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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Trichet calls for the Ministry of Finance of the eurozone (AP)

Frankfurt, Germany - European head of the Central Bank insisted on tighter control EU spending by national Governments to strengthen monetary union against future and even crises proposed the creation of a single Ministry of finance for the 17-nation bloc.

Jean-Claude Trichet has proposed allowing officials of the European Union make decisions spending for countries in financial difficulty if - as the Greece - they have already been rescued and omitted to make progress on reducing their deficits.

"A way this could imagine is for the European authorities have the right to veto some decisions of national economic policy," Trichet said. "The mission could include major posts tax expenditures and the essential elements for the competitiveness of the country."

With the test of integrity of the euro zone debt crisis, Trichet suggested that the only outcome is a closer union of economic policies between the countries of the euro. He even suggested that the euro could in the coming years to have its own Department of supranational finance.

Trichet, who leaves office when his mandate expires on 31 October, made remarks Thursday at Aix-la-chapelle (Germany), that he accepted the City International Charlemagne Prize, recognizing service for unification European.

Proposals for Trichet looking to the future of Europe long term, since they would require a change much time in the basic Treaty of the European Union. But his remarks were a reference in a timely manner to the situation of the Greece.

The Greece took a rescue ($158 billion) European billion last year, but did not meet its deficit and revenue goals. Officials of the Union European and Greek are discussing the terms of a possible second rescue to avoid as the country default on its debts.

Ireland and the Portugal also have need of eurozone Rescue Fund redemptions and the Monetary Fund International.

Trichet said that the only way to protect the common currency of exceedances by Governments is to make a "quantum leap" by strengthening the rules against the excess debt and deficit limits. A series of previous rules are for is ineffective, as they ignored by Governments.

The European Union is working on a set of proposed new rules, but Trichet said that they are not strong enough to prevent individual countries bad habits of others is in difficulty and urged Parliament to strengthen the proposal.

He said "Is looking today in the euro area, we can see clearly that countries which respect the rules of the single currency can flourish and prosper,". "But we also see the contrary." The countries who have not lived in the letter or spirit of the rules have experienced difficulties. Through the contagion, these difficulties have affected other countries "in the monetary union."

"Strengthen rules to prevent unsound policies is therefore an urgent priority."

Greece have had problems over the years of too spent, with bond assuming market lenders that its accession to the euro meant it was a good risk. When he ran into financial difficulty, however, Greece suddenly found that he could no longer borrow on the capital markets.

Longer term, he said, Europe should consider creation of a Ministry of finance in the euro area which would be standing above national ministries and the police.

He would not have a big budget funded by tax revenue, and the national ministries, but would instead monitor the economic performance of countries and keep an eye for the budgets that go off track or economies who lose competitiveness. It should also to the financial regulations of the euro-wide zone.

"In this Union of tomorrow or day after tomorrow, it would be too bold, in the economic field, with a single market, single currency and a single Central Bank, to consider a Ministry of Finance of the Union?" He declared.

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May the euro-zone inflation slows, ECB interest rate increase still SUV (Reuters)

Brussels (Reuters) - inflation in the Euro zone slowed in may largely through lower prices, but the dip is likely to be temporary, and the European Central Bank to increase rates in July will not stop.

European Union Eurostat statistics office estimates that inflation in 17 countries, with the euro was 2.7% on the year this month, compared to 2.8% in April.

Economists surveyed by Reuters had expected inflation to stay at 2.8% on the year. The ECB wishes to limit the growth of prices slightly less than 2.0% in the medium term.

"I think that they are still on the objective of increasing by a further quarter point interest rates this summer, probably in July." "Then I think we will get one this year bringing the refi rate to 1.75%", said Martin van Vliet, an economist at ING.

The ECB has raised interest rates of 25 1.25% basis points in April to try to stem inflationary pressures in the euro area, following a strong increase in raw material prices.

There is no rupture or monthly data with Eurostat inflation estimate, but economists said that once more the details were published in June, they are likely to show that prices of energy has a strong following a decrease in the price of oil.

Food prices were likely to be again on the rise, but core inflation, which excludes volatile energy costs and non-processed, food was likely to have facilitated.

"Seasonal will help maintain core inflation under control in the next few months, but the underlying trend in core inflation is upward, reflecting the gradual transmission of prices rising, the chain of the formation of prices, said Eoin O'Callaghan, an economist at BNP Paribas.".

"The ongoing moderation in economic activity probably reduce some of these pressures but will not change the overall picture." We anticipate that core inflation to reach 1.7% year on year in December, from about 1.5% this month and 1.1% in December 2010, "he says.

"Global inflation, overall, is should culminate over 3% in the fourth quarter."

Eurostat said that the rate of unemployment in the euro area remained unchanged at 9.9% of the population active in April for the third month, despite the small declines in the number of unemployed in Germany, France and Italy.

He said 15.529 million people are unemployed in the euro area in April, 115 000 less in the previous month and 457,000 less than a year earlier.

"With growth currently euro area showing signs of losing some momentum, the suspicion remains that euro-zone unemployment will trend only gradually in the coming months," said Howar Archer, Economist at the IHS Global Insight. "."

"The employment situation continues to significantly vary depending on the region, with the improvement of Germany labour markets and other economies of eurozone North contrasting core with unemployment remains very high in the countries of the periphery struggling," he said.

(Additional reporting by Luke Baker in Brussels and Scott Barber in London)

(Statement by Jan Strupczewski, mounting by Rex Merrifield)

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Candidate IMF Carstens request urges the eurozone plan tough (Reuters)

MADRID (Reuters) - a non-European Monetary Fund Head International could serve a plan of action more severe, more realistic of the euro zone debt crisis, the Mexican Central Bank Chief Agustin Carstens, said in interviews newspaper Tuesday.

Carstens is the only rival said the French Minister of finance Christine Lagarde in its submission lead the global lender.

"It would be appropriate to have non-European, because a pair of fresh eyes can see European problems with greater objectivity," Carstens said El Pais on a visit to Spain a visit to the campaign for the job.

He said that he had more experience and power than Lagarde in an interview with the newspaper of the Expansion.

Greece, Ireland and the Portugal received international rescues to combat a debt crisis that threatens to swallow other peripheral countries of the euro area. During this time, economists fear the Greece sovereign debt levels are not viable.

The resignation of Dominique Strauss-Kahn has led to the calls of developing countries to put an end to the traditional European lock job.

"I believe that emerging countries have been loyal partners in the international economy in recent years and we should be recognized," Carstens said El Pais.

EU countries are highly choirs Lagarde, arguing that a European leader is crucial at a time where the IMF is working with the euro area to avoid the risk of the Greece by default on its loans and evoking the broader financial impact.

Carstens said Mexico the only way to resolve the crisis in the euro area is to take drastic measures, without saying what these measures should be.

"There are still bitter pills to be swallowed, and the international financial community should give its support, but my experience there is no alternative to take these drastic measures," he said.

The Greek or Irish debt restructuring was not a magic bullet, he said, and should be a measure of last resort and in a large-scale program.

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Eurozone eyes new deal for the Greece. ECB issues threat (Reuters)

Brussels/BERLIN (Reuters) - Euro area Governments are considering a plan to prevent a Greek default that private investors would be called upon to maintain their exposure to debt and Athens would receive a new package of assistance from the EU and the IMFsaid sources in the euro area.

The sources told Reuters in the new strategy Thursday after the European Central Bank has raised the stakes in its bid to prevent a restructuring of the Greek debt by telling Governments that he would refuse to accept the bonds as collateral in the case of such an approach.

The threat made by a member of the Executive Council of ECB Juergen Stark at a Conference in Athens on Wednesday came after European Finance Ministers have suggested the possibility of a "soft restructuring" extensions of maturity of debt earlier this week.

A source with an overview of the discussions of European on the Greek debt said any "soft" or "hard" restructuring which could trigger a "credit" event - or to the payment of default insurance contracts - was now off the coast of the table.

Instead of an extension of maturity, which can decrease the value of bonds and trigger such an event, banks would be encouraged to maintain their holdings of Greek debt and buy new bonds to replace questions that they reach maturitysaid the source.

This would be done in combination with a new package of Greek reforms and austerity, although more money EU and IMF to ensure the financing of the Greece of needs through 2014.

"We hope to have an agreement by the end of June," the source told Reuters.

The source does not clear how the block could convince the owners of Greek bonds ride on their assets or say how many additional aid, the EU and the IMF might be willing to provide on the package of EUR 110 billiongiven to the Greece, the last year.

VIENNA INITIATIVE

EU economic and Monetary Affairs Commissioner Olli Rehn has returned to the Vienna Initiative as a model of debt rollover.

The initiative has been an agreement at the height of the crisis between the European Central Bank, the European Bank for Reconstruction and development, the regulators and banks with subsidiaries in Central Europe.

Under it, groups of parents Bank committed publicly to maintain their exhibitions and recapitalize their subsidiaries in the countries of Central and Eastern Europe within the packages of financial assistance from the European Union and the IMF.

Greek sovereign debt is expected to increase to almost 350 billion euros at the end of 2011, or 154% of its gross domestic product (GDP), one of the highest levels in the world.

Many economists say a debt restructuring is inevitable, but European Governments have promised not step of forcing losses on creditors before mid-2013.

ECB officials have warned for weeks that a debt restructuring would be disastrous for the euro area and stepped up their rhetoric this week after the President of the Eurogroup Jean-Claude Juncker has suggested that the block was opened in a voluntary of Greek debt deadlines extension.

"For the ECB, in accordance with our legal obligations, a restructuring of debt undermine collateral adequacy of the obligations of the Greek Government," said Stark the ECB.

"This means that a debt restructuring would prevent the continuation of the large segments of the supply of liquidity of the banking system of the Greece Central Bank".

Comments and a report in the Financial Times Deutschland that the President of the ECB, Jean-Claude Trichet had issued the same warning to euro-zone finance ministers at a meeting of the Eurogroup, heated Monday, weighed on the euro, who has slipped to $1.4235.

The cost of insuring Greek debt against default has also increased, and the differences between Greek bonds of 10 years and those of German marks safer oscillated about 13%, close to a record level.

Greek banks rely on the system of guarantees to finance themselves and refusing to accept the obligations of the Government that security would be paralyzed, with disastrous implications for other European banks exposed to the Greece.

HIGH FLEXIBILITY

Economists are skeptical that the Frankfurt-based Central Bank would respond to the threat, describing as a bargaining ploy to stop the progression towards some form of restructuring.

"I think that this is part of the negotiation process." Deep down the ECB probably knows anything to do, but they want to be as lightweight as possible, ", said Gilles Moec, Economist at Deutsche Bank."

Statutes of the ECB gives the Bank a high degree of flexibility in determining what it can and cannot accept banks seeking short term loans, indicating only that loans should be based on "appropriate safeguards".

The ECB continued to accept obligations of Greek and Irish Government as a guarantee in its liquidity operations, regardless of their credit rating and can probably decide to voluntarily accept swapped routes with long durations.

However, the source of the euro area said that the ECB had clearly indicated that in cases where a Greek debt restructuring triggered payments in default of insurance contracts swaps - credit default - it would accept the bonds as collateral.

Beyond the impact on the euro area, the ECB may also be concerned about the effect of restructuring on his own books.

He purchased an approximately 40-50 billion euros of sovereign debt Greek in his controversial bond purchase program and has indirect exposure via the tens of billions of euros in Greek paper, already accepted as collateral in its lending operations.

(Statement by George Georgiopoulos Athens, Sakari Suoninen and Marc Jones in Frankfurt, Annika Breidthardt in Berlin) (Written by Noah Barkin; editing by Mike Peacock)

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Eurozone divided over solutions of Greek debt (AP)

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Par GABRIELE STEINHAUSER et DAVID McHUGH, AP Business écrivains Gabriele Steinhauser et David Mchugh, Ap Business écrivains – lundi le 16 mai, 7:18 h HE

Bruxelles – haut fonctionnaires européens sont en désaccord sur l'opportunité d'envisager de modifier les modalités de remboursement de la dette pour les obligations grecques, un déménagement que certains experts disent est inévitable et d'autres jugent trop dangereuse pour la stabilité financière plus large de la région.

Jean-Claude Juncker, président du groupe de 17 ministres des finances de la zone euro, a déclaré lundi il ? ne serait pas exclure ? un retard de volontaire de remboursement de la dette du gouvernement grec qui donnerait le pays qui ont des difficultés plus de temps à corriger son économie et de regagner la confiance du marché.

Mais il a été immédiatement contredit par le ministre des finances Christine Lagarde la France, qui régna sur l'étape out, signe que les fonctionnaires européens sont débattent encore plus quoi faire sur la crise de la dette de Grèce.

Juncker dit attitude inflexible du groupe contre restructuration — ou donnant des créanciers moins de toute la valeur de leurs avoirs bond — ne s'étend pas à ce que lui et autres ont appelé "Report", ou une offre volontaire des détenteurs d'obligations d'accepter de remboursement échelonné sur une période plus longue.

Toutefois, il a averti que la Grèce n'était pas prête encore pour une telle démarche, qui seraient considérés uniquement comme après que la Grèce rend plus d'efforts pour amasser des fonds de privatisation, de compressions budgétaires et de refonte de son économie.

Le ministre des Finances néerlandais Jan Kees de Jager a reconnu plus t?t que les ministres avaient discuté de l'option de la restructuration de la dette massive de la Grèce — quelque chose de fonctionnaires de la zone euro avaient également jusqu'à présent refusé.

? Nous discutons évidemment toutes sortes de sujets, y compris la restructuration, ? de Jager dit qu'il est arrivé à la réunion à Bruxelles. ? Mais en public, nous sommes très réticents à discuter et débattre de la restructuration. ?

De Jager n'a pas dit si son pays ont favorisé une restructuration, mais il a exprimé sa frustration avec la situation désastreuse de la Grèce.

? En ce moment, qu'il semble que la Grèce n'est pas sur la bonne voie, et il devrait être tout d'abord ramené sur la droite suivre ? avant de décider sur toute nouvelles mesures de soutien, il dit des journalistes.

Cette frustration était partagée par les autres ministres, qui a exigé la Grèce prendre les autres mesures afin de que pouvoir réduire son déficit budgétaire pour les objectifs énoncés dans son programme de sauvetage initiale.

Le gouvernement grec a accepté à la privatisation des biens nationaux encore plus pour aider à payer ses factures et adopter des mesures d'austérité supplémentaires et des réformes économiques, a déclaré Juncker.

En mars, la Grèce a déjà engagé à privatiser certains euro50 milliards (71 milliards de dollars) en actifs, tels que stakes dans des sociétés nationales et de l'immobilier, d'ici à 2015, mais les ministres de la zone euro se plaint qu'ils ont vu le peu de progrès sur ces efforts.

? Je ne suis pas tellement heureux avec la Grèce, ? Juncker dit, ajoutant que toute nouvelle mesure devait être approuvé par tous les partis politiques dans le pays.

Les ministres ont dit qu'ils n'a pas discuter en détail si Grèce peut-être aussi avoir besoin de plus de prêts d'urgence de l'UE et le FMI, mais aussi n'excluait pas une aide supplémentaire une fois qu'une mission de contr?le de son programme actuel de sauvetage est conclue dans les prochains jours. Le pays a déjà obtenu certains prêts de sauvetage en milliards d'euro110 il y a un an, mais il reste bloqué dans la récession et verrouillé des marchés de la dette internationale.

Dette de la Grèce est prévue vers le haut de 166 % de la production économique en 2013, et le pays a du mal à obtenir une emprise sur les déficits budgétaires. La plupart des investisseurs et analystes croient à la charge de la dette est si grande et l'économie si faible que seule une restructuration aidera à remettre sur pied.

Athènes devait commencer à soulever des fonds sur les marchés de la dette internationale à nouveau l'année prochaine pour aider à payer ses factures, mais avec des taux d'intérêt pour les obligations de 10 ans grecques constamment au-dessus de 15 p. 100, que cette perspective ressemble plus en plus improbable, laissant le gouvernement avec un énorme déficit.

Pendant ce temps, les ministres de la zone euro a signé au large sur euro78 milliards (110 milliards de dollars) sous forme de prêts au Portugal. Un tiers des prêts de sauvetage proviendra du Fonds monétaire International, tandis que le reste serait divisé en nombre égal parmi les deux fonds de sauvetage de l'Europe — un soutenue par les pays de la zone euro, l'autre par le budget de l'UE.

Un fonctionnaire européen a déjà dit la maturité moyenne des prêts de sauvetage sera 7 1/2 ans — comme le plan de sauvetage de l'Irlande et la Grèce — et à un taux d'intérêt d'environ 5,7 %. C'est plus bas que le taux de Qu'irlande a payer pour son plan de sauvetage.

Dans leur déclaration, les ministres a déclaré lundi que les autorités portugaises ont convenu de ? encourager ? investisseurs privés pour maintenir leur exposition au pays "sur une base volontaire" et sortez pas de fonds. C'était une demande clée de la Finlande, qui avait du mal à obtenir l'approbation pour le plan de sauvetage de son Parlement.

Comment exactement qui devrait être fait, sera aux autorités portugaises, dit Juncker.

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Highlights: the comments after the euro-zone finance ministers meet (Reuters)

Brussels (Reuters) - the Finance Ministers of the Euro area approved a rescue plan of 78 billion euros ($110 billion) for the Portugal, but as a condition of the agreement insisted that Lisbon ask private bond to maintain their exposure to debt.

Here are a few comments made by officials of the European Union and the Finance Ministers after their Monday discussions.

FRENCH: THE MINISTER OF FINANCE CHRISTINE LAGARDE

THE GREEK DEBTS:

"The restructuring, rescheduling: off the coast of the table."

"A restructuring or a rescheduling which would constitute a default situation, what we would call a credit event, are off the table for me."

EUROGROUP PRESIDENT JEAN-CLAUDE JUNCKER

ON the IMF DOMINIQUE STRAUSS-KAHN:

Mr. Dominique Strauss-Kahn has not resigned and I do not say that it should do so. I refuse to give an answer to these questions. It is indecent that some Governments already this morning began on this debate. This is a debate that has no place. ?

ON THE OUTSIDE OF THE AGENCY IN THE TERM GREEK PRIVATIZATION:

"It was a question that we were already discussing...". In the assumption that additional measures should be necessary and the need to give far more importance to the privatization program, it is an option that will be taken under the reason, which is shared by some of our colleagues, but no doubt the Minister of finance said that you are not shared by everyone. ?

ON "REPORT" OF THE GREEK RATHER THAN RESTRUCTURING DEBT:

"I must repeat that a major restructuring is no option." No one was mentioning this evening the need for a major restructuring.

"Would not exclude definitively a kind of report, but it is not an isolated... response."

"We see that if additional measures more are needed... and then, only if all these conditions are met, can the debate us of the report.". It does not Report or anything, its measures and measures and measures and then perhaps Report. ?

ON THE GREEK FISCAL TARGETS:

"Urgent measures are needed in Greece to achieve the budgetary objectives which are those that we agreed when we launched the Greek assistance program.".

"We have clear agreement of the Greek Government to take additional measures to achieve the budgetary targets for 2011, to increase the volume of the privatization effort and everyone knows that the Greece has to spend more effort and the Greek Government would be the first to recognize...." ?

"Things are achievable." I would never say that things are easy, but they are achievable, if they are taken on board by the Greek authorities. "What is of paramount importance for us is to have a multiparty agreement in Greece, we had one in the Portugal...."

ON THE SITUATION OF THE IMF DOMINIQUE STRAUSS-KAHN:

"We are discussing the situation of Mr. Strauss-Kahn meeting, but I must say that I am very sad and upset." It is one of my friends... Mr. Strauss-Kahn is in the hands of American justice, it is not for us to comment on this subject, but it saddens me deeply, deeply. ?

ON MARIO DRAGHI, CHAIRMAN OF THE ECB FOR:

"We unanimously appointed Mr Mario Draghi, Governor of the Central Bank, as the successor to the President of the European Central Bank Jean-Claude Trichet outgoing."

"The decision of the Eurogroup is sent to the Hungarian Presidency that tomorrow the Ecofin Council will be able to adopt this proposal, which will be immediately transmitted to the European Parliament... so that the European Council in June will be able to take a final decision on this questionqui will be made legally effective in July by the Eurogroup and the Ecofin.".

STABILITY (MSS) EUROPEAN MECHANISM:

"I am absolutely convinced that the Treaty on the ESM console will be signed as the framework agreement on the EFSF (European financial stability facility), at the end of June, to enable us to quickly launch the national procedures of ratification so that the ESM console can be ready and operational when it is to take over the FESF2013 to". Midway. ?

GREECE:

"The situation is extremely difficult, in Greece and the Greece." "We were satisfied, pleased to see that the Greek Government has agreed to make progress in a short period of time on additional measures, which will allow to respect budgetary limits for 2011 on which we agreed when we launched the Greek program".

"The privatisation programme is extremely important."

"Based on reports by the European Central Bank, the European Commission and the IMF, will allow us definitively conclude Greek chapter at our meeting in June."

EUROPEAN STABILITY FINANCIAL CHIEF KLAUS REGLING INSTALLATION

FUNDING FOR PORTUGAL:

"The EFSF probably go to market this year three times." the details are not yet decided, we discuss them with the Portuguese authorities...

"And of course this also depends on the conditions of market, but probably three questions, two possibly before the summer break." I am convinced that we will be able to mobilize the necessary funds.

EUROPEAN COMMISSIONER OLLI REHN MONETARY AFFAIRS

THE RATE OF INTEREST OF PORTUGAL:

"In respect to the rates on the Portugal of interest - we based the decision on the principles already agreed and this will lead to a level of interest rates which is somewhere around 5.5% and clearly below 6.0 per cent."

ON GREECE

"The mission of the troika EU/IMF will continue the review of the program are a still gaps to be filled, especially with respect to the program of privatization and fiscal consolidation." Let me emphasize that... The Greece must still intensify the implementation of its structural and fiscal reforms and justify and a implementation of the ambitious privatisation programme which is about EUR 50 billion, and do so without further delay. It is a very important part of reducing the burden of the debt of the Greece, as the EUR 50 billion is equivalent to about 20% of the GDP of the Greece. ?

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Union seeks to facilitate the China of the eurozone fears (Reuters)

BEIJING (Reuters) - Europe will not allow the failure of the euro and the countries of the European Union committed themselves to cutting deficits, the President of the European Council said Tuesday, seeking to allay fears that the crisis in the euro area may jeopardize China investmentChinese officials.

"All the countries of the EU are overthrew deficits." The most vulnerable countries are action determined to overcome the crisis, "President Herman Van Rompuy said in a speech at the Central Party school in Northwest Beijing, which form the Chinese leadership.

His four-day China visit coincided with a deterioration in the 18 months of Europe's sovereign debt crisis, with the Greece to be forced to restructure its debts and Ireland and Portugal also come under the pressure of growing concern.

China reported last month that he was prepared to buy more debt of weaker States in the euro area. There is no precise figures, but China has said that he has purchased billions of euros of debts.

"The euro is second in the world reserve currency and a currency strong and stable - same too high, compared, for example, your currency," he said.

"We are determined to defend and develop these assets for the benefit of our citizens and in dialogue with partners.

"I want to commend the confidence that China has demonstrated towards Europe in these difficult times." "A stable eurozone is in our common interest", Van Rompuy said in remarks to officials studied at the sprawling school.

"China invests in the euro area and it (is) the evidence of their confidence in the future of the euro area and the euro as a major reserve currency in the world.".

Van Rompuy said that the Greece and the Ireland had received financial assistance tied to strict policy measures and that an agreement with the Portugal had been concluded.

"And let me remind you that although these countries enjoy a disproportionately high attention of the international press, together, they represent only 6% of GDP in the euro area," he said.

Van Rompuy noted the strengthening banking regulation and economic recovery of the European Union, with the expectations of growth of 1.8% in the European Union this year and growth of 2% in 2012.

"The European side, our main contribution to the stability of the global economy is first to put our House in order, a stronger governance of the euro area and to tackle the problems of economies low and low budgets,"he says."

Van Rompuy also gently pressed again on the human rights and democracy, in his speech to the Communist officials who will be a day for running single-party State, saying that the world must learn a lesson from the tumult of today's Middle East.

"For us, the"Arab spring"was a clear reminder that the values of justice, democracy and social development are universal," he said.

Chinese leaders are more implacable face pressure from the West but also suspicious on what they see as subversion and abroad inspired dissent.

This alarm grew only where the Chinese sites overseas in February spread calls for demonstrations across China inspired by the "revolution of Jasmine" anti-authoritarian upheavals around the Arab world.

China has this year imprisoned, detained or placed in dozens of secret informal care of dissidents, human rights lawyers and protesters feared will challenge Communist party rule.

(Other reports by Michael Martina;) (Editing by Ken wills and Sugita Katyal)

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Germany powers eurozone economic surge (AP)

LONDON - with better forecasts of economic growth in Germany and a surprise rebound in Greece, contributed to the 17-nation euro zone begin the new year with a bang, with the region of growth twice faster than the United States despite constant fears about the debt.

Of the euro area economy expanded by a quarterly rate of 0.8 per cent in the first three months of the year, according to Eurostat, the EU statistical office Friday.

It was more that double the growth of 0.3% posted in the previous period of three months, prior to the expectations of analysts for an increase of 0.6 per cent and twice the US growth.

"The euro area is therefore considerably outperforming all other large developed economies at the moment," said Chris Williamson, Chief Economist at Markit.

The figures have cemented expectations that the European Central Bank will be followed by an increase in the interest rate for April - the first in nearly three years - with another, possibly in July, despite the problems of indebtedness of some countries.

In terms of year on year, the economy of the euro area increased by 2.5%, at approximately that many observers believe should be its long-term average.

Olli Rehn, European Commissioner for economic and Monetary Affairs, said that the EU will surpass the levels of pre-financial crisis growth next year.

It is much earlier than planned in 2008, when the economy sank into its deepest and longest recession after the collapse of the US investment bank Lehman Brothers has put the financial system to its knees.

"The main message in our forecast is that the economic recovery in Europe is strong and continues, despite recent external turbulence and tension on the sovereign debt market," said Rehn.

The new Commission forecasts are for the euro zone to grow by 1.6% this year and the enlarged EU of 27-nation, which includes members other than the euro as Britain, 1.8%.

Unsurprisingly, given its size, the Germany was the main reason that the euro area has grown so fast in the first quarter. Growth of 1.5% means that most large economy of the European Union has made all the production lost during the recession. He was taken by a healthy balance of exports and household spending.

"The Germany is the engine of growth among the industrial countries - and not only in Europe,"stated the Minister of the German economy Philipp Roesler."."

Economy of the France, second largest in the eurozone, expanded by a solid 1 percent on higher consumer spending and business investment. The economies of the North as the Netherlands have increased strongly, while the Italy and the Spain late.

Perhaps more surprising, given the quagmire of debt that is, Greece posted solid growth of 0.8%, its first economic growth since the fourth quarter of 2009. However, the increase is not likely that a sign of a sustained pick-up as the contraction of the previous quarter has doubled a colossal 2.8%.

Manos Chatzidakis, head of investment strategy at Pegasus Securities, said that the Greek figures were disappointing because of the revision.

"The economy still has a considerable way to go before recovery," said Chatzidakis. "We remain in a very unfavourable situation."

Portugal, another beneficiary of rescue, returned in a recession. Its quarterly decline of 0.7% following the 0.6% decline recorded in the previous three month period - a recession is classified as two consecutive negative growth quarters. The Portugal is the third country of the eurozone to agree to a rescue, following the Greece and the Ireland.

Problems of these countries are likely to be protracted as they struggle to reduce their mountain of debts. It is to these problems, including those in the Greece, which continue to dominate sentiment towards the euro.

The Executive Board of the European Union, on Friday raised its forecast of debt for the three of them.

This will probably spices discussions between the Governments of the euro on the question of whether if the Greece will need a second rescue plan. It will also fuel calls from many economists who say that the Greece have to restructure its debts - to delay or reduce its bond payments. Ministers of the euro zone will begin to discuss how to help the Greece at a meeting Monday.

Although growth has contributed to the euro for some time, the broader concerns of the debt crisis has prompted a modest retreat.

By times of London late afternoon, the euro declined 0.1% to $1.4222, after having traded as high as $1.4338 earlier. Last week, it was near 18-month highs above $1.49 before that disorders of the Greece most recent debt began to dominate sentiment.

Despite of underway in the eurozone debt crisis, the European Central Bank should continue to increase the rate of interest over the next few months, especially as the economic recovery is becoming rooted.

"Performance solid growth of the economies of power plants in the EU is the European Central Bank, in a more difficult situation uncomfortable" said Tim Ohlenburg, Senior Economist at the Centre for Economic and Business Research.

"High interest rates would make sense for large countries, the Centre of the euro in which unemployment is falling and exit is back, but it would further undermine the weaker economies with high debt levels and fragile banking sector".added Ohlenburg.

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Gabriele Steinhauser Brussels, Geir Moulson Berlin and Nicholas Paphitis in Athens contributed to this story.

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Eurozone inflation more far over target to 2.8 pct (AP)

Frankfurt, Germany - Inflation in 17 countries that use the euro slipped to a surprisingly high 2.8 percent in April, official data showed Friday, keeping the pressure on the European Central Bank later this year to increase interest rates more.

At the same time, measures of corporate and consumer optimism has decreased and unemployment remained high - having an image mixed with the future of the economy that could complicate the work of the Bank as President Jean-Claude Trichet, whose mandate ends on October 31prepares to deliver broadband to a successor.

Speculation that inherits employment have focused on the head of the Bank of Italy Mario Draghi, who has been publicly supported by the France and the Italy. European leaders say that a decision will be made in the coming weeks.

The figure of inflation published by Eurostat, the Statistical Office of the EU, increased by 2.7% in March. Many analysts expected the figure to remain unchanged this month.

Inflation has remained above the purpose of the ECB of slightly less than 2%, mainly due to higher oil and food prices. Although the Bank expects the bump in price in order to facilitate the next year, she was concerned enough to start at rates high depressions Records, with increase of a quarter of a point to 1.25% on 7 April.

Economists predict many more these increases by the end of the year.

While the price of oil are the main culprits, "the underlying trend in prices seems also recently, have become a bit stronger," said economist Ralph Solveen at Commerzbank. "Numbers of today will support those on the Council who are pushing for a faster normalisation of monetary policy of the ECB."

Although the key interest rate is not far from its lowest record, relocation of the Bank has raised concerns that higher borrowing costs may make it more difficult for countries in financial difficulty, such as the Greece and the Irelandwhich received loans from rescue to avoid default on their detteset the Portugal, who sought a rescue plan.

These three countries are only a small fraction of the economy of the euro area, however and the Bank seeks to strong growth and rising prices in Germany, which consists of 27 per cent of economic production in the euro area and has a powerful export cars and industrial machinery-led economy.

Higher rates are the main tool of the Central Bank in the fight against inflation, but they can hurt growth if it at the wrong time. The Bank must find a rate that works for all the countries of the euro area, which has renounced their independent interest rate policies when they joined the euro.

Other signs for the zone euro remained mixed Friday. Unemployment rate was steady at 9.9% in March. The rate was reinforced by the underperformance of the economies in several countries, particularly in Spain, the fourth euro economy. He has a record unemployment rate 21.3% following a housing bubble has collapsed and unemployment 44.6% for persons of less than 25 years.

During this time, indicator of broad economic sense of the EU declined significantly, 2.3 points to 105.1, for the European union of 27 members, oppressed by a sharp drop in services and sectors of the retail of Great Britain.

The index fell more moderately 1.1 point of 106.2 for the euro area, the second consecutive decline. Most of the members of the EU registered a dip, and index remains firmly above its long-term average in Germany, France and the Netherlands.

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The eurozone crisis erupting on Greek debt fears (Reuters)

By Matthias Sobolewski and George Georgiopoulos Matthias Sobolewski and George Georgiopoulos - Monday, April 18, 4: 47 pm and

BERLIN/Athens (Reuters) - fresh fears that the Greece will have to restructure its mountain of debt, may be sent as early as this summer, the euro and some prices of binding the euro tumbling Monday block debt crisis intensified.

Sources of the German Government said Reuters in Berlin that they do not believe the Greece, which has sealed a rescue of 110 billion euros ($158 billion) of the EU and the IMF, a year ago, would make all summer without a restructuring.

The confidence of the markets is also affected by a new threat to rescue awaiting the Portugal, the rise of the anti-euro party in Finnish elections.

The anti-euro party of true Finns scored big gains in a vote on Sunday and pledged to push changes to a Portuguese rescue by the European Union which is expected to total 80 billion euros, when it is finalized by a delay mid-May.

After a brief lull in the debt crisis of the EU in early 2011, it exploded again, and some analysts are now openly speculate that Greece and possibly in other countries could finally forced to leave the block.

"You can see some countries decided to leave the euro because they deal with the force fiscal straitjacket it imposes on them," Andrew Lynch, a manager at Schroders Fund, stated to Reuters Insider.

Greek debt restructuring would be the first by a Western European nation in over half a century and represents a challenge for policy makers of the EU, of the difficulty in reconciling the interests of their citizens with the expensive steps necessary to preserve the integrity of the 17-nation currency zone.

Greece, faced with a burden of debt which is expected to swell to 160% of GDP in 2013, has repeatedly denied it intends to restructure. Greece Bank Governor George Provopoulos, warned Monday that he would have "of the catastrophic consequences."

"To be clear, the Greece has the money,"when considering public wealth that could be privatized, Member of the Executive Council of the ECB Lorenzo Bini-Smaghi told Reuters Insider before a New York event sponsored by Chatham House, home of the Royal Institute of International Affairs.""

"You have the possibility of sale of property and accelerate privatization or going in the direction of the major financial collapse, which happen in the event of default or restructuring."

But German daily Die Welt quoted an anonymous Greek Minister by saying that it was only a matter of time before the Government took such an approach.

And Government sources in Berlin told Reuters a form any of the debt restructuring now seemed inevitable and suggested Greece evolve quickly, rather than wait until its funding situation gets critical next year.

"Decisive voice in the Federal Government expect that the Greece will not make all summer without a restructuring", said a high-ranking German coalition source.

RISK OF CONTAGION

European shares sank to their lowest close in three weeks Monday, and the euro fell more than two hundred at its lowest level against the dollar briefly trade below $1.42, in almost two weeks as the euro-zone debt crisis rattled the market confidence.

US stocks also took a blow after Standard & Poor cut its credit for the United States to negative prospects in a reminder that the eurozone is not alone in suffering from deficits and high debt.

The cost of insuring Greek debt against default jumped and Spanish bond of 10-year yields rose to a record high close to 5.6%, while yields Portuguese hit a new peak of 9.4%.

European officials have been careful to note that the Spain can avoid the contagion that has forced the Greece, the Ireland and Portugal to rescues. Much larger economy could strain resources block breaking point, if it succumbed to the need for a debt rescue plan.

Data Monday showed a decline accelerated in Spanish real estate in the first quarter and increased yields at the auction of the Treasury of the Government.

Spain faces an additional criterion of the application of its debt on Wednesday when it aims to raise 2.5 to 3.5 billion euros with two issues long term.

DEBT GREEK LARGER THAN ARGENTINA BEFORE DEFAULT

To return the economy of the Greece to a sustainable path, most economists agree that it should write off the coast about half of the value of its outstanding debt, striking the private creditors with significant "haircuts" on their holdings.

The Greece of 325 billion euro debt load is nearly double the level of most economists regard as sustainable and much larger than that of the Argentina, when he did not at the end of 2001.

But EU leaders have promised no step that the holders of private debt to pay before 2013.

Doing so in the short term, when the block remains vulnerable, could raise pressure on the Portugal and the Ireland to restructure their debt also, threatening the balance sheets of banks in the euro area.

Winning creditor agreement for a more gentle form of restructuring, as a voluntary extension of debt maturities, is likely to be difficult.

And even if it does not work, it would probably not enough of a tooth to in charge of Greece debt to ensure viability long-term. Markets may view the option "restructuring lite" simply the first step in a restructuring of two floors, with the real pain still to come.

BAILOUT OF PORTUGAL AT RISK

Meanwhile, in the neighbouring Portugal, representatives of the European Commission, European Central Bank and the Fund International Monetary are met officials Monday to define the third rescue conditions of the block within a year of several billion euro deals with the Greece and the Ireland.

However, after the election in Finland, this rescue plan could come under threat.

Perussuomalaiset anti-euro party what big gains in Sunday vote, the wish to push changes to the Portuguese rescue.

It may take weeks to know if true Finns will now be part of a new Government in Helsinki and be able to respond to this threat. The party which won the most votes in Finland is pro-European and seems unlikely that his position of compromise, even if it leads to a coalition with the true Finns.

But the result highlighted the importance of public anger in Northern Europe to the series of agreements for assistance for the countries of the euro disaster area that poorly managed their economy and finance.

"It is extremely difficult for politicians in Europe ignore the strong signal of the Finland, said Steen Jakobsen, Chief Economist of Saxo Bank." The result could mean away rescue packages with no sharing by banks and private investors in the burden. ?

Any delay in the approval of the rescue for the beyond Portugal agreement could leave the country scrambling for new sources of funding. He faces an election on June 5 and has warned that it will run more money at the same time.

(Report and written by Noah Barkin; other reports by Al Yoon in New York)

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