European leaders meet over finance crisis as stocks surge
Leaders of Britain, France and the European Union gathered Monday for a mini-summit on the world financial crisis as stock markets across Europe and Asia enjoyed one of their best days in months.
By Agencies |
LONDON: The leaders of Britain, France and the European Union gathered Monday for a mini-summit on the world financial crisis as stock markets across Europe and Asia enjoyed one of their best days in months.
The summit in London, notable by the absence of German Chancellor Angela Merkel, was held against a backdrop of more big European job losses with Swedish steel group SSAB cutting 1,300 posts due to a sharp decline in demand.
Evidence of the impact of the downturn on the auto industry was brought into focus again with the German boss of luxury carmaker BMW insisting the company was not in a crisis even though sales collapsed last month.
In the US, expectations mounted that lawmakers may throw crisis-hit American carmakers a financial lifeline to avert an industry collapse.
The surge on the stock markets began in Asia with Tokyo closing up 5.20 per cent, Hong Kong rocketing 8.7 per cent, Seoul rallying 7.5 per cent and Sydney climbing 4.1 per cent.
In early European trading, London was up 5.60 per cent, slightly off initial gains of more than six per cent. Frankfurt gained 6.03 per cent, Paris rallied 6.03 per cent, Madrid was up 5.25 per cent and Zurich climbed 4.45 per cent.
Jan Lambregts, head of Asia research at Rabobank International, said markets had been buoyed by the prospect of another cut in US interest rates after figures showed the US economy lost more than half a million jobs in November.
"Job losses of this magnitude dismiss the notion this recession's just another blip that will blow over soon," said Lambregts.
"They should also prove constructive ground for further policy action, both on the monetary and fiscal front," he said, predicting another cut in US interest rates next week.
Investors were also waiting anxiously to see whether US lawmakers will agree to a bailout of the Big Three carmakers - General Motors, Ford and Chrysler.
Democrats said Sunday that a deal was imminent after a weekend of negotiations with the White House on a short-term loan package of about 15 billion dollars but Republicans warned of a tough debate ahead.
A business-savvy "car czar" could be named to oversee taxpayer-funded loans to General Motors, Ford and Chrysler, which employ millions of US workers.
While the US auto industry has been pleading for help, the head of BMW's operations was insisting that a 25 per cent drop in sales in November was no cause for panic.
"BMW is not in crisis," Philipp von Sahr told the daily Tagesspiegel on Monday, though he added that "at the global level, we are not going to reach last year's figures" in 2008.
Fellow German automaker Audi announced its sales rose 0.4 per cent last month, although Daimler reported 11-month sales of 1.03 million cars, down 4.0 per cent.
While countries such as Britain have cut taxes to battle recession, Merkel has refused to follow suit.
The German government however has denied reports she was not invited to the summit in London with British Prime Minister Gordon Brown, French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso after reports that her counterparts were distancing themselves from her.
"Because it is a bilateral meeting, we never expected that the chancellor would take part," said spokesman Thomas Steg.
Their hour-long talks, due to start at 1500 GMT, will focus on measures to revive the economy, a French presidential source said.
"It's a chance to evaluate the situation to see where we are in Europe," the source said.
The aim is to "give coherence" to different European rescue plans "so that a message of confidence can be put forward by the European Council on the 11 and 12" December, he added.
The leaders' meeting will be followed by hour-long talks with some 50 economists and business leaders including Lakshmi Mittal, boss of steelmaker ArcelorMittal, Bank of England Governor Mervyn King and the CEO of French oil giant Total, Christophe de Margerie.
The summit in London, notable by the absence of German Chancellor Angela Merkel, was held against a backdrop of more big European job losses with Swedish steel group SSAB cutting 1,300 posts due to a sharp decline in demand.
Evidence of the impact of the downturn on the auto industry was brought into focus again with the German boss of luxury carmaker BMW insisting the company was not in a crisis even though sales collapsed last month.
In the US, expectations mounted that lawmakers may throw crisis-hit American carmakers a financial lifeline to avert an industry collapse.
The surge on the stock markets began in Asia with Tokyo closing up 5.20 per cent, Hong Kong rocketing 8.7 per cent, Seoul rallying 7.5 per cent and Sydney climbing 4.1 per cent.
In early European trading, London was up 5.60 per cent, slightly off initial gains of more than six per cent. Frankfurt gained 6.03 per cent, Paris rallied 6.03 per cent, Madrid was up 5.25 per cent and Zurich climbed 4.45 per cent.
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Jan Lambregts, head of Asia research at Rabobank International, said markets had been buoyed by the prospect of another cut in US interest rates after figures showed the US economy lost more than half a million jobs in November.
"Job losses of this magnitude dismiss the notion this recession's just another blip that will blow over soon," said Lambregts.
"They should also prove constructive ground for further policy action, both on the monetary and fiscal front," he said, predicting another cut in US interest rates next week.
Investors were also waiting anxiously to see whether US lawmakers will agree to a bailout of the Big Three carmakers - General Motors, Ford and Chrysler.
ADVERTISEMENT
Democrats said Sunday that a deal was imminent after a weekend of negotiations with the White House on a short-term loan package of about 15 billion dollars but Republicans warned of a tough debate ahead.
A business-savvy "car czar" could be named to oversee taxpayer-funded loans to General Motors, Ford and Chrysler, which employ millions of US workers.
ADVERTISEMENT
While the US auto industry has been pleading for help, the head of BMW's operations was insisting that a 25 per cent drop in sales in November was no cause for panic.
"BMW is not in crisis," Philipp von Sahr told the daily Tagesspiegel on Monday, though he added that "at the global level, we are not going to reach last year's figures" in 2008.
Fellow German automaker Audi announced its sales rose 0.4 per cent last month, although Daimler reported 11-month sales of 1.03 million cars, down 4.0 per cent.
While countries such as Britain have cut taxes to battle recession, Merkel has refused to follow suit.
The German government however has denied reports she was not invited to the summit in London with British Prime Minister Gordon Brown, French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso after reports that her counterparts were distancing themselves from her.
"Because it is a bilateral meeting, we never expected that the chancellor would take part," said spokesman Thomas Steg.
Their hour-long talks, due to start at 1500 GMT, will focus on measures to revive the economy, a French presidential source said.
"It's a chance to evaluate the situation to see where we are in Europe," the source said.
The aim is to "give coherence" to different European rescue plans "so that a message of confidence can be put forward by the European Council on the 11 and 12" December, he added.
The leaders' meeting will be followed by hour-long talks with some 50 economists and business leaders including Lakshmi Mittal, boss of steelmaker ArcelorMittal, Bank of England Governor Mervyn King and the CEO of French oil giant Total, Christophe de Margerie.
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