There have been so many 'Newsworthy' events this week that I have been spoiled for choice in terms of what to comment upon.

So I thought I'd steer clear of Greece this week (as it continues to worsen and alarmingly, is creating severe downward pressure on the Euro; pressure that no analyst a month ago would ever have predicted!).

Firstly this week, there was something stirring in terms of Asean Stockmarkets allowing cross-border trading - something I have always been an advocate of.

Initially, in the absence of a global clearing house that will guarantee the completion of trades, brokers will hesitate to trade with their counterparts overseas since they have no protection against defaults.

They will not start to trade with their counterparts overseas without this safety net since they do not really know their counterparts overseas and they don't want to risk holding the bag if their foreign counterpart fails to pay for transactions.

But once we see a large entity step up to the plate and become that global clearing house, Cross-Border-Stock trading on an Asean level and then potentially AsiaPac' wide will be a tremendous step-forward in my humble opinion.

It was reported Friday that Cross-border trading between stock exchanges in south-east Asia is on course to start next year, initiating a common trading space covering stocks with a market capitalisation of more than $1,000bn, according to the head of Bursa Malaysia.

Initial trades on a pilot basis would link the Kuala Lumpur and Bangkok exchanges, with the Singapore Exchange and the Philippine Stock Exchange joining the system by the middle of 2011, Yusli Mohamed Yusoff told the Financial Times.

Vietnam's Ho Chi Minh Stock Exchange and the Indonesia Stock Exchange are also backing the project, with the Jakarta bourse expected to join within two or three years, Mr Yusli said in an interview.

NYSE Technologies, the technology arm of NYSE Euronext, the transatlantic exchange that owns the New York Stock Exchange, is developing software designed to link the exchanges to brokers in all the countries involved.

Mr Yusli said it was unlikely that the system would evolve into a single exchange for the 10 countries of the Association of South East Asian Nations, which has a population of nearly 600m and an economy bigger than India's. But he said the project was on course to create a common trading space between the region's leading exchanges that would allow investors to trade across borders easily, potentially creating a new Asean asset class. "The idea is to create a system that will link the trading engines of the different markets to enable electronic trades to go through seamlessly from one country to another."

"Whether we will see a common exchange in the near future in my view is unlikely, but [we] can certainly build connectivity and we can certainly look at harmonising all the rules and standards so that we have a market that works more seamlessly across borders," he added.

Mr Yusli said the system would cover all the stocks quoted on the exchanges involved, rather than a small number listed on a separate common board, as had been suggested earlier in the development of the project. Clearing would be carried out by the home exchanges of the stocks traded, with settlement in the local currency, he said. About 2,500 companies are listed on the five biggest exchanges, which excludes Vietnam.

Mr Yusli said there was also growing interest in the Asean project among stock exchange chiefs from elsewhere in Asia, who met last week in Bali at the annual meeting of the Asian and Oceanian Stock Exchanges Federation. The Tokyo and Seoul stock exchanges said they were interested in the Asean project, but had no current plans to link to the new system.

Now you all know I have a tendency to focus on the US's problems/issues; well this week I'll mention a few of the UK's issues (no-one can called me anti-American then - just anti UK and American!).

The UK economy grew half as much as economists forecast in the first quarter as winter weather hampered expansion, underscoring the recovery's fragility two weeks before the election.

Gross domestic product rose 0.2% from the final three months of 2009, when a 0.4% expansion ended the recession, the Office for National Statistics said Friday in London. The median forecast in a Bloomberg News survey of 32 economists was for a 0.4% increase.

Prime Minister Gordon Brown said in a televised debate last night that the economy continues to need stimulus and that Conservative leader David Cameron's plans to cut spending this year are a "risk" to growth. The winner of the May 6 vote will need to tackle a budget shortfall that swelled to the worst since World War II in the fiscal year through March.

I'm not sure a weak number plays into any party's hands very clearly. For the incumbents it may support their platform for postponing spending cuts, while the Conservatives say it's a symptom of what the government's policies have caused.

From a year earlier, the economy contracted 0.3% in the first quarter. Economists forecast a 0.1% decline, according to the median of 28 projections in a survey.

Friday's report is the first of three estimates for the quarter. It uses data for the first two months of the period from about 40% of companies assessed, or about 40,000 businesses, and three-month figures for a further 20,000 firms. Chancellor of the Exchequer Alistair Darling said on April 13 the statistics office has "three cuts" at the data and people should look at longer-term economic trends.

The UK is the first of the Group of Seven nations to report first-quarter GDP. The economy faced headwinds from coldest winter since 1979 that snarled traffic, slowed construction and kept shoppers home, and a government increase in sales tax.

The cold snap restrained manufacturing and retail sales, the statistics office said. Industrial production, which accounts for 17% of the economy, rose 0.7% on the quarter, while services, which make up 76% of GDP, increased 0.2%. Construction slumped 0.7%.

Brown-the-Clown, Cameron and Liberal Democrat leader Nick Clegg clashed in their second live televised debate Thursday evening, where they grappled with questions on foreign affairs and plans to support growth as the economy recovers from the worst recession on record.

"We've got to keep the government support in the economy for the time being," Brown-the-Clown said during the debate.

Some opinion polls suggest the May 6 election may result in a hung parliament, where voters fail to deliver a parliamentary majority. An Ipsos Mori poll in Thursday's Evening Standard newspaper put support for both the Conservatives and Liberal Democrats at 32%, with Labour at 28%. On that result, Labour may still have the most seats.

Cameron has said the deficit will be his top priority if elected. The shortfall was 152.8 billion pounds ($234 billion) in the fiscal year through March, the highest in the Group of Seven nations. Based on a European Union measure, Britain's deficit amounted to 11.5% of GDP in 2009, almost three times the bloc's upper limit.

Vince Cable, who speaks for the Liberal Democrats on financial matters, said an increase in unemployment to a 16-year high in the three months through February "exposes the folly of Tory plans to pull the rug from under the recovery."

The International Monetary Fund this week cut its 2011 UK GDP forecast to 2.5% from 2.7% and held its prediction for expansion this year at 1.3% as domestic demand "remains subdued."

Also in the UK, Sir Richard Branson's Virgin Atlantic airline on Thursday night moved to defend its reputation after Britain's competition watchdog accused it for the second time of conspiring with a rival to fix prices charged to passengers.

The Office of Fair Trading claimed that employees of Cathay Pacific Airways and Virgin exchanged commercially sensitive information between 2002 and 2006 with the aim of co-ordinating ticket prices on the busy London-Hong Kong route.

The OFT's case comes after Virgin admitted involvement in a separate cartel that led the watchdog to impose its biggest ever corporate fine on British Airways and to prosecute four of BA's past and present executives in a criminal trial due to start next week.

The watchdog said it should not be assumed the companies had broken the law, adding that it launched its probe after Cathay came forward with information in return for immunity from any penalty imposed in the case.

Virgin said it would "robustly defend itself" against the allegations, adding it did not believe it had "acted in any way contrary to the interests of consumers". Cathay said it had a policy of complying with competition law and would co-operate with the authorities.

The OFT's action is uncomfortable for Sir Richard, who - while not involved in this case - has built his global brand on claims to be the consumer's friend and the monopolist's foe.

He has spent much of the past year berating the allegedly anti-competitive efforts of rival carrier BA for trying to create a "monster monopoly" at Heathrow by deepening its alliance with American Airlines.

The OFT conducted a criminal investigation into the roles of individuals in the Virgin-Cathay case but decided not to bring a prosecution because of lack of evidence, people familiar with the matter said.

The Virgin-Cathay affair is the latest in a web of probes into alleged price-fixing in the airline industry that have highlighted the increasing internationalisation of anti-cartel enforcement efforts.

The investigations have left airlines facing big fines, reputational damage and private lawsuits from passengers.

The first high-profile punishments were the fines of more than $800m levied on BA and Korean Air in 2007 by US and UK competition authorities over fuel surcharges.

The cases had come to light the previous year when investigators raided the offices of a number of big carriers, including Japan Airlines, Cathay, Air France-KLM and some leading US airlines.

The watchdog declined to comment further on the Virgin-Cathay case.

It is hard for me to comment on the UK's issues without thinking they are minor compared to those in the US though; seriously.

However, there was one newsworthy pick Friday that tied both the UK and the US to some financial jiggery-pokery ... again!

Goldman Sachs was both an underwriter and an investor in Lloyds Banking Group's vast refinancing deal late last year, the FT has learned, highlighting the potential conflicts of interest at the heart of the investment bank's business model.

According to four people involved in the capital raising, Goldman - a dealer manager on the debt portion of the £23.5bn transaction - demanded last-minute changes to the structure of a deal it was underwriting. This had the effect of benefiting its position as a bond investor.

Goldman bankers stress that its Chinese walls bar underwriters from knowing anything about the investment activity of its proprietary traders and say the exposure of the affair reveals rivals' opportunism in besmirching its reputation.

The incident, in the final hours of UK bank Lloyds' capital raising, the biggest in corporate history, last November, will nonetheless add fuel to critics' suspicions that Goldman puts its own interests ahead clients'.

The revelation comes as Goldman fights fraud charges brought by the US Securities and Exchange Commission.

According to those involved in the Lloyds refinancing, Goldman on the eve of the deal's announcement that the extra interest payable on the bonds which were to be exchanged for new ones should be increased to as much as 2.5%, when a consensus of other banks was 2%. The rise followed a surprise cut in the credit rating assigned to the securities, making them a riskier investment.

Goldman was also involved in discussions about the ranking in a so-called waterfall determining which bonds should be prioritised for the exchange offer. "They were dictatorial about it," said one person involved in the deal. Goldman bankers say its role as dealer manager was subservient to senior advisers, and did not allow it to dictate the terms of the waterfall.

It emerged that Goldman was a large investor in the 6.9% bond that was top-ranked for the waterfall, said four people close to the deal. One person said Goldman had bought as much as half the $1bn issue. However, Goldman bankers said last night its proprietary position was "not substantial".

Goldman's role in the transaction - both the alleged conflict of interest and the allegation that it helped make the terms more expensive - will be politically sensitive, given that the UK government owns 41% of Lloyds.

Lloyds would not comment on the advice it received but said: "The final decision on the terms and pricing of this offer was made by the group following the recommendation of the syndicate, and not any one bank." Goldman did not comment.

More 'no comments' than a Fifth Amendment convention there!

Still in the US, the top two US ratings agencies - Moody's and Standard & Poor's - were unduly influenced by investment bankers who paid their fees and wilfully ignored signs of fraud in the lending industry in the lead-up to the financial crisis, a congressional investigation has found.

E-mails and other documents released on Thursday by the Senate subcommittee on investigations, ahead of a full report due on Friday, showed that positive ratings for complex mortgage-backed securities and collateralised debt obligations were sometimes used as a negotiating tactic between the firms and bankers.

"The credit rating agencies allowed Wall Street to impact their analysis, their independence and their reputation for reliability," said Carl Levin, Democratic senator who heads the Senate panel.

In 2007, a Moody's analyst told a Merrill Lynch investment banker that a rating could not be finalised until the "fee issue" was resolved.

The banker responded: "We are OK with the revised fee schedule ...'We are agreeing to this under the assumption that ...'you will work with us further'...'to try to get some middle ground with respect to the ratings."

The same year, Moody's chief credit officer told Ray McDaniel, chief executive, in an e-mail that pressure from bankers, issuers and investors, and "internal emphasis on market share", constituted a "risk to ratings quality".

Mr Levin said the agencies' outdated models were incapable of gauging high-risk mortgages. Even after Moody's and S&P adjusted those models, documents show they declined to re-evaluate the riskiest products, largely at the behest of the banks.

All told, so much news it is impossible to focus on just one particular theme this week and so on to the numbers on the boards for the week that was:

European stocks climbed, paring a weekly decline, after Adidas AG raised its earnings forecast, Volvo AB posted an unexpected profit and business confidence in Germany improved.

Adidas, the world's second-biggest sporting-goods maker, advanced 3.9% and Volvo, second-largest truckmaker, soared the most in 14 months. Akzo Nobel NV rallied 5% after posting increased earnings and receiving expressions of interest for its food additives unit. Taylor Wimpey Plc, the homebuilder that gets 32 of revenue from North America, soared the most in almost a year as US home sales jumped.

The Stoxx Europe 600 Index rose 0.8% to 267.42. The benchmark gauge for European shares has declined 0.2% this week, its second straight weekly loss.

The Stoxx 600 has climbed 5.3% in 2010 as the European Union agreed a 45 billion-Euro ($60 billion) aid package to help Greece tackle the region's biggest budget deficit. Greece Friday called for activation of the financial lifeline in an unprecedented test of the Euro's stability and European political cohesion.

National benchmark indexes advanced all 18 western European markets, except Greece and Iceland. The UK's FTSE 100 climbed 1%, France's CAC 40 rose 0.7% and Germany's DAX rallied 1.5%. Greece's ASE Index slipped 0.2%.

GERMANY

German stocks advanced, rebounding from two days of losses, as Adidas AG raised its full-year earnings forecast and a report showed business confidence in Germany at a two-year high.

Adidas, the world's second-largest sporting-goods maker, surged 3.9% as it said profit rose for the first time in five quarters. MAN SE, Europe's third-biggest truckmaker, rallied 4.6% after Swedish rival Volvo AB reported first- quarter results that surpassed analysts' estimates.

The benchmark DAX Index climbed 1.5% to 6,259.53, bringing the weekly gain to 1.3%. The measure has risen 5.1% this year on signs the global economy is rebounding from the worst recession since World War II. The broader HDAX Index also advanced 1.5% Friday.

German business confidence rose more than economists forecast in April as the global economic recovery boosted export demand and warmer weather allowed workers back onto construction sites. The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, jumped to 101.6 from 98.2 in March. That's the highest reading since May 2008. Economists expected a gain to 98.7, according to the median of 37 forecasts in a Bloomberg News survey.

Adidas soared 3.9% to 44.495 Euros. The company now forecasts full-year earnings per share of 2.05 Euros to 2.30 Euros, compared with a previous projection for profit on that basis of 1.90 Euros to 2.15 Euros. First-quarter net income was 168 million Euros ($223 million).

MAN rallied 4.6% to 70.14 Euros. Volvo, the world's second-largest truckmaker, reported first-quarter net income of 1.68 billion kronor ($230 million). Analysts surveyed by Bloomberg had forecast a loss of 8.25 million kronor.

MAN had a first-quarter operating profit of about 120 million Euros and sales reached about 3 billion Euros, Platow Brief reported, without saying where it got the information. The company will say growth was driven by its Brazilian unit when it releases figures on April 29, the newsletter reported.

Bayerische Motoren Werke AG, the world's largest luxury-car maker, climbed 2.8% to 37.28 Euros. The company raised its 2010 China sales target to 120,000 units from an earlier 100,000 units, Chief Executive Officer Norbert Reithofer told reporters at the Beijing Auto Show.

Daimler AG increased 2.7% to 38.87 Euros, rebounding from Thursday's 1.6% fall. Sales in China may exceed 100,000 units this year, CEO Dieter Zetsche said at the Beijing Auto Show. It's also "not impossible" that Mercedes could surpass BMW's sales in China this year, he said.

BASF SE rose 3.4% to 47.75 Euros, the largest gain since November. The world's biggest chemicals company is raising its prices for all paper and board dispersions in Europe, the Middle East and Africa by as much as 20%, with immediate effect, the company said in a statement on its Web site, citing a "dramatic increase in raw material costs."

Salzgitter AG, Germany's second-biggest steelmaker, may have to lower its profit target as the prices of iron ore, coal and scrap metal rise, Financial Times Deutschland reported, citing CEO Wolfgang Leese. The shares fell 2.1% to 63.94 Euros, extending Thursday's 2.2% slide.

Axel Springer AG, Europe's biggest newspaper publisher, tumbled 2% to 89.90 Euros after the company said it plans to place as many as 2.93 million shares with institutional investors.

German investor sentiment rose more than expected in April as a recent increase in exports and stable incoming orders boosted financial market experts' confidence.

The Mannheim-based Centre for European Economic Research or ZEW, said on Tuesday that its economic sentiment indicator for Germany rose to 53 in April from 44.5 in March. That was the first rise in seven months. Economists had forecast a reading of 45.1 for April.

Further, the think tank said investors have again become more positive on the current economic situation. The corresponding indicator rose 12.7 points to minus 39.2. It was expected to rise to minus 48 from minus 51.9 in March. The current assessment component increased for the eleventh consecutive month to its highest level since October 2008.

"Currently impulses from exports invigorate German business activity," ZEW President Wolfgang Franz said. "Indeed these impulses are necessary to stabilise the upward trend of the economy."

The biggest-Eurozone economy stagnated in the fourth quarter of 2009 after recording 0.7% growth in the previous three months. Economists fear that Germany's recovery could falter later in the year if the global economic revival loses momentum as the country remains heavily reliant on the external sector.

Moreover, ZEW said the economic expectations for the Eurozone increased 8.1 points to stand at 46. The indicator for the current economic situation in the region improved by 8.9 points to minus 52.4.

Germany's Federal Ministry of Economics and Technology on Wednesday retained its growth outlook for this year at 1.4%. Further, an acceleration in growth to 1.6% is expected for 2011.

Economics Minister Rainer Bruederle said, "Germany's economy is growing again, and we observe a small job miracle." The unemployment is forecast to remain broadly unchanged at around 3.4 million. This estimate is much better than the government's forecast four months ago that unemployment would increase to 3.7 million this year.

Bruederle told reporters that the government will begin to consolidate its budget in 2011. The government will focus on the expenditure side to cut deficit.

The federal government estimate stood above the International Monetary Fund's growth projection for Germany. The lender had lowered the forecast for this year to 1.2% from 1.5%, citing weakness in banking sector and possibility of weaker-than-expected global trade. At the same time, the Paris-based Organization for Economic Cooperation and Development sees 1.3% growth for 2010 and 1.9% next year.

Wednesday the ministry said exports will grow 6.8% this year after plunging 14.2% in 2009. At the same time, imports are likely to rise 4.9% in 2010, following a drop of 8.9% last year. Further, private consumption expenditure is forecast to fall 0.6% this year and to rise 0.6% in 2011. The increase in domestic demand for 2010 is seen at 0.4% and that for next year at 0.8%.

Last week, Germany's leading economic research institutes raised their growth forecast for the economy to 1.5% this year from 1.2%. In the coming year, real GDP will increase by 1.4%, they said.

German GDP was flat in the fourth quarter of 2009, following two quarters of expansion. National output grew 0.7% in the September quarter. The Federal Statistical Office is slated to issue first quarter GDP data on May 12.

Reflecting the ongoing rebound from the extreme lows of 2009, the German manufacturing sector expanded at a record pace in April, extending a strong boost to private sector growth.

The flash manufacturing PMI rose to 61.3 in April from 60.2 in March, Markit Economics said Thursday, which is the fastest pace of expansion recorded since the series began in April 2006. Economists had forecast a reading of 60.1.

A PMI reading above 50 indicates expansion, while a level below 50 signals contraction.

Manufacturing growth was driven by strong increase in new export orders amid rising demand from emerging markets. New work from abroad has increased continuously since October 2009, and the latest rise was the second-strongest in the survey history.

The flash manufacturing output index also climbed to a record high of 66.8 from 64.2 in the previous month.

Overall private sector grew at the fastest pace in 32 months in April. The flash composite output index rose to 59.1 from 58.7 in March. The reading stood above the neutral 50.0 mark for the ninth month in a row. Further, the latest reading was much higher than its long-run average of 52.8.

The survey signaled the spread of the growth momentum to the services sector. The flash services activity index also showed improvement as it rose to a 30-month high of 55 in April from 54.9 in March. Economists were looking for a figure of 55.2.

The survey pointed to a further increase in new business received by private sector companies, supported by improved business sentiment, strong global demand and client restocking. The rate of expansion remained comfortable though it eased from the thirty-one month high registered in March.

Backlogs of work grew for the fifth straight month in April led by manufacturing. Services sector had the first increase in backlogs since November 2007 due to modest accumulation of unfinished work.

Job creation in the private sector remained weak compared to the pre-recession trend, with firms still being cautious about hiring extra staff. Overall employment growth rose to a twenty-one month high in April, while manufacturing recorded staff hiring for the first time since September 2008.

Input cost inflation advanced for the fourth straight month in April and was the highest since September 2008. Output charges rose for the first time in a year-and-a-half. While service providers blamed rising fuel prices for the latest increase in cost burdens, manufacturers cited supply chain pressures and steel surcharges.

The latest survey revealed the fastest lengthening of vendor lead-times in the manufacturing sector since the series began in April 1996. The main reason cited by manufacturers was the deterioration to pressure from higher demand.

FRANCE

France's CAC 40 Index added 26.65, or 0.7%, to 3,951.30. The SBF 120 Index gained 0.7% to 2,913.85.

Cie. de Saint-Gobain rose 2.46 Euros, or 6.7%, to 39.34 Euros, the biggest jump in two months. Europe's biggest supplier of building materials reported first- quarter sales of 8.74 billion Euros ($11.6 billion), beating the estimates of brokerages including Exane BNP Paribas. Wendel (MF FP), owner of 18% of Saint-Gobain, advanced 2.33 Euros, or 5%, to 48.9.

Damartex jumped 90 cents, or 4.6%, to 20.40 Euros, taking this week's advance to 2%. The maker of thermal clothing said third-quarter revenue rose to 133.6 million Euros from 128.2 million Euros a year earlier.

L'Oreal rose 1.84 Euros, or 2.3%, to 81.72 Euros. The world's largest cosmetics maker reported first- quarter revenue of 4.72 billion Euros, up from 4.37 billion Euros a year earlier. Sales growth accelerated to the fastest in almost three years.

Renault advanced 2.36 Euros, or 6.9%, to 36.72 Euros, the steepest gain since September. Volvo AB, the world's second-largest truckmaker, reported its first profit in more than a year, beating analysts' estimates and sending the stock 10% higher in Stockholm. Renault owns 20% of Volvo.

SES, the world's largest publicly traded satellite operator, dropped 78 cents, or 4.3%, to 17.36 Euros, the worst performance since October. The company posted first-quarter earnings that disappointed analysts and cut its sales forecast.

STMicroelectronics lost 39 cents, or 5.1%, to 7.29 Euros, the steepest decline since October. Europe's largest chipmaker fell after its ST-Ericsson joint venture that produces chips for mobile phones reported a wider first-quarter loss and forecast "approximately flat" sales.

Valeo rose 74 cents, or 2.8%, to 27.10 Euros, a third gain in four days. France's second-largest car- parts maker had first-quarter revenue of 2.31 billion Euros, up from 1.62 billion Euros a year earlier.

French Business confidence indicator stood at 96 in April, up from 92 in the previous month, the statistical office INSEE said on Thursday. Economists expected a reading of 95.

The business climate index for manufacturing increased to 97 in April from 94 in March. Stocks of finished goods decreased further to minus 10 from minus 7, while total order increased to minus 36 from minus 43. The general production outlook, which shows business leaders' opinion on French industry as a whole, improved in April.

The economic situation increased in the retail trade and in the trade and repair of motor vehicles and goes over its long-term average, the statistical office said. The economic sentiment in the service sector rose to 98 in April from 92 in the previous month.

The French private sector activity grew at a faster pace in April signaling strong growth through the second quarter.

The flash France composite output index rose to a four-month high of 58.4 from 55.8 in the previous month, survey data released by market research group Markit Economics showed Thursday. A reading above 50 indicates expansion, while a level below 50 signals contraction.

The latest reading is the highest this year so far. The stronger increase in output in April was primarily driven by a faster expansion of incoming new business placed with French private sector firms, highest since last December. "After signs of a slowdown in Q1, April's strong PMI figures provide reassurance that the recovery in France still has legs," Markit economists said.

Manufacturing continued to drive growth in the private sector economy. The flash Markit/CDAF manufacturing PMI rose to a 45-month high of 56.7 in April from 56.5 in March, in line with the economists' forecast. New orders to manufacturers rose at the fastest pace since September 2000 led by strong domestic demand.

However, the flash France manufacturing output index fell to a two-month low of 59.8 in April from 60.1 in March.

The services activity index climbed to 57.8 from 53.8 in March, which is also the highest reading in four months. The reading came in much higher than economists' consensus of 54.2. Service providers reported the sharpest growth of new business in four months.

Employment in private sector fell for a 23rd month in April, though the rate of decline was the weakest since June 2008. Company restructuring plans largely resulted in job cuts.

Input cost inflation accelerated rose to a 19-month high in April with manufacturers logging a sharper rate than service providers. On the other hand, output prices declined for the 18th successive month, although the latest drop was the smallest in the sequence. Strong competitive pressures largely prevented firms from passing on cost increases to customers, Markit said.

BELGIUM

In Brussels the Bel 20 closed the week on 2,644.14, up 0.50% for the day Friday.

Belgium's consumer confidence indicator improved to the highest level in two years, the National Bank of Belgium said on Wednesday.

The consumer confidence indicator stood at minus 8 in April, up from minus 13 in the previous month. A year ago, the index was minus 22.

The measure for households' saving capacity over the next twelve months decreased to 1 in April from 6 in March, while the financial situation indicator stood stable at 2.

Further, the gauge for economic situation in Belgium for the next twelve months increased to 8 in April from 2 in the preceding month. At the same time, the measure for unemployment decreased to 43 from 60 in March.

King Albert II sought to prevent Belgium's government from collapsing, urging Prime Minister Yves Leterme to make a new effort to stay in power at a time of economic and social crisis.

The monarch, 75, refused to immediately accept Leterme's offer to resign Friday after the Flemish liberal party withdrew its support for the federal government over a failure to split a disputed voting district.

Instead, he and Leterme issued a joint statement saying that "in the current circumstances, a political crisis would be inopportune and would do serious damage to the economic and social well-being of the citizenry and to Belgium's role at the European level."

Belgium will take over the European Union's rotating presidency from Spain for six months starting July 1 and is one of 15 Euro-area nations that have agreed to offer debt-stricken Greece a combined 30 billion Euros ($40 billion) of bilateral loans. King Albert kept Leterme, 49, in office once before in July 2008, seeking more time to heal a rift between the nation's Dutch- and French-speaking communities.

The yield premium investors demand to hold Belgian 10-year bonds rather than benchmark German bunds of similar maturity widened after the liberal Open VLD party withdrew its support for the federal government. The spread was at 51 basis points as of 3:38 p.m. in Brussels, compared with 45 basis points at 11:50 a.m. A basis point is 0.01 percentage point.

Leterme finally quit in December 2008 over his cabinet's role in the breakup of Fortis, which was knocked from its perch as Belgium's biggest financial-services firm by the banking crisis. He made his comeback as prime minister in November after his successor Herman Van Rompuy was named the European Union's first president.

Leterme's remaining four-party coalition still holds a majority of 76 seats compared with 74 for the opposition in parliament, even as his government now has the backing of only Leterme's Christian-Democratic party among Dutch speakers.

"By exiting the government, we want to maximally raise the pressure on everyone to find a solution," Open VLD party leader Alexander De Croo told reporters at a briefing in parliament in Brussels. He called upon all Flemish parties to use their majority in parliament to set a "quick" vote on the split of the bilingual Brussels-Halle-Vilvoorde voting district, signaling that parliament won't be dissolved soon.

French- and Dutch-speaking politicians under the leadership of Leterme have failed to agree on splitting the Brussels-Halle- Vilvoorde voting district, which encompasses both the bilingual capital and 35 surrounding Flemish municipalities. The constituency allows French-speaking voters living in Flanders to vote for French-speaking candidates from Brussels.

The impasse has prompted Flemish parties to use their parliamentary majority in a bid to obtain the split, a move that so far has been blocked by French-speaking parties invoking a conflict of interest.

THE NETHERLANDS

The Aex in Amsterdam finished the trading day and week Friday on 353.38, a rise of 0.59%.

Thursday, Netherlands Central Bureau of Statistics announced that the jobless rate stood at 6.1% in the January to March period, up from 4.4% recorded a year ago. Economists expected the jobless rate to be 5.8%.

The number of unemployed persons totaled 472,000 in the January to March period, up from 441,000 in the December to February period.

The seasonally adjusted unemployment rate stood at 447,000 in the January March period, which was 6,000 more than the previous three months period, the statistical office said.

Wednesday, Netherlands Central Bureau of Statistics said in a report that the consumer confidence indicator stood at a seasonally adjusted minus 15 in April, down from minus 12 in the previous month. Economists expected a reading of minus 12. A year ago, the confidence indicator was minus 28.

Economic climate indicator decreased to minus 21 in April from minus 20 in the preceding month, while the economic situation in the next twelve months deteriorated to minus 6 from 7.

Meanwhile, the index measuring for willingness to buy stood at minus 11 in April, down from minus 7 in the previous month.

Tuesday, Netherlands Central Bureau of Statistics announced that the consumer spending dropped 1.1% on an annual basis in February, compared to the 0.7% fall in the previous month.

Consumer spending on services decreased 0.6% annually in February, while spending on goods fell 1.7%.

The households spending on footwear, home furnishings dropped in March, but spending on new cars increased. Spending on food, beverages and tobacco rose by more than 1%, the statistical office said.

SWITZERLAND

Zurich's SMI rounded out the week at 6,767.97, up 0.71%.

The latest financial market test conducted by the Centre for European Economic Research, or ZEW, in cooperation with Credit Suisse showed on Thursday that economic sentiment for Switzerland dropped 0.4 points to 53.4 in April.

The assessment of the current economic situation improved considerably and showed positive reading for the first time in 18 months. The corresponding index rose 15.9 points to reach 13.3.

Although the share of analysts expecting a rise in inflation increased by 20.5 percentage points, the overriding majority of 62.3% of analysts anticipated an unchanged inflation rate in the coming six months. The survey showed that the balance for short-term interest rate expectations climbed 15.7 points to the 31.1 mark.

Credit Suisse Group, Switzerland's second-biggest bank, fell the most in more than two months in Zurich after missing a gain in debt trading that helped lift earnings at rivals.

Debt trading revenue dropped 34% to 2.66 billion Swiss francs ($2.47 billion) from a record 4.02 billion francs a year earlier and missed analysts' estimates for 2.8 billion francs. Net income rose to 2.06 billion francs from 2.01 billion francs, the Zurich-based bank said Friday.

Chief Executive Officer Brady Dougan is hiring sales people for the bank's debt trading unit to gain market share in the business that boosted first-quarter earnings at Goldman Sachs Group Inc., JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley. He said the Swiss bank's results were "lower risk" than those of its US competitors.

Credit Suisse fell 4.7% to 51.60 francs in Zurich. The stock has climbed 0.8% this year, compared with a 0.5% gain in the 52-company Bloomberg Europe Banks and Financial Services Index.

Pretax profit at its investment bank declined 26% to 1.79 billion francs. Credit Suisse said rates business, the single biggest revenue contributor at the investment bank in 2009, saw a "weaker market environment."

"The quality of our earnings at the investment bank is different," Dougan, 50, told analysts on a conference call. "It's a higher quality, lower volatility earnings stream because it's focused on client business."

Chief Financial Officer Renato Fassbind said the bank's result was "completely in line" with its strategy of taking lower risks and focusing on less capital-intensive businesses. Credit Suisse had 229.1 billion francs of risk-weighted assets in the first quarter, less than half the level at Goldman Sachs.

Credit Suisse last year earned about $6 billion less in revenue from fixed-income, currencies and commodities than the average of its top three rivals, according to the analysts.

The fixed-income unit plans to hire about 130 sales people this year to help it boost revenue as competitors return to the market, which is normalizing after the credit crisis, David Mathers, chief operating officer of the investment bank, told investors at a conference on March 23.

Credit Suisse plans a 34% expansion of the sales force of its rates business to counter the expected slowdown, Mathers said. Those 40 new hires will be matched in emerging markets, while it will also add 30 people in foreign exchange and 20 in leveraged finance, he said.

Wednesday, the Swiss National Bank said in a report that the M3, the broadest measure of money supply increased 5.9% year-on-year in March, faster than the 5.7% growth in the previous month. A year ago, the M3 money supply was up 3.8%.

Further, the M2 money supply growth slowed to 10.4% in March from 12.5% in the previous month, while the M1 money supply increased at a slower pace to 9.8% from 11.8%.

AUSTRIA

In Vienna the ATX brought the week to a close on 2,731.03, up 1.11%.

Austria's troubled Oesterreichische Volksbanken AG said Wednesday it experienced a loss of Euro1.1 billion (S1.5 billion) last year due to write-downs and increased risk provisions for loans and advances.

The bank said its annual result for 2009 before taxes amounted to a loss of Euro943.5 million and that risk provisions totaled Euro863 million. It said its total assets on Dec. 31 amounted to Euro48.1 billion -- Euro3 billion less than a year earlier.

In a statement, the bank -- known as VBAG -- said the 2009 fiscal year was characterized by "a number of negative events" and that it was therefore necessary to increase its provisions for credit risks.

"The impact of the financial crisis on the real economy is clearly reflected in risk provision for the lending business," it said.

In 1991, VBAG became one of the first banks to expand into Central and Eastern Europe. Friday, the Vienna-based Volksbank International AG, of which a majority stake is owned by VBAG, has a presence in nine countries in the region -- many of which are now struggling due to the global economic downturn.

The bank also noted that it saw write-downs on real estate last year.

"This negative development was also reflected in the real estate markets in the form of significant reductions in carrying values on the balance sheet," it said.

VBAG CEO Gerald Wenzel said the bank, which last year received a state capital injection worth Euro1 billion, was currently evaluating possible strategic partnerships.

"The process of seeking a partner has been progressing intensively for some weeks and is yielding a number of interested parties," Wenzel said. "We are currently entering into more detailed negotiations with some of these potential partners in order to develop joint future scenarios."

Monday, the Statistics Austria announced that the producer price index or PPI dropped 0.7% on an annual basis in February, compared to the 1.3% fall in the previous month. A year ago, the PPI was up 0.6%.

Intermediate goods prices decreased 1.7% annually in February, while energy prices increased 1.1%. Producer prices for capital goods grew 0.8%.

On a monthly basis, the PPI rose 0.5% in February, after falling 0.2% in January.

Austria's consumer price annual inflation rose to 2% in March from February's rate of 1%, the Statistics Austria said Friday. Hence, the rate touched its highest level since November 2008.

Without the price increase for energy, the inflation would have been 1.2%, the statistical office said. Rents for housing were also contributing to the inflation rate. On a monthly basis, the consumer price index grew 1.1%.

The annual inflation rate in terms of the harmonized index of consumer prices, or HICP, was 1.8% in March, up from a revised 0.9% in February. The HICP climbed 1% month-on-month.

SWEDEN

Stockholm's OMX headed into the weekend on 1,066.82, a huge daily leap of 2.74%.

The Swedish government says it has asked the EU executive to exempt airlines from aviation fees for the period European airspace has been closed due to volcanic ash.

Sweden says it has offered airlines an extended 90-day period to pay Swedish aviation fees in an effort to support the industry in the crisis triggered by the volcano eruption in Iceland.

In a meeting with industry representatives Thursday, the government also discussed the possibility of offering state-guaranteed loans to airlines but did not make any firm commitments.

Industry Ministry Maud Olofsson said she reminded Swedish airlines they have the opportunity to postpone payments of payroll taxes under a scheme launched for all industries during the financial crisis.

Swedish wireless equipment maker LM Ericsson AB on Friday reported a 26% drop in first-quarter net profits, with worse-than-expected sales and large restructuring costs weighing on the results.

Net profit for the three months ended March 31 came to 1.3 billion kronor ($180 million), down from 1.72 billion kronor a year ago. Restructuring costs, mainly related to Ericsson's costs savings program and excluding joint ventures, totaled 2.2 million kronor in the quarter.

The company launched an extensive savings program in the first quarter of 2009 and said in Friday's report that the scheme is still expected to be completed in the second quarter of this year. It is expected to accumulate 15-16 billion kronor in annual savings at a cost of around 15 billion kronor.

Stockholm-headquartered Ericsson said first-quarter revenues amounted to 45.1 billion kronor, down from 49.6 billion in the same three months in 2009.

Ericsson CEO Hans Vestberg said part of this was due to its Networks unit, an area where operators "in a number of developing markets" have been wary with investments.

This was somewhat offset by its Professional Services unit though, he said, where sales had been good.

Ericsson also said it now estimates global mobile data traffic to have surpassed voice traffic, growing some 280% in the past two years.

In its outlook, it said it expects mobile data traffic to double annually over the next five years.

Swiss-Swedish engineering group ABB Ltd. reported a 29-percent decline in first-quarter net profits Thursday as fewer orders came in for power infrastructure projects.

Profits totaled $464 million for the period from January to March, said ABB, which sells power transmission and distribution equipment and automation technology for factories and utilities.

Analysts expected better, and shares plunged 5.85% to 22.37 Swiss francs ($21) in early Zurich trading.

ABB said demand remained low for power products, power systems and process automation. Large orders sank by 55% in local currencies and accounted for only 16% of total orders. In the same quarter a year ago, they amounted to over a quarter of all sales.

Overall orders fell 12% to $8 billion, ABB said. They increased in the Americas, but fell significantly in Europe.

Earnings per share declined to $0.20, from $0.29 last year.

ABB said earnings were also affected by an $80 million charge from derivatives and currency movements.

Sweden's central bank on Tuesday left its key interest rate unchanged at a record low of 0.25% and said the rate needs to remain at a low level to support production and employment and to attain the inflation target.

The central bank said it will begin raising the repo rate towards a more normal level in the summer or early autumn. It noted that the Swedish economy was very weak last year, but GDP growth is expected to be positive again in 2010.

The outlook for growth has been lowered to 2.2% this year from 2.5% forecast initially. But, forecast for 2011 revised up to 3.7% from 3.4%.

The central bank revised down its inflation outlook for this year to 1.1% from 1.6% estimated in February. Forecast for 2011 is placed at 2.1%, down from 2.9% projected earlier.

The Nordic countries - Denmark, Finland, Norway and Sweden - on Tuesday provided second tranche of Eur1.775 billion loan to Iceland to help the country in its efforts to gain economic recovery.

The four countries have agreed to provide bilateral loans totaling Eur1.775 billion for disbursement in four equal tranches in the context of Iceland's economic programme with the International Monetary Fund and under the condition that Iceland will honor its international obligations.

"The Nordic countries welcomed the IMF Board's approval of the second review of Iceland's economic stabilization and reform programme on 16 April 2010 and the broad international support thereof," the four countries said in a joint statement. "We have now made the second tranche of the Nordic loans available to Iceland."

In the fourth quarter, the seasonally adjusted GDP in real terms increased 3.3% from the previous quarter, ending a severe recession.

DENMARK

In Copenhagen, the OMX completed the trading day Friday on 407.43, up 1.55%.

Thursday, the Statistics Denmark announced that the consumer confidence indicator stood at 4.2 in April, up from minus 1 in the previous month. This was the biggest consumer confidence since November 2007. Economists expected a reading of 1.

The current economic situation in Denmark increased to minus 14.9 in April from minus 25.4 in the previous month, while the economic situation for the next twelve months rose to 18 from 13.3. The consumers expect their own future financial situation will be better in a year than it is at the moment.

Danish Underground Consortium's (DUC) oil and gas output from the Danish part of the North Sea rose in March, operator A.P. Moller-Maersk said on Thursday.

Oil and condensate output rose to 229,700 barrels per day (bpd) in March from 225,600 bpd in February, Maersk said. But liquids production was down from 240,300 bpd in March 2009, it added.

DUC production of natural gas rose to 710 million cubic metres in March from 650 million in February and was up from 410 million in the same month a year ago, Maersk said.

DUC is responsible for most of the crude oil output from Denmark's North Sea oil and gas fields.

Denmark is the third-biggest producer in western Europe after Norway and Britain. Shipping and oil group A.P. Moller-Maersk owns 39% of DUC.

GN Store Nord A/S, banned in 2007 from selling its hearing-aid unit to Sonova Holding AG, won an appeal in Germany's highest court, re-opening the industry to mergers and acquisitions.

GN rose 19% in Copenhagen trading after the Federal Court of Justice, Germany's highest civil tribunal, Friday overturned a regulator's 2007 veto of the sale of GN's ReSound hearing-aid unit.

GN and Sonova dropped the $2.9 billion transaction after losing a lower court challenge to the veto. GN pursued an appeal to the top court to help expand merger options in the hearing- aid industry. Siemens AG, Europe's largest engineering company, shelved the possible sale of its hearing-aid unit after receiving bids short of the 2 billion Euros ($2.7 billion) that it sought, two people familiar with the plan said last month.

Banks aren't often known for their architecture these days, but the Middlefart Savings Bank (I promise you that is its name - Google it if you doubt me ...) is making a name for itself in the small Danish harbour town.

The grand roof is covered in 83 prism-like skylights, which drawn an abundance of natural light into the bank and courtyard below. Heating and cooling for the bank's interior is provided through a radiant floor system and technology developed at the Danish Technical University.

This energy-efficient bank, designed by 3XN, is adding up to be more than just a place to keep your money.

Energy efficiency was a main factor in the design, and with the inclusion of a radiant heating and cooling system, the bank is able to cut energy use by 30-50% compared to traditional systems.

Plastic tubes are embedded in the prefabricated concrete flooring. During the winter, water is heated and circulated through the floor and the room temperature can be controlled very precisely.

For cooling in the summer, water is cooled by driving it into the ground, and even cooler seawater can be used and then run through the pipes.

Hardly earth-shattering financial news but with a name like that and a lack of Danish news, it deserved a mention this week!

FINLAND

The OMX in Helsinki ended the day and week Friday at 7,046.66, up 0.54%.

Paper maker Stora Enso Oyj on Thursday reported a first-quarter net profit of Euro102 million ($136 million) on lower costs and improving markets.

Sales also grew in the period, to Euro2.3 billion from Euro2.1 billion a year earlier, the company said. In the same period in 2009, Stora posted a net loss of Euro36 million as the global downturn hit paper demand.

The improved performance was "driven by volume recovery, active cost management and pulp price increases," the Finnish-Swedish group said.

Stora's stock was up almost 4% at Euro6.06 ($8.10) in morning trading in Helsinki.

Demand grew in European markets for newsprint, magazine paper, fine paper and packaging products compared to 2009, Stora said, but cautioned that "overall demand for all products remained materially less than pre-crisis levels two years ago."

Chief Executive Jouko Karvinen said Stora will close down newsprint production at its Varkaus mill in Finland because of falling prices in Europe. He said overcapacity in the market was expected to reach 18% this year.

The closure will mean about 200 layoffs among the work force of more than 500 at Varkaus that also makes fine papers.

"Our path forward may not be easy, but we are well on our way, focusing on long-term sustainable returns," Karvinen said.

Karvinen also confirmed that the company had signed an agreement to sell its Finnish mills at Kotka and its laminating paper operations in Malaysia to the Los Angeles-based private equity firm OpenGate Capital.

All 570 workers, mostly in Finland, will be transferred to the new owners, Stora Enso said.

Nokia Oyj, the world's biggest maker of mobile phones, plunged more than 14% after posting a lower-than-estimated profit on competition from Apple Inc.'s iPhone, and cutting its margin forecast.

Shares tumbled the most in nine months after the company said net income rose to 349 million Euros ($465.6 million), or 9 cents a share, from 122 million Euros, or 3 cents, a year earlier. Analysts had predicted profit at the Espoo, Finland- based company of 409.6 million Euros, according to the average of estimates in a Bloomberg survey.

Nokia lacks a hit high-end touchscreen device to take on Apple's iPhone and Research In Motion Ltd.'s BlackBerry, with its market-share gains coming mainly from lower-priced smartphones. On entry-level devices, a boom in phones from so- called grey market vendors in Asia led Nokia to revise down its market-share figures in March.

Nokia fell 1.60 Euros in Helsinki to 9.68 Euros, the biggest drop since July 15. The company's market value of about 36 billion Euros, or $48 billion, compares with Apple's $236 billion. In 1999, Nokia had the highest market value of any European company -- 203 billion Euros.

Nokia Friday cut its adjusted margin target for the handset unit to between 11 and 13% this year, from 12 to 14% earlier. The second-quarter margin could be as low as 9%, it said.

Sales in the first quarter of 9.52 billion Euros fell short of analyst estimates of 9.78 billion Euros in a Bloomberg survey. Nokia Siemens Networks, the company's telecommunications equipment unit, reported an operating loss of 226 million Euros, reversing a profit last quarter.

"We continue to face tough competition with respect to the high-end of our mobile device portfolio, as well as challenging market conditions on the infrastructure side," Chief Executive Officer Olli-Pekka Kallasvuo said in a statement.

Nokia's market share in smartphones and overall edged up in the quarter over last year as prices plunged. Smartphone prices fell 18%, while prices for low-end mobile phones declined 13%, the company said.

Nokia shares plummeted to 6.91 Euros in March 2009 from 28.60 Euros in November 2007. Before Friday, the stock had risen about 26% since the start of the year.

Finland's net migration count contracted to 14,500 in 2009 compared to 15,500 in 2008, Statistics Finland said on Thursday.

Some 26,700 persons immigrated to Finland from foreign countries during 2009 compared to 29,100 in 2008.

Emigration from Finland also decreased slightly, falling to 12,200 from 13,700.

NORWAY

Oslo's OBX finished the day Friday at 356.07, a daily gain of 1.06%.

Norway's economy will expand at a slower pace over the next two years than previously forecast, prompting a "slow and modest" rise in borrowing costs, Svenska Handelsbanken AB said.

The mainland economy, which excludes oil, gas production and shipping, will grow 0.7% in 2010 and 1.9% in 2011, the lender said in an e-mailed report issued in Oslo Friday. Handelsbanken's October forecast was for 2.7% growth this year and next.

"Over the longer term, we believe in few and modest rate hikes, in line with our downward revised growth and inflation forecast," Handelsbanken said in the report. "The next rate increase is more likely in June than in May." Policy makers next meet on May 5 to decide whether to change the benchmark deposit rate, currently 1.75%.

The economy of the world's sixth-largest oil exporter suffered a milder recession and recovered faster than its neighbors, thanks to continued oil investment, record stimulus packages and low borrowing costs, encouraging the central bank to start raising interest rates in October. Since then, stalling recoveries in many of Norway's trading partners, including Germany, have clouded the outlook and prompted the central bank to signal a slower tightening path on March 24.

"Another key reason is our belief that neither the ECB nor the Fed will start tightening until a year from now," Handelsbanken said. They don't expect policy makers to lift the bank's deposit rate above 2.5% in the next 12 months.

Handelsbanken expects the krone to appreciate to 7.85 per Euro within the next six months. Unemployment will stand at 3% this year, the bank said, revising down a previous forecast of 3.3%. Underlying inflation will slow to 1.5% in 2010 before accelerating to 2.1% in 2011, the bank said.

Cisco Systems has finally managed to acquire video-conferencing vendor Tandberg.

The networking giant announced Monday that it has completed a so-called voluntary offer for Tandberg, with 91.1% control of the Oslo, Norway-based company. Cisco said it will now launch a compulsory acquisition to pick up the rest of the outstanding shares.

Following that move, Cisco will have paid $3.3 billion (19 billion Norwegian Kroner) to own the company it has sought since its initial bid in October.

Norway's house prices increased 3.4% on a sequential basis in the first quarter, the statistical office said on Tuesday.

Detached houses and row houses price increased by 3.9% and 3.7% respectively in the first quarter from the previous quarter. Prices of flats in blocks grew 1.5%.

Year-on-year, house prices climbed 10.8% in the first quarter. A total of 16,669 house sales are used in the index computation for the first quarter, the Statistics Norway said.

SPAIN

The IBEX in Madrid closed off the day Friday at 10,918.20, a jump of 0.89%.

Spanish house prices declined at a slower pace in the first quarter, official data showed Monday.

House prices dropped 4.5% year-on-year in the first quarter of 2010 compared to 6.2% fall in the previous quarter, the Ministry of Housing said. The decline eased for the third consecutive quarter, while it was the sixth fall in a row. Prices were down 8.2% a year ago.

House prices declined 1.3% on a quarterly basis.

Other surveys have also shown a decline in Spanish house prices recently. Last week, property website TINSA said house prices dropped 1.7% compared to the previous year when prices were down 3%. Prices fell 5.3% annually in March following a 5.5% drop in February.

On the same day, Spain's National Statistics Institute said home sales rose 7.2% month-on-month in February, taking the annual growth to 18.7%.

Spain remains the only major economy remaining mired in recession. The Bank of Spain has predicted that the economy may contract 0.4% this year, with severe corrections in household consumption and high debt accumulated by the private sector weighing down on growth.

Spain's industrial new orders increased 7.9% on an annual basis in February, faster than the 2.1% growth in the previous month, the National Institute of Statistics said on Monday.

New orders for intermediate goods grew 7.9% annually in February, while new orders for capital goods rose 12.1%. Orders for consumer goods increased 1.9%.

Meanwhile, the industrial turnover rose 7.4% year-on-year in February, after a 0.8% rise in January. The turnover for capital goods grew 19.6% and the turnover for intermediate goods rose 5.4%.

Separately, the statistical office said, the service sector turnover dropped 0.9% in February, compared to the 4.1% fall in the previous month. For the first two months of the year, the services sector fell 2.5% over a year ago.

PORTUGAL

Lisbon's PSI General headed into the weekend at 2,698.88, up 0.68%.

The Portuguese government Friday named Carlos Costa, a long-time veteran of domestic and international banking, as the next governor of the Bank of Portugal, a spokeswoman at the central bank confirmed.

Costa will succeed Vitor Constancio at the helm of Portugal's central bank on June 1, the same date that Constancio will become the new vice president of the European Central Bank in Frankfurt.

As head of the Bank of Portugal, Costa will hold a seat on the ECB's Governing Council and will participate in the monthly monetary policy meetings. There will thus be two Portuguese Governing Council members.

Costa currently serves as a vice president of the European Investment Bank in Luxembourg. The Portuguese press credits him with strengthening ties between his country and the EIB. In 2008, for example, the number of projects in Portugal financed by the EIB rose 62%, while EIB loans to the country rose 124% to E2.3 billion, according to Portugal's financial newspaper Diario Economico.

Costa, who graduated with a degree in economics from the University of Porto, served as administrator of the state-owned General Deposit Bank (Caixa Geral de Depositos) and has held numerous posts in private banking as well - with emphases both on domestic and international issues.

Portuguese Finance Minister Fernando Teixeira dos Santos said the country is on the right track to meet the government's deficit target for this year.

Teixeira dos Santos spoke Friday in Lisbon at a press conference following a cabinet meeting in which the government approved proposals announced earlier on capital gains and income taxes.

Portugal had a deficit of 9.4% of gross domestic product in 2009, more than three times the European Union limit of 3%, and the government has pledged to narrow its deficit to 8.3% this year and 2.8% in 2013.

Tuesday, the Statistics Portugal announced that the producer price index or PPI rose 3% on an annual basis in March, faster than the 2.1% growth in the previous month. A year ago, the PPI was down 3.7%.

On a monthly basis, the PPI rose 0.4% in March, after a 0.1% increase in February.

Meanwhile, manufacturing PPI increased 3% year-on-year in March and was up 0.5% compared to the preceding month.

ITALY

Italy's benchmark FTSE MIB Index gained 109.50, or 0.5%, to 22,726.00, ending a two- session loss, in Milan. The gauge fell 1.2% this week.

The following stocks were among the most active on the Italian market Friday.

Ansaldo lost 28 cents, or 1.9%, to 14.84 Euros, a third straight decline. Finmeccanica SpA's railway technology unit said first-quarter net income fell to 14.4 million Euros ($19.2 million) from 15.6 million Euros.

Bulgari gained 45 cents, or 7%, to 6.90 Euros, the biggest gain since August last year. Banca Akros upgraded the world's third-largest jeweler to "accumulate" from "hold," citing "a general improvement in the top line of luxury companies in the first quarter, better trend for Swiss watch exports in February and the start of the restocking in some categories such as perfumes."

Buzzi Unicem, Italy's second-biggest cement maker, increased 56 cents, or 5.2percent, to 11.37 Euros. Cement stocks advanced in Europe as Cie. de Saint-Gobain SA, Europe's biggest supplier of building materials, reported first-quarter sales that beat the estimate of brokerages including Exane BNP Paribas. Italcementi SpA (IT IM), Italy's biggest cement maker, surged 26 cents, or 2.9%, to 9.14 Euros.

Fiat rose for a third day this week, gaining 28 cents, or 2.7%, to 10.58 Euros. Gruppo Banca Leonardo increased its price estimate on the Italian carmaker to 15.6 Euros from 13.2 Euros. The brokerage, which kept a "buy" rating, said in a note that management "has a clear vision and showed strong commitment in driving the group in the right direction to compete successfully with a global scope."

MutuiOnline gained for a second day, rising 6 cents, or 1%, to 5.97 Euros. The online credit mortgage broker said it would distribute a cash dividend of 34 Euro cents per share after posting a 2009 net income of 13 million Euros.

Saipem rose 64 cents, or 2.3%, to 28.66 Euros, ending a two-day loss. Europe's largest oilfield-services provider had its price estimate lifted at BofA-Merrill Lynch Global Research, Credit Suisse Group AG, Cheuvreux, Santander Private Banking. The latter cited "better-than-expected sales and margins in the first quarter."

Snam Rete Gas retreated 6 cents, or 1.6%, to 3.67 Euros, falling for a third day. Equita Sim SpA downgraded Italy's gas-distribution network operator to "hold" from "buy," citing the stock's "good performance."

STMicroelectronics, Europe's largest chipmaker, sank the most since June last year, falling 40 cents, or 5.2%, to 7.30 Euros as its ST-Ericsson joint venture reported a wider first-quarter loss and forecast "approximately flat" sales.

Standard & Poor's lowered its 2010 growth forecast for Italy on Tuesday citing feeble demand, weak capital spending and export prospects.

The rating agency cut the growth forecast to 0.5% from a previous 0.7%, reports said. Looking ahead, S&P forecast the economy to grow 1% next year, which is half of what is seen for the Eurozone as a whole.

Feeble consumer demand on the back of falling earnings, anemic capital spending because of damaged corporate profitability and export prospects penalized by weak competitiveness are holding the economy in check, the rating agency was quoted as saying in a report that made no reference to ratings. S&P expects any return to growth in 2010 to be modest.

The Italian economy contracted 0.3% sequentially in the fourth quarter following the 0.5% growth in the third quarter, when the economy ended five quarters of negative GDP. The statistical office is due to release the preliminary estimate of first quarter GDP on May 12.

Interim forecast from the European Commission showed 0.4% growth for the Italian economy in the first three months of this year. The Paris-based Organisation for Economic Co-operation and Development said in an interim assessment recently that the economy likely grew 1.2% in the first three months of the year. The economy is forecast to expand 0.5% in the second quarter.

Italy's non-EU trade balance showed a deficit of Eur 1.21 billion in March, compared to a Eur 165 million surplus recorded in the previous year, the statistical office Istat said on Tuesday.

Exports to non-EU countries increased 12.5% on an annual basis to Eur 12.36 billion in March, while imports climbed 25.4% to Eur 13.58 billion.

On a monthly basis, exports increased a seasonally adjusted 2.3% in March and imports climbed 4.5%. In the January to March period, exports and imports grew 7.2% and 14.5% , respectively compared to the previous three months.

For the first three months of the year, exports to non-EU countries increased an unadjusted 6.8% compared to the same period of the previous year. At the same time, imports rose 10.3%. The trade deficit stood at Eur 6.03 billion, widening from Eur 4.56 billion deficit last year.

Excluding energy, the trade balance showed a surplus of Eur 5.97 billion in the January to March period, down from Eur 6.32 billion surplus a year ago.

The total foreign trade data for March is scheduled on 18 May 2010, the Istat said.

Italy's seasonally adjusted industrial orders fell 0.4% month-on-month in February, statistical office Istat said Tuesday. The drop was unexpected as economists were looking for an increase of 1.5%. In January, orders declined 2.8%.

Orders from the domestic market were down 0.3% and those from non-domestic market fell 0.5%.

On an annual basis, the unadjusted industrial new orders climbed 5.6% in February, beating forecasts for a 2.6% rise.

Further, Istat said seasonally adjusted industrial turnover fell 2.6% on a monthly basis, with domestic market logging a 2.4% fall and the non-domestic market with a 3% drop. That was the first fall since October 2009. In January, turnover was up 2.7%. The unadjusted industrial turnover rose 4.1% annually, while calendar adjusted turnover grew 4.2%.

GREECE

The Athex composite in Athens closed out the Friday session and the week at 1,857.96, down 0.15%.

deficit in 2009 was larger than previously forecast, a report from the European Union statistical agency Eurostat showed Thursday.

Greece's budget deficit was 13.6% of the gross domestic product in 2009, bigger than the previous estimate of 12.7%, data from Eurostat indicated. A year ago, the country had a deficit of 7.7% of GDP.

The EU rule instructs all its members to keep budget deficits at 3% of GDP or under. The Greek government had pledged to cut the deficit to 8.7% of GDP this year. The troubled country accumulated a debt of Eur 273.40 billion, which account for 115.1% of GDP last year, up from 99.2% logged in 2008.

Eurostat said it is expressing a reservation on the quality of the data reported by Greece, due to uncertainties on the surplus of social security funds for 2009, on the classification of some public entities and on the recording of off-market swaps. Following completion of the investigations that Eurostat is undertaking on these issues in cooperation with the Greek Statistical Authorities, this could lead to a revision for the year 2009 of the order of 0.3 to 0.5 percentage points of GDP for the deficit and 5 to 7 percentage points of GDP for the debt.

Greek authorities on Wednesday started talks with EU and IMF officials on details of the rescue measures offered by them. The bailout amount is estimated at Eur 45 billion for three years, of which EU will give Eur 30 billion and the rest will be funded by the IMF. If Athens secures the loan, that will be the biggest multilateral aid provided so far.

Though Greece has not officially asked for aid, the decision to hold a discussion is considered as the first step of formally requesting external assistance. Any decision to materialize the offer would need approval from all 16 Eurozone members, the European Commission and the European Central Bank.

The Greek bailout plan has raised concerns that additional burden would be put on other debt-ridden Eurozone economies like Spain, Portugal and Italy. These countries would be forced to contribute to the aid package, while struggling to solve domestic issues.

Germany has strongly opposed any rescue measure for Greece. This may delay or block the aid. Meanwhile, France reportedly pledged to provide Eur 6.3 billion from its 2010 fiscal budget. Greece's socialist government, led by Prime Minister George Papandreou, was under pressure from the public since it announced austerity measures in March.

The Eurostat said budget deficit for the Euro area increased to 6.3% of GDP in 2009 from 2% in 2008 and debt ratio increased to 78.7% from 69.4%. Deficit in the EU27 increased to 6.8% from 2.3% and debt ratio to 73.6% from 61.6%.

Among the member states, Ireland logged the largest deficit of 14.3%. Commenting on the figure, Irish Finance Minister Brian Lenihan said headline deficit for 2009 is a result of a technical reclassification associated with government support provided to the banking sector.

The Greek government's cost of borrowing in the international financial markets surged to a new high on Wednesday as talks with the International Monetary Fund and the Eurozone on a rescue package got under way.

Uncertainty over Greece's fiscal outlook drove the yield on 10-year bonds to 8.3% - the highest since the Euro was introduced in 1999.

Greece successfully raised Eur 1.95 billion by selling three-month Treasury bills on Tuesday, although the yield on the bills stood at 3.65% - up from the 1.67% yield in a similar bill issued in January.

The surge in borrowing costs come as Greek Finance Minister George Papaconstantinou began meetings with officials from the European Commission, the European Central Bank and the IMF in Athens Thursday.

Eurozone officials have offered an emergency package of loans worth up to Eur 30 billion to the Greek government, with a further Eur 10-15 billion coming from the IMF.

Investors have become increasingly skeptical of Greece's fiscal consolidation plans, with speculation rife that the government is not far away from activating the aid program.

There is also speculation that the aid package will not be enough to tame the country's debt crisis. Earlier in the week, ECB governing council member Axel Weber denied media reports that Greece might need as much as Eur 80 billion to avert a default.

Greece's deficit is over four times more than E.U. rules allow, and its debt is estimated at about Eur 300 billion.

Its fiscal plan aims to reduce the budget deficit, estimated at 12.7% of gross domestic product, to less than 3% by 2012.

The government has unveiled a number of austerity measures in a bid to cut its deficit, including civil service wage cuts, a public sector hiring freeze, higher taxes and a raise in petrol prices, sparking mass unrest among the public.

The Bank of Greece on Monday said the current account deficit more than doubled from the previous year to Eur 3.25 billion in February, mainly as a result of the evolution of current transfers to general government. In February 2009, the deficit was Eur 1.23 billion.

The deficit on trade in goods stood at Eur 2.46 billion, slightly smaller than the Eur 2.47 billion shortfall in the same period of last year. Meanwhile, the surplus on services decreased to Eur 355.7 million from Eur 413.1 million.

The income account showed a negative balance of Eur 766.3 million in February compared to Eur 771 million in the prior year. The current transfers balance recorded a deficit of Eur 376 million, reversing a surplus of Eur 1.59 billion in February 2009.

The jobless rate in Greek stood at 11.3% in January, up from 10.2% in the previous month, the statistical office said on Tuesday. A year ago, the jobless rate was 9.4%.

The number of unemployed totaled 567,132 persons in January, larger than the 465,692 persons last year. On the other hand, the number of employed persons decreased to 4.45 million from 4.49 million a year ago.