A look at economic developments around the globe

AP News
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Posted: May 20, 2011 3:52 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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PARIS _ France's frank, hard-working and chic finance minister, Christine Lagarde, emerged as Europe's likely choice to lead the International Monetary Fund.

The IMF insists the departure of former chief Dominique Strauss-Kahn has not hurt its day-to-day operations, but it is clearly under pressure to find a successor fast to lead an organization that provides billions in loans to stabilize the world economy. A new chief would also draw attention away from the seamy scandal surrounding Strauss-Kahn, who quit this week to face charges in New York that he tried to rape a hotel maid.

Lagarde's chances for the top IMF job got a boost when Kemal Dervis, a former finance minister for Turkey, said he did not want to be considered for the job.

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ATHENS, Greece _ The Fitch ratings agency downgraded Greece's debt grade by three notches further into junk status, another blow to the debt-ridden country. Greece's borrowing rates spiked to new record highs.

Fitch cited problems with the country's implementation of essential reforms to its economy, which European officials have said are behind schedule and need to be broadened.

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LONDON _ Stocks in Europe turned lower after a disappointing update from clothing chain Gap reinforced concerns about the U.S. economy, while another credit rating downgrade of Greece weighed on the faltering euro.

Worries about the pace of the U.S. recovery have been the main driver in stock markets over the past couple of weeks after a run of disappointing economic news.

The FTSE 100 index of leading British shares closed down 0.1 percent, while Germany's DAX fell 1.2 percent and the CAC-40 in France was 0.9 percent lower. All three indexes had been trading higher for most of the day but Wall Street's decline changed the mood.

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TOKYO _ Earlier in Asia, Japan's Nikkei 225 index closed 0.1 percent lower. South Korea's Kospi gained 0.8 percent, Hong Kong's Hang Seng was nearly 0.2 percent higher while Australia's S&P/ASX 200 fell 0.5 percent.

Mainland Chinese shares edged lower as investors fretted over the economic outlook and watched for possible new, anti-inflation tightening measures by the country's central banks.

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HONG KONG _ Thousands of Hong Kong investors who faced big losses from financial products tied to collapsed investment bank Lehman Brothers Holdings Inc. voted to accept a deal to get some of their money back.

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MADRID _ Spain's prime minister avoided saying if he'll order police to break up crowds if they attend banned election-eve protests, part of a snowballing movement that has riveted the country.

Thousands have demonstrated over their bleak economic future. They are angry over the country's economic crisis and at political parties they see as inept, corrupt and indifferent to everyday people struggling to get by.

Municipal and regional elections are scheduled for Sunday. The ruling Socialist party is widely expected to suffer big losses at the polls, perhaps even in traditional strongholds.

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WASHINGTON _ The White House expects world leaders to back President Barack Obama's call for financial assistance for Tunisia and Egypt during next week's G-8 meetings, but said it's unlikely the summit will produce a deal on an aid package.

Interim prime ministers of Tunisia and Egypt will attend the summit in Deauville, France to present their plans for stabilizing and modernizing their economies. While U.S. officials say G-8 countries will discuss their role in that process, they say it's too soon to reach a deal on dollar amounts for assistance.

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FERMONT, Quebec _ Global steel giant ArcelorMittal will create 8,900 construction and mining jobs with a $2.16 billion expansion of its Quebec mining complex near Labrador.

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AMSTERDAM _ Klaas Knot was named president of the Netherlands' central bank, handing him a key role in revamping the country's oversight of the banking system still recovering from the global financial crisis.

The appointment also grants Knot a seat on the European Central Bank's governing council, where the Netherlands generally endorses German views on policy.

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AMSTERDAM _ ABN Amro, the Dutch government-owned bank, said first-quarter profit more than doubled due to cost-cutting and good margins.

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TOKYO _ Japan's central bank kept its key interest rate unchanged at virtually zero to shore up a quake-battered economy.

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TOKYO _ The president of the Japanese utility that runs a tsunami-devastated nuclear plant resigned in disgrace after reporting the biggest financial losses in company history. He said he was stepping down to take responsibility for the ongoing crisis.