Germany calls for Greek bond swap save time (AP)

By DAVID McHUGH and GABRIELE STEINHAUSER, AP Business writers David Mchugh and Gabriele Steinhauser, Ap Business writers - Wed Jun 8, 4: 34 pm EST

Frankfurt, Germany - Minister of Finance of the Germany, said the private creditors must share the burden of any financial assistance more high for the Greece under an agreement to prevent, by default on its debts.

In a letter to officials dealing with the debt crisis and obtained by the Associated Press Wednesday, Wolfgang Sch?uble suggested an Exchange that extend repayments of the debt by seven years and Athens to give time to reform its economy.

Such an approach has already been strongly opposed by the ECB in the field, that it could spread unrest through the financial system of the continent, then the ratings agencies have warned, it could be considered as a defect.

In the letter of Mr. Jean-Claude Trichet, the President of the European Central Bank, the Monetary Fund interim management International Director John Lipsky and other finance officials, said bond - so far spared losses that the countries of the euro area were rescue of Greece, the Ireland and Portugal - should be a "substantial and quantified contribution" for the new aid package reviewed by the Governments of the euro and the Monetary Fund International.

The best way to do that, it was said, was to swap the existing Greek bonds for new bonds which could extend their maturity in seven years. Sch?uble is one of the Finance Ministers of the euro area trying to find an agreement on a new package of aid for the Greece in time for the next formal meeting on 20 June.

He said that expect the Greece need for a "substantial" increase in aid.

"At the same time without another disbursement of the funds before July, we face the real risk of the first default unorderly in the euro area," it said.

In the letter, said any deal June 20 "" must include a clear mandate - to Greece, possibly with the IMF - to begin the process to involve Greek bonds holders.""

"Such a result can best be achieved through an exchange of link leading to an extension of Greek sovereign bonds in circulation by seven years, at the same time giving Greece the time needed to fully implement the necessary reforms and regain the confidence of the markets," said.

The idea may face the opposition of the ECB, which has flatly opposed any restructuring of the Greek debt that would bond with less than full value. ECB officials said that such an approach would be inflict losses on the unstable Greek banks which the Government can afford sick bail and could make it more difficult for other countries to borrow money on the bond market because investors would fear the possibility that similar measures.

The ECB has even threatened to ban the use of the obligations of the Greek Government as collateral for Central Bank credit to Greece does what he considers a restructuring of its debt. Rock, which would be the Greek banking system, which is based on the support of the ECB, because banks can not find credit elsewhere.

The Greece received a package of international rescue (161 billion dollars) last year European billion, but is still the difficulty come with money to pay its debts, as it is considered too risky to borrow on the private bond markets.

The risk of Greece running money next year, as banks and investment funds reluctant to buy bonds of the country, which remains stuck in recession and is struggling to reduce its large budget deficit. Some rich nations are opposed to put more money without obtaining the private creditors share the part of the load.

A spokesman of Monetary Affairs Commissioner Olli Rehn of the Union - one of the recipients of the letter - said Wednesday that no decision on the exact nature of the participation of the private sector has been made, but that officials of the euro area are currently seeking a several options, including asking banks and other financial institutions to keep their loans in Greece at its current level or to extend the deadlines for repayment for bonds that they hold.

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Steinhauser contributed Brussels

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Dow 1% as stocks rebound (Reuters)

NEW YORK (Reuters) - The Dow rose 1% Thursday, with Wall Street rebounding after six days of losses a restricted US trade deficit has been seen as a positive point in a recent string of weak economic data.

The Dow Jones industrial average (.)(DJI) has acquired 120.49 points, or 1.00%, to 12,169.43. The Standard & Poor 500 Index (.)(SPX) increased $ 12.17 points, or 0.95%, to 1,291.73. Nasdaq Composite Index (.)(IXIC) added 11.86 points, or 0.44%, to 2,687.24.

(Reported by Edward Krudy.) (Editing by Jan Paschal)

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Dollar mixed, slide in stocks on the comments of Bernanke (AFP)

London (AFP) - the dollar traded mixed, and global markets mainly remote fellows on Wednesday as comments by Federal Reserve Chairman Ben Bernanke and German data underlined the fragility of the global economy.

The dollar against the euro but slipped against the yen in London trading.

The euro fell to $1.4656 in London in exchange of $1.4688 at New York on Tuesday. Against the Japanese currency, the dollar has fallen to 79.86 hollow Tuesday yen.

In trade in the stock market, benchmark FTSE 100 in London fell by 0.91% to 5,810.88 points, DAX 30 Frankfurt hangar 1.16% to 7,022.44 points and in Paris the CAC 40 index lost 0.96% to 3,837.31 near the mark to Midway.

"All the hits so far this morning have a muted response to the comments of Bernanke, yesterday evening reflecting fairness and the weakness of the products and the strength of the dollar," said analyst Simon Denham capital spreads trading group.

Gold prices slid to $1,537 ounces $ 1 545 Tuesday. Asian stocks closed mostly lower that concerns about the State of the global economy has reached the confidence, but a rally end saw the Nikkei finished the day in positive territory, said traders.

Oil futures also fell as a divided OPEC considered to boost supplies in a move aimed at reviving global economic growth low but which returned lower risks for energy producing nations.

On Tuesday, Bernanke warned that there was a "loss of momentum" in the already lukewarm us jobs market.

Two years after a slow recovery and largely unemployed, Bernanke said that employment and growth would eventually pick up, but a recent soft patch was carefully monitored and that stimulating policies were still necessary.

US stock market has waived all their gains Tuesday after comments from the Director of the reserve which came just 15 minutes before the closing bell.

A floating day became the fifth losing session in a row after Bernanke said to an audience that the low housing sector retain recovery and that job creation was in a recession "from normal".

On Wednesday, traders digested as low data Germany European powerhouse. Official figures showed that industrial production slipped 0.6 percent in April from output in March, the first fall since December.

The result was another sign that the largest economy in Europe slows, although economists expect him still increase by at least 3% this year.

During this time the trade between the Germany and the rest of the world collapsed in April, separate data showed underlying forecasts for a slowdown in global activity in the middle of the year.

German exports fell by 5.5% compared to the previous month while imports decreased by 2.5%, the national statistical office, said in a news release.

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Growth in the first quarter euro-zone confirmed to 0.8% (AFP)

Brussels (AFP) - economic growth of euro 17-state area was 0.8 per cent in the first three months of the year of output in the last quarter of 2010, the European Union said Wednesday.

Final confirmed figures of the Office of the EU data, Eurostat, showed an acceleration in the rate of recovery of the euro between January and March of growth of 0.3% in the previous quarter - an increase of 2.5% on the corresponding period 12 months earlier.

The figure for the euro area, despite his battle with a deep and persistent debt crisis, compares favourably with that for the United States, which has posted growth of 0.5%, and the Japan, where the economy decreased by 0.9%.

When counted up, the full EU, which also includes powerful but non-euro Member States Britain and the Poland, also logged growth of 0.8%, having hit just 0.2 percent over the last three months of last year.

In retail, household expenditure increased by only 0.3% in the euro area, the same as in the previous quarter, while exports increased by 1.8% and imports also up to 1.9 per cent.

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Speedy coalition of Portuguese politicians eye deal (AP)

Lisbon, Portugal - Portuguese political leaders Wednesday began to discuss the possible formation of a coalition Government that would require enough votes in Parliament to ensure the adoption of austerity measures promised in exchange for rescue billions of euro78 of the country.

Portugal attempts to release a burden of ruinous debt that has launched the economy into recession and unemployment at a record 12.6%.

He committed these increases and compensation and expenses budgetary and social reforms and deep economic, through the provided by Europe and the Monetary Fund financial rescue plan International. Any sign that the new Government fails to comply with the commitments of the country could further complicate the European sovereign debt crisis.

Pedro Passos Coelho, head of centre-right Social Democrat who won the most seats in the general election at the end of last week, has opened talks with Paulo Portas, smaller people's party leader, conservative.

Together, the two parties have 129 seats in the 230-seat Parliament, giving them an absolute majority and the power to adopt policy of debt reduction and economic reforms.

The Social Democrats, who had filed a six-year Socialist Government, collected 105 parliamentary seats in Sunday's ballot. This means that the opposition parties could potentially consolidate to overcome its plans if it governs alone in his four year term.

The Greece, who also had a rescue plan, is struggling to ensure parliamentary approval for a new set of strikes and protests austerity measures. Portuguese unions have also committed to demonstrate against austerity measures.

The Social Democrats and the popular Party approved rescue repair to dig the Portugal of its debt hole, and they ruled in coalitions in the past.

Passos Coelho, who has never held a Government post, should become Prime Minister. Portas is tipped to be Foreign Minister.

In a brief statement written after two hours of negotiations, the leaders said that their delegations would be to continue the negotiations in the coming days.

On his Facebook page, Portas wrote that the needs of the Portugal are urgent. "Negotiations... cannot be extended,"he wrote."".

The new Government has no time to lose as the Portugal must adopt measures more than 200 over the next two years under the Rescue Agreement. A slate raise money privatisations is due to take place before the end of the year. They include the state airline TAP Air Portugal, ANA airport management company and the division of the transport of the national railway company.

President Anibal Cavaco Silva, mostly a ceremonial figure, said that he wanted to to swear in Passos Coelho as Prime Minister in time for a June 23 Summit of the Union European.

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Poland increases the interest rate of 4.5 per cent (AP)

Warsaw, Poland - Central Bank of Poland Wednesday raised interest rates by a percentage point to a quarter of 4.5 per cent that it tries to curb inflation.

The National Bank of the fourth increase in the Poland this year has been widely expected that the price of fuel, food and other items continue to increase. The move also comes in strong consumer demand and high wage pressures.

Despite higher borrowing costs, the Poland economy continues to grow strongly. Economic growth this year should rise to about 4%.

Bank BPH in Warsaw said that it expects a rise in rates more this year if inflation remains high.

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OPEC split on the increase in oil production (AP)

Vienna - Mideast turmoil, a weak global economy and divisions to raise crude production promise to make OPEC this week meeting one of the most volatile in recent history or not.

Ultimately, the Group of 12 countries is probably opt to increase the output level to reduce international concerns about the high price of oil. But some influential members are looking to increase the price of crude oil.

Iraqi oil Minister Abdul - Karim Elaibi, said to journalists Tuesday that a price of $100 and $120 per barrel is "reasonable". Who is reached or exceeds the current prices and is considered too high by the major catch oil consuming countries with their economies. And it goes against the efforts made by the cartel, OPEC Saudi Arabia to push prices downward.

OPEC oil ministers are often faced with easier choices at regular meetings, where they seek agreement on how to pump and sell to the rest of the world. But mixed signals before the meeting on Wednesday to take difficult decisions.

Disorders of the Libya and the Yemen threatens to destabilize the large region's oil-producing nations. Normally, the two countries produce less than 4% of the world's oil needs, and Saudi Arabia, and other increased profitability to offset much of the deficit. But the concerns that the violence could spread to more large producers and seriously cut in world production has caused jitters, crude exporters and United States, China and other consumers with enormous needs.

The precarious state of the world economy is an another wild card of talks this week.

Weak housing and employment reports in the United States, added to the gloom spread by the attempts of Europe to bail out Governments and the merger of the Japan post-Fukushima. Its current price of about $100 a barrel, crude reference may be too expensive for the nations of ends, a worsening of the situation, and resulting economic difficulty less demand for oil.

But with the spraying of savings by using less energy, raising output to lower prices can also flood the market, leading to a surplus which can result in prices below $ 80 per barrel. Even this reference, which is preferred by the Saudis and other moderate OPEC members is considered as too weak by price hawks Iran and the Venezuela.

Analysts noted that it y much at stake, but that the contradictory signals facing Ministers are creating uncertainty.

Johannes Benigni of energy JBC called meeting of OPEC on Wednesday "an event key..." (which) could be in fact the most important (OPEC) gathering of the Decade. "Energy analyst IHS Catherine Hunter described as" one of the most difficult sessions for some time, in terms of gauging fundamental market and navigating the Intergroup policy. "

In one such context, OPEC - supplies of oil, which represents approximately one-third of the planet - cannot be regarded as indécise. Ehsan Ul - Haq, with KBC Energy Economics, said the world "would like a clear signal" of OPEC that it is ready to stabilize markets and to alleviate the concerns of the price will lead still above.

The 11 members of OPEC are already exceeding their current production quotas. Their production is about 26.15 million barrels per day – approximately 1.3 million barrels above the daily target of production overall 24,85 million barrels a day OPEC agreed two years ago.

Opens the way to what would be a relatively painless decision - the meeting may choose to raise the ceiling for output levels of real output of about 26 million barrels per day. Add the daily 2.7 million barrels produced by Iraq, which is not bound by quotas, and OPEC could lead to more than 29 million barrels per day on the market.

Head of energy JBC Benigni expects a similar scenario. Production of OPEC forecasts it will be approximately 30.5 million barrels per day by end of 2011, assuming that the members of the nations producing above their individual ceilings, as usual.

Once more, the Saudis - which represent approximately one third of OPEC's production - will be the main champions of hiking the ceiling of production to drive down prices, in their opinion that should be the crude extraction between $70 and $80 per barrel. Oppose is Iran, producer of no. 2 of the OPEC, which argues that world inventories are already high and an increase in output targets would lead to a glut and a corresponding price decline.

"There is no need for any increase in the performance of the production by OPEC", Mohamad Ali Khatibi, a senior Iranian OPEC delegate, told Iranian State television Monday.

While the Saudis are supported by the countries of the Gulf, the weakness of the US dollar could generate support for the Iran. The price of oil is $, which means that producers lose whenever the greenback slides in value.

Ul Haq noted that the Iran and assailed Government of Libya - which has little sympathy for the United States and other consumer oil Western choirs insurgents seeking to overthrow Muammar Gaddafi - will send new Ministers to the meeting.

The two should be severed price hawks. That said Ul - Haq, "could result in very long discussions between the group led by Saudi Arabia and the group led by the Iran."

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George Jahn is available at http://twitter/georgejahn

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Margaret Childs in Vienna and Ali Akbar Dareini in Tehran has contributed to this report.

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