive budget deficit Tuesday to conform with European Union spending rules in just three years, helped by higher taxes on cigarettes and alcohol and lower bonuses to civil servants.

Finance Minister George Papaconstantinou announced the news on the eve of a visit by EU finance officials, who are arriving in the Greek capital Wednesday to review the nation's fiscal plans.

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LONDON _The annual inflation rate in the 16 countries that use the euro rose in December to its highest level in 10 months.

In its flash estimate for the month, the European Union's statistics office Eurostat said consumer prices increased 0.9 percent in the year to December, up from November's 0.5 percent.

Eurostat did not provide an immediate reason for the increase, which was towards the top end of market expectations. However, analysts were expecting a rise given the recent spike in oil prices.

In European markets, stocks took a breather as some of the optimism that drove the previous session's hefty gains was dented by disappointing U.S. housing data. The FTSE 100 index of leading British shares closed up 0.4 percent, but Germany's DAX fell 0.3 percent. The CAC-40 in France slipped 1.06 point to close at 4,012.91.

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TOKYO _ Japan's elderly finance minister has offered to resign due to health reasons after being hospitalized last week, reports said.

Finance Minister Hirohisa Fujii, 77, told Prime Minister Yukio Hatoyama that he would like to step down, Kyodo News agency said, citing an unnamed ruling party lawmaker.

Japanese public broadcaster NHK also said Fujii wanted to quit, but Hatoyama wanted him to stay on.

A spokesman for the finance ministry said he was aware of the reports, but he declined to comment further.