US stocks slid, capping the worst May for the Dow Jones Industrial Average since 1940, as a downgrade of Spain's debt spurred concern the European credit crisis will worsen and energy shares sank on President Barack Obama's moratorium on new deepwater drilling permits.
 
Wells Fargo & Co., Bank of America Corp., American International Group Inc. and JPMorgan Chase & Co. fell more than 2% each after Fitch Ratings stripped Spain of its AAA credit rating. Baker Hughes Inc., Halliburton Co. and Schlumberger Ltd. fell more than 6% after Obama canceled pending lease sales in the Gulf of Mexico as work continued to plug BP Plc's oil spill.
 
The S&P 500 tumbled 1.2% to 1,089.41, ending the week up less than 2 points. The Dow Jones Industrial Average declined 122.36 points, or 1.2%, to 10,136.63, ending the week 0.6% lower. About three stocks declined for each that rose on US stock exchanges, which are closed on May 31 for Memorial Day.
 
Goldman Sachs Group Inc. investment strategists David J. Kostin and Stuart Kaiser raised their estimates for operating earnings per share among S&P 500 companies to $78 for 2010 and $93 for 2011, up from $76 and $90 respectively. They said the change was made to reflect first-quarter results and better net margins than they had expected.
 
A gauge of 79 financial stocks tumbled 2.1%, the most of 10 groups in the Standard & Poor's 500 Index. Wells Fargo & Co. fell 2.5% to $28.69. Bank of America Corp. slid 2.7% to $15.74. American International Group Inc. lost 3% to $35.38. JPMorgan Chase & Co. declined 2.1% to $39.58.
 
The S&P 500 fell 8.2% in May, its worst month since February 2009, amid concern European nations will have difficulty reducing their deficits without harming the economic recovery.
 
A gauge of US corporate credit risk climbed the most in 15 months this month, making it harder for companies to refinance. The Markit CDX North America Investment Grade Index Series 14, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, increased 1.34 basis point to 117.2 basis points, according to Markit Group Ltd.
 
Energy companies lost 2% as a group, for the second- biggest decline of 10 industries in the S&P 500, after BP Plc restarted its effort to block a damaged oil well to halt a Gulf of Mexico spill that may be the largest in US history. BP's US shares fell 5.4% to $42.95. Halliburton lost 8% to $24.83 for the biggest decline in the S&P 500 Index. Baker Hughes declined 7.2% to $38.14. Schlumberger slipped 6.1% to $56.15.
 
The well began leaking after an April 20 explosion and fire on the Deepwater Horizon drilling rig, which resulted in the deaths of 11 workers. BP leased the rig from Geneva-based Transocean Ltd., the largest deep-water driller, which fell 4.9% to $56.77.
 
Obama is suspending exploration in two areas off Alaska, including planned drilling by Royal Dutch Shell Plc, canceling pending lease sales in the Gulf of Mexico and proposed sales off Virginia's coast, extending by six months a moratorium on deepwater drilling permits and suspending operations at all 33 exploratory wells being drilled in the Gulf.
 
Apple Inc. rose 1.4% to $256.88. The iPad is now available in Australia, Canada, Japan and six European countries following the sale of one million of the devices within a month of its April 3 debut in the US Apple may sell 8 million iPads this year, according to Royal Bank of Canada.
 
SeaChange International Inc. jumped 6.8% to $8.35. The provider of digital video systems reported first-quarter profit excluding some items was 10 cents a share, topping the 8- cent average analyst estimate in a Bloomberg survey.
 
OmniVision Technologies Inc. added 5.9% to $19.29. The maker of image sensors for camera phones projected first- quarter profit of at least 27 cents a share, topping the 22-cent average analyst estimate.  

 European stocks declined Friday, paring the Stoxx Europe 600 Index's weekly gain.
 
The Stoxx 600 slipped 0.2% to 244.34, trimming this week's advance to 0.7%.
 
The Stoxx 600 has slumped 5.9% so far this month, on course for the biggest drop since February 2009, on concern that European nations will have difficulty taming their budget deficits without harming the economic recovery. The decline has left the gauge trading at less than 15 times the reported earnings of its companies, near the cheapest valuation since 2008.
 
GERMANY
 
German stocks climbed, with the benchmark DAX Index posting a weekly gain, led by advancing E.ON AG and Daimler AG shares.
 
Metro AG, Germany's biggest retailer, and E.ON, the country's biggest utility, rose more than 1%. Daimler advanced after raising a profit forecast, while Freenet AG rose 2.4% as Berenberg Bank recommended the shares.
 
The DAX gained 0.2% to 5,946.18 in Frankfurt, extending its weekly advance to 2%. The gauge is still 6.1% below its April 26 high on concern the sovereign- debt crisis in Europe will grow. The broader HDAX Index also rose 0.2% Friday.
 
MAN SE climbed 1.1% after Chief Financial Officer Frank Lutz told Les Echos the truckmaker will sell 25% more vehicles this year. Daimler, the world's biggest truckmaker, also advanced, while Freenet AG rose 2% as Berenberg Bank recommended the company's shares.
 
The DAX gained 0.3% to 5,952.95 as of 4:45 p.m. in Frankfurt, extending its weekly gain to 2.2%. The gauge is still 5.9% below its April 26 high on concern the sovereign-debt crisis in Europe will grow. The broader HDAX Index rose 0.4% Friday.
 
MAN SE advanced 1.1% to 69.62 Euros. Europe's third- largest truckmaker will sell about 50,000 vehicles this year, an increase of about 25%, Lutz told French daily Les Echos in an interview.
 
Daimler AG rose 1.6% to 40.59 Euros after raising its profit forecast for the Mercedes-Benz division for the second time in six weeks, as the global recovery spurs demand.
 
The unit's full-year earnings before interest and taxes will be at the "upper end" of the carmaker's target of 2.5 billion Euros ($3.1 billion) to 3 billion Euros, Stuttgart, Germany-based Daimler said Friday. Second-quarter Ebit will exceed the first quarter's 806 million Euros, it said.
 
Daimler makes about a quarter of its vehicle sales outside Europe, Bloomberg data shows, while MAN SE gets more than three- quarters of its revenue from outside Germany, it shows.
 
Freenet surged 2% to 8.09 Euros. Germany's fourth- largest mobile-phone operator was rated "buy" in new coverage at Berenberg Bank, which said the company's "disciplined and successful management of costs will largely protect its cash flow over the medium term, enabling it to pay the proposed dividends from internally generated cash flow."
 
KWS Saat AG increased 2.6% to 119.70 Euros as the world's largest producer of beet seeds said it met its growth targets, increasing net sales and profit due to a "good corn and sugarbeet business" in the first nine months of the current fiscal year.
 
Fielmann AG jumped 5.4% to 61.01 Euros after Europe's largest chain of optical stores was raised to "buy" from "sell" at Merck Finck & Co., while Carl Zeiss Meditec AG climbed 0.9% to 11.61 Euros after it was raised to "buy" from "sell" at DZ Bank AG.
 
German import prices increased 7.9% year-on-year in April after logging 5% rise in March, the Federal Statistical Office said Friday. That was the highest price increase since August 2008, when import prices grew 8.3%. Economists had forecast 7.1% increase for April.
 
On a monthly basis import prices were up 2%. Prices were expected to climb 1.5%. It follows 1.7% growth in March.
 
The index of import prices, excluding crude oil and mineral oil products, was 3.3% above the level of a year earlier. It went up 1.4% compared to March 2010.
 
Further, the statistical office said the index of export prices climbed 3% in April from the corresponding month of the preceding year. This was the highest year-on-year-price increase since November 2000, when prices rose 3.5%. In March, export prices logged 2% growth. From March 2010 to April 2010 the index rose by 1%.
 
Import and export price data came a day after the statistical office released preliminary estimate on May consumer price inflation. According to the report, consumer prices grew 1.2% annually in May, faster than 1% rise in April, led by a sharp rise in energy prices. 
 
FRANCE
 
France's CAC 40 Index declined 10.25, or 0.3%, to 3,515.06 in Paris, falling for the first time in three days. The SBF 120 Index lost 0.3%.
 
Alcatel-Lucent added 1.3% to 2.10 Euros, a third straight gain. Sales of Apple Inc.'s iPad started in France and other countries outside the US Friday. Alcatel has said that the tablet-style computer will have a massive impact on the mobile networks it supplies.
 
Derichebourg rallied 14.1 cents, or 4.9%, to 3.03 Euros, a third day of gains. Gilbert Dupont raised its recommendation for the environmental services company to "add" from "reduce" after the company reported first-half net income of 6.6 million Euros.
 
EDF Energies Nouvelles dropped 1.51 Euro, or 4.9%, to 29.45 Euros. Exane BNP Paribas lowered its recommendation for the renewable-energy arm of Electricite de France SA to "neutral" from "outperform."
 
EuropaCorp jumped 25 cents, or 5.2%, to 5.10 Euros after the movie-production company reported a 41% increase in full-year sales to 181 million Euros.
 
PSA Peugeot Citroen declined 26.5 cents, or 1.3%, to 19.55 Euros, trimming some of Thursday's 7.1% rally. Dongfeng Motor Group Co. and Peugeot's Chinese venture will recall 53,459 cars for cooling fan problems from May 31, according to a statement.
 
Veolia Environnement climbed 1.1%, to 21.01 Euros after the water company said it won a 270 million Euro contract from Cincor.
 
French consumer confidence continued its downward trend in May to reach the lowest level in 12 months, a closely watched survey showed Thursday. Consumers' outlook for the economy worsened amid weak spending.
 
Consumer confidence eased slightly to minus 38 in May from minus 37 in April, data from the statistical office INSEE showed. The score was in line with economists' forecast and stood significantly below its long-term average. The declining trend started at the beginning of this year.
 
Two of the five main components of the indicator deteriorated during the month. The gauge measuring consumers' view on the outlook for the French economy slid to minus 53 from minus 48. The other indicator that showed decline was the index for consumers' own financial outlook assessment. The index came in at minus 19, down from minus 16.
 
The measure reviewing the state of the national economy over the past year improved slightly to minus 67 from minus 68. The index measuring consumers' intentions to make major purchases in the future rose to minus 24 from minus 26. At the same time, the gauge for consumers' financial situation in the past year was unchanged at minus 25.
 
The survey found that there were less number of households that were expecting an increase in unemployment. Still, fears remain high since this balance has been notably above its long term average since the beginning of the year. The index measuring households' inflation expectations rose to minus 26 from minus 31 and remains above its long term average.
 
Households' opinion about their current financial situation was stable and remained higher than its long term value. Households hold the view that their savings capacity in the next twelve months is stable. However, their opinion on the timeliness for savings went down by 3 points.
 
In April, consumer spending declined 1.2% from the previous month largely due to a sizeable fall in automobile sales. There was a steep decline of 9.5% in car purchases in April.
 
Household spending is unlikely to support growth in the second quarter. The French economic growth had slowed to 0.1% in the first three months of the year as households' consumption leveled out and government's stimulus measures started fading. 
 
BELGIUM
 
In Brussels the Bel 20 headed into the weekend on 2,460.54, down 0.37%.
 
As part of its annual "Tax Misery Index" survey, Forbes magazine examines the tax burden for professionals earning between 50,000 and 1,000,000 Euros (gross) per year. For this fortunate lot, it ranks Belgium the third most "miserable" in general; on a million a year, Belgium is the second-worst place to be tax-wise, says Forbes.
 
Think tanks have also demonstrated that the land of beer and mussels is no picnic for top earners and entreprenEurs: In its 2009 edition of Economic Freedom of the World, the Fraser Institute (Canada) ranks Belgium as the 47th "freest", just below Jamaica worldwide and 20th in the EU. Washington's Heritage Foundation, in its annual Index of Economic Freedom, shows Belgium at No. 20 worldwide - more reassuringly, just below Japan and 8th in the EU.
 
While high-earning foreigners seem to have every right to complain about them, are Belgian taxes really so high for the typical employee, the Average Joe?
 
Belgium's top marginal tax rate - the top rate is 50%, and communal taxes can add as much as 9% - is a factor in all of these studies' calculations.  But as the OECD Observer once noted, the income tax isn't the only tax levied on employment, and "concentrating on these 'headline' rates can be misleading." Indeed, in many European countries, income taxes are dwarfed by the sums demanded for social security contributions.
 
And surely not everybody is paying the top rate, anyway, are they? What about the Average Joe earning a typical wage in Belgium?  How does he compare to his European neighbours? For those of us who aren't enjoying cushy expat contracts or the virtually tax-free status of Eurocrats, L'Anglophone decided to find the answer. We looked up the average wages of employees in the 27 EU member states and asked Ernst & Young to uncover the tax data.
 
The results revealed that, when personal taxes and social security contributions are factored in, the wages of the typical worker in Belgium are the highest-taxed in Western Europe, and the second-highest in the EU as a whole. (Hungary takes the proverbial cake - 56.55% of it, that is - and with a European Commissioner of Taxation who hails from Budapest, the word "harmonization" might now strike a dissonant chord among the populations of the member states.)
 
The average gross salary of a Belgian employee in the industry and services sector in 2006, according to Eurostat, was 37,674€. In addition to this salary, an employer Friday would pay 11,501€ in social security contributions, thus making the total cost of employment 49,175€. The employee's net pay would be 21,903€, or 44.54% of the total employment cost; taxes and social security contributions thus comprise 55.46% of the "real" gross income.
 
As for the top marginal rate: Yes, it is imposed on Average Joe in Belgium; for the year 2010, the 50% rate applies to each Euro of gross income over 34,300€.
 
Many think tanks and consumer groups calculate "tax freedom days" (TFDs) for various countries around the world, with the goal of determining the average calendar date on which a citizen has finished paying his tax obligations and begins to keep his earnings.
 
To calculate June 10th as Belgium's Tax Freedom Day in 2009, for example, PriceWaterhouseCoopers (PWC) divided Belgium's total tax revenue (including social security contributions) by its Gross Domestic Product.  These figures count revenue from all taxes (including those on corporate profits, petrol, cigarettes, &c.) and thus present a more complete picture of the country's total tax burden.
 
PWC's date, however, is an average applied to all Belgians - not all Belgian workers; in 2008, less than half of Belgium's population (4.99 million working out of 10.67 million citizens) was legally working. Consequently, a huge share of Belgium's tax burden is borne by the working population.
 
While it would be nearly impossible to precisely define the impact of every Belgian tax on a typical worker, L'Anglophone has made an effort to more nearly estimate the Average Joe's tax burden by comparing the impact of standard value-added tax (VAT) rates, which vary in the EU from 15 to 25%.
 
If Average Joe spends 35% of his take-home pay on rent (around 550 Euros per month), and half of what remains on items not subject to VAT (groceries, for example), he pays an additional 1,495€ in VAT at the cash register each year. In this scenario, Average Joe's total tax burden rises to 28,767€ or 58.5% of his "real" gross salary.
 
Applied to the calendar year, these numbers show that our typical Belgian employee works until August 2nd to pay the government, making August 3rd his "Tax Freedom Day" (TFD) on which he has finished paying his personal taxes, social contributions and VAT and begins to choose for himself how his salary is spent (or saved - though this would mean more taxes).
 
Belgian property group Bernaerts is hoping to raise about 90 million Euros ($110.5 million) in an initial public offering (IPO) of 30% of the company, its managing director said on Thursday.
 
It will use the cash to pay off taxes and increase its capital position, Guido Bernaerts told Reuters in a telephone interview.
 
"The market is not ready for it at the moment. We decided to go in the second part of 2010, maybe in September or October depending on the market situation," he said.
 
"We have a market value of the real estate we own at about 250 million Euros and we want to increase the total capital to about 300 million ... 30% is 90 million Euros."
 
He added that Bernaerts was in talks with another property group for a merger, and that if this went ahead he might float another 50 million Euros in 2011.
 
Bernaerts said the company could have assets totalling as much as 700 million Euros at the end of 2011 or the beginning of 2012 once it includes its Belgian commercial development European Market City.
 
Belgian financial group KBC has ended talks to sell its private equity unit to AXA Private Equity  and Belgian investment group Sofina without success, Belgian business daily De Tijd said on Wednesday.
 
KBC had been holding exclusive discussions with the would-be buyers for some time. It was unclear whether talks would be held with any other potential suitors, De Tijd said.
 
A KBC spokeswoman had no comment on the deal. KBC Private Equity has 29 staff and a portfolio of more than 350 million Euros, including holdings in Pizza Hut and listed Belgian frozen food company Pinguin.
 
KBC has agreed with the European Commission to divest units to help pay off 7 billion Euros ($8.55 billion) in state aid it received in the financial crisis.
 
It agreed to sell its private banking arm to Indian family-owned Hinduja Group for 1.35 billion Euros last week. 
 
THE NETHERLANDS
 
The AEX in Amsterdam rounded out the week at 320.64, down 0.16% on the day Friday.
 
Some 45,000 home owners face a risky combination of having high housing costs and a mortgage which is bigger than the value of their home, according to the government's social policy unit SCP.
 
Before the recession, 30,000 households were in a similar position, the SCP says in a report out on Wednesday. But unemployment and lack of savings have forced up the number of households in a potentially difficult situation.
 
The SCP say housing costs can be considered too high if more than 35% of income is spent on mortgage, local taxes, water and energy.
 
Starters on the housing ladder are most vulnerable, but immigrants and the self-employed are also increasingly effected, the SCP says.
 
If the economic crisis continues, some 65,000 home owners, or 2% of the total, will be in trouble, the organisation says.
 
The SCP estimates scrapping tax relief on mortgage interest payments will lead to a 10% drop in house prices, forcing more households into the danger zone.
 
Most parties have included a commitment to mortgage tax relief reform in their election manifestos.
 
The home owners lobby group VEH said on Wednesday it did not regard reducing mortgage tax relief as a taboo subject.
 
'If homes remain affordable and the value of property does not suffer, then [maintaining] mortgage tax relief is not an end in itself,' VEH director Rob Mulder told website nu.nl.
 
The housing market in its entirety should be looked at instead, Mulder said. 'We are very opposed to scrapping mortgage tax relief as a simple cost cutting exercise.'
 
Energy company Eneco has stopped looking for new shareholders after its 61 local authority owners said they were unhappy at having their stakes reduced, the Financieele Dagblad reports on Wednesday.
 
The paper says Eneco needs to find €400m to fund the separation of itself into supply and delivery companies by January 1 2011, and to invest in boosting its production capacity.
 
An Eneco spokesman said the company is now considering taking out a subordinated loan to cover part of the bill and hopes to have the financial details sorted out within six weeks.
 
Eneco is the third biggest energy company in the Netherlands. The numbers one and two - Essent and Nuon - have sold themselves to foreign companies.
 
The FD says The Hague city council, which owns 16.6% of Eneco, is keen to sell its stake if the price is right.
 
Rotterdam, which owns 31% has no plans to sell and is looking at ways to help the company fund the split off of its supply arm, the paper says. These could include a dividend holiday or bank guarantee.
 
The outlook for the Netherlands' drug market is fairly subdued over the next five years. Having been calculated at Eur6bn (US$8.45bn) consumer prices in 2009, the market value is expected to virtually stagnate through to 2014, posting a comPound annual growth rate (CAGR) of -0.01% in local currency terms (or -2.12% in US Dollars), partly due to pending patent expirations.
 
While growth will return to the positive territory over the longer, 10-year forecast period, at 1.68% and 0.47% respectively, the 2009- 2019 CAGR can be called modest at best. Low inflation levels, expected to average 1.7% in the course of 2010, will also hamper stronger market development. 
 
SWITZERLAND
 
Zurich's SMI ended the trading session and the week Friday on 6,321.92, up 0.27% on the day.
 
Foreign banks in Switzerland saw their profits decrease by 38% in 2009 to SFr1.95 billion ($1.7 billion).
 
The group, which represents around 45% of banks in Switzerland's financial centre, put the loss down to write-offs and declining interest rates and commission.
 
The number of employees also dropped, by eight% to 20,000, the Association of Foreign Banks in Switzerland reported in Zurich on Wednesday.
 
Although the amount of private wealth management in the 155 companies increased from SFr940 billion to SFr980 billion, more than SFr10 billion in client funds flowed out.
 
Regarding the tax debate involving Switzerland and other countries, association president Alfredo Gysi said the foreign banks supported the introduction of an anonymous withholding tax for foreign bank customers. The European Union on the other hand is calling for the automatic exchange of information and data.
 
Foreign banks generate two% of Swiss GDP, according to the association's own figures. The biggest foreign bank is HSBC in Geneva. Other big players are Deutsche Bank and Crédit Agricole.
 
UBS bank's Switzerland consumption indicator climbed in April signaling an acceleration in private consumer spending.
 
The consumption indicator rose to 1.76 in April from a revised 1.68 in March, well above its long-term average of 1.50.
 
UBS said the rise in the indicator was driven by significantly higher business activity in the country's retail sector.
 
"The rise in the UBS consumption indicator indicates that growth in consumption further increased in the first quarter of this year, buoyed by low interest rates, immigration and a rapidly recovering job market," the bank said.
 
The UBS consumption index is calculated by taking five parameters into account namely new car sales, activity in the retail sector, the number of hotel stays by Swiss residents, the consumer confidence index and credit card transactions made via UBS points of sale.
 
A rise in consumer spending bodes well for the Swiss economy, with private consumption making up nearly 60% of the country's gross domestic product.
 
McDonald's Corp. raised 250 million Swiss francs ($217 million) from its first sale in the currency in almost three years as investors seek so-called safe-haven alternatives to weakened Euro-denominated assets.
 
The world's largest restaurant company's new six-year notes were priced to yield 48 basis points more than the benchmark swap rate, according to a banker with knowledge of the sale. The issue lifts this week's corporate issuance in the Swiss currency to 725 million francs, the most since August 2009, according to data compiled by Bloomberg.
 
The Swiss franc has strengthened 5% against the Euro in the past six months amid concern that Greece's fiscal crisis will spread through the nations sharing the common currency, hampering economic growth. The Euro has slumped to near its lowest level in four years against the Dollar.
 
AUSTRIA
 
The ATX in Vienna completed a hecric week on 2,430.27, up 0.33% Friday.
 
People's Party (ÖVP) Economy Minister Reinhold Mitterlehner claimed Austria was "positioned to achieve sustainable growth" as the Organisation for Economic Co-operation and Development (OECD) predicted a bright future was ahead for the country's economy.
 
The body announced Friday (Weds) it expected Austria's economy to grow by 1.4% year on year in 2010. Its most recent forecast claimed the country's economy could expect a year on year growth of just 0.9%.
 
The OECD also said Austria's economy will grow by 2.3% year on year in 2011 after recently claiming 2.2% annual growth was ahead.
 
Mitterlehner welcomed the good news. "These figures confirm that Austria is well positioned to achieve sustainable growth," he said.
 
The minister added he was especially optimistic since Austrian exports were set to rise again after dwindling figures in the worst period of the economic crisis.
 
Mitterlehner however also appealed to "act more efficiently" as the government said it needed to reduce the soaring state debt.
 
"We need to act more efficiently and save costs in an intelligent way. It is important not to axe rising consumption by too drastic measures," he warned.
 
Viennese think tank Institute for Economic Research (WIFO) recently said the Austrian economy failed to grow in the first quarter of 2010 compared to the last quarter of 2009.
 
WIFO earlier this year corrected its 1.5% growth forecast for the Austrian economy made last December to 1.3%, while the Institute for Higher Studies (IHS) - Austria's other leading think tank - said it would stick to its 1.3% year on year growth prediction.
 
Austrian political and economic leaders especially focus on Asia as far as exports are regarded.
 
President Heinz Fischer was accompanied by a high-profile business delegation on his state visit to China in January.
 
Social Democratic (SPÖ) Chancellor Werner Faymann pointed out China's "important role in crisis times" for Austria's economy during his visit to the Austrian pavilion at the Expo 2010 in Shanghai last week.
 
He said: "Trade with most partners receded in the crisis, while it didn't with China. The country has had a key role for the Austrian economy and will be even more important in the future."
 
Styrian industrial plant producer Andritz AG has been assigned to deliver special devices to Chinese premium steel producers.
 
Andritz said Friday (Tues) both firms - Jiuquan Iron & Steel Group andTianjin Tisco & TPCO Stainless Steel - were "customers for many years", adding that the overall value of the orders was around 50 million Euros.
 
Andritz has come under fire over the past few months by environmentalists for bidding to build a dam at the Amazonas river in Brazil. Organisations such as Greenpeace and GLOBAL 2000 claimed several tribes would have to relocate if the Belo Monte project goes underway.
 
Andritz was also criticised for failing to withdraw its willingness to participate in the controversial Ilisu dam project in Turkey.
 
The firm said recently the value of the orders it received in the first quarter of this year was 5.8% higher year on year at 4.7 billion Euros.
 
It predicted its turnover would increase this year. "Our cost reduction and restructuring programmes will help produce better overall results this year," a spokesman for Andritz said.
 
Austria's production index for industries and construction decreased a working day adjusted 2.8% year-on-year in March, Statistics Austria said Tuesday.
 
The industrial output index edged down by 0.4% year-over-year, while construction output fell a steeper 14.4%.
 
Analyzing based on usage categories, durable consumer goods output fell 10.1% and capital goods production was down 5.6%. The declines were offset by a 4.8% increase in energy production.
 
On a monthly basis, the index fell a seasonally adjusted 2.1%. Industrial output was down 1.4% and output of the construction sector decreased 5.1%.
 
Austria exited recession in the third quarter with the GDP increasing 0.9% sequentially after contracting 0.5% in the second quarter, official data has showed. However, the economy grew at a slower pace in the fourth quarter as GDP rose 0.4% on a quarterly basis. 
 
SWEDEN
 
The OMX in Stockholm closed out the Friday session on 979.12, a day's gain of 0.06%.
 
Sweden's unemployment rose sharply in April exceeding expectations.
 
Jobless rate stood at 9.8% in April, an increase of 1.5 percentage points during the month compared to April 2009, the Statistics Sweden said Tuesday. The rate stood much above March's 9.1%. Economists were expecting the unemployment rate to be 9%.
 
The number of unemployed persons increased by 80,000 from last year to 483,000 in April. Women accounted for two thirds of this increase.
 
After adjusting to seasonal factors, the jobless rate stood at 9.3%. The number of unemployed stood at 464,000. Nearly 4.5 million people were employed in Sweden during April, on a seasonally adjusted basis.
 
In March, the National Institute of Economic Research forecast the jobless rate to be at 9.1% this year and next. The think tank has warned that the Swedish economy will not return to cyclical balance until 2014, when the unemployment rate will be around 6.8%.
 
Meanwhile, the Swedish government expects unemployment to peak at 9.2% this year, compared to a previous estimate of 9.5%. The government revised down its economic growth forecast for this year to 2.5% from 3% in April.
 
Riksbank policy makers expect that the Swedish economy will grow this year and there appears to have been a turnaround in the Labour market. On April 19, the rate-setting board decided to hold the lending rate at 0.75% and the deposit rate at negative 0.25%.
 
Sweden's trade surplus declined to SEK 6.9 billion in April from SEK 7.9 billion last year, the Statistics Sweden said in a report on Wednesday. The surplus also stood below March's SEK 7.6 billion surplus.
 
Compared to April 2009, exports increased by 13% to SEK 92.3 billion. Imports, at the same time, grew 15% to SEK 85.4 billion.
 
Trade with countries outside the EU showed in a surplus of SEK 12.4 billion. Meanwhile, the EU trade resulted in a deficit of SEK 5.5 billion.
 
Seasonally adjusted, the net trade surplus amounted to SEK 5 billion in April compared to SEK 5.1 billion in March. The corresponding figure for February was SEK 5.2 billion.
 
During January to April, the trade surplus totaled SEK 23.8 billion. The corresponding surplus figure for these months one year earlier was SEK 31.2 billion.
 
Nearly one in four households, or 22%, would have difficulty dealing with an unforeseen expense of 5,000 kronor ($635), according to a study by Länsförsäkringar.
 
The study showed that 34% would struggle to cope with 10,000 kronor more in expenses, while 49% would have problems addressing an additional 20,000 kronor in expenses, the study, which was conducted among Swedes aged 25 to 65, revealed.
 
More men than women believe that they can cope with unforeseen expenses, regardless of the amount. In two-parent households, more than eight out of ten said they could cope with an unplanned one-off expense of 5,000 kronor. Among single parents, only 45% said they would cope with such an expense.
 
The financial situations varied between counties. In Halland, 26% of households said they could not sustain an extra expenditure of 10,000 kronor, while in Södermanland, 40% said they could not make the sum.
 
It is important to secure a buffer in a regular bank account of about two or three times one's monthly net salary, said Ingela Gabrielsson, family economist at Nordea.
 
"It might take time to accumulate it, so one must get started with setting aside money every month," said Gabrielsson. "Even if it is very little, one can put it aside. It's better than nothing."
 
She questioned how so many people can be so badly off despite low mortgage rates and tax cuts.
 
"Maybe these are long-standing holes to fill and so we happily consume," said Gabrielsson, who believes that SMS loans and credit cards often act as a safety net when one's car breaks down or one deals with a high dentist's bill.
 
"It is easy for it to become a vicious circle that people cannot get out of," she added. "People get trapped making new installments all the time and there is still not enough to get by."
 
Even Finance Minister Anders Borg believes it is important for households to try to create a financial buffer.
 
In response to whether he believed it was concern that households have such tight financial margins, Borg responded, "Yes, one should always be careful and it is good for households to try to be frugal, especially when interest rates are so low - as they are gradually going to rise,"
 
He added, "I know that it is tough for people with small margins, but one should always try to have a small, small margin to have a sense of security."
 
Swedish household borrowing continues to increase at one of the world's highest rates and economists at the state Housing Credit Guarantee Board (Statens bostadskreditnämnd - BKN) have raised concerns over the risks for individuals, house prices, and the Swedish economy.
 
During the first three months of 2010 household mortgage debt increased at an annualized rate of 8%, one of the highest rates of increase worldwide.
 
"We have a debt-price spiral within the housing market. Sweden is among the OECD countries with the greatest increase in housing loans. There is a causal link between rapid debt growth and subsequent deep economic crisis," said Bengt Hansson, an analyst with BKN, to the TT news agency.
 
It is one of the conclusions of a new BKN report on the dangers of the current Swedish mortgage market with the board standing by its assessment that house prices will decline by 20-30% within 3-5 years.
 
"Household mortgage debt is expected to exceed 2 trillion kronor ($251 billion) this year. They are very vulnerable to interest rate shocks and the recent rapid indebtedness has comPounded the situation," said Bengt Hansson.
 
Much of the Swedish mortgage stock is held in variable rate mortgages, with 80% of new mortgages in March 2010 variable, up from only 45% as recently as March 2008. Ten years ago only every fifth household chose a variable rate for their mortgage.
 
The difference between variable and fixed interest rates since the late 1990s has been about 1.5 percentage points according to BKN but is currently uncompetitive for many mortgage holders, especially those with larger loans.
 
"Many households would gain from fixed-rate mortgages, not all, but it is especially heavily indebted households who are vulnerable for higher interest rates. But there is currently a lack of possibilities to fixed rates in the longer term at competitive conditions," the report states.
 
BKN warns that home-owners will sooner or later have to face up to higher interest rates, which are currently at record lows as a result of the finance crunch and subsequent public debt crisis.
 
"The Riksbank expects a "normal" repo rate in around three years of 4%, which means mortgage rates of around 7%," said Bengt Hansson.
 
Hansson argued that Swedes should be given the alternative to fix their interest rates for terms of up to 30 years, which he observes, is the case in the US and Denmark.
 
"This concerns mainly young and highly-leveraged households, who are unable to manage interest rate volatility," he said.
 
The risks of the mortgage market are not reserved to individual home-owners and house prices, Bengt Hansson argues, warning that the whole Swedish economy could be exposed to instability.
 
"The countries which have had rapidly increasing levels of indebtedness during the 2000s are also those countries which have had the weakest economic development during the finance crisis," he said.
 
The new report is not the first by BKN to warn of a house price crash and The Local reported on similar concerns expressed in February.
 
The February report's findings were rejected as unfounded by economists at state-owned mortgage lender SBAB who argued that interest rate rises will not come as any surprise to households and will be gradual, allowing mortgage-holders to adapt to higher housing costs.
 
Sweden's Financial Supervisory Authority (Finansinspektionen -FI) however appeared to heed warnings over the increased debt burden when it submitted a proposal in May that banks limit the amount offered for new residential mortgages to 85% of a property's market value.
 
"It is about protecting households from over-borrowing and about slowing the growth in borrowing, which is not a good thing in the long term," said Financial Markets Minister Mats Odell on receipt of the proposal.
 
The new guidelines are expected to come into force from October 1st.
 
DENMARK
 
Denmark's own OMX finished the week on 387.00, down 0.73% for the Friday session.
 
A law designed to give a cement producer a tax break in lieu of increased environmental charges is expected to be ruled illegal by the EU
 
Denmark has violated one of the EU's most central principles - that of free competition - in saving cement and concrete company Aalborg Portland around 100 million kroner by virtue of an annual waste charge exemption, according to the head of the EU's competition authority.
 
The company, which is the world's largest producer of white cement, has been allowed the break through legislation passed two years ago exempting cement dust from industrial waste fees. The move was designed to compensate for expenses incurred by cement companies from a recently imposed environmental tax.
 
That exemption would save Aalborg Portland around 100 million kroner by 2020.
 
But according to the European Commission's assessment, the law was a direct illegal advantage for Aalborg Portland, which is the nation's only cement producer.
 
'It is the view of the commission that through the granting of this exemption, the Danish cement producer is the recipient of illegal state aid,' wrote European competition commissioner Joaquin Almuniao in his introduction to the case's investigation.
 
The case is currently under review by the commission, but Almuniao's initial assessment does not bode well for the law staying in place.
 
Former tax minister Kristian Jensen - who introduced the proposal in 2008 - stands by the law, which he maintained was only aimed to give Aalborg Portland compensation for the new environmental expenses.
 
'We approved that ongoing tax break because the overall green bill passed at the time hit Aalborg Portland particularly hard,' Jensen told Politiken newspaper.
 
Specifically, the government's restructuring of total energy charges in connection with its tax reform plan would have cost Aalborg Portland an extra 9 million kroner a year, according to the company's own calculations.
 
The only party in parliament to vote against the exemption was the Red-Green Alliance, which argued that Jensen was unduly influenced by intense lobbying from Aalborg Portland advocates.
 
Red-Green party leader Per Clausen said the move was not merely anti-environmental but an affront to Denmark's official opposition to state support for private companies.
 
'Apparently a company having powerful friends is enough to solve these types of problems,' said Clausen. 'It's embarrassing that it has to be the EU that puts a stop to it.'
 
According to Politiken, many analysts believe Thursday's assessment by Almuniao will result in the EU taking action against Denmark.
 
Niels Rytter, former head of the Competition Authority, said he believes the case 'unquestionably' represents illegal state aid. Rytter is backed up by Michael Steinicke, professor of European law at the University of Southern Denmark.
 
Steinicke pointed out that the European Commission review expressed an extremely firm opinion and that it indicated the conditions necessary to give an exemption are not present in this case.
 
'So unless the Tax Ministry has any new convincing arguments to present, it's difficult to imagine that the commission will not order the tax break stopped,' said Steinicke.
 
Current tax minister Troels Lund Poulsen said he would not comment on the case because it is an ongoing matter. 
 
NORWAY
 
The OBX in Oslo ended the Friday session on 318.69, down 1.34%.
 
Norway's Central Bank (Norges Bank) Investment Management (NBIM) which manages the Norwegian Government Pension Fund Global will open an office in Singapore to expand its operations.
 
NBIM, which is already located in Oslo, London, New York and Shanghai, says in a press release that the aim is to expand in Asia's fast-growing markets.
 
"Asia is of increasing importance to NBIM. The move into China two years ago helped us form new business contacts and find new investment opportunities in an important market," says Yngve Slyngstad, NBIM's chief executive officer. "The next step into Singapore will further strengthen our operations in this region."
 
As one of Southeast Asia's financial hubs, Singapore offers new investment opportunities and proximity to many emerging markets. Its diverse population and international business community also provide a valuable recruitment pool for NBIM. The Singapore office will primarily focus on investment and trading activity in the region, complementing the office NBIM opened in Shanghai in November 2007.
 
The Government Pension Fund Global was worth more than 2,700 billion kroner at the start of May. Almost 10% of the fund's assets were in Asian countries including Singapore, China, Japan, South Korea, Malaysia and Thailand at the end of 2009.
 
"NBIM has grown fast since its inception in 1998 and become a global organisation with about 250 employees and investments in 70 countries," Slyngstad says.
 
Norwegian company Aker Solutions is to provide the basic engineering for two Arkema PVC licenses in Xining City, People's Republic of China, consisting of a 230 000 ton (kT) PVC Suspension production plant and a 35 kT PVC Emulsion plant.
 
"The licensing agreement concluded with Qinghai Salt Lake Industry Group Co., Ltd for three licenses confirms the remarkable quality of Arkema's PVC production processes, which makes them one of the most efficient PVC technologies in the world. Our partnership with Aker Solutions, one of the world's leading engineering and construction groups, has undoubtedly been a key element in the choice made by this Chinese manufacturer," states Otto Takken, Vice President of Arkema's Vinyl Products business segment.
 
"The choice made by Qinghai Salt Lake Industry Group Co., Ltd for Arkema's technology in combination with Aker Solutions' solid expertise in designing and executing projects in China, is a further illustration of the successful partnership between our companies," says Johan Cnossen, SVP - Europe, Middle East and Africa for Aker Solutions' Process and Construction business.
 
The licensing agreement covers the operation of the Arkema technologies, basic engineering, and technical support for the plants' startup.
 
The contract party in relation to the basic engineering is the Aker Solutions subsidiary Aker Process BV.
 
Norway's oil company Statoil ASA has agreed to sell 40% of the Peregrino field offshore Brazil to the Chinese Sinochem Group. Statoil maintains 60% ownership and the operatorship of the field.
 
Production on the Peregrino field is expected to start early in 2011.
 
Sinochem Group will pay a total of USD 3,070 million in cash for the 40% share of the Peregrino field, located in the Campos basin offshore Brazil.
 
"The transaction confirms the high quality of the Peregrino asset, reflecting Statoil's value added through the field development. The transaction demonstrates Statoil's ability to leverage its industrial competence developed at the Norwegian Continental Shelf, and realise value for our shareholders. The divestment is a natural step in our continuous effort to optimise our portfolio", says Helge Lund, CEO of Statoil.
 
"We are pleased with the transaction and look forward to partner with Sinochem Group in the further development and operations of the large Peregrino field. Both companies see many opportunities for value creation through increased recovery and exploration for additional resources in the decades to come. I am pleased that we also have agreed to sign a MoU to jointly investigate further opportunities in Brazil and elsewhere", says Lund.
 
The transaction is subject to government approvals in Brazil and China. The consideration is based on an effective date of January 1st 2010 and subject to customary adjustments.
 
The divestment of a 40% share of Peregrino will reduce Statoil's equity production guiding for 2012 by 40,000 boepd to a range of 2,060 000 - 2,160 000 boepd.
 
FINLAND
 
Helsinki's OMX rounded out a busy week Friday on 6,487.30, up 0.05% for the day.
 
The Finnish unemployment rate rose in April as more men were left without a job.
 
The unemployment rate climbed to 9.3% in April from 9.1% in March, the Labour Force Survey of Statistics Finland showed Tuesday. A year ago, the rate was 8.8%.
 
There were 15,000 more jobless during the month than a year ago, the Helsinki-based agency said. The unemployed total stood at 248,000 in April compared to 240,000 in the previous month and 233,000 last year.
 
From a year earlier, the jobless figure rose only for men, the statistical office noted. There were 145,000 men unemployed in April versus 130,000 a year ago. The jobless total for women remained unchanged at 103,000.
 
The number of employed persons stood at 2.41 million in April. It was 15,000 less than last year. The employment rate was 66.9%, down 0.7 percentage points from the year before.
 
The Labour force total was stable at 2.67 million from last year. The Labour force participation rate slid to 66% from 66.3% in the same month last year. The number of persons between 15 years and 74 years, not belonging to the Labour force grew by 19,000.
 
Data from the Employment Ministry showed that there were 264,000 registered job seekers at the end of April, which was 12,000 higher than last year. The number of persons covered by labour market policy measures stood at 92,000, up 7,000 from the year before. Overall, 3.5% of the Labour force was covered by Labour market policy measures at the end of April.
 
In March, the Finance Ministry predicted that the number of people out of work will continue to rise this year despite the trend of output growth. The unemployment rate is expected to climb to 10.2%. However, the situation is likely to improve next year, when the rate is forecast to fall back to 9.6%.
 
Meanwhile, the Bank of Finland said the slow recovery in growth is unlikely to reduce unemployment from around 9% this year.
 
Kuusakoski OY, a Finnish recycling company, has entered into a joint venture agreement with the British electronics recycling firm SWEEEP. Going forward, the British firm will be known as SWEEEP/Kuusakoski.
 
Despite the name change, the company will continue to focus on recycling obsolete electronics throughout the United Kingdom. SWEEEP has invested more than £6.5 million in its facility since its inception three years ago.
 
The facility includes a MeWa QZ plant, which processes more than 10 metric tons of obsolete electronic equipment per hour. It also recycles over 4,000 televisions and monitors every day.
 
SPAIN
 
The IBEX in Madrid drew proceedings to a close Friday on 9,425.50, up 0.97%.
 
Four regional savings banks in Spain have announced that they have agreed to merge some operations to form a single group worth around Eur 135 billion in assets, reports said on Monday.
 
The merger deal, which includes Caja de Ahorros de Mediterraneo, Cajastur, Caja de Extremadura and Caja Cantabria, is intended to consolidate the finances of the banks involved.
 
The announcement follows the government rescue of one of the country's biggest regional lenders, Cajasur, over the weekend.
 
That development affected Spanish banking shares, while the Euro was also hit due to concerns over Spain's overall financial health.
 
Spain's savings banks have been hard hit by the property sector crash and a number of these regional banks are in merger talks to shore up their solvency.
 
Meanwhile, the International Monetary Fund said that Spain's banking sector remains sound but is littered with "pockets of weakness".
 
Spain's producer prices rose at a faster pace in April largely due to higher energy costs.
 
The industrial price index increased 3.7% year-on-year in April, faster than 2.4% in March, the Spanish statistical office INE said Tuesday. Prices rose for the fifth month in a row. The inflation rate increased in each month.
 
On a monthly basis, producer prices rose 1% in April, faster than 0.8% increase in March. It was the sixth straight monthly gain. The rate accelerated for the second month.
 
Energy prices climbed 13.5% from a year ago compared to a 10.3% rise in the previous month. Month-on-month, energy prices stood 2.5% higher. The price index for intermediate goods showed an annual increase of 2.4% versus 0.5% in the previous month. The monthly rise in the index was 1.2%.
 
Overall consumer price inflation rose to 1.5% in April, while the underlying inflation registered negative growth for the first time on record. The Spanish economy edged out of a deep recession in the first quarter, growing just 0.1%. However, economists believe the country is yet to see signs of a strong and sustained recovery. 
 
PORTUGAL
 
The PSI General in Lisbon limped into the weekend on 2,510.40, a daily dip of 0.07%.
 
Portugal Telecom SA, escalating a battle for Brazilian wireless operator Vivo Participacoes SA, is in talks with investors from the Middle East and Asia as it weighs a possible offer for Telefonica SA's stake.
 
"I can tell you for sure that there are people interested from the Middle East and from Asia," said Jose Maria Espirito Santo Ricciardi, an executive of Banco Espirito Santo SA, Portugal Telecom's second-biggest shareholder. He declined to name any of the investors.
 
Either Portugal Telecom buys Telefonica out of Vivo or the Portuguese operator needs to find another company in Brazil, Ricciardi, chief executive officer of Banco Espirito Santo's investment banking unit, said in an interview at Bloomberg's headquarters in New York Thursday. Brazil, whose economy analysts forecast will grow by the most in more than two decades this year, has South America's largest mobile-phone market.
 
Telefonica, Spain's largest phone company, prompted a fight for control of Vivo with an unsolicited 5.7 billion-Euro ($7 billion) offer on May 10 to buy Portugal Telecom's stake. The Portuguese company rejected the offer.
 
Mercantile Bank Holdings and financial services company Sasfin Holdings said Thursday they were exploring the possibility of a merger.
 
Mercantile's share price Thursday soared more than 9% to 24c after the announcement was made, while Sasfin's share price remained static at R37,10.
 
Mercantile said Thursday the proposals could result in Mercantile's parent, the state-owned Portuguese company Caiza Geral de Depositos, becoming a controlling shareholder of the entity.
 
EDP-Energias de Portugal SA, the European nation's largest power company, expects its Brazilian earnings to grow about 10% in each of the next three years as it invests in thermal, wind and hydro power projects.
 
An $800 million coal-fired plant near Porto do Pecem, in the Brazilian state of Ceara, that EDP is building with companies controlled by billionaire Eike Batista, will be ready by the end of 2011, EDP Chief Executive Officer Antonio Mexia said Thursday in an interview in New York. The company's $100 million Tramandai wind farm in the state of Rio Grande do Sul will be finished by the end of this year, he said.
 
Lisbon-based EDP is in a better position than other European utilities to expand in Brazil, where energy projects are more attractive than in the US, Mexia said. About 18% of EDP's earnings before interest, taxes, depreciation and amortization, or Ebitda, come from Brazil, a higher percentage than its rivals in Europe, he said.
 
Investors "are excited with the fact that we are more exposed than others to Brazil," Mexia said. "There is a very good perception about the Brazilian market and the growth potential it represents, so it is a good asset for us."
 
US projects face "lower demand, a lower price of energy and sluggish regulation," Mexia said. EDP bought Horizon Wind Energy LLC of Texas from Goldman Sachs Group Inc. in 2007 and says it's now the world's third-biggest wind-park operator.
 
ITALY
 
Italy's FTSE MIB Index declined 155.99, or 0.8%, to 19,475.88, giving the index a loss on the week of 0.3%.
 
Finmeccanica dropped 28 cents, or 3.2%, to 8.495 Euros, paring two days of gains. The defense company denied any wrongdoing amid press reports of an investigation by Italian prosecutors into alleged corruption in connection with foreign bank accounts that may have been used for kickbacks, according to a statement distributed by the Italian exchange.
 
Gruppo Coin surged 22.5 cents, or 4.5%, to 5.225 Euros, a third straight gain. Gruppo Banca Leonardo reiterated a 'buy" rating on Italy's largest clothing distributor, saying in a note that Coin "is well structured to defend its current positioning and increase its market shares mainly through the conversion of the Upim locations, despite the still weak consumer spending in Italy."
 
Telecom Italia gained 1.05 cents, or 1.1%, to 96.95 cents, a third straight increase. BofA Merrill Lynch Global Research upgraded Italy's biggest phone company to "neutral" from "underperform." The brokerage cited a "very poor performance."
 
Uni Land climbed for a third day, gaining 4.4 cents, or 8%, to 59.2 cents as the real-estate developer said it signed an agreement to purchase a majority stake in Fenergy, which develops photovoltaic parks.
 
Italy's borrowing costs may climb at the country's first debt sale since Prime Minister Silvio Berlusconi announced 24.9 billion Euros ($30.7 billion) in budget cuts as governments struggle to address their deficits.
 
The Treasury plans to auction as much as 9.5 billion Euros of bonds Friday, including 4 billion Euros of 10-year debt. Italy sold 3.5 billion Euros of the same security at a yield of 4.09% on April 29. The yield on the benchmark 4% bond due September 2020 rose to as high as 4.14% Thursday.
 
Borrowing costs in southern Europe surged after Greece required a 110 billion-Euro three-year bailout to avoid default, compelling the most-indebted nations in the region to pledge budget cuts to reduce their deficits. Berlusconi's Cabinet approved the deficit package on May 25, while Spain's parliament passed the country's deepest budget cuts in 30 years by a single vote Thursday.
 
Italian business sentiment improved in May as the corresponding indicator reached the highest reading in almost two years, backed by increase in total orders and further reduction in inventories, a survey by ISAE showed Thursday. Meanwhile, production expectations dropped slightly.
 
Starting this month, the research institute is compiling the survey results using a new methodology, while the analysts' forecasts were related to the previous series.
 
The headline seasonally adjusted ISAE business confidence index rose to 96.2 in May, its highest since June 2008, from 95.9 in April, the research firm, which polled 4,000 companies between May 3 and May 18, said.
 
The gauge measuring the status of orders received showed a reading of minus 33 in May compared to minus 35 in April with both domestic and foreign demand stabilizing. Firms reported a slight reduction in inventories with the corresponding indicator dropping to minus 3 from minus 2 in the previous month.
 
Expectations on production also declined as the relevant indicator moved to minus 35 from minus 34. However, companies grew more pessimistic on the economic situation of the country as the corresponding measure fell to minus 19 from minus 14 in April.
 
The Italian government led by Prime Minister Silvio Berlusconi Thursday approved an austerity plan aggregating 24 billion Euros for the next two years as a part of efforts to reduce its budget deficit.
 
The measures reportedly consist of spending cuts and revenue increases, including a three-year wage freeze for public sector employees and a freeze on new recruitment in the next two years to help save up to 5 billion Euros.
 
GREECE
 
Athen's appropriately named ATHEX ended the Friday session and the last week of the month on 1,570.22, a drop of 0.52% on the day.
 
There was concern in the government Thursday that Greece might be appearing to renege on some commitments it has made to the European Commission and International Monetary Fund following comments made by a minister on TV on Monday that throw into doubt the date that pension reforms will come into effect.
 
Speaking to private Mega Channel on Monday, Labour and Social Insurance Minister Andreas Loverdos said that the EC wants Greece to make pension reforms, which foresee an increase in the legal retirement age and reduced monthly payments, apply from 2015 as opposed to 2018, the date agreed upon in a pact signed with the EC and IMF. The EC said Thursday that it had made a written request for the measures to apply as of 2015 but that Athens had already agreed to this when it signed the loan agreement.
 
Loverdos's decision to draw attention to this discrepancy was the main topic of discussion in government circles Thursday, according to sources. The same sources said that many other cadres of ruling PASOK also have serious reservations about other provisions in the agreement signed between Greece on the one hand and the EU, IMF and European Central Bank on the other. Some reportedly fear that many of the measures are too harsh and will not be swallowed by the Greek public.
 
The pension system overhaul is one of the reforms the government has committed to push through in exchange for a 110-billion-Euro aid package. The government's pension reform bill, which was due for submission in Parliament this week, is vehemently opposed by workers' unions, which describe it "unacceptable" and "outrageous" as it increases the number of years one has to work to get a full pension and abolishes entitlements enjoyed for decades by thousands of civil servants and other Labour groups.
 
Last week the country's two main unions, the civil servants' union ADEDY and the Confederation of Greek Labour (GSEE), which together represent close to 3 million workers, staged a 24-hour strike and protest rally against proposed the pension reforms.
 
Loverdos's draft law is aimed at ensuring that Greece's pension system, now teetering on the brink of collapse, will be viable in years to come but also means that, before the end of this decade, the basic monthly retirement payment will be just 360 Euros. According to Deputy Labour Minister Giorgos Koutroumanis, the reforms would result in an average reduction in pensions of 7% by 2030.
 
The Finance Ministry intends to replace the managers of tens of tax offices and investigate accusations of corruption made against revenue collection employees in a move to boost transparency and make the department more efficient.
 
The ministry will replace the heads of 20 tax offices throughout Greece after they failed to meet their targets in the first few months of the year as the government scrambles to collect the revenues needed to save the country from possible bankruptcy. Fifty official investigations will also be launched to check claims of corruption and negligence against employees mostly working at tax offices and customs points. The allegations were made on the four-digit 1517 phone hotline where taxpayers can report employees who ask for money in return for lightening their tax burden.
 
"Restoring transparency to tax collection services and protecting the work and reputation of employees... are the vital factors needed to secure a sustainable boost to state revenues," the ministry said in a statement.
 
The move comes after recent news that only three out of 67 revenue collection offices had met their goals for the first three months of the year.
 
At the same time, some 23 of them had not bothered to submit data to the ministry on income collected in the first quarter of the year.
 
Other changes announced Thursday include transferring 70 revenue collection officers to new positions and calling on 234 Finance Ministry employees to explain why they haven't filed a tax return for the 2007-08 period.
 
Some sources said that almost all of the 20 officials being demoted were employees appointed under the previous ruling conservative government while others said that the ministry is preparing the groundwork to replace employees with auditors from private companies.
 
In an article published in Kathimerini Friday, Panagiotis Grivas, the president of the Hellenic Federation of Tax Employees, welcomed the ministry's efforts, saying that they are a step toward boosting efficiency.
 
Grivas also called on the ministry to launch talks with the tax employees' union on all relevant topics in order to help them implement the government budget.