The Dow Jones Stoxx 600 Index added 0.2% to 241.06, extending its first weekly gain in three weeks to 1.7%. US

National benchmark indexes advanced in 10 of the 18 western European markets. The UK's FTSE 100 added 0.3% and Germany's DAX rose 0.1%. France's CAC 40 slipped less than 0.1%.

German stocks extended their weekly advance as gains in Deutsche Lufthansa AG and carmakers helped offset a report that showed the highest US unemployment rate in 26 years.

The benchmark DAX Index added 0.1% to 5,488.25, having climbed 1.4% this week. The measure is up 50% from the lowest level this year on March 6 amid signs that government stimulus policies and record-low interest rates are helping to drag the global economy out of recession.

German factory orders rose for a seventh month in September as exports helped the recovery in Europe's largest economy to gather pace. Orders, adjusted for seasonal swings and inflation, advanced 0.9% from August, when they gained a revised 2.1%, the Economy Ministry in Berlin said Friday.

Lufthansa, Europe's second-largest airline, climbed 3% to 11.06 Euros as competitor British Airways Plc said declines in passenger traffic and ticket prices may have turned a corner. Deutsche Post AG, Europe's biggest postal service, increased 1.1% to 11.93 Euros.

Daimler AG climbed 1.7% to 33.21 Euros after the carmaker said sales at its Mercedes-Benz unit rose 7% in October to 88,400 vehicles. Volkswagen AG added 1.3% to 109.18 Euros. The company's Audi luxury-car division raised its sales goal for 2009, the Frankfurter Rundschau newspaper reported, citing board member Peter Schwarzenbauer.

Hannover Re added 3.1% to 32.28 Euro as Germany's second-largest reinsurer raised its full-year profit target. Third-quarter net income was 159 million Euros ($237 million), exceeding the median estimate of 148 million Euros in a Bloomberg survey of 13 analysts.

Escada AG, the German luxury fashion maker that filed for insolvency in August, jumped 37% to 70 cents after saying the Mittal family trust agreed to buy its main assets.

Software AG, the country's second-largest software company, climbed 3.7% to 69.51 Euros as brokerages including Citigroup Inc., Commerzbank AG and UniCredit Markets & Investment Banking lifted their recommendations on the stock.

ProSiebenSat.1 Media AG rallied 7% to 7.66 Euros. Morgan Stanley lifted its share-price estimate for Germany's biggest private broadcaster 4.2% to 12.50 Euros and kept its "overweight" stance.

Symrise AG climbed 6.5% to 14.34 Euros, the biggest gain since May, as Commerzbank upgraded the maker of fragrances and cosmetic ingredients to "add" from "hold."

France's CAC 40 Index slipped 1.44, or less than 0.1%, to 3,707.29 in Paris, paring its gain this week to 2.8%. The index earlier rose as much as 0.5%. The SBF 120 Index increased less than 0.1% Friday.

Electricite de France slipped 1.22 Euros, or 3.2%, to 37 Euros, dropping for a second straight day. The company will likely miss its objective for "moderate organic growth" in earnings before interest, taxes, depreciation and amortization this year because of nuclear outages, analysts at Exane BNP Paribas wrote in a report dated Thursday.

Hermes International added 1.98 Euros, or 2.1%, to 98.80, gaining for a second day this week. The maker of Birkin handbags reported a 10% increase in third- quarter revenue and said sales for the year may "slightly exceed" its forecast.

Lafarge SA tumbled 2.17 Euros, or 3.7%, to 55.82, after two days of gains. The world's biggest cement maker said third-quarter western European volumes fell 22% and North America volumes slipped 25%. The two regions accounted for about 48% of Lafarge's sales in 2008, Bloomberg data show.

Latecoere retreated 27 cents, or 3.9%, to 6.58 Euros, falling for a second day this week. The French supplier of aerospace components said third-quarter sales dropped 24% to 95.5 million Euros ($142 million). The company expects full-year sales to drop by 25%, with no sustained recovery in business before 2011.

L'Oreal lost 1.22 Euros, or 1.7%, to 70.08 after two days of gains. The world's largest cosmetics maker said third-quarter sales fell 0.7% from a year earlier to 4.23 billion Euros. The stock was cut to "hold" from "buy" at Societe Generale SA, which cited "slow" growth.

M6-Metropole Television jumped 1.15 Euros, or 6.6%, to 18.50, for the biggest gain since March. France's second-largest commercial television company said third-quarter revenue rose 9.2% to 296 million Euros.

The Bel 20 in Brussels ended the trading week at 2,431.71, up 0.52% for the day.

Belgium-based supermarket operator Delhaize Group Thursday raised its full-year outlook after surpassing market hopes with a 28% surge in third-quarter net profit.

The company said sales had declined in the US due to a continuing price war among grocers, but it managed to offset the decline with cost cutting and said it had outperformed the market and grown volumes by using targeted promotions and price reductions and making sure its stores were as efficient as possible.

Delhaize makes about 70% of its profit and sales in the US, mostly in the south east where it operates the Food Lion, Hannaford and Sweet Bay chains.

Grocers have proved resilient during the economic downturn as consumers have kept spending on food, even if trading down to cheaper goods and stores. However, the US is now experiencing price deflation, stoking competition between retailers there.

"While price pressure in the US continued to impact sales, we were encouraged to see that targeted promotions and outstanding store execution resulted in improving volume trends for the third consecutive quarter," Chief Executive Pierre-Olivier Beckers said.

The company posted a third quarter net profit of Eur128 million, up from Eur100 million in the same period last year, beating analysts' expectations for a 10% rise to Eur110 million. Sales grew 4.8% on year to Eur4.9 billion, boosted by a 5.2% rise in the Dollar against the Euro compared with 2008. At identical exchange rates sales rose 1.9%

Like-for-like sales at its US stores dropped 1.3%, hit by the price war with the likes of discount giant Wal-mart Stores Inc. (WMT), while total sales fell 1.2% to Eur3.3 billion ($4.8 billion).

Delhaize's comments on US prices echo those of Netherlands-based peer Royal Ahold, which earns about 60% of its revenue in the US Late last month, Ahold reported a smaller-than-expected 4.3% rise in third-quarter sales, including a 1.9% rise in its key US chains, Stop & Shop and Giant-Landover and a 0.8% rise at the smaller Giant-Carlisle chain. It had blamed price deflation, trading down by customers and increased promotional activity in the US for missing expectations.

Belgian biomedical firm Tigenix may increase its capital to fund its expansion in regenerative medicine if market conditions are favourable for such a move.

The group, which develops cell-based medicinal products to treat damaged and diseased joints, recently won EU approval for its first product, ChrondroCelect, which helps to regrow cartilage.

ChrondroCelect is expected to start generating revenue from 2010.

"To finance its external growth, it might be necessary to raise additional financial means. Therefore, Tigenix does not rule out that the company will increase its capital if the market conditions are favourable," Tigenix said in a statement on Thursday.

It did not provide further details. Belgian newspaper De Tijd had earlier on Thursday cited observers as saying a capital increase of 15 million-25 million Euros ($22.1 million-36.9 million) was realistic for the company.

The paper also quoted Tigenix's chief executive, Gil BeYen, as saying that the company could manage with the 22 million Euros it has in cash.

Amsterdam's AEX rounded out a mixed week on 307.14, a drop of 0.22% for the session.

Thursday, Netherlands' Central Bureau of Statistics announced that the consumer price index or CPI rose 0.7% year-on-year in October, faster than the 0.4% growth in the previous month. Economists expected an increase of 0.6%. A year earlier, the CPI was up 2.8%.

On a monthly basis, the CPI increased 0.1% in October, slower than the 0.5% growth in the preceding month. Economists were looking for a decline of 0.1%.

Meanwhile, the harmonized index of consumer prices or HICP rose 0.4% year-on-year in October, after a flat reading in September.

Dutch telecoms group KPN is considering the sale of its business-customer unit and fibre network in Belgium, Belgian daily De Tijd reported on Friday, citing several unidentified industry sources.

KPN declined to comment on the report.

KPN, which owns the smallest of Belgium's three mobile operators, BASE, is active in broadband through Tele2 Belgium, which it acquired in 2007 and recently rebranded to BASE.

A shortlist of potential buyers has been drawn up, the newspaper said, with sources citing Belgian cable company Telenet and corporate telecoms specialist Colt Telecoms as candidates.

Dominant Belgian telecoms operator Belgacom was not interested in acquiring the assets, De Tijd said.

Anglo-Dutch consumer-products giant Unliever reported a 36% fall in third-quarter net profit on Thursday, but a measure of revenue rose for the maker of Ben & Jerry's ice cream as strong volume growth offset price cuts.

Unilever said profit fell to 1.05 billion Euros ($1.56 billion), or 36 Euro cents a diluted share, from 1.6 billion Euros, or 57 Eurocents.

Revenue slipped 2% to 10.2 billion Euros.

Unilever said earnings fell more quickly than sales due to disposals of businesses last year. Excluding restructuring, disposals and other one-off items, Unilever would have earned 43 cents a share.

Analysts polled by Capital IQ had expected adjusted earnings of 40.2 cents on revenue of 10.39 billion Euros.

Gross-profit margin widened 2.9 percentage points as the company operated more efficiently and cut costs.

The company saw underlying sales growth of 3.4% during the period, faster than the 3% analysts had estimated, as a volume rise of 3.6% offset falling prices. Underlying sales strips out asset sales and currency changes.

The ATX in Vienna closed out Friday and the week at 2,561.12, down 0.02%.

World No.1 brickmaker Wienerberger missed forecasts for third-quarter core earnings and forecast full-year results would also fall short as business in emerging Europe and the United States shows no signs of a pickup.

Wienerberger, highly geared to the contracting residential construction market, said third-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 40% to 76.9 million Euros ($114 million).

It took the biggest hit in central and eastern Europe, where EBITDA almost halved, and in the United States, where it turned negative. Analysts had on average expected a 35% fall in EBITDA.

"Although volume declines were more moderate during the summer, September remained below expectations - especially in the USA and Eastern Europe," new Chief Executive Heimo Scheuch said in a statement.

"There are no signs that the downturn in the operating business will soon bottom out," he said.

Scheuch, who is cutting costs and closing factories, and raised fresh cash in a rights issue in September to reduce Wienerberger's leverage, said EBITDA in the second half would be on roughly the same level as the first half of the year.

This implies full-year EBITDA of around 200 million Euros -- much less than the 240 million Euros average estimate according to Thomson Reuters I/B/E/S.

"I do not expect any significant improvement in earnings by year-end 2009," Scheuch said in a statement. "It is too early to speak of recovery from Friday's perspective because the economic environment is still difficult."

Wienerberger has suffered the full force of the housing collapse, especially in Britain, where Scheuch said business was improving in the United States and emerging Europe.

Austria's Finance Minister Wednesday expressed deep regret at the decision by General Motors Co. to keep its European unit Adam Opel GmbH, and urged the US carmaker not to delay a restructuring further in order to protect local plants and jobs.

"All involved are now expecting a presentation soon of a sustainable future plan for Opel, and that GM puts an end to the poker game over the financing of measures at local Opel production sites," Finance Minister Reinhold Mitterlehner said in a statement.

"Anything less would be a risky game at the cost of Opel's employees and the European economy," Mitterlehner said, adding that further delays in presenting a restructuring plan could lead to "problems for several production sites in Europe".

Following months of negotiations, GM reneged on a tentative plan to sell a stake in Opel to a consortium led by Magna International Inc. (MGA).

Reinhold Mitterlehner Wednesday said GM is eligible to apply for a state- guaranteed credit to aid efforts to maintain Opel's Austria-based production plant.

The minister had previously pledged that the government would support measures to protect the local Opel production under Magna's restructuring plan.

Austrian high-tech machinery maker Andritz Friday said its third-quarter 2009 net profit fell 24%, due mainly to weaker business in its pulp-and-paper and metals business.

Andritz reiterated it expects full-year sales to fall by 15%, and net profit "to decrease in comparison to 2008."

Andritz's net profit came to Eur27.1 million in the quarter, down from Eur35.6 million in the year-earlier period, hampered by weaker demand amid the global economic crisis.

Overall sales fell 15% in the quarter, to Eur756.1 million from Eur888.9 million, with a 34% drop in sales in its pulp and paper segment and a 25% decrease in metals segment sales, it said.

However, Andritz's hydropower equipment and plant producing division managed to increase sales by 9.3%, to Eur337 million in the period, Andritz said.

Zurich's SMI finished the week on 6,293.61, uo 0.13% Friday.

Adecco, the temporary staffing agency, climbed 8.2% to SFr49.78 after the Switzerland-based company reported a pick-up in demand for blue-collar workers in key markets.

Swiss bank UBS AG has been fined 8 million Pounds ($13.3 million) for management failures which allowed employees to make unauthorized trades with customers' accounts, Britain's financial regulator said Thursday.

The fine is the third-largest ever imposed by the Financial Services Authority.

Margaret Cole, the regulator's director of enforcement and financial crime said the fine included a 20% discount from the maximum because UBS  cooperated at an early stage.

Four employees and at least 39 accounts in UBS' London-based wealth management business were involved in the unauthorized transactions in 2006 and 2007.

"These employees were able to take advantage of UBS' inadequate systems and controls, giving them free rein to make unauthorized trades with customer money that they were then able to conceal," said Cole.

UBS has paid more than $42 million compensation to the wealthy customers who were affected.

The FSA and UBS both declined to say whether the employees faced prosecution, nor would they comment on the motive for the activity.

However, the FSA suggested that UBS management's emphasis on performance in determining employees' earnings was a factor.

"UBS was undergoing a period of substantial growth in relation to its international wealth management business and accordingly, financial performance of employees was a material factor in assessing their remuneration, in particular discretionary annual bonuses for desk heads and client advisers," the FSA said.

A whistle-blower brought the bank's attention to a proposed transfer of a customer's funds to the personal account of the head of a desk in the division.

"Upon further investigation, it was discovered that UBS employees had taken part in the trading of foreign exchange and precious metals using customer money without authorization and allocated losses to customers' accounts," the FSA said.

It added that as many as 50 unauthorized transactions a day were taking place at the operation's peak in 2006 and that weaknesses in controls allowed the employees to allocate losses to customer accounts.

The agency said UBS relied too much on employees' honesty, and that it failed to manage and control key risks, carry out effective remedies and provide adequate supervision.

Switzerland consumer confidence indicator increased to minus 14 in the fourth quarter from minus 39 in the third quarter, the State Secretariat for Economic Affairs or SECO said on Thursday. The confidence indicator in the third quarter was revised from minus 42 reported initially. Economists expected the index to be minus 38.

The improvement in consumer sentiment was mainly due to a more optimistic assessment of the expected economic situation and anticipation of a less pronounced rise in unemployment in the next twelve months, the SECO said.

Switzerland's jobless rate stood at 4% in October, up from 3.9% in the prior month, a report released by the State Secretariat for Economic Affairs showed Friday. The rate matched economists expectations. Meanwhile, the seasonally adjusted rate remained stable at 4.1% in October.

The number of unemployed persons in October increased by 3,729 to 158,138. Compared to the same month of last year, unemployment rose 57,667. According to SECO, around 217,972 job seekers were registered, up 5,070 from the prior month.

The OMX in Stockholm closed out the trading session Friday on 941.48, down 0.29%.

The Swedish Riksbank's plan to keep interest rates at a record low for a further year risks fueling a house price bubble in the largest Nordic economy, some policy makers and economists warned.

The world's oldest central bank proposes keeping its key interest rate at a record-low 0.25% until autumn 2010 to spur consumer prices after half a year of deflation. Governor Stefan Ingvestold lawmakers Friday "the responsibility for sustainable growth with regard to lending and house prices is largely beyond the Riksbank's control."

That is encouraging Swedes to exploit the European Union's lowest borrowing costs to take on bigger mortgages. Homes in greater Stockholm are back at last year's peak, mortgage lender SBAB estimates, adding to the "risk that a bubble will build up and eventually burst," Riksbank First Deputy Governor Svante Oeberg warned at the meeting. Even so, the bank wants to keep rates "low for a long period of time," it said last month.

The Riksbank's comments have persuaded households they can rely on low borrowing costs, with 66.9% of all new loans in September based on floating rates, compared with 41.6% two years earlier, Statistics Sweden estimates.

House prices rose 3% in the three months through September from the previous quarter, the statistics office said on Oct. 14. Prices in the greater Stockholm area may increase 5% this quarter and 2% next quarter, SBAB forecasts.

Finance Minister Anders Borg said Thursday the housing market poses a "serious" potential risk to the economy in the "medium term," adding that policy makers need to monitor "very, very carefully" the situation on the housing market.

Norway's central bank on Oct. 28 became the first in Europe to raise rates a month after Governor Svein Gjedrem warned asset prices "have risen sharply and probably excessively." The bank raised the key rate a quarter point to 1.5%.

At the Federal Reserve, officials under Chairman Ben S. Bernanke are reviewing whether gains in asset prices and narrowing credit spreads are justified as they try to ensure near-zero borrowing costs don't generate bubbles.

House prices are rising even as Sweden struggles to recover from its deepest recession in seven decades. The economy will contract 4.6% this year, the Riksbank forecasts, a deeper slump than in neighboring Norway and Denmark.

The rise in house prices recalls the 1990s asset bubble that sparked a banking crisis. The government intervened with capital injections and by nationalizing two lenders.

Ingves, who was a key figure in dragging Sweden out of that crisis, will have to signal faster rate increases to avert a second bubble, according to Nordea AB, the biggest Nordic bank.

House prices have risen even as joblessness goes up and unemployment may reach 10.3% next year, the central bank estimates.

Household debt may rise to 200% of disposable income by 2011, compared with 160% Friday, failing a policy shift.

The Riksbank last month said there are signs house prices "are somewhat higher than the level that would be sustainable in the long term" and warned banks to ensure lending policies don't fuel property prices.

Ingves has brushed off concerns his policy may be to blame, saying on Oct. 22 that "interest rates will eventually rise" and that that "will make it more expensive to own a house and it will also affect what happens on the housing market."

The governor said in Friday's speech that "in the long-term it is hardly sustainable that house prices should continue to rise as quickly as they have done since the mid-1990s, but in the shorter-term, our assessment is that there is no reason for the Riksbank to give greater consideration to house prices than we already do in our forecasts for the economy."

While Ingves said the Riksbank would be willing to hold discussions with other authorities about the Swedish housing market, for example about making it mandatory for households to amortize on their loans or lower the percentage of the price of a property people can borrow from banks, those are "measures that have to be handled somewhere else" than at the Riksbank.

A 10% decline in house prices, given current lending conditions, would leave one in five apartment owners and one in ten house owners with debt that exceeds their equity, the National Housing Credit Guarantee Board estimates.

Swedish central government payments resulted in a deficit of SEK 19.6 billion in October, reversing from a surplus of SEK 163 million last year, the Debt Office said Friday. The deficit in October was more than the the Debt Office's forecast of a SEK 14.3 billion deficit.

The difference is explained by displacements of payments between months within the Debt Office's net lending and will thus not affect the annual outcome, the official report said.

The Debt Office's net lending was SEK 9 billion higher than calculated. The main explanation is on-lending to the Riksbank of SEK 5 billion. This on-lending is temporary and is due to refinancing of maturing loans. The new loans that the Debt Office has taken on behalf of the Riksbank do not have the same payment dates as the maturing loans. Since the payments are carried out on different months this will have the opposite effect in November. Also other differences within the Debt Office's net lending are mainly of temporary nature.

Disbursements from authorities were SEK 4 billion lower than calculated. Tax payments developed in line with forecast. Interest payments on central government debt were SEK 1.6 billion, which is SEK 0.1 billion lower than calculated.

For the twelve-month period up to the end of October, central government payments resulted in a deficit of SEK 178 billion. Central government debt amounted to SEK 1,110 billion at the end of October.

Sweden's unemployment rate stood at 8.1% in the third quarter, up from 5.7% in the same period of the previous year. During the quarter, 399,000 persons aged between 15 and 74 years were unemployed. The unemployment rate among males stood at 8.4%, while it was 7.7% among females.

In the third quarter, the total number of people not at work increased by 84,000 from the previous year to total 3.63 million. This value incorporates employed persons who are absent during the reference week, unemployed persons and persons outside the labor force.

At the same time, the number of people outside the labor force increased by 85,000 from a year ago to total 2.02 million.

Copenhagen had a mixed week too, rounding off Friday on 328.55, a dip of 0.36% for the day.

Danish pharmaceutical company Genmab said Thursday it will cut around 300 jobs, sell its US-based manufacturing facility and reorganize its business in order to "match resources to ongoing and future needs".

As a result of the plans, Genmab cut its full-year guidance, taking into account restructuring costs as well as savings from the reorganization.

It said it now expects an operating loss of 1.16 billion Danish kroner ($232 million), compared to its previous full-year guidance for a DKK650 million loss.

The company's shares fell sharply on the news, and at one point were trading down 14% at DKK110.75.

Friday, the Statistics Denmark announced that the industrial production dropped 1.1% month-on-month in September, compared to the 0.9% fall in the previous month. At the same time, the industrial sales of own goods and services fell 1.5%.

For the July to September period, industrial production fell 1.5% compared to the previous three months period.

Meanwhile, industrial new orders climbed 43% on a monthly basis in September.

Thursday, the Danish central bank agreed to lend Eur 1.95 billion or US$ 2.9 billion to the International Monetary Fund in order to boost its lending capacity on the back of the global crisis.

The IMF and the Danmarks Nationalbank, the Danish central bank, signed the borrowing agreement, as part of the commitment made by the European Union in March 2009 to contribute upto Eur 75 billion to the Fund, to increase the lender's capacity. In September, the EU committed to provide an additional Eur 50 billion to the Fund.

Denmark's manufacturing activity increased in October, the purchase and logistics lobby DILF said on Monday.

The Manufacturing Purchasing Managers Index or PMI rose to 48.5 in October from 37.4 in September. The reading was the highest level since July when the index was at 48.7.

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

Denmark's foreign exchange reserves fell by 17.8 billion crowns to 376.1 billion Danish crowns ($73.96 billion) in October against economists' expectation of no change, central bank data showed on Tuesday.

Analysts surveyed by Reuters had estimated that the reserves remained unchanged in October at the September level of 393.8 billion crowns, according to the median of five forecasts.

Analysts said the drop in the forex reserves -- the first decrease in the monthly figure since October 2008 -- indicated that the central bank's interest rate cuts have curbed inflows into the Danish currency.

The central bank said it had sold foreign currency in the month for a net 0.1 billion crowns and the central government repaid foreign loans worth 17.7 billion.

Changes in the foreign reserves can signal that the central bank has been stabilising the crown or indicate that the bank may change its key interest rates.

'In October, Denmark's Nationalbank has not intervened in the foreign exchange market,' the central bank said.

European Union member but Euro zone outsider Denmark's policy of holding the crown steady against the Euro means that the central bank shifts interest rates for the sole purpose of keeping the crown around its central parity of 7.46038 per Euro .

Denmark's forex reserves climbed steeply from the late 2008 until September this year as interest rate spreads between Denmark and the Euro zone initially widened in the financial and economic crisis, making crown investments attractive.

But the spread to the Euro zone has narrowed, with Denmark's policy rate now just a quarter point above the Euro zone's 1% after 10 Danish rate cuts lopped 4.25 percentage points off the Danish central bank's lending rate since November 2008.

Market interest rate spreads remain wider than the gap between official rates, but have also narrowed.

Helsinki's OMX finished the week at 6,077.70, up 0.51% for the session.

Finnish engineering firm Metso launched a 177 million Euro ($261 million) bid for smaller rival Tamfelt on Thursday, seeking to bolster its services business.

"The combination will strengthen Metso's services business especially in the pulp and paper industry," Metso said in statement.

"For Tamfelt, the combination creates new growth opportunities especially outside Europe, where Metso has an extensive installed base and wide sales and services network," it said.

Metso said it was offering Tamfelt shareholders 3 new shares for every 10 Tamfelt shares, plus 0.35 Euros cash for some 400,000 outstanding stock options, valuing Tamfelt at around 177 million Euros total.

Metso said the deal, which requires regulatory approval in Finland "and some other countries", should close in the first quarter of 2010 at the latest.

It said the purchase should boost services business sales by some 140 million Euros annually.

Metso said Tamfelt's board has backed the bid, with 35.6% of shareholders having agreed to the offer. The offer will open on Nov 23 and is expected to close around Dec 18.

The outlook for Finnish firms has brightened slightly but companies expect no rapid return to growth, the Confederation of Finnish Industries (EK) said in its latest quarterly barometer.

It said its business outlook indicator rose to minus six points in October from minus eight points in July.

'The weak stage of the cycle is expected to continue into the first half of next year,' EK said in a statement.

'Although the market situation is in fact expected to stabilise gradually, there are no expectations of a rapid recovery and return to growth,' it said.

EK said outlooks varied by sector. In the forest and chemical industry and in information and communication services, the weak market situation was expected to improve somewhat.

It said the technology industry predicts a weak economy far into next year. In construction, while the worst of the recession seems to be over, upcoming months are still expected to remain bleak due to seasonal factors.

Finland's economy is seen growing around two% per year once it stabilises after the global financial crisis, the finance minister said on Tuesday.

'We estimate that Finnish economic growth in a normal cycle will be around two%,' Finance Minister Jyrki Katainen said, speaking at a seminar on taxation.

The Nordic country has forecast gross domestic product will shrink 6% this year, as ailing demand saps sectors ranging from electronics to pulp and paper to steel, but grow by an anaemic 0.3% in 2010.

Finland, taking on 13 billion Euros ($19.02 billion) in new debt next year, has warned stimulus spending will weigh on government finances.

'The spiral of indebtedness is so strong ... the debt curve needs to be turned around quickly,' Katainen said, adding if the crisis took the shape of a 'W', there would be no room for extra stimulus.

Finland's national output dropped a working day adjusted 8.4% in August, after a 8.9% fall in July, revised upwards from a 9.2% decline reported initially, the Statistics Finland said Friday. On an annual basis, the national output has been declining continuously since October last year.

During the month, secondary output fell 17% annually, while services output declined 6%.However, primary output rose 2%. Primary output includes agriculture, forestry and fishing, while secondary output includes manufacturing and construction.

Seasonally adjusted, the output dropped 0.5% month-on-month in August.

The OBX in Oslo ended a volatile week at 302.56, a drop of 0.80% for the day.

Norwegian newsprint maker Norske Skog said Thursday its losses narrowed by 63% in the third quarter, helped by cost reductions and currency gains.

The better-than-expected result - as well news that its cost-cutting measures are going according to plan - saw the company's shares soar, closing up 13.7% to 10.4 kroner ($1.83) on the Oslo Stock Exchange.

The company posted a net loss of 438 million kroner ($76.5 million) for the July through September period, compared with a loss of 1.2 billion kroner in the same period of 2008.

Revenues dropped to 5 billion kroner ($881.1 million) from 6.3 billion kroner.

The company said the sale of its share in a Shanghai mill and the decision to "indefinitely idle" a Dutch plant helped its result. In addition, a strong krone value throughout the quarter resulted in significant currency gains.

"The sharp fall in demand has leveled off, but the market remains challenging," said Chief Executive Officer Christian Rynning-Toennesen.

Norwegian oil service company TTS Marine said Friday that it slipped to a net loss of NOK180m in the first nine months of 2009 from a profit of NOK77.6m a year earlier.

TTS Marine's financial results were influenced by bankruptcies among its customers and cancellation of contracts.

Write-downs of goodwill of NOK100m and additional development cost of NOK40m weakened the results even further, the company said.

Due to changed market conditions, TTS Marine has started an extensive project to adjust organisation and costs to a lower level of activity, it said.

Turnover fell to NOK2.915bn from NOK2.947bon. Operating loss was NOK149.6m compared to an operating profit of NOK147.4m. TTS Marine slipped to a pretax loss of NOK209m from a profit of NOK103m.

Diluted loss per share stood at NOK5.11 versus EPS of NOK3.01.

Norway's biggest industry group warned the Krone's 6.8% advance against the Euro since July is eroding profits at manufacturers like Norsk Hydro ASA, Europe's second-largest aluminum producer, and says further gains will create "big problems" for the export-reliant economy.

"Norwegian industries may have the worst time ahead of them," the Confederation of Norwegian Business and Industry, said in a telephone interview on Nov. 3. "Large parts of the manufacturing sector are sailing into very big problems at the moment." The group represents about 19,800 companies employing around 500,000 people.

The world's sixth-biggest oil exporter suffered a milder recession than most industrialized economies thanks to its petroleum industry, allowing the central bank last week to become the first in Europe to reverse an easing cycle. At the same time, Norges Bank Deputy Governor Jan F. Qvigstad has said the bank must pace rate increases to spur a recovery in domestic demand without boosting the Krone and hurting exporters.

Qvigstad said in a Nov. 4 interview it's "most probable" the bank will raise its key rate, now 1.5%, no higher than 1.75% by the end of March, compared with a target range as high as 2.25% in the same period.

"A marked increase in the interest rate and a wider interest rate differential between Norway and other countries may entail a risk of a stronger-than-projected Krone," Qvigstad said in a speech in Fredrikstad. "This would indicate that the interest rate should not be raised too rapidly."

The currency of the world's second-biggest natural gas exporter has been the third-best performer against the Euro of the 16 major currencies tracked by Bloomberg since the end of June, after the Brazilian real and Australian Dollar.

That's hurt companies such as Oslo-based Norsk Hydro, which supplies the automotive and building industries. For every Krone the Norwegian currency strengthens against the Dollar, based on an exchange rate of 5.5 Kroner, Norsk Hydro's earnings before interest and tax would be cut by 1.6 billion Kroner ($282 million), according to its third-quarter presentation.

The Krone has strengthened from 6.4311 against the Dollar on June 30, compared with as weak as 5.6555 Thursday.

"A weak Dollar and a strong Norwegian Krone is not a positive situation for us and of course we are concerned if this will continue," Erik Brynhildsbakken, a spokesman for Hydro, said in a Nov. 4 interview. "For globally exposed industries such as aluminum, we are still in the middle of the storm. The financial crisis for us is not over."

Norske Skogindustrier ASA, the biggest Norwegian newsprint maker, said Thursday that the strong Krone hurt earnings last quarter. Dag Opedal, chief executive officer at Orkla ASA, a consumer goods and industrial products firm, told Dagens Naeringsliv last week a "strong Krone" and a "high cost level" will hurt industry in coming years.

The Krone is a problem for Norske Skog and all export- related companies from Norway that have production in Norway.

Industry Minister Trond Giske in a Nov. 2 interview warned the government must contain budget spending to avoid fueling higher interest rates that would strengthen the Krone and hurt exporters.

Norway's central bank isn't the only regulator facing divergent needs pulling policy in opposite directions. In Sweden, Governor Stefan Ingves is trying to tailor policy to fix half a year of deflation without fueling what Riksbank board members have warned may develop into a housing bubble.

Norges Bank Governor Svein Gjedrem is also signaling a possible scaling back of the pace of increases, and has said the strong Krone can be a "headache."

"The Krone is hurting. Absolutely," the Confederation of Norwegian Business and Industry said. "Many Norwegian businesses are telling us they are almost pulling out of certain markets" after becoming unprofitable. The UK and Sweden, two of Norway's most important trading partners, are "extremely difficult."

While the government expects the non-oil economy to grow 2.1% next year, exports, which make up almost half of output, will grow 0.1%.

"There is a two-tier economy," the Confederation of Norwegian Business and Industry said. "The sector competing on the export markets are doing quite badly, while some of the more sheltered industries and the public sector are growing strongly."

Norway's manufacturing industry contracted for a third month in October as orders and production slumped compared with the previous month, Fokus Bank, which compiles the purchasing managers' index, said on Nov. 3. This compares with a fifth month of growth for manufacturing in neighboring Sweden.

Prime Minister Jens Stoltenberg's coalition government has pledged to increase spending next year after already using a record amount of the country's $450 billion oil wealth on stimulus measures this year. Economists say an expansionary budget may lead to a tighter monetary policy which could trigger a strengthening in the currency.

"If they keep on increasing interest rates that would lead to an upward push on the Norwegian Krone, which is a big concern," the CNBI said.

Policy makers meet on Dec. 16 to decide on borrowing costs.

Madrid's IBEV finished the day Friday at 11,580.60, gains of 0.27% on the session.

Polymer Group Friday announced it has signed a definitive agreement to acquire the Barcelona, Spain-based Tesalca-Texnovo nonwovens businesses from Grupo Corinpa, S.L. in a two-phase process. The purchase is expected to close by the end of November, subject to customary closing conditions.

Thursday, Spain's National Institute of Statistics announced that the industrial production dropped a calendar adjusted 12.5% year-on-year in September, compared to a 12.7% fall in the previous month, revised from 13.1% decline reported initially. Economists were looking for a decline of 13.3%.

Manufacturing production fell 13.3% on an annual basis in September, while mining and quarrying production slipped 14.1%.

On an unadjusted basis, industrial production declined 12.5% year-on-year in September, after falling 10.6% in August.

Tuesday, the Ministry of Employment and Immigration of Spain announced that unemployment rose 2.6% month-on-month in October.

The number of unemployed increased 98,906 to 3.80 million in October. Compared to the previous year, it was an increase of 990,327. Male unemployment rose 2.8% and female unemployment grew 2.4%.

Monday, Markit Economics announced that the Spain Manufacturing Purchasing Managers' Index stood at a seasonally adjusted 46.3 in October, up from 45.8 in September. A reading above 50 indicates expansion, while one below 50 suggests contraction.

Manufacturing output declined modestly as the recession in Spain continued to have an adverse impact on demand. Production has now contracted in twenty of the last twenty-one months. New orders continued to fall and also at their fastest pace since May, with new foreign orders decreasing for the twenty-third consecutive month. Backlogs of work also declined and at an accelerated rate.

Employment levels in the manufacturing sector declined for the twenty-sixth straight month as a result of lower workloads. The stabilization of unemployment in the third quarter signaled by official figures is likely to be only temporary with PMI data continuing to show considerable falls in employment in the manufacturing sector as firms seek cost cuts.

The PSI General in Lisbon closed out the week at 2,878.08, down 0.03% for the session.

Fernando Teles, CEO of Angolan bank Banco Internacional de Credito (BIC, expressed interest Thursday in the privatization process of nationalized Portuguese bank Banco Portugues de Negocios (BPN).

Teles told Reuters his bank, Angola's fourth biggest, was not the only bank in Angola interested in the privatization of BPN.

Portuguese State Secretary for the Treasury and Finances said this week that BPN's privatization would be approved at "very short notice."

BIC, with a "twin" bank in Portugal led by Mira Amaral, is owned by industrialist Americo Amorim and Isabel dos Santos, daughter of Angolan President Jose Eduardo dos Santos. Each as a 25% stake. Fernando Teles has a 20% shareholding with the other 20% held by small investors.

BIC is also interested in floating shares on stock markets in London, Johannesburg or Luanda, said Teles.

Portuguese Prime Minister Jose Socrates says it would be a grave error to withdraw the economic stimulus packages in place to help steady the economy following the financial crisis.

The Socialist prime minister has been outlining his government's economic programme as he begins a second term following his election victory at the end of September.

"Let's move on priority areas: the TGV between Lisbon and Madrid and Lisbon Porto-Figo. We need to launch the new airport south of Lisbon and get on with the National Road plan," he said.

Socrates added that it is the "state's duty" to assist with unemployment in Portugal running at a 30-year high.

Opposition leader Manuela Ferreira Leite is concerned that the country's debt burden is already "unsustainable."

Speaking in parliament she said:

"We are looking at the government program with the same suspicion we looked at their manifesto, because it was designed to win votes and not be implemented."

Portugal earmarked 2.2 billion Euros at the end of last year to help weather the financial storm.

The government lost its overall majority in the recent election, meaning it will have to negotiate the passage of bills and reforms with the opposition.

Italy's benchmark FTSE MIB Index retreated for the first time in three days, losing 32.60, or 0.1%, to 22,549.64 in Milan. The gauge rose 2.2% this week.

Banco Popolare added 19.5 cents, or 3.4%, to 6.02 Euros. Bank stocks were the second-best performers in Europe Friday. "This, coupled with the stock's recent decline helped the shares Friday," said Alessandro Frigerio, a fund manager at RMJ Sgr in Milan. He noted that in the last few trading sessions Banco Popolare's 14-day relative strength index, or RSI, got near the level of 30 that some traders use as a trigger to buy.

Banca Monte dei Paschi di Siena gained 1.7 cents, or 1.3%, to 1.3 Euros. Banca Popolare di Milano Scarl (PMI IM) added 9 cents, or 1.8%, to 5.16 Euros. Keefe, Bruyette & Woods Ltd reiterated an "outperform" rating, citing "a cheap valuation" and "improving asset quality trends."

Bulgari, the world's third-largest jeweler, fell 10.5 cents, or 1.8%, to 5.68 Euros. Credit Suisse Group AG reiterated an "underperform" rating on the stock ahead of third-quarter results, saying that "significant top and bottom line recovery seems already priced in the shares."

Buzzi Unicem, Italy's second-biggest cement maker, lost 28 cents, or 2.4%, to 11.57 Euros, ending a two-day gain after Wienerberger AG, the world's biggest brickmaker, reported a third-quarter net loss, and Lafarge SA, the world's biggest cement maker, lowered its estimates for cement sales this year.

Fiat dropped 16 cents, or 1.5%, to 10.62 Euros. The Italian carmaker said it will consider selling shares in its auto making unit. "We'll talk about it when it's the right time, it's not now," Chief Executive Officer Sergio Marchionne said after a speech in Zurich Friday.

Indesit rose 18.5 cents, or 2.3%, to 8.29 Euros. Banca Imi increased its price estimate on Italy's biggest home-appliance maker to 8.7 Euros from 4.6 Euros. The brokerage reiterated a "hold" rating.

Pirelli lost 0.5 cents, or 1.2%, to 40.6 cents, ending a two-day increase. Intermonte Sim SpA lowered its recommendation on the tiremaker to "outperform" from "buy," citing the stock's recent performance.

Prysmian added 67 cents, or 5.5%, to 12.82 Euros. Exane BNP Paribas lifted its recommendation to "neutral" from "underperform." Prysmian expects a "strong" fourth quarter as orders rise at its subsea cable division, the company's chief financial officer said in an interview.

Telecom Italia retreated 2.4 cents, or 2.1%, to 1.12 Euros. BofA Merrill Lynch Global Research lowered its price estimate on ordinary shares of Italy's biggest phone company to 1.1 Euros from 1.15 Euros. The brokerage kept an "underperform" rating. Bank of America also trimmed its price projection on the savings shares to 1 Euro from 1.05 Euros while keeping a "buy" recommendation. The savings shares lost 0.5 cents, or 0.6%, to 79.6 cents.

Athens' Athex Composite ended the day and the week at 2,701.42, a gain of 0.67% for the day.

Greece's new government pledged in its 2010 draft budget on Thursday to save the country from bankruptcy by cutting the deficit while keeping electoral promises to help the poor amid the economic crisis.

Greece forecast its public debt will explode to 120.8% of GDP next year, making it the Euro zone's most indebted country, while it would be one of just three Euro members to remain stuck in recession, according to EU data.

'We need to save the country from bankruptcy,' Socialist Prime Minister George Papandreou, who won an Oct. 4 election, told a televised cabinet meeting. 'We can get out of the crisis.'

Greece aims to reduce its budget deficit by more than 3 percentage points to 9.4% of GDP next year with a mix of spending cuts, crackdown on tax evasion and increased taxes on tobacco, alcohol and real estate. But the ratio will still be over three times the 3% ceiling set for Euro members.

Analysts said the deficit reduction target was ambitious and it would be difficult to cut spending while increasing social support.

Social support measures to help kickstart the economy include one-off solidarity benefits to low income earners and above-inflation wage and pension increases for state workers.

'It is a budget for Greek economy's growth, it is a budget of redistributing (wealth) and it is a budget of tidying up,' Finance Minister George Papaconstantinou said.

The government said the draft budget would aim at re-establishing the confidence of the EU and investors in the Greek economy, after setting this year's deficit forecast at more than double than the previous government's projection.

Fitch downgraded Greece's debt to A- with a negative outlook last month. Moody's put Greece on review for possible downgrade.

Neither the 10-year Greek debt yield spread nor five-year Credit Default Swaps (CDS) moved after the comments, according to Reuters data and CDS monitor CMA DataVision. The debt yield spread was steady at 138 bps.

The budget shortfall will narrow to 9.4% of GDP in 2010 from 12.7% this year, Papaconstantinou said. The economy will drop by 0.3%, albeit at a slower pace, after falling into recession this year for the first time since 1993 with GDP down by 1.5%.

'The dynamics of the public debt is a bomb on the foundation of the Greek economy,' Papaconstantinou said.

The government declined to say how much Greece would need to borrow next year, saying more details will be given in the final budget proposal on Nov 21.

Greek manufacturing activity decreased marginally in October, signaling a further deterioration in manufacturing economy, a report from the Markit Economics said on Monday.

The Manufacturing Purchasing Managers' Index or PMI dropped to 48 in October from 48.5 in September.

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

Manufacturing output contracted in October, which showed an another slight decrease in new business.