Developing countries seeking to raise their standards of living should focus on educating girls, former U.S. Treasury Secretary Larry Summers said.
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European leaders will this week try to rescue under-fire efforts to deliver new fiscal rules and cut Greece
Standard & Poor’s is threatening to downgrade the credit rating of 15 eurozone countries, saying the worsening debt crisis is affecting the bloc’s strongest economies.
The decision Monday to put 15 eurozone countries, including AAA-rating nations such as Germany and Luxembourg, on watch for a possible downgrade piles pressure on eurozone leaders to find a solution to the currency union’s debt troubles at a summit later this week.
S&P said its decision was “prompted by our belief that systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole.”
The only two euro nations not put on credit watch were Cyprus, which was already under review, and Greece, which already holds the world’s worst rating.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
BRUSSELS (AP) _ Efforts to stabilize Europe’s financial crisis were thrown into disarray late Monday as the 17 countries that use the euro braced for a possible downgrade of their credit ratings.
The leaders of France and Germany sought to restore confidence in the troubled European currency during the day with a joint call for changes to the European Union treaty so that countries using the euro would face automatic penalities if budget deficits ran too high.
Stock prices rose and borrowing costs for European governments dropped sharply in response to the changes proposed by French President Nikolas Sarkozy and German Chancellor Angela Merkel. They said their proposals would prevent the kind of out-of-control spending and borrowing that led to the debt crisis that is engulfing Europe and threatening the global financial system.
But on Monday night two people familiar with the matter said Standard & Poor’s is examining the credit rating of all 17 eurozone countries for a possible downgrade as the continent’s debt crisis lingers. They said S&P is likely to make an announcement on putting the euro countries on “credit watch” after the closing of markets in the U.S. on Monday.
The people were speaking on condition of anonymity because of the sensitivity of the matter.
The threat to downgrade all 17 eurozone countries _ including the ones that enjoy the stellar AAA-rating _ comes ahead of a crucial summit of EU leaders later this week. If there is widespread support at the summit, it is assumed that would be an important first step in bringing an end to the crisis, which has dragged on for more than two years.
“Our wish is to go on a forced march toward re-establishing confidence in the eurozone,” Sarkozy said at a news conference in Paris, with Merkel at his side. “We are conscious of the gravity of the situation and of the responsibility that rests on our shoulders.”
EU treaty changes could take months, if not years, to implement and don’t wipe away the mountains of government debt dragging down Europe’s economy. But preliminary buy-in Friday from the 17 countries that use the euro could set the stage for further emergency aid from the European Central Bank, the International Monetary Fund or some combination.
“The onus is still on the ECB to print money to make huge loans or bond purchases and draw a line under the crisis,” said Jennifer McKeown, senior European economist at Capital Economics. “Perhaps if other member states sign up to Merkel’s and Sarkozy’s proposals this week the (ECB) will step in.”
Sarkozy pledged to have a revised EU treaty ready for signing by March. It would then need to be ratified in each country, which could mean lengthy parliamentary debates or national referendums in some cases.
“A lot depends on the specifics and how these are going to be framed by lawyers,” said Piotr Maciej Kaczynski, an expert on EU constitutional issues at the Center for European Policy Studies in Brussels.
At the very least, it could take at least 18 months to ratify a new treaty once it has been signed by all heads of state, said Kaczynski. “That is a much longer timeline than what markets might want,” he said.
Bond-market analysts said they remain skeptical of Europe’s ability to prevent future profligacy. “If you say it strong enough and often enough maybe people will believe it,” said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott. “But I don’t think the markets believe ‘Merkozy’ at this point.”
EU governments reacted with caution.
No other EU leaders came out against the Franco-German proposals, but no strong statements in favor were immediately forthcoming. The reaction from Austrain Finance Minister Harald Waiglein was fairly typical: “There is nothing here that contradicts our position,” although more details are needed, he said.
The modern EU is based on a set of treaties, dating as far back as the 1950s, when the project of consolidating the continent began payday loan lenders. The treaties detail the rules that countries must follow and outline the mandates of institutions like the ECB. The most recent was the Lisbon Treaty, which was ratified in 2009, giving additional powers to the European Commission and European Parliament.
Sarkozy said he and Merkel would prefer that the treaty changes they’re proposing be agreed to by all 27 members of the EU. But he left the door open to an agreement only among the 17 euro countries and anyone else “who wants to join us.”
Sarkozy and Merkel discussed several broad changes for the EU treaty, but failed to provide much detail. The changes they outlined included:
_ Introducing an automatic penalty for any government that allows its deficit to exceed 3 percent of GDP. A majority of nations would need to oppose automatic sanctions for a country to avoid them.
Governments are supposed to abide by the deficit limit under existing rules, but many, including France, have flouted it. Further, punishment only occurs after a majority of euro countries votes to impose them.
_ Requiring countries to enshrine in law a promise to balance their budgets.
A key issue for the proposal’s final approval will be how much flexibility countries can have to run temporary deficits during economic downturns.
_ Pledging that any future bailouts would not require private bond investors to absorb a part of the costs, as was the case for the Greek bailout.
Germany had earlier insisted that Europe’s permanent bailout fund would demand private investors take losses if a country in the future needs rescuing.
_ Promising to not criticize or otherwise comment on the work of the ECB.
This is intended to ensure the bank’s independence and its ability to act without pressure from European leaders.
Sarkozy said more details would be included in a letter sent Wednesday to European Council President Herman Van Rompuy.
After Sarkozy and Merkel spoke, stocks rose and borrowing rates for governments across Europe plunged, indicating a sharp rise in investor confidence in the continent’s ability to resolve the crisis.
France’s CAC-40 index climbed 1.2 percent, Germany’s DAX rose 0.4 percent and markets outside of Europe also pushed higher, with the Dow Jones industrial average up 1.2 percent.
French banks, which have been hit hard this year over fears about their large exposure to the government bonds of financially weak countries like Greece, saw some of the biggest gains.
Societe Generale’s stock price climbed 6.2 percent while BNP Paribas rose 4.9 percent. In Italy, shares of Unicredit rose 5.4 percent while Spain’s Santander rose 3.6 percent.
Worries about the stability of the euro reached a fever pitch in recent weeks as the yields on Italy’s bonds _ in a nutshell, its borrowing costs _ jumped above 7 percent. That is the level that eventually forced Greece, Ireland and Portugal to require bailouts. By comparison, bond yields in Germany, Europe’s largest and most stable economy, are roughly 2 percent.
Italian and Spanish bond yields fell sharply on Monday, an indication of growing investor confidence in their financial future. The yield on Italy’s benchmark 10-year bond fell from 6.65 percent to 5.93 percent.
Italy, whose government debt is equivalent to 120 percent of the country’s annual economic output, needs to refinance $270 billion of its $2.6 trillion of outstanding debt by the end of April.
The size of the problems facing Italy and Spain are considered too large for the existing funds available to the European Financial Stability Facility ($590 billion) and the IMF ($389 billion.) To boost the firepower of the IMF, several economists have proposed that the ECB lend to it.
The big threat to the global financial system is that Europe’s debt crisis could spiral out of control.
If governments default on their bonds, banks that own them could take a significant hit. It could become very difficult for these banks to borrow and nervous depositors could flee with their cash. In the worst case, a global financial panic could be triggered, in which banks all over are too skittish to lend to each other. That would cause a credit crunch that deprives businesses of the short-term financing they depend on for day-to-day operations.
With such fears in the air, the United States is ratcheting up its involvement.
Geithner will meet Tuesday in Germany with ECB President Mario Draghi and German Finance Minister Wolfgang Schauble. On Wednesday, he travels to France for talks with Sarkozy and the prime minister-elect of Spain, Mariano Rajoy Brey.
Lee Enterprises, the owner of the St. Louis Post-Dispatch and one of the largest newspaper publishers in the country, announced Friday that it will file for bankruptcy after efforts to work out a debt exchange deal with its lenders failed.
In a press release, Lee Enterprises, based in Davenport, Iowa, didn’t say when it would file for “pre-packaged” Chapter 11 bankruptcy.
However, the publisher said the bankruptcy will cause no changes to its business. Vendors, subscriptions, employees and the company’s operations will not be affected.
The publicly-held company said earlier this year it would seek a ‘prepackaged’ bankruptcy if it failed to refinance $904.5 million in debt that matures in April 2012.
In an debt exchange proposal, Lee had tried to convince at least 95 percent of its lenders to swap existing debt for new debt with a later maturity date and a higher interest rate. At one point, it had 90 percent acceptance for the swap.
Those efforts ultimately failed, however, in reaching that level, prompting Lee to proceed with the bankruptcy filing.
However, the level of support for debt restructuring by the vast bulk of creditors will allow the company to file a prepackaged bankruptcy, the company said.
“We have achieved agreements with an overwhelming majority of our creditors to extend our existing loan agreements on reasonable terms that preserve stockholders’ ownership interests in the company with only 13% dilution,” Lee Chief Executive Mary Junck said in a press release.
With a prepackaged deal, Lee expects to exit bankruptcy in sixty days or less.
It was a passengers’ nightmare at Bradley International Airport in Hartford, Conn., this weekend.
Passengers on three JetBlue planes and one American Airline plane say they were stranded on the tarmac for seven hours or more after being diverted from New York-area airports.
The ordeal continued after they were let off and had to spend the night on cots and chairs in the terminal.
A passenger on one of the diverted JetBlue planes says the crew ran out of snacks and bottled water for the last few hours of the delay.
“The toilets were backed up. When you flushed, nothing would happen,” said Andrew Carter, a reporter for the Sun Sentinel of Florida, who was traveling to cover the Miami Dolphins game against the New York Giants. His plane took off from Fort Lauderdale for Newark Liberty International Airport at around 9 a.m. After being diverted to Hartford, the plane sat on the tarmac between around 1:30 p.m. and 9 p.m., he said.
A representative for Bradley International was not available to comment on the scope of the tarmac delays at the airport.
A JetBlue spokeswoman, Victoria Lucia, confirmed in an emailed statement that six of its planes, carrying a total of about 700 passengers, were diverted to Hartford as a result of a “confluence of events” including equipment failures at Newark and New York’s John F. Kennedy International Airport that prevented planes from landing in low visibility.
She declined to specify how long the planes sat on the tarmac at Bradley, but noted that 17 other flights with different carriers were also diverted to airport.
Once the planes landed at Bradley, Lucia said that intermittent power outages at the airport made refueling and deplaning difficult.
Kate Hanni, executive editor for FlyersRights.org, said she got calls and emails from passengers and worried family members regarding at least four flights that were stranded on the tarmac for up to 10 hours.
Brent Stanley and his wife were on one of those planes, an American Airlines flight that had originally been headed to JFK after taking off from Charles de Gaulle airport in Paris.
After being diverted and landing in Hartford at 2:30 p.m., Stanley said passengers were given various reasons for being held on the tarmac, including the need to refuel and de-ice and the airport’s limited capacity for handling international flights. He and his wife were eager to get back home to their two young sons in Lake Zurich, Ill. But they realized they didn’t have it as bad as the parents who had infants on the plane.
“There was a lady in front of us with an 18-month-old daughter,” Stanley said. “Another woman came by to borrow diapers because we couldn’t get to our luggage.”
After spending the night at the airport, Stanley was lucky to find two seats Sunday on an afternoon flight home to Chicago. But the headache isn’t over yet; his luggage was headed to JFK because the Hartford airport crew wasn’t able to handle international luggage, he said.
An American Airlines spokesman, Ed Martelle, said the passengers weren’t allowed off the plane by customs at the airport. Martelle did not know the exact number of American planes that were diverted to Bradley or how long they sat on the tarmac personal business card.
Matt Shellenberger, who was on a JetBlue flight from Boston to JFK, said his plane was diverted to Bradley International and sat on the tarmac for seven hours.
The crew picked up trash regularly and handed out water and snacks and “everyone held their cool,” he said. But his frustrations grew with each status update; the reasons for the delay kept changing as the hours passed.
Early on, passengers were told that the plane was just being refueled and would fly out soon, Shellenberger said. Then they were told it was being de-iced. Then there was an emergency on another plane.
“We were told we were the third plane in line to get to the gate when we landed,” he said. “Then we stayed on the plane for seven hours.”
Carter of the Sun Sentinel, who was on another JetBlue flight, reported a similar sequence of updates.
The saga continued long after passengers were let off the plane.
The power outages from storms throughout Connecticut made booking hotel rooms difficult. As a result, many passengers just slept at the airport, Carter and Shellenberger said in separate interviews.
When they awoke, hundreds of passengers had to wait in line for hours just to figure out which flight they’d be on.
“That was most disappointing part,” Carter said. “It seemed like there was no plan when we got off the plane.”
In the morning, Carter said he and several other passengers rented a van to drive to New Jersey rather than wait for the afternoon flight JetBlue had scheduled to Newark.
It’s not the first time JetBlue has had problems with tarmac delays. The New York-based airline also made headlines in 2007 when snow and ice storms stranded its planes for nearly 11 hours at New York’s John F. Kennedy International Airport.
Such high-profile delays helped prompt a regulation last year that fines airlines for holding domestic flights on the tarmac for more than three hours. This year, the rule was extended to apply to international flights that are held on the tarmac for more than four hours.
The Department of Transportation often doesn’t enforce the fines to their full extent unless delays are extreme, however. Passengers also do not get a cut of the fines.
Low-cost carriers are more prone to tarmac delays because letting passengers off planes can cost an airline a lot of money, said Hanni of FlyersRights.org.
If a plane is diverted because of a reason within the airline’s control, such as a mechanical failure, ticket contracts usually state that passengers will be reimbursed for hotels, food and transportation. That means airlines do everything in their power to keep passengers on board in hope that the plane will be able to take off again.
JetBlue said that passengers who were diverted to Bradley International would be reimbursed for their fares and hotel expenses.
A representative for the Port Authority of New York & New Jersey, which oversees Newark and JFK airports, could not immediately say how many total flights were diverted to other airports because of equipment failures.
WellPoint says its third-quarter earnings fell more than 7 percent even as medical enrollment and revenue grew.
The largest publicly traded health insurer based on enrollment reported net income of $683.2 million, $1.90 per share, in the three months that ended Sept. 30. That’s down from $739.1 million, or $1.74 per share, a year earlier.
Total operating revenue rose almost 6 percent to $15.2 billion.
Analysts polled by FactSet forecast earnings of $1 guaranteed payday loans.68 per share on $15.22 billion in revenue.
WellPoint says enrollment climbed more than 2 percent to 34.4 million members.
The Indianapolis company operates Blue Cross Blue Shield plans in 14 states, including California, New York and Ohio.
Switzerland’s leading chocolate makers are trying to convince their countrymen to embrace quality over quantity.
The chocolatiers from around the Alpine nation have gathered in Geneva to show off their finest wares to consumers already spoiled for chocolate choice.
On Sunday, thousands lined up outside the venue in a converted hydropower station to get a taste.
Tibor Luka, one of the organizers of Switzerland’s first chocolate salon, says 24 master chocolatiers have been invited to explain the fine points of cocoa quality and flavoring free 3-in-1 credit report.
The aim is to teach visitors to think about chocolate the way they would about wine.
Switzerland has the highest per capita consumption of chocolate in the world, with about 26.5 pounds (12 kilograms) per person each year.
U.S. stock futures are rising on hopes that European leaders will come up with a new strategy to resolve the region’s debt crisis.
Finance officials met in Washington this past weekend and pledged to take bolder steps to fight the problems. German leaders, for example, want banks and private institutions that hold Greek bonds to take a bigger loss on those holdings to slash Athens’ debt.
Investors have been on edge about Europe’s debt problems for months. Last week, the Dow Jones industrial average fell by 6.4 percent, its biggest drop since October 2008.
Ahead of the opening Monday, Dow futures are up 134 points, or 1.3 percent, at 10,833. S&P 500 futures are up 17, or 1.5 percent, at 1,147. Nasdaq 100 futures are up 23, or 1.1 percent, at 2,225.
Many smart people have applied their brainpower to the question of how to pull the nation out of the ongoing jobs crisis. The answers have not come easily cash advance loan. We put the question to three experts in St. Louis: What should government and policymakers do