World Bulletin/News Desk
Socialist President Francois Hollande's 2013 budget amounts to France's toughest belt-tightening for 30 years as the debt crisis takes its toll on the euro zone.
The package aims to narrow France's deficit to 3.0 percent of national output next year from 4.5 percent this year, bringing in 30 billion euros ($39 billion) for the treasury.
But the budget dismayed business by opting for tax hikes -- including a 75 percent tax on those earning over one million euros a year -- by holding public spending and not cutting government jobs.
With Hollande facing record unemployment and economic stagnation, there were also fears the deficit target will slip as France falls short of the modest 0.8 percent economic growth rate on which it is banking for next year.
"This is a fighting budget to get the country back on the rails," Prime Minister Jean-Marc Ayrault said, adding that the 0.8 percent growth target was "realistic and ambitious".
In Spain, an independent audit of the country's banks confirmed that a manageable 59.3 billion euros in extra capital is needed for them to ride out a serious economic downturn, buying time for Rajoy who faces intense pressure to seek an international bailout.
The audit is a condition of getting European funds to patch up Spanish banks that have been damaged by a prolonged real estate crash.
Spending cuts and tax hikes in response to the euro zone debt crisis are throttling any recovery in the euro zone's fourth largest economy, driving up unemployment and prompting sometimes violent street protests.
Spain has replaced Greece, Ireland and Portugal as the main threat to the survival of the euro currency project.
Both the strict 2013 budget presented by Rajoy's government on Thursday and the audit of 90 percent of Spain's banking system are necessary steps for Madrid to request sovereign aid and trigger a European Central Bank bond-buying programme.
The audit results, which will be used to determine how much aid Madrid will tap from an agreed 100-billion-euro European credit line for the banks, were in line with government and market expectations and were applauded by the European Commission.
"That's another layer of uncertainty that's off the table," said David Schnautz, rate strategist at Commerzbank.
In further signs that austerity measures imposed on the euro zone's struggling southern members are having a harsh social cost, thousands of trade unionists marched through Rome as part of a general strike, forcing authorities to close the Coliseum.
Opposition to austerity policies aimed at steering Italy out of its economic crisis is growing as the country's year-long recession shows no signs of ending and unemployment continues to rise.
"At the moment, I just can't see a future that gives us any hope, particularly for the youth," Emilio Amiraglia, a former Italian soldier, said.
The march by mainly public sector workers followed clashes between anti-austerity protesters and police in Madrid and Athens this week.
In the euro zone's paymaster Germany, Angela Merkel learned on Friday that she will face former finance minister Peer Steinbrueck as the opposition Social Democrats' leader in next year's election, a development that may cause some unease in the chancellor's camp.
Steinbrueck, a combative veteran from the right of the centre-left SPD, backs tougher rules for banks and a coalition government with the Greens.
Analysts saw his rapid emergence from a three-way struggle within his party as the outcome most threatening to Merkel, though polls show the conservative leader still well ahead.
"We want to oust this government. We want to make sure it isn't just partially replaced but completely replaced with an SPD-Greens government," he told a news conference, referring to the ecologist party currently ranked third in opinion polls.
Former finance minister says Russian sovereignity doesn't preclude economic, trade and financial relations with Europe and the US.
The comments came after Foreign Minister Frank-Walter Steinmeier told German weekly Der Spiegel that he was worried Russia could be destabilised if EU sanctions were not eased.
Rosneft, which produces more oil than Iraq or Iran, has asked for 2.5 trillion roubles ($44.07 billion) from the government to help it weather sanctions and refinance its debts.
The raise is expected to bring Israel's civil servants' salaries up to 5,000 shekels (around $1,282) from 4,200 shekels (roughly $1,076)
Russian sanctions have hit Lithuania's transport sector, which employs around 100,000, as well as its dairy industry.
The suspension comes as South Korea is struggling to contain its own outbreak of bird flu in birds.
Austrian Chancellor Werner Faymann justified the original sanctions as "a self-defence step", but added: "Our goal cannot be tightening the sanctions."
Both the European Union and United States adopted tighter restrictions on investments in Crimea this week, targeting individuals, Russian Black Sea oil and gas exploration and tourism.
Chinese Premier Li Keqiang said the offer included $1 billion for infrastructure, $490 million for poverty alleviation and $1.6 billion in special loans for China's production capacity export
Ukraine could default on its debt obligations if the situation does not change in the next few months, S&P said on Friday.
Damascus has relied on Tehran to fight its war with drop in oil price affects oil-producing Iran. Syrian traders say Damascus worried about future support
The ruble makes small gain Friday morning, but RTS index continues to contract
Norwegian energy company Statoil, which suspended 5 rigs in the last 2 months, granted $610 million for development of its gas fields
Putin earlier announced pipeline project via Bulgaria would be cancelled.
President Vladimir Putin said that Russia needed to take the opportunity to diversify its economy to protect it from external shocks.
Verdi said in a statement that workers at four of those centres had decided to continue their strike until Saturday and employees at the Graben warehouse would strike until Dec. 24.