A look at economic developments around the globe

AP News
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Posted: Mar 04, 2011 3:17 PM
A look at economic developments around the globe

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

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LONDON _ In-line U.S. jobs figures failed to boost stocks any further but weighed on the dollar, pushing the euro above $1.40 for the first time since November.

In Europe, the FTSE 100 index of leading British shares closed down 0.2 percent, Germany's DAX dropped 0.7 percent and the CAC-40 in France was 1 percent lower.

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TOKYO _ Earlier in Asia, the Nikkei 225 stock average, Japan's main benchmark, climbed 1 percent, South Korea's Kospi jumped 1.7 percent,

Hong Kong's Hang Seng added 1.2 percent and China's Shanghai's Composite Index ended the week at its highest level so far this year, gaining 1.4 percent to 2,942.31.

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LISBON, Portugal _ The shock warning that European interest rates could rise as soon as next month has set alarm bells ringing in Portugal, slapping the debt-ridden country with an extra burden just as it fights for its financial future.

Though the prospect of higher interest rates by the European Central Bank doesn't immediately make Portugal more likely to tap a bailout, analysts warned that rising borrowing costs will make the country's expected slide back into recession this year longer and more painful.

Mortgage rates would rise, business loans would become more expensive, and exporters would have a tougher time if the euro's value keeps rising.

That would be manageable in countries like Germany or France, but it is a grim prospect for Portugal, where unemployment is above 11 percent and households are buckling under the strain of tax hikes and pay cuts as the government struggles to heal its weak finances.

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HELSINKI _ Europe's center-right leaders struggled to show a united front amid stark divisions on how to tackle the debt crisis that has rocked the continent over the past year.

The summit of the conservative European People's Party in Helsinki kicks off three weeks that will decide whether the eurozone can finally get a grip on the crisis that has already pushed Greece and Ireland into multibillion international bailout.

The debate will culminate on March 25, when heads of state and government hope to seal the "comprehensive solution" to the crisis they have promised to the markets.

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ATHENS, Greece _ European socialist parties urged the EU and the IMF on to lower the interest rates on rescue loans for Greece and Ireland and to steady the continent's economy with new measures, including EU-wide bonds and a financial transaction tax.

European Socialist group leader Poul Nyrup Rasmussen said he backed an immediate drop in the loan rates by the European Union at a summit on March 25, but that conservatives leading the bloc refused to accept that.

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ROME _ Italy is warning that the unrest in the Arab world could result in a "destabilizing" dismantling of those countries' sovereign fund investments in Western nations.

Treasury Minister Giulio Tremonti didn't specify Libya or its sovereign wealth funds by name. But Italy has a lot to lose if Libya's sovereign funds were to be dismantled amid the escalating fighting there. Libya has stakes in major Italian companies like Unicredit bank, the Juventus football club and the engineering firm Finmeccanica.

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BEIJING _ China will boost its defense spending by 12.7 percent this year, a legislative spokesman said, while reiterating that Beijing's return to double-digit military budget growth after a dip in 2010 is not a threat to other countries.

China's defense buildup and military plans in recent years have alarmed its neighbors and the United States, where military and political leaders have spoken about a lack of transparency and cooperation in the process.

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MADRID _ Spain lowered its highway speed limit and passed other energy-saving measures such as switching to more efficient light bulbs to offset sharply higher oil prices and protect the country's fledgling economic recovery.

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GENEVA _ The chief executive of Swiss bank UBS will forgo his bonus for the second year in a row because the share price did not increase during 2010.

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SEOUL, South Korea _ Attackers targeted about 40 South Korean government and private websites, but officials reported no serious damage.

The National Cyber Security Center said there were signs of a "denial of service" attack, in which large numbers of "zombie" computers try to connect to a site at the same time in an attempt to overwhelm the server.

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MADRID _ Spanish antitrust authorities meted out about $70 million in fines for price-fixing involving beauty parlor products sold by local units of companies including L'Oreal and Procter & Gamble.

The National Competition Commission said the eight companies formed a cartel as far back as 1989 and have been meeting twice a year to coordinate pricing and other strategies.

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BHUBANESHWAR, India _ Indian police detained two people after an angry mob of fired workers burned to death a senior executive of a steel factory, an official said.

Incidents of industrial violence are common in India, where workers often target executives in cases of wage disputes and job losses.