My finance view

European Central Bank president Mario Draghi says there’s “no external savior” for heavily indebted governments in the eurozone debt crisis and gave no sign the bank is ready to step in and support their finances.

Draghi said governments must take the tough steps to balance budgets and reform economies to promote growth.

“I will never tire of saying that the first response should be from government,” Draghi said Thursday at a speech in Berlin. “There is no external savior for a country that doesn’t want to save itself.”

As a “firewall” to calm markets in the meantime, Draghi said, the EU has its newly strengthened bailout fund.

Some economists have urged the ECB to support governments with bigger purchases of government bonds. So far the bank has made some purchases but kept them limited and said the program is temporary, stressing that governments must not rely on such help from the ECB.

Draghi said that the purchases were “neither eternal nor infinite.”

In his speech, Draghi focussed instead on the European Financial Stability Facility, the current EU bailout fund, as the “firewall” against the crisis. He urged EU officials to quickly implement decisions to strengthen it to assure markets governments will pay their debts on time.

Governments have agreed on ways to increase the fund’s lending power and are seeking outside investors such as countries in emerging markets to contribute to its lending power, so far without much progress.

Economists say the EFSF is too small to bail out Italy, the most recent focus of the debt crisis that has seen Greece, Ireland and Portugal seek bailouts from other eurozone governments and the International Monetary Fund.

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Toll Brothers Inc. says its fiscal fourth-quarter net income slid 70 percent, partly because last year’s quarter was helped by a large tax benefit.

Still, the performance topped analysts’ expectations, and the luxury homebuilder’s revenue climbed as home deliveries and net signed contracts increased.

Toll Brothers reported Tuesday that it earned $15 million, or 9 cents per share, for the three months ended Oct. 31. That compares with net income of $50.5 million, or 30 cents per share, a year earlier.

Last year’s results included a $59 payday loans with no fax.9 million tax benefit.

Analysts expected earnings of 5 cents per share.

Revenue rose 6 percent to $427.8 million. That beat Wall Street’s $424.3 million estimate.

Home deliveries climbed 8 percent. Signed contracts increased 15 percent.

Toll Brothers is based in Horsham, Pa.

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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.

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Tropical Storm Kenneth has formed in the eastern Pacific Ocean, with forecasters calling it a rare late-season tropical storm.

The U.S. National Hurricane Center in Miami said Sunday that Kenneth had maximum sustained winds near 40 mph (65 kph). The storm was centered about 525 miles (845 kilometers) south of Manzanillo, Mexico.

Projections show Kenneth moving west out to sea, away from land, over the next several days payday lenders.

The eastern Pacific hurricane season ends Nov. 30.

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Metropolitan Urological Specialists PC, a leading St. Louis area medical practice, appears to be digging itself out of a $1.3 million tax problem.

Public records filed this year indicate that the Chesterfield-based medical practice and its property affiliate — Metropolitan Urological Properties LLC — has owed at least that much in delinquent federal, state and local taxes, interest and fees.

Metropolitan, which operates a sexual health clinic and offers surgery and radiation treatments, has about a dozen physicians. The medical firm has an imaging center, a laboratory, and doctors’ offices at various locations in Crestwood, Creve Coeur, Florissant, and Chesterfield including offices on the campuses of Mercy Hospital St. Louis and St. Luke’s Hospital.

Metropolitan’s new interim chief executive, Bob Lawson, and several doctors did not respond to requests to comment. The firm referred questions to its attorney, Mayer Klein. The medical firm has substantially paid down its tax liabilities in recent months, Klien said. He would not specify Metropolitan’s remaining balance of delinquent withholding taxes, he said, because the company is privately held.

“Metro is strong and very successful and a very solid company,” Klein said. ”I’m aware of our financial condition and we do not have any tax concerns.”

On Sept. 16 of this year, the Internal Revenue Service filed an $855,291 tax lien on “all property and rights to this property” belonging to the medical practice, federal records show.

The IRS filed the tax lien after Metropolitan fell behind on its federal taxes - namely, the employer’s quarterly payments of funds it must withhold from its employee’s paychecks for Social Security and Medicare. “We have made a demand for payment of this liability, but it remains unpaid,” the federal tax lien states.

Earlier this year, the Missouri Department of Revenue placed three tax liens on the firm totaling $154,103 involving overdue withholding taxes, state records show. The smallest of those state tax liens, totaling about $405, has been released.

Metropolitan’s delay in meeting its federal and state tax obligations echoes its difficulties paying its property taxes. The Post-Dispatch reported last week that the medical firm’s property affiliate - Metropolitan Urological Properties LLC - owes state and local tax authorities $338,224 in delinquent taxes, interest and penalties from 2009 and 2010 on two of its properties, which include medical office buildings at 10296 Big Bend Boulevard in Crestwood and at 215 Dunn Road in Florissant, according to St. Louis County Department of Revenue.

According to Missouri Department of Revenue records, Metropolitan’s problems paying its wittholding taxes began in early 2009.

In 2010, Missouri state tax authorities placed a $8,854 tax lien on Metropolitan, but the medical firm paid those delinquent withholding taxes and that lien was released in February of this year.

The medical firm’s former chief executive, Dunard Morris, left the firm last month for unexplained reasons. He did not return calls Thursday for comment.

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U.S. stock futures are edging lower ahead of a full day of economic reports.

Investors will receive reports Wednesday on consumer prices, factory production, foreign demand for U.S. debt and a measure of homebuilder confidence. Positive reports could be further evidence that the U.S. economy is not in danger of slipping back into another recession.

Concerns linger about Europe’s debt crisis. Greece’s new prime minister Lucas Papademos’ government will face a confidence vote later in the day. The government must pass austerity measures to receive additional financial assistance.

Dow Jones industrial average futures were down 40 points, or 0.3 percent, to 11,998 two hours ahead of the opening bell. S&P 500 futures fell 7, or 0.5 percent, to 1,247. Nasdaq 100 futures shed 4, or 0.2 percent, to 2,356.

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Italian Premier Silvio Berlusconi resigned Saturday after parliament’s lower chamber passed European-demanded reforms, ending a 17-year political era and setting in motion a transition aimed at bringing the country back from the brink of economic crisis.

A chorus of Handel’s “Alleluia,” performed by a few dozen singers and classical musicians, rang out in front of the president’s palace as thousands of Italians poured into downtown Rome to rejoice at the end of Berlusconi’s scandal-marred reign.

Hecklers shouted “Buffoon, Buffoon!” as Berlusconi’s motorcade entered and exited the presidential palace, where he tendered his resignation to President Giorgio Napolitano, the palace said in a statement.

Respected former European commissioner Mario Monti remained the top choice to try to steer the country out of its debt woes as the head of a transitional government, but Berlusconi’s allies remained split over whether to support him.

Their opposition wasn’t expected to scuttle Napolitano’s plans to ask Monti to try to form an interim government as early as Sunday, but it could make Monti’s job more difficult.

Napolitano will hold consultations Sunday morning with all Italy’s political forces. The back-to-back, 10-minute meetings he has scheduled indicated the talks wouldn’t drag on and that Monti would be nominated by the end of the day. Late Saturday, Berlusconi’s party said it would support Monti, albeit with conditions.

Berlusconi’s resignation was set in motion after the Chamber of Deputies, with a vote Saturday of 380-26 with two abstentions, approved economic reforms which include increasing the retirement age starting in 2026 but do nothing to open up Italy’s inflexible labor market.

The Senate approved it a day earlier and Napolitano signed the legislation Saturday afternoon, paving the way for Berlusconi to leave office as he promised to do after losing his parliamentary majority earlier in the week. He chaired his final Cabinet meeting Saturday evening and thanked his ministers.

Berlusconi stood as lawmakers applauded him in the parliament chamber immediately after the vote. But outside his office and in front of government palazzos across town, hundreds of curiosity-seekers massing to witness the final hours of his government heckled him and his ministers.

“Shame!” and “Get Out!” the crowds yelled, many toting “Bye Bye Silvio Party” posters as they marched through downtown Rome in a festive indication that for many Italians, like financial markets, the time had come for Berlusconi to go.

Berlusconi supporters were also out in force, some singing the national anthem, but they were outnumbered.

Earlier in the day, Berlusconi lunched with Monti in a clear sign the political transition was already under way, news reports said.

While the euroskeptic Northern League remained opposed to Monti’s nomination, some lawmakers suggested they could support a Monti-led government for a few months to enact the additional EU-demanded reforms before elections are held in early 2012.

In a statement issued late Saturday, Berlusconi’s Peoples of Liberty party said its members would support Monti, but added that they would also ensure that Monti’s Cabinet, legislative agenda and the timeframe of his government meets their requirements.

Napolitano appealed for lawmakers to put the good of the country ahead of short-term, local interests _ an indirect appeal to members of Berlusconi’s party and the allied Northern League to work with the new government.

“All political forces must act with a sense of responsibility,” he said.

It was an ignoble end for the 75-year-old billionaire media mogul, who came to power for the first time in 1994 using a soccer chant “Let’s Go Italy” as the name of his political party and selling Italians on a dream of prosperity with his own personal story of transformation from cruise-ship crooner to Italy’s richest man pay day loan lenders.

While he became Italy’s longest-serving post-war premier, Berlusconi’s three stints as premier were tainted by corruption trials and accusations that he used his political power to help his business interests.

His last term has been marred by sex scandals, “bunga bunga” parties and criminal charges he paid a 17-year-old girl to have sex _ accusations he denies.

In the end, his downfall came swiftly: Just last week Berlusconi boldly told a G-20 summit in Cannes, France, he was the only one who could steer Italy out of its economic morass. A week of battering on the markets and the defection of several party members later, his fate was sealed.

Italy is under intense pressure to quickly put in place a new and effective government to replace him, one that can push through even more painful reforms and austerity measures to deal with its staggering debts, which stand at euro1.9 trillion ($2.6 trillion), or a huge 120 percent of economic output. Italy has to roll over a little more than euro300 billion ($410 billion) of its debts next year alone.

Markets battered Italy this past week amid uncertainty that Berlusconi would really leave and questions over whether Italy’s notoriously paralyzed parliament could rally around a replacement. But Italy’s borrowing rates pulled back after Napolitano made clear he intended to tap the politically neutral economist Monti to try to head an interim government to push the reforms through.

The yield on benchmark Italian 10-year bonds fell to 6.48 percent Friday, safely below the crisis level of 7 percent reached earlier this week.

Greece, Ireland and Portugal all required international bailouts after their own borrowing rates passed 7 percent. The Italian economy would not be so easy to save. It totals $2 trillion, twice as much as the other three countries combined.

An Italian default could tear apart the coalition of 17 countries that use the euro as a common currency and deal a strong blow to the economies of Europe and the United States, both trying to avoid recessions.

The head of the International Monetary Fund, Christine Lagarde, said Saturday that Italy’s political transition over the next few days should send a “clear sign of clarification and of credibility” that the country is now on the right path to get its finances back in order.

Speaking to reporters in Tokyo, Lagarde had high praise for Monti, saying she had great esteem for the “quality” economist with whom she had long enjoyed a “extremely warm” and effective relationship.

The IMF has a key role to play over the next few months in overseeing Italy’s efforts to pull itself back from a Greek-style economic disaster, monitoring how it implements reforms to rein in debt and spur growth, which is projected at a scant 0.6 percent this year and 0.3 percent next year.

Amid market turmoil last week, Berlusconi was forced to ask for IMF monitoring of Italy’s finances, a humiliating prospect for the eurozone’s third-largest economy and an embarrassment for the long-defiant Berlusconi.

The premier, however, received a warm sendoff from one of his closest pals, Russian Prime Minister Vladimir Putin, who called Berlusconi “one of the last Mohicans of European politics” who had brought political stability to Italy.

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Taiwan says fishermen on a Taiwanese boat fought back against Somali pirates and freed themselves after a hijacking in the Indian Ocean.

Some of the 28 crew on the Chin Yi Wen overcame the hijackers then the boat met up with British anti-piracy vessels nearby. Three crew had minor injuries.

The government news agency said the fight happened about 4 a.m. Sunday Taiwan time (2000 Saturday GMT). That was some 48 hours after the boat was reported missing.

The Central News Agency report cited the island’s Fisheries Agency. It said the 260-ton Chin Yi Wen is now heading to Port Victoria in the Seychelles.

Piracy is rife off the Somali coast. Somalia has not had a functioning government since 1991.

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It’s moving day for bank customers.

A grassroots movement that sprang to life last month is urging bank customers to close their accounts in favor of credit unions by Saturday.

The spirit behind “Bank Transfer Day” caught fire with the Occupy Wall Street protests around the country and had more than 77,000 supporters on its Facebook page as of Friday. The movement has already helped beat back Bank of America’s plan to start charging a $5 debit card fee.

It’s not clear to what extent the banking industry’s about-face on debit card fees will extinguish the anger driving the movement. But many supporters say their actions are about far more than any single complaint.

“It’s too little, too late,” said Kristen Christian, the 27-year-old Los Angeles small business owner who started “Bank Transfer Day.” She already opened accounts at two credit unions in preparation for cutting ties with Bank of America this weekend.

“Consumers are waking up and seeing that they have options,” she said.

Even with its public support, however, it’s not likely that any account closings that take place on Saturday will make a big dent with industry titans such as Chase, which is the largest bank in the country with some 26.5 million checking accounts.

But the call to action shows just how incensed consumers were at the prospect of a debit card fee at a time of so much economic uncertainty. Even those who were appeased by the industry’s reversal may have tapped into a new sense of empowerment.

That’s the case for Dan Blakemore, a Bank of America customer for the past 10 years. He said he no longer plans to close his checking account now that the debit fee has been scrapped. But he’ll be on the lookout for any other changes that might hit his wallet.

“I’m pretty confident they’re going to find some way to get that extra money,” said Blakemore, a 28-year-old who works for a nonprofit fundraiser in New York City. “I’ll just have to see if it offends my sensibility enough to close the account.”

Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. are keeping mum on whether they’ve seen an uptick in account closures in recent weeks. But credit unions and small community banks have been basking in the spotlight and issuing press releases highlighting what they say are superior interest rates and more intimate service, along with tips on how consumers can transfer accounts. They haven’t been shy about the surge in new business they’re enjoying either.

Navy Federal Credit Union, the largest credit union in the country, says new account openings in September and October were up 38 percent from a year ago. National Capital Bank, a two-branch community bank in Washington, D.C., says the vast majority of its new account openings in recent weeks have been by fed up Bank of America customers.

“The debit fee was definitely a driver,” said Noah Wilcox, president of Grand Rapids State Bank in Minnesota, which is also enjoying a lift in account openings freecreditscore.

Because credit unions and community banks vary so greatly in size, however, it’s hard to gauge the total scope of the defections they’re reporting. For example, the Lower East Side People’s Federal Credit Union in New York City says it’s enjoying more than 55 new account openings a week. That’s a big jump from its average of about 10 new accounts per week, but insignificant when weighed against the portfolios of the nation’s largest banks.

Big banks have also learned that customer grumblings don’t always translate into action. That’s particularly true for those who have multiple accounts, direct deposit and automatic bill pay; many decide that switching just isn’t worth the hassle.

“People will do a lot of complaining before they actually uproot and move,” notes Mark Schwanhausser, a banking analyst with Javelin Strategy & Research.

The recent firestorm over debit card fees was “in a class of its own” because customers saw it as a charge for accessing their own money, he said.

The timing of Bank of America’s fee announcement was unfortunate on multiple levels as well. In addition to the anxiety many are feeling amid high unemployment and stagnant wages, the news broke just as the Occupy Wall Street protests were capturing the national spotlight.

And big banks have been a key target for Occupy Wall Street, which has tapped into the lingering resentment many harbor over the role of banks in the financial meltdown of 2008.

Last month, two dozen Occupy Wall Street protestors were arrested when they entered a Citibank branch in New York City and refused to leave. Protestors have also banged drums and demonstrated outside bank branches in other cities; PNC Bank twice closed branches in downtown Pittsburgh last week after protestors entered.

But those are the extremes. Schwanhausser of Javelin said many customers will likely be placated by the industry’s white flag on debit card fees.

“People are people going to look at that Nov. 5 date and say `We made our point’,” Schwanhausser said

The banking industry may feel the same way; representatives for Bank of America, Chase, Citi and Wells Fargo indicate they haven’t done anything to prepare branch employees for a surge in account closings this weekend. Then again, many of the closures may have already taken place.

Molly Katchpole, a 22-year-old nanny in Washington, D.C., who started an online petition urging Bank of America to drop its debit card fee, says the bank’s about-face won’t win her back.

“The damage is done,” said Katchpole, who has since joined a credit union in Washington, D.C.

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The European Central Bank has cut interest rates by a quarter percentage point under new head Mario Draghi to boost weakening growth in a eurozone struggling with a crisis over too much government debt.

The move, which comes earlier than expected by many economists, takes the bank’s benchmark rate to 1.25 percent.

European growth is expected to slow to near or below zero in the last three months of the year.

Uncertainty from Europe’s debt crisis is a factor. Business and consumers are reluctant to spend and investors because they fear more financial turmoil if Greece defaults on its debts.

Now markets are waiting for Draghi’s first news conference to see if he indicates the bank is willing to intervene more forcefully in bond markets to keep Greece’s troubles from spreading to Spain and Italy.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

FRANKFURT, Germany (AP) _ Mario Draghi holds his first press conference as new head of the European Central Bank under pressure to signal it will continue buying government bonds to keep Europe’s debt crisis from worsening.

A surprise interest rate cut has also not been ruled out as Draghi takes over. He faces an array of problems: weakening growth, excessive inflation and uncertainty over whether a bailout for heavily indebted Greece will go through or be derailed by a proposed referendum.

Markets are waiting to see if Draghi will be more aggressive in supporting troubled governments than predecessor Jean-Claude Trichet, whose eight-year term expired.

The bank’s program to buy government bonds drives down the borrowing costs that Italy and Spain face in bond markets. High interest rates on borrowing drove Greece, Ireland and Portugal to take bailout loans from other eurozone governments.

Under Trichet’s leadership, both he and Draghi, a former World Bank director and top Italian official, stressed that the program was temporary and that the new eurozone bailout fund needs to be ready to step up and take the purchases over. The fund won’t finish arrangements to leverage its limited financial resources until next month at the earliest, however.

That has left the ECB as the last line of defense in the bond market _ a position it has been uncomfortable holding. Trichet limited his comments on the program, and markets want to see if Draghi will open the door to more aggressive purchase.

“Draghi’s attitude to the ECB’s program of buying distressed government debt will be of prime importance,” said Jane Foley at Rabobank. “Today’s press conference will be no doubt used as an opportunity to test his resolve on this issue.”

Those expecting a more aggressive stance on bond purchases and a signal for a rate cut may be disappointed as Draghi may choose to stress continuity at the bank, wrote Unicredit economist Marco Valli. “We think Draghi will be very much in agreement with Trichet” and will signal that the bond purchases are a temporary measure, he wrote.

The bank’s key rate stands at 1.5 percent after increases in April and July aimed at warding off inflation. Since then the economic outlook has worsened significantly for the 17 countries that use the euro, leading many analysts to think the bank will cut rates in December or early next year. A rate cut Thursday has not been ruled out.

Inflation at 3.0 percent _ well above the bank’s goal of just under 2 percent _ gives a reason to hold off. Rate cuts spur growth but can worsen inflation.

Draghi will also face questions about Greek Prime Minister George Papandreou’s proposal to hold a referendum on Greece’s bailout, part of a broader plan to halt the crisis agreed upon at a summit last week but already in danger of unraveling.

Greece is to get euro100 million ($138 million) in more bailout financing to avoid a disorderly default on its bonds that could damage Europe’s banks and choke credit to the wider economy. But it comes with painful conditions and Papandreou says he wants the people to decide despite being told that no more bailout money will be forthcoming from other eurozone governments until the result is clear.

Papandreou faces a confidence vote Friday and it’s not clear the referendum will take place.

Critics of bond purchases argue that they take pressure off politicians to get their budget deficits down.

The issue is pressing, with Italian bond yields at an elevated 6.3 percent. Earlier, the ECB purchase program had driven them under 5 percent. But fears of more turmoil in Greece, and a perception that Italy is not acting quickly to cut spending and improve growth have put more pressure on its bonds.

But some economists have argued that only the ECB can act quickly and forcefully enough to backstop troubled governments and contain the crisis. Europe’s bailout fund is considered too small, at euro440 billion, despite proposals agreed last week by eurozone leaders to increase its financial firepower to euro1 trillion by letting it insure part of the value of government bond issues.

Key details of how the bailout fund would do that have not been filled in, and the initial burst of market relief over the idea has faded. Eurozone officials also worked out plans to cut Greece’s debt burden by 50 percent and to push banks to increase the size of their financial cushions against any losses or further market plunges that might result from that.

The ECB has potentially unlimited firepower, backed by its ability to create new money _ an ability the U.S. Federal Reserve and Bank of England have used. The ECB has been unwilling to do that. When it buys government bonds to stabilize their market price, it withdraws an equivalent amount of money from circulation to avoid creating inflation.

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