Finance topics

Italian Premier Silvio Berlusconi averted a government collapse and reached a deal with allies on emergency growth measures in time for an EU summit on saving the euro before political tensions erupted in a fist fight in parliament.

Berlusconi and Northern League leader Umberto Bossi reached a compromise on raising Italy’s retirement age in late-night parliament talks Tuesday _ a point of disagreement that had threatened Berlusconi’s leadership. His majority in parliament needs the support of the Northern League.

A fist fight in the Chamber of Deputies on Wednesday when League lawmakers briefly came to blows with colleagues loyal to a former Berlusconi ally Gianfranco Fini, the Chamber president who broke with the governing coalition early in its term. Scuffles are not rare in Italy’s parliament.

League deputies were incensed when Fini, on a TV talk show, mentioned that Bossi’s wife, took early retirement from a teaching job when she was 39.

Berlusconi will deliver a letter detailing the emergency measures to an EU summit. A spokesman said the contents are reserved for summit leaders, but Italian media reported the measures include new infrastructure spending, with a push for more private investment for strategic projects, the privatization of public entities and property and simplifying rules for companies.

Changes to Italy’s pension scheme had become a major sticking point, with Bossi’s party refusing to risk alienating its constituency of workers from the productive north.

Under the overnight deal, Italy will gradually raise the pension age for all workers to 67 by 2025, bringing it in line with European trends. Currently, Italian men retire at 65 along with women in the public sector but some women in the private sector retire earlier.

The 15-page letter also reportedly contains details of the euro54 billion ($75 billion) in austerity measures passed by lawmakers last month to balance Italy’s budget by 2013.

The European Union had asked for measures, with a clear calendar for implementation, to promote growth, raise the pension age and simplify civil legal proceedings to encourage foreign investment

Outgoing Bank of Italy governor Mario Draghi called the letter of intent “an important step … but now it’s time to implement the measures swiftly and concretely.” Draghi, who takes over helm of the European Central Bank on Nov. 1, also urged Berlusconi’s government to quickly activate the spending cuts and new taxes approved last month.

In Brussels, a spokesman for the European commission, Olivier Bailly, said the EU was “confident” it would have the letter by the end of the day.

Italy is seen as the next country at risk in the widening sovereign debt crisis, but with euro1.9 trillion ($2.6 trillion) in public debt, an Italian default would be disastrous for the global economy. The European Central Bank for months has been buying billions in Italian bonds to help keep borrowing costs down.

Nonetheless, Italy saw borrowing costs on short-term bonds spike Wednesday. The Italian Treasury sold euro8.5 billion ($11.83 billion) in six-month bonds at 3.53 percent, up sharply from last month’s 3.071 percent, its highest level in three years. Yields on two-year bonds rose to 4.628 percent from 4.511.

A Berlusconi spokesman, meanwhile, brushed off reports that Berlusconi was preparing to resign. The left-leaning La Repubblica newspaper, one of Berlusconi’s staunchest critics, reported that he had threatened to resign if no deal could be reached with the Northern League, which was persisting in its resistance to raising the retirement age.

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Unemployment rates fell in half of U.S. states last month, a sign that September’s pickup in hiring was felt around the country.

The Labor Department says unemployment rates dropped in 25 states, rose in 14 and stayed the same in 11. That’s a modest improvement from August, when unemployment rose in 26 states.

Nationwide, employers added 103,000 net jobs in September, nearly double the number created in August. Still, that’s not enough to lower the unemployment rate, which stayed at 9.1 percent for the third straight month.

Nevada reported the highest unemployment rate for the 16th straight month. It stayed at 13.4 percent for the second consecutive month. California was next. The rate there fell from 12.1 in August to 11.9 percent. Michigan had the third-highest rate, at 11.1 percent.

Layoffs have slowed at a national level in recent months. The number of people applying for unemployment benefits has fallen to a six-month low, according to a four-week average calculated by the government. That has helped calm fears that the economy was sliding into another recession, as have other recent data.

Manufacturers in the Philadelphia region grew in October after contracting for two straight months, according to a survey by the Federal Reserve Bank of Philadelphia. In September, consumers boosted their spending on retail goods by the most in seven months.

Still, the national unemployment rate has been stuck near 9 percent for more than two years payday loan. Employers have added an average of only 72,000 jobs per month in the past five months. That’s far below the 100,000 per month needed to keep up with population growth. And it’s down from an average of 180,000 in the first four months of this year.

Americans are pessimistic about the economy. And more than half say President Barack Obama does not inspire confidence about a recovery.

A sizable majority _ more than 7 in 10 _ believe the country is headed in the wrong direction, according to a new Associated Press-GfK poll. And 43 percent describe the nation’s economy as “very poor,” a new high. Among those surveyed, less than 40 percent say Obama’s proposed remedies for high unemployment would increase jobs significantly.

Employers pulled back on hiring this spring after seeing less demand from consumers. Higher food and gas prices forced consumers to rein in spending. Consumer spending accounts for 70 percent of economic activity.

Job growth is critical to a recovery in the housing market, which many economists say is years away.

The number of Americans who bought previously occupied homes fell in September to a seasonally adjusted annual rate of 4.91 million homes, the National Association of Realtors said Thursday. The pace matches last year’s sales figures, which were the worst since 1997.

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Federal Reserve Chairman Ben Bernanke says the United States and other rich nations could re-learn a few lessons from developing countries: Adopt disciplined budget policies, embrace free trade, make public investments and support education.

Bernanke’s speech about the explosion of growth in the developing world was largely academic. But in his conclusion, he appears to criticize U.S. lawmakers and others in developed countries who he says have failed to embrace some key economic principles.

Bernanke has cautioned U.S. lawmakers against cutting deficits too quickly to reduce budget deficits. He has said that could put the fragile economy at risk.

In his speech, Bernanke suggests many emerging countries have enjoyed three decades of strong economic growth with support from their governments. .

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The United States is about to adopt the Canadian way of granting patents for new inventions, which may not necessarily be a good thing.

That is the opinion of some people from the arcane field of intellectual property rights, which is nowhere near as glamorous as what viewers see on Dragon

A brand new Oakville house that was listed for $1 has been pulled off the market after six bids came in over the weekend, two of them in the $700,000 range.

That was about $200,000 less than the sellers had been hoping for after first listing their three-bedroom stucco home for $1.088 million in August and then urging their agent to drop the price last week.

The unusual $1 price tag stimulated a lot of interest, along with some accusations of false advertising. About 170 people came from miles away to tour the house Saturday and Sunday, but the bidding war never got as heated as hoped.

Greece’s cash-strapped government said Sunday that it would impose a new property tax on top of existing austerity measures in order to combat a revenue shortfall.

The government also decided, in a symbolic move aimed at a public angry at politicians, to dock a month’s pay from all elected central and local government officials.

Finance Minister Evangelos Venizelos said the tax will be levied over the next two years and will cost citizens an average of euro4 ($5.53) per square meter (10.76 sq. feet).

Debt-crippled Greece urgently needs to keep a program of cutbacks on track to secure the continued flow of international rescue loans _ worth euro219 billion ($302.6 billion) _ protecting it from catastrophic bankruptcy.

Over the past 20 months, the Socialist government has cut pensions and salaries while raising taxes and retirement ages. But its efforts to cut back while reviving a fast-contracting economy amid record unemployment have faltered, sparking new market distress.

Speaking after a three-hour cabinet meeting in Greece’s second-largest city of Thessaloniki, Venizelos said the new property levy _ in addition to public sector reforms announced last week _ will make up for lagging revenues this year by providing more than euro2 billion ($2.76 billion), about 1 percent of annual gross domestic product.

Venizelos added that top Greek officials from the head of state to senior ministry executives will lose one month’s pay.

“The levy and the reforms are enough for us to pull through, but that also depends on the response of Greek society,” he said. “It will be sufficient for us to achieve our targets.”

Venizelos added that, if the measures work, Greece can expect a 2012 budget deficit of euro17.1 billion, about 8 percent of GDP, higher than the previously predicted 7.6 percent.

He warned, however, that the economy was expected to shrink at an even faster pace than expected, contracting 5.3 percent in 2011.

On Saturday, Prime Minister George Papandreou, in a keynote speech on the economy in Thessaloniki, pledged to meet fiscal targets despite the economic slowdown.

As the prime minister spoke, riots raged on the streets outside during an anti-austerity protest by some 25,000 people. Police arrested nine suspected rioters, while nine officers and 10 demonstrators were injured.

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A 109 billion euro ($157 billion) international bailout for Greece ran into trouble Thursday after at least five countries demanded that the Greek government give them cash as collateral in exchange for their contributions to the rescue fund.

The Netherlands, Slovenia, Austria and Slovakia said Thursday they wanted hundreds of millions of euros in collateral just like Finland, which struck a deal with the Greek government on Tuesday to receive cash as security for the Finnish part of the bailout.

The pro-European Finnish government demanded the collateral from Greece in response to the increasing popularity of an anti-bailout nationalist party that made sizable gains in April elections.

Even with five nations demanding extra security for their loans in response to the Finnish deal, the amount of cash would probably not be large enough to scuttle the bailout entirely. But it could drive up the overall cost of the bailout, as Greece would need extra funds to put up collateral on top of servicing its debts, paying workers’ salaries and meeting other financial obligation.

The demands for collateral also reveal growing fissures in the eurozone’s efforts to rescue Greece and other struggling countries and ultimately safeguard the common currency.

With the Finnish collateral deal, “a message is being sent to countries (that) if you have a euro-sceptic vote, you are actually being rewarded for it,” said Pieter Cleppe, the head of the Brussels office of think tank Open Europe.

Finland says without the collateral its parliament won’t sign off on its share of the second rescue package for Greece, which was left unable to pay its bills after investors worried about its massive national debt began demanding extremely high interest rates on Greek bonds.

A provision for such added security was included in the July 21 agreement by eurozone leaders on the bailout.

Ever since the national elections in April saw the right-wing, anti-bailout True Finns party gain a large share of the vote, traditionally pro-euro Finland has joined a growing group of countries that have struggled to convince their own parliaments and citizens that bailing out their neighbors is in their own good.

Slovakia and Slovenia, two of the eurozone’s poorer members, have long balked at having to support countries like Greece and Ireland, whose citizens on average make more money than theirs. Slovakia refused to participate in the first 110 billion euro bailout package for Greece, but is a member of the European Financial Stability Facility, which will fund the majority of the second rescue package.

Critics in Finland, Austria and the Netherlands, meanwhile, point out that their countries’ banks have a lower exposure to Greece than lenders in Germany and France and will thus see less of a direct benefit from supporting the country.

Estonian Finance Minister Jurgen Ligi blasted Finland’s agreement with Greece on Thursday, calling it “a deviation from the common policy of the eurozone.”

“The guarantee for the aiding countries should be Greece’s budget and economic policies as well as structural reforms, not how much one manages to gather Greek assets as collateral for its own use,” Ligi said in an interview with the Baltic News Service.

Ligi later told reporters that having to put up money for collateral “will weaken (Greece’s) ability to pay back its loans.”

But Harald Waiglein, a spokesman for the Austrian finance ministry, which is now also demanding extra security for its contribution to the rescue package, said it was politically not viable to give a collateral deal to one country but not others.

“Our position has always been that if there is collateral, Austria will also use it,” Waiglein said.

The cost of providing collateral for the contributions of small countries whose banks don’t have a big exposure to Greece should be “manageable,” reaching less than a two-digit million figure, said Waiglein, but he conceded that such deals could drive up the overall bailout sum.

The exact amount of each country’s share of the euro109 billion rescue is not clear yet, because the International Monetary Fund has not said how much it will provide and Greece is still in the process of negotiating easier debt repayment terms with banks and other private lenders.

A lower contribution from the private sector or extra collateral costs could require the eurozone and the IMF to put up more than the 109 billion euros they initially agreed on.

Slovenia’s finance ministry spokeswoman Irena Ferkulj said in a written statement to the AP that Slovenia is currently negotiating “possible guarantees” and will strive to get them for the complete sum that it pledged for Greece.

Slovak government spokesman Rado Bato said Slovakia had also demanded collateral.

Dutch Finance Ministry spokesman Niels Redeker said that his country had always “indicated in discussions in Brussels that if Finland would get a collateral agreement that we also want a collateral agreement.”

Other eurozone countries have to approve the Finnish collateral deal and national representatives were set to discuss the agreement and other requests at Thursday and Friday.

Jussi Lindgren, an official at the Finnish finance ministry, who was presenting the deal to other eurozone member countries in Brussels said the country has no reason to be worried if other eurozone members demand similar collateral.

“From Finland’s point of view it’s clear. We don’t really have to be worried if other countries want similar or other guarantees from Greece,” Lindgren told Finnish broadcaster YLE. “They would have to negotiate their own deals, and see if it’s at all possible.”

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Jari Tanner in Tallinn, Estonia, Elena Becatoros in Athens, Matti Huuhtanen in Helsinki, Dusan Stojanovic in Belgrade and Michael Corder in The Hague contributed to this story.

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Tensions between Britain’s government and police leaders flared Saturday over Prime Minister David Cameron’s recruitment of a veteran American police commander to advise him on how to combat gangs and prevent a repeat of the past week’s riots.

The criticism, led by Association of Chief Police Officers leader Sir Hugh Orde, underscored deep tensions between police and Cameron’s coalition government over who was most to blame for the failure to stop the four-day rioting that raged in parts of London and other English cities until Wednesday.

Cameron criticized police tactics as too timid and announced he would seek policy guidance from William Bratton, former commander of police forces in Boston, New York and Los Angeles. British police have branded the move misguided and an insult to their professionalism.

“I am not sure I want to learn about gangs from an area of America that has 400 of them,” Orde said of Los Angeles, which the 63-year-old Bratton oversaw until 2009.

“It seems to me, if you’ve got 400 gangs, then you’re not being very effective. If you look at the style of policing in the states, and their levels of violence, they are fundamentally different from here,” said Orde, a former commander of Northern Ireland’s police and deputy commander of London’s Metropolitan Police. Orde made his comments to the Independent on Sunday newspaper.

The riots row overshadowed a day of peace on England’s streets and continued progress in processing more than 2,100 riot suspects arrested so far, mostly in London, in unprecedented round-the-clock court sessions.

In England’s second-largest city of Birmingham, prosecutors charged two males with the murder of three men in a hit-and-run attack Wednesday, the deadliest event during the past week’s urban mayhem.

Both males _ identified as Joshua Donald, 26, and a 17-year-old whose name was withheld because of his juvenile status _ were being arraigned Sunday at Birmingham Magistrates Court on three counts each of murder.

The breakthrough by a team of 70 detectives came less than four days after Haroon Jahan, 20, and brothers Shazad Ali, 30, and Abdul Musavir, 31, were mortally wounded when a car struck them at high speed. The trio had been part of a larger group standing guard in front of a row of Pakistani-owned shops.

The killings threatened to ignite clashes between the area’s South Asian and black gangs, but the father of Haroon Jahan made a series of impressively composed public statements in the hours after his son’s death pleading for forgiveness, racial harmony and no retaliation.

Hours before Saturday’s murder charges were announced, the father, Tariq Jahan, told journalists at a Birmingham news conference he had received thousands of letters from well-wishers worldwide.

“I would like to thank the community, especially the young people, for listening to what I have to say and staying calm,” said Jahan, 46, a delivery driver for an electronics chain.

Police in London were continuing to interrogate several suspects linked to the riots’ two other killings: of a 26-year-old man shot to death in a car after a high-speed chase involving a rival group of men, and a 68-year-old loner who was beaten to death after arguing with rioters and trying to extinguish a fire they had set bad credit payday advance.

England’s forces of law and order have been on the defensive over their slow initial response to riots that rapidly spread Aug. 6 from the north London district of Tottenham to several London flashpoints and, eventually, to Birmingham, Manchester, Nottingham and other cities with high gang activity.

But police leaders mounted a series of critical interviews Saturday underscoring their view that Cameron was jumping the gun by seeking foreign advice at a time when his debt-hit government was pressing ahead with plans to cut police budgets by 20 percent.

Leaders of the police unions in London and the northwest city of Manchester _ which dealt relatively harshly with rioters and quelled trouble there in one night _ stressed that Cameron needed to listen to their expertise first, rather than seek to apply lessons from America’s better-armed, more aggressive approach to policing.

“America polices by force. We don’t want to do that in this country,” said Paul Deller of the Metropolitan Police Federation, which represents more than 30,000 officers in the British capital.

Deller, a 25-year Met officer, accused the government of not being serious about following Bratton’s recipe for reducing crime.

“When Mr. Bratton was in New York and Los Angeles, the first thing he did was to increase the number of police on the street, whereas we’ve got a government that wants to do exactly the opposite,” he said, warning that planned budget cuts would mean 2,000 officers lose their jobs in London and thousands more nationwide.

Ian Hanson, chairman of the federation’s Manchester branch, said local officers knew better how to police their own communities than “someone who lives 5,000 miles away.”

Results of an opinion poll published Sunday suggested stronger public support for the police than for Cameron’s approach to the crisis.

The poll, commissioned jointly by British newspapers Sunday Mirror and the Independent on Sunday, found that 61 percent thought Cameron and his Cabinet colleagues were too slow to end their foreign summer holidays following last weekend’s outbreak of violence. Cameron returned to London from his break in Italy’s Tuscany region Tuesday, after almost all of the London rioting had passed.

And strong majorities backed greater support and resources for the police, calling for planned budget cuts to be put on hold. About 65 percent said British troops should be used to reinforce police in event of future riots, while even heavier majorities said police should be permitted to use water cannon and plastic bullets against rioters and impose curfews on unruly communities. All of those measures have been used to control street violence in the British territory of Northern Ireland but never in Britain itself.

The survey of 2,008 people, conducted Tuesday and Wednesday, had an error margin of 3 percentage points.

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Allstate is reporting a $620 million second-quarter loss, as the property and casualty insurer was hit by a previously disclosed $2.3 billion in catastrophe losses.

Allstate Corp. said Monday that it recorded losses from 33 catastrophic events during the April through June quarter, including five tornadoes, three wildfires and 25 wind and hail storms.

The $620 million loss amounted to $1.19 per share. That compared with a profit of $145 million, or 27 cents per share, in the same quarter a year ago.

Allstate’s adjusted loss for the latest quarter was $1.23 per share. That was a narrower loss than Wall Street had predicted. Analysts surveyed by FactSet had forecast a loss of $1.46 per share, on average.

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