A look at economic developments around the globe

AP News
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Posted: May 17, 2011 3:26 PM
A look at economic developments around the globe

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

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LONDON _ The global financial community was abuzz with speculation about who would eventually replace Dominique Strauss-Kahn as head of the International Monetary Fund.

With Strauss-Kahn jailed in New York on sex crime charges, the prevailing view in the markets and in policymaking circles is that it's only a matter of time before he quits or is forced out by the IMF board.

Even before his arrest Sunday, Strauss-Kahn was widely expected to resign from the IMF later this year to pursue the French presidency in 2012.

A number of names were touted as potential candidates but the final choice will largely hinge on whether the U.S. and the European Union continue their arrangement of splitting the jobs of the two Washington-based sister organizations _ the International Monetary Fund and the World Bank. The IMF focuses on stability in the international financial system, while the World Bank funds projects in developing countries.

Since World War II, a European has headed the IMF while the U.S. has taken the top job at the World Bank. This arrangement might change as developing nations such as China and Brazil become more potent forces in the world economy.

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BRUSSELS _ Greece's private creditors may be asked to give the struggling country more time to repay its debts, the European Union's top economic official said, marking an important shift in the region's attitudes towards solving the crisis.

Until this week, European officials had denied that extending debt repayments had even been discussed, for fear of undermining market confidence. But many investors are convinced a change in Greece's debt deals is inevitable at some point.

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SHANGHAI _ Much of central China is enduring its worst energy crisis in years, with factories and residents facing power cuts as supply runs short of demand _ a problem worsening as drought dries up rivers, reducing hydroelectric capacity.

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LONDON _ Britain's inflation rate rose to 4.5 percent in April, renewing pressure on the Bank of England to raise interest rates.

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BEIJING _ Foreign investment in China slowed in April as the government tried to cool an overheated economy.

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BRUSSELS _ European finance ministers say they have reached a compromise on restricting naked short-selling, a trade in which investors sell stocks or government bonds they don't own.

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BEIJING _ The European Union president called for a level playing field in commerce between China and Europe, warning the European public could turn to protectionism if it felt China wasn't playing fair.

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LONDON _ Defense contractor BAE Systems says it has agreed to pay a fine of up to $79 million to settle an export case with the State Department. Last year, the company agreed to pay a fine of $400 million to settle a Justice Department investigation and another of 30 million pounds ($49 million) to settle a parallel investigation in the U.K.

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MADRID _ Spain raised $7.8 billion in a bond auction at a lower interest rate, reflecting easing market fears following Portugal's bailout approval.

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BERLIN _ A survey said investor confidence in Germany slipped further this month.

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CANBERRA, Australia _ A planned tax on industries that release carbon emissions would be far below a recommended price that might have forced polluters to switch to greener technology, the Australian government said.