A look at economic developments around the globe

AP News
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Posted: Dec 14, 2009 12:58 PM

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

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LONDON _ World markets mostly rose after Dubai said it had received $10 billion in emergency funds from its oil-rich neighbor Abu Dhabi, helping to allay investor fears that the emirate will default on its debt. In Europe, the FTSE 100 index of leading British shares closed up 53.77 points, or 1 percent, at 5,315.34 while Germany's DAX rose 45.97 points, or 0.8 percent, to 5,802.26. The CAC-40 in France was 26.72 points, or 0.7 percent, higher at 3,830.44.

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ATHENS, Greece _ Greece's new government readied plans to pull the country out of its worst debt crisis in decades and boost confidence in its shaky finance with measures expected to include a crackdown on rampant tax evasion. Greeks concerned about how spending cuts would affect them were awaiting a speech by Prime Minister George Papandreou outlining the government's efforts. European Union officials have warned that Greece must deal with its problems itself and not expect a bailout. A delegation from Moody's credit rating agency was in Athens to review the economic situation, which has seen the country's projected deficit swell to more than 12 percent of economic output this year. That is four times the limit imposed European Union as a condition of using the euro currency, and twice the previous official projection.

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LONDON _ Industrial output in the 16 countries that use the euro fell in October after five months of expansion, official figures showed, stoking fears that the recovery from recession in the eurozone will be muted. Eurostat, the EU's statistics office, said industrial production fell by 0.6 percent in October from the previous month. The decline was in line with market expectations after figures last week showed German industrial output slid 1.8 percent during the month. The main reason behind the monthly fall was a 1.4 percent drop in the production of consumer goods, which provided further evidence that the recovery in exports is not yet spreading to the household sector.

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KUWAIT CITY _ Leaders of the six Gulf Arab states were to move ahead with plans to set up a common currency and launch a new $1.6 billion regional electricity grid, the latest bids for regional integration at a summit where Iran's nuclear program was also on the agenda. The two-day gathering of Gulf Cooperation Council leaders came against a backdrop of concerns about Dubai's debt as the emirate's chief conglomerate wrangles for more time on some of its $60 billion in liabilities. But officials appeared poised to focus on broader political and economic challenges confronting their oil-rich countries in the wake of the global economic meltdown.

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PARIS _ French President Nicolas Sarkozy unveiled details of a 35 billion euros ($52 billion) government-backed spending program aimed at boosting France's investments in its universities as well as in fields such as electric cars and renewable energy. Sarkozy said the plan, known as the "Big Loan," was needed to get France ready for the future, although critics contend it will significantly worsen France's already stretched public finances. The president rejected claims the program amounted to a stimulus plan, saying the investments it will finance "would be necessary even without the crisis."

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ZURICH _ Swiss President Hans-Rudolf Merz rejected the idea of imposing a special tax on bank bonuses like the one proposed in Britain, saying it would be too easy to dodge. His comments came as European leaders said they're trying to act against bank bonuses that are rising again after last year's financial downturn that led to taxpayer-funded bailouts in some cases. British Prime Minister Gordon Brown and French President Nicolas Sarkozy said last week it was a good idea to slap higher taxes on performance pay. German Chancellor Angela Merkel also supported the proposal.

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BRUSSELS _ European Union regulators approved Britain's bailout of Royal Bank of Scotland PLC but warned that they will intervene and demand more selloffs if the bank doesn't shrink its operations by 2013. The British rescue of the bank will cost between 60 billion pounds and 100 billion pounds ($98 billion to $163 billion) and is the "largest amount of state aid ever received by any company in the European Union's history," said EU spokesman Jonathan Todd. RBS must offload British branches and its insurance and commodity trading operations to raise funds and compensate for the competitive advantage it got from a 20 billion pound ($33 billion) capital injection from the British government. EU Competition Commissioner Neelie Kroes warned that she could call for more selloffs if RBS fails to meet balance sheet reduction targets by 2013.

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SAMANDEPE GAS FIELD, Turkmenistan _ A landmark pipeline from Central Asia to China began pumping natural gas, marking Beijing's latest coup in its search for new sources of energy to fuel its burgeoning economy. The new pipeline is Central Asia's first major gas export route that completely bypasses Russia, and will play a key role in getting former Soviet republics in the region out of Moscow's exclusive economic sphere of influence. Completed in just over two years, the first stage of the Turkmenistan-China pipeline has been wrapped up before work on rival Russian and Western projects to tap into Central Asia's gas riches have even started.

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TOKYO _ Japanese companies are gaining confidence in the global recovery, but an uncertain outlook at home is fueling a worrisome retreat in corporate spending, a key central bank report showed. In the Bank of Japan's closely watched "tankan" quarterly survey of business sentiment, the main index for large manufacturers stood at minus 24, a nine-point improvement from three months ago. The figure represents the percentage of companies saying business conditions are good minus those saying conditions are unfavorable. The result beat Kyodo News agency's average market forecast of minus 27 and reflects how robust Asian demand is bolstering the world's second-biggest economy. The fine print, however, paints a less encouraging picture. Amid deflation and a strong yen, companies remain reluctant to invest in factories, equipment or workers.

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SHANGHAI _ Chinese shares rebounded, along with other regional markets, after Dubai said it had received $10 billion from Abu Dhabi to repay debts owed by its Dubai World investment conglomerate. The benchmark Shanghai Composite Index jumped 55.59 points, or 1.7 percent, to 3,302.90. The Shenzhen Composite Index for China's second exchange ended flat at 1,217.98. Blue chips led the rally as institutional investors were building positions, shifting from smaller companies.