A look at economic developments around the globe

AP News
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Posted: Aug 12, 2011 4:26 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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BRUSSELS _ Stocks in Europe ended sharply higher after positive retail sales data out of the U.S. helped ease concerns that the world's largest economy is heading back into recession. A ban on short-selling in several major eurozone countries lifted bank shares.

The gains followed one of the most volatile weeks in years. Sometimes stocks rose as investors cheered anti-crisis measures, such as the European Central Bank's decision to support the bonds of Italy and Spain. Shares collapsed as investors' mood soured because of concerns about the health of the global economy and the exposure of banks to the debt of countries like Greece.

As the week progressed, the tension seemed to have calmed somewhat.

London's FTSE 100 jumped 3 percent, Germany's DAX was 3.5 percent higher and the CAC-40 in France gained 4 percent.

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TOKYO _ Shares were mixed in Asia. Japan's Nikkei 225 stock average closed down 0.2 percent. Hong Kong's Hang Seng added 0.1 percent, Australia's S&P/ASX 200 gained 0.8 percent, China's Shanghai Composite Index gained 0.5 percent and benchmarks in New Zealand and Singapore rose.

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PARIS _ Economic growth in France, Europe's second biggest economy, ground to a halt in the spring, in another sign that the global economy is facing rising recessionary threats. The report came out as policymakers scramble to soothe investor concerns that the country could be the next major economy to lose its coveted AAA credit rating.

With the worse-than-expected French growth figures suggesting a possible budget shortfall this year, government ministers may have to find additional savings ahead of a key meeting with President Nicolas Sarkozy on Aug. 24.

The flat growth in the second quarter of the year was because of slumping consumer spending and exports.

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ROME _ Italy's government approved 45 billion euros ($64 billion) in cuts over the next two years to balance the budget by 2013 to meet demands of European Central Bank.

The Cabinet approved the measures despite fierce resistance from local government officials who denounced the emergency austerity measures as socially unjust.

Premier Silvio Berlusconi told a news conference that the measures respond to requests from the ECB, which demanded a balanced budget a year earlier than anticipated as well as structural reforms to promote growth.

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FRANKFURT, Germany _ As a week of market turmoil ended, an increasing number of economists and policymakers called for an unprecedented solution to combat Europe's debt crisis: A new joint bond backed by all countries using the euro.

Eurobonds would be a dramatic step toward the economic integration of the European Union, and are billed by supporters as an overnight solution to the crisis.

But the idea is being strongly resisted by Germany, which as the most creditworthy European country fears it would face higher borrowing costs and more risks if it had to borrow jointly with financially shaky nations.

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BERLIN _ Nearly half of Germans think their government is doing a poor job of handling the eurozone debt crisis, and even more fault the European Union's response, according to a new survey.

Chancellor Angela Merkel's center-right coalition has taken a hard-nosed approach, repeatedly emphasizing the importance of austerity measures in debt-laden countries and often appearing reluctant to put more money into bailouts.

As the crisis deepened this month, the government has stood by the conclusions of a July 21 summit at which EU leaders agreed to boost the powers of the eurozone rescue fund, but not to increase its size.

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LISBON, Portugal _ Debt-laden Portugal got a passing grade from international inspectors who made a first check on progress of reforms ordered in exchange for a 78 billion-euro ($112 billion) bailout in May. But they warned that the toughest problems remain to be tackled.

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BEIJING _ China's infatuation with high-speed rail soured at bullet train velocity. Six months ago, the rail network was a success symbol and the basis of a planned high-tech export industry. But after a July crash that killed 40 people, Beijing has suspended new construction and is recalling problem-plagued trains, raising questions about the future of such prestige projects.

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HONG KONG _ Hong Kong's economic growth slowed in the second quarter as exports from the Chinese territory stagnated.

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DETROIT _ Honda Motor Co. says it will build an $800 million factory in Mexico to make small cars. The plant will meet growing demand for small cars in the region. The automaker will hire 3,200 workers for the plant, which is in the state of Guanajuato

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OSLO, Norway _ Norway's vast fund for oil wealth posted a 0.3 percent return in the second quarter, with rising bond prices offsetting the slump that has spread across many of the world's stock markets.