A look at economic developments around the globe

AP News
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Posted: Jun 29, 2011 2:10 PM
A look at economic developments around the globe

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

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ATHENS, Greece _ Greece approved more austerity measures needed to avert default next month in a vote that calmed markets but triggered a second day of riots that left dozens injured and the capital blanketed with tear gas.

The passage of the bill was a decisive step for the country to get the next batch of bailout loans from international creditors and was met with a huge sigh of relief in markets and by Greece's partners in the eurozone. A Greek default could potentially trigger a banking crisis, particularly in Europe, and turmoil in global markets.

Another bill has to be passed Thursday for the government to secure the money.

The bill to cut spending and raise taxes by 28 billion euros ($40 billion) over five years, and raise 50 billion euros ($71 billion) in privatizations over the same period of time, has provoked widespread outrage, coming after a year of deep cuts that have seen public sector salaries and pensions cut and unemployment rise to above 16 percent.

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LONDON _ European stocks and the euro rose after the Greek Parliament passed austerity measures needed to secure the next round of an international bailout and prevent a default.

A no vote could have had disastrous effects on European banks and world markets.

Britain's FTSE 100 closed up 1.5 percent, Germany's DAX rose 1.7 percent and France's CAC-40 ended up 1.9 percent.

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WASHINGTON _ The International Monetary Fund urged U.S. lawmakers to raise the nation's borrowing limit. It warned that inaction could lead to a spike in interest rates that would harm the U.S. economy and world financial markets.

The debt limit is the amount the government can borrow to help finance its operations. The United States reached its $14.3 trillion borrowing limit in May. It is at risk of defaulting on its debt if it doesn't raise that limit by Aug. 2. President Barack Obama and Republican lawmakers have been at odds on a plan to raise it.

The IMF also warned in its annual report that rising U.S. budget deficits pose a risk to the economy. But it advocates a long-term strategy for reducing those deficits, not steep immediate cuts or tax increases. Cutting the deficit too quickly could slow the weak U.S. recovery, the fund said.

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BERLIN _ Germany's most prominent banker said the country's financial sector is likely to help Greece head off a "meltdown," but highlighted the difficulties of the move.

Chancellor Angela Merkel's center-right coalition has pushed hard for a private-sector contribution amid increasing unwillingness among the public _ and particularly in its own parliamentary ranks _ to pledge more taxpayer money to rescue Greece.

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TOKYO _ Japan's industrial production posted the sharpest rise in nearly six decades in May but was still below pre-quake levels as factories toiled to reverse the sharp downturn triggered by the March 11 disaster.

Japan's Nikkei 225 rose 1.5 percent. Elsewhere in Asia, South Korea's Kospi climbed 1.5 percent and Hong Kong's Hang Seng closed flat.

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PARIS _ France named Francois Baroin as new finance minister to replace Christine Lagarde, who takes the top job at the International Monetary Fund next week.

Baroin, who is currently budget minister, inherits the task of working with other European finance ministers to find a solution to the debt crisis afflicting the eurozone.

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LONDON _ Thousands of British schools will close and travelers will face long lines at airport immigration this week when three quarters of a million workers go on strike, the first blast in what unions hope will be a summer of discontent against the cost-cutting government's austerity plans.

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MOSCOW _ Russia's President Dmitry Medvedev ordered the government to prepare for selling its controlling stakes in some key state companies.

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BERLIN _ A poll finds little support among Germans for tax cuts that the government is considering as a booming economy improves public finances.

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LISBON, Portugal _ Portugal's budget deficit declined in the first quarter, but it remains far off target despite an unpopular austerity program.

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MINSK, Belarus _ Police in Belarus have violently put down a peaceful rally, beating and detaining dozens of people protesting the authoritarian regime of President Alexander Lukashenko.

Public anger has swelled at the government in Belarus, which is suffering its worst financial crisis since the fall of the Soviet Union.

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SEOUL, South Korea _ Allegations of multibillion dollar fraud at banks and revelations by South Korea's top business conglomerate of shady dealings are forcing the country to grapple anew with a legacy of deep-seated corruption.

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CAIRO _ The Egyptian stock exchange's benchmark index tumbled 2 percent amid fresh clashes between security forces and protesters in central Cairo.

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HANOI, Vietnam _ Vietnam's gross domestic product grew at a slower pace in the first half of 2011 compared to the same period a year ago amid high inflation and a trade deficit.