Italy’s borrowing rates skyrocket, Monti scrambles
ROME (AP) — A week into his new job, Premier Mario Monti is running out of time to reassure nervous investors that his government has a strategy to deal with Italy’s crippling debts.
The nation’s borrowing rates skyrocketed Friday after a grim set of bond auctions, with a new auction looming Tuesday. Another borrowing debacle could ratchet up fears that Italy has entered a debt spiral driving it toward bankruptcy and the 17-nation eurozone into its most acute crisis yet.
Monti’s government of so-called "technocrats" is battling to convince investors that it has a successful strategy to reduce the country’s $2.6 trillion debt. But Friday’s dismal bond auction results for the eurozone’s third largest economy temporarily battered Europe’s stock markets.
The auction outcome also is likely to fuel calls for European Union officials to do more to jump-start economic growth and the European Central Bank to use more firepower to cool down a rapidly escalating debt crisis.
Airlines cut small jets as fuel prices soar
MINNEAPOLIS (AP) — The little planes that connect America’s small cities to the rest of the world are slowly being phased out.
Airlines are getting rid of these planes — their least efficient — in response to the high cost of fuel. Delta, United Continental and other big airlines are expected to park, scrap or sell hundreds of jets with 50 seats or fewer in coming years. Small propeller planes are meeting the same fate.
The loss of those planes is leaving some little cities with fewer flights or no flights at all.
The Airports Council International says 27 small airports in the continental U.S., including St. Cloud, Minn., and Oxnard, Calif., have lost service from well-known commercial airlines over the last two years. More shutdowns are planned.
China launches probe of U.S. renewable energy policy
BEIJING (AP) — China’s government announced a trade probe Friday of whether U.S. support for renewable energy companies improperly hurts foreign suppliers, adding to tensions over an industry seen as an important source of jobs and economic growth.
The announcement comes after Washington said Nov. 9 that it would investigate whether Beijing is inappropriately subsidizing its own makers of solar panels, allowing them to flood the U.S. market with low-priced products and hurt American competitors.
Hungary says Moody’s downgrade ‘financial attack’
BUDAPEST, Hungary (AP) — Hungary has slammed Moody’s decision to downgrade its credit rating to junk status, describing it Friday as another unjustified financial attack against the country.
Hungary, which last week asked the International Monetary Fund and the European Union for possible financial help, is feeling the fallout from the debt crisis in the 17-country eurozone, even though it does not use the euro. Its economy has not grown as much as hoped and its debt burden remains relatively high.
Late Thursday, Moody’s, one of the three major international credit rating agencies, cut its view on Hungary’s government bonds by one notch, from Baa3 to Ba1 and maintained its negative outlook. The move to junk status could mean that Hungary will find it increasingly difficult to borrow in money markets as well as having to pay a higher premium.
S&P’s lowers sovereign credit rating on Belgium
BRUSSELS (AP) — Standard & Poor’s downgraded Belgium’s financial standing Friday, citing the country’s government stalemate and a looming European recession.
Spurred on by the ratings agency’s cut, six leading parties hurriedly resumed talks to agree on a 2012 budget to contain Belgium’s high debt and deficit, two more reasons why the country has come under increasing pressure from financial markets this week.
In a sign that financial contagion is spreading across Europe, the agency cut Belgium’s credit rating from AA+ to AA, a move coming two days after Germany fared surprisingly poorly at a bond auction.
Belgium has been without a permanent government for 530 days, as a series of negotiators has struggled without success to bridge the country’s divide between its French and Dutch speakers.
Dutch, Finns back stronger IMF role
BERLIN (AP) — The Dutch and Finnish finance ministers advocated a stronger role for the International Monetary Fund in helping stem Europe’s debt crisis as they met Friday with their German counterpart.
The three ministers, whose countries are among the eurozone’s healthiest financially and have taken a hard line in the crisis, consulted ahead of a meeting next Tuesday of the 17-nation bloc’s ministers.
They stressed the need to press ahead with implementing month-old decisions by European leaders aimed at shoring up the eurozone, particularly by increasing the firepower of the bloc’s euro440 billion ($588 billion) rescue fund — the European Financial Stability Facility.
India minister: New retail policy has safeguards
NEW DELHI (AP) — India’s commerce minister said Friday that the decision to open the country’s $400 billion retail sector to global chains such as Wal-Mart has a built-in safety net for small shops and farmers.
Anand Sharma told reporters that the Indian cabinet’s decision late Thursday to allow 51 percent foreign ownership of supermarkets would vastly improve decrepit infrastructure that causes massive food waste in a country plagued by malnutrition and high inflation.
Sharma said the new rule would only apply in cities with more than 1 million residents. The minimum investment would be $100 million and half of this would have to be invested in rural infrastructure and refrigerated transport and storage. Thirty percent of the produce sourced by the retailer would also have to come from small and medium enterprises.
UK pledges $1.5 billion to spur jobs for young
LONDON (AP) — Britain’s government has set aside 1 billion pounds ($1.5 billion) to help record numbers of unemployed youths find work.
Deputy Prime Minister Nick Clegg said Friday the "Youth Contract" funds will be used to help create internships and pay for apprenticeships.
He said the goal of the plan is "to get every unemployed young person earning or learning again." Britain has a record 1.16 million 16 to 24-year-olds out of work, government figures showed earlier this week.