Actual finance blog

China is blocking orders for at least $12 billion worth of Airbus jets to protest the European Union’s emissions trading fees, in a new challenge to the program aimed at fighting global warming, the planemaker said Thursday.

With some analysts warning of a brewing trade war, Airbus spokesman Stefan Schaffrath said his company is seeing “retaliation threats” from 26 countries, “in particular from China.”

Speaking to The Associated Press, he said 35 orders by Chinese airlines for A330 planes are on hold because China’s government is refusing to approve them. He said orders for another 10 A380 superjumbos are also under threat, and that the combined list prices of the aircraft is $12 billion.

“The economic impact is real,” he said.

Officials at the Chinese Embassy in Paris could not be reached for comment on the Airbus statements Thursday.

EU officials defended the emissions system. Asked about the Airbus complaint at the daily midday briefing, EU spokesman Isaac Valero Ladron said, “I’m not in a position to make any comments about possible trade decisions. I think it’s in everybody’s interest to reduce greenhouse gases, which affects climate change, and airplanes affect that, as well.”

The emissions trading system went into effect at the start of the year as part of European efforts to reduce global warming.

Airlines flying to or from Europe must obtain certificates for carbon dioxide emissions. They will get free credits to cover most flights this year but must buy or trade for credits to cover the rest payday advance.

The United States, China, Russia, India and many other countries are opposed and say the bloc cannot impose taxes on flights outside its own airspace.

EU officials have said they acted unilaterally because of a doubling of aviation carbon emissions in Europe between 1990 and 2006 and the inability of governments to forge a global deal on reducing emissions.

Schaffrath insisted that Airbus is working to reducing emissions but argued that a Europe-only measure creates trade imbalances.

“Our sector is committed to green aircraft,” he said. “We truly believe that the global issue of emissions does not know boundaries, and we need a global solution.”

Airbus made its warnings on the same day that its parent company EADS NV reported its annual earnings. EADS CEO Louis Gallois warned that the emissions scheme would cost Airbus and other European companies business globally. Schaffrath said the Chinese blockage could threaten Airbus’ plans to ramp up production of its popular planes.

China has said it will prohibit its airlines from paying the EU fees, and in Washington Congress has voted to exclude U.S. airlines from the emissions cap-and-trade program.

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Federal Reserve Chairman Ben S. Bernanke is trying to compensate for the damage lawmakers threaten to inflict on the U.S. economy, even as Republicans skewer his stimulus efforts for risking inflation.

The potential drag from fiscal restraint contributed to the rationale behind policy makers

Markets reacted cautiously Tuesday to the news that Greece finally secured its second massive bailout in less than two years, which is aimed at giving the debt-ridden country the breathing room to enact widespread economic reforms and set it back on the path to growth and prosperity.

That is the most optimistic hope in Europe’s capitals but with many hurdles still to be cleared and the country still lumbered with massive amounts of debt even after its private creditors agreed to a huge writedown of debt, the prevailing view in the markets is that Greece remains insolvent and that its debt crisis still has a few more chapters to run.

“This deal clearly does not solve Greece’s problems or that of the rest of the eurozone. What it does do is buy some time,” said Louise Cooper, markets analyst at BGC Partners. “This deal does not rule out a breakup of the eurozone. It does not rule out a Greek default in the future, it does not prevent contagion and does not help the wider eurozone indebtedness problem.”

The heart of the deal that emerged after 12 hours or so of wrangling in Brussels is that Greece’s partners in the 17-country eurozone have agreed to hand over another euro130 billion ($170 billion) to the country in the hope that it will avoid a potentially disastrous default as soon as next month, and secure the euro currency.

On top of the new rescue loans, Athens will also ask banks and other investment funds to forgive it some euro107 billion ($142 billion) in debt, while the European Central Bank and national central banks in the eurozone will forgo profits on their holdings.

However, the pieces of the jigsaw have yet to be put in place and many in the markets think that there will be more high-wire acts in the Greek debt drama. Perhaps most important of all will be Greek elections, due in April, which will take place at a time when the country’s economy is in freefall and unemployment is standing at a record rate above 20 percent.

With the parties of the governing coalition struggling to get a combined 30 percent in opinion polls, there are real fears in the markets that anti-bailout forces may win the day, or at least hold the balance of power.

“With the recession thwarting debt reduction efforts and public outrage growing, we still see Greece leaving the eurozone before the year is out,” said Jennifer McKeown, senior European economist at Capital Economics bad credit pay day loans.

Over recent days, stocks have rallied in the hope that a deal would be secured and that Greece would avoid defaulting on its debts in a disorderly fashion that could hobble a tentative improvement in the global economy.

The eurozone _ and Greece _ had been under pressure to reach an accord quickly to prevent Athens from defaulting on a euro14.5 billion ($19.2 billion) bond payment on March 20. The fear has been that an uncontrolled bankruptcy even of relatively small Greece could unleash market panic across the rest of the continent. That would further unsettle other struggling countries like Ireland, Portugal or the much bigger Italy or Spain.

Despite the promise of new rescue loans, which come on top of a euro110 billion ($146 billion) bailout granted in 2010, the other 16 euro countries made clear that their trust in Greece is running low. Before Athens will see any new funds, it has to put into practice a whole range of previously promised cuts and reforms.

With the deal agreed, many investors took profits on the gains they have mustered over recent days.

In Europe, the FTSE 100 index of leading British shares was down 0.4 percent at 5,919 while the CAC-40 in France fell 0.9 percent to 3,441. Germany’s DAX was 0.8 percent lower at 3,890.

The euro was faring slightly better, trading 0.2 percent higher on the day at $1.3230.

Wall Street was poised for a modest advance later as it returns from a long holiday weekend _ Dow futures were up 0.3 percent at 12,969 while the broader Standard & Poor’s 500 futures rose 0.2 percent to 1,363.

Earlier, Asian shares were mixed as they awaited the developments in Brussels.

Japan’s Nikkei 225 index closed down 0.2 percent at 9,463.02 while Hong Kong’s Hang Seng rose 0.3 percent to 21,478.72

In the oil markets, the attention was as much on Iran as on Greece. Earlier, Iran has laid out conditions for future oil exports to European countries after halting sales to Britain and France earlier this week.

Benchmark crude was up $1.49 to $104.73 a barrel in electronic trading on the New York Mercantile Exchange.

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Wynn Resorts says it forcibly bought back shares from its biggest stakeholder after finding the Japanese tycoon made improper payments to gambling regulators.

The Las Vegas company says it took action against Kazuo Okada after a year-long investigation uncovered that he engaged in activities that violated U.S. anti-corruption laws. Wynn has asked Okada to resign from the board.

The company says discoveries include cash payments and gifts totaling about $110,000 to foreign gaming regulators

Okada is the founder of casino game maker Universal Entertainment. He held an almost 20 percent stake in Wynn Resorts Ltd.

An email was sent seeking comment from Okada but it generated no immediate response.

Wynn says it filed a lawsuit against Okada and Universal Entertainment in Nevada District Court for breach of fiduciary duty and related offenses.

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At first glance, there’s nothing the least bit unusual about the routine followed by Ben Griswold on any given workday.

He analyzes markets, crafts investment strategies and performs various other responsibilities assigned him by Kennedy Capital Management, a boutique Creve Coeur financial services firm.

All fairly normal in the world of finance, were it not for this:

Griswold is an intern.

The hand-wringing over the brain drain that siphons the best and brightest from St. Louis to New York, Chicago, San Francisco and other exotic locales (Minneapolis, anyone?) has gnarled a fair share of economic development knuckles in these precincts.

But there may be an antidote to St. Louis bidding farewell each Spring to newly-minted professionals that head for brighter lights the ink barely dry on diplomas from St. Louis University, Washington University and the University of Missouri-St. Louis (to name just a few).

It can be found in the paid internship programs offered by Kennedy Capital and its larger counterpart, Town & Country-based ScottTrade - two businesses that provide college students with far more than a single semester or a summer break to absorb the intricacies of the trade.

Companies that offer extended internships are the exception rather than the rule, said Peggy Gilbertson, intern coordinator at UMSL.

But the role of interns, she added, have thankfully evolved whether a college student is on the job for three months or three years.

“I’m definitely part of a team,” said UMSL student Ceri (cq.) Berble, an intern in the ScottTrade public relations department. “I don’t get coffee for anyone. I sit in team meetings and my ideas are heard. I’m not intimidated.”

The interns at both Kennedy Capital (12 currently) and ScottTrade (428 in company branches nationwide) further shatter the stereotype of college students relegated to menial tasks with zero professional value.

“I’d be embarrassed to ask our interns” to make coffee, said Caroline Dybala, the internship program manager at ScottTrade.

Basic economics guided Kennedy Capital co-founder Jerry Kennedy’s decision 20 years ago to hire interns for terms of as long as 36 months.

From a business perspective it makes little sense to show interns the exit just at the exact moment they were getting comfortable with the quotidian of institutional finance.

“There’s a lot to learn at the start,” said Alex Mosman, the manager of the intern cooperative learning program. “And if you only had a summer or a semester you’d learn the basics and then leave.”

A fair number of the 185 sophomores and juniors hired by Kennedy Capital out of SLU, WashU, UMSL and other schools over the past two decades have in fact stuck around a lot more than three years.

In fact, 25 percent of the full-time employees at the company’s Olive Boulevard headquarters are former interns, Mosman and the firm’s chief financial officer included.

The same is true at ScottTrade which moves between 50-60 percent of its interns into permanent positions.

ScottTrade launched its extended length internship 12 years ago as a farm system to accommodate job growth at its network of branch offices, said Caroline Dybala, the internship program manager.

Dybala knows first hand the benefit of the long-term internship.

She arrived as a ScottTrade intern in 2000 with a goal of working in human resources but uncertain about where she might fit into the field following graduation from xxxx.

Her six months at ScottTrade cleared the picture and paved the way for Dybala’s current position.

By encouraging college students to stay on the job longer than standard internships, the ScottTrade and Kennedy Capital programs support to the notion that an investment in the personal and professional of young employees is an investment in the community as well.

Kennedy Capital in fact estimates that at least 60 percent of its former interns have remained in St. Louis. (The numbers for ScottTrade are more difficult to track since its interns are scattered around the country.)

The first three months former intern Alex Mosman spent at Kennedy Capital in the capacity of 20-hour-a-week intern may have been “overwhelming.”

But he attributes a big part of steep learning curve to his invaluable interaction with the top company executives.

“You’re thrown into it right away,” said Mosman, now a full-time research associate and the manager of the firm’s intern cooperative learning program. “You’re sitting in on management meetings and having conversations with (the chief financial officer).”

Research director Michael Bertz notes that Kennedy interns as full members of the team are expected to interact with clients and do their share to bump up the firm’s bottom line.

Likewise at ScottTrade where Dybala says an intern is usually the company representative greeting customers that walk through the door of its branches.

Griswold’s tenure as a Kennedy Management intern will earn him him a valuable entry for the resume he’ll send to prospective employers following graduation next year from SLU with a bachelor’s degree in finance and a graduate degree in accounting.

As the head intern charged with coordinating the schedules of seven fellow undergrads in the finance department (four other interns serve in other Kennedy Capital departments) Griswold will bring supervisory experience to his first job out of college.

“I’m not saying I was a 100 percent proficient from day one. But I communicate here constantly with professionals and I won’t miss a beat wherever I go,” Griswold said.

The reluctance of companies large and small to hire untested graduates straight of college have long-since turned real-world internships into a pre-requisite for full-time employment.

The question facing St. Louis businesses is whether to make worthwhile internships available locally or open the door for top-drawer college students to look elsewhere.

For the answer, the local business community might want to consult Alex Mosman.

“You can leave St. Louis and take an internship somewhere else,” said Mosman. “But if you do that, you may be gone for good.”

QUOTE OF THE WEEK

“Don’t just always go out to lunch with, you know, a couple of your friends, but actually go out to lunch with people from other departments, from other companies, and explicitly address questions like, how do you see the industry changing? How do you do your job effectively? Is there anything I should learn from that in terms of how do I do my job effectively? Do you see interesting opportunities? And that’s not necessarily always a question of job transition. It can be. Those kinds of talking to other people, building those relationships, are, I think, the things that everyone needs to be doing.” - Reid Hoffman, co-author of LinkedIn and author of The Start-up of You.

Source: National Public Radio’s Morning Edition

BY THE NUMBERS

43 - Percentage of hiring managers who expressed concern the top talent in their organizations will voluntarily depart for other positions in 2012.

34 - Percentage of hiring managers working for companies that experienced voluntary turnover in 2011.

Source: Harris/CareerBuilder survey

FINAL WORD

“You know, it’s funny. I bet someone is going to listen to this and say, you know, if I went in to my boss at my workplace, and said, you know, I went out to lunch with this guy from another division, or another company entirely, and came up with this interesting idea, that they would say my boss doesn’t want to hear that.” - Morning Edition co-host Steve Inskeep’s response to Reid Hoffman’s observation.

“Well, then your boss is not really adapting to the modern world.” - Reid Hoffman

Source: National Public Radio’s Morning Edition

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BOSTON • The Federal Reserve is making it increasingly hard for investors to earn anything, unless they’re willing to accept plenty of risk. Ben Bernanke and his Fed are playing the role of adviser, encouraging Americans to get a little more adventurous by shifting savings out of low-yielding bonds and putting it to work in stocks.

The latest nudge came last month when the Fed said it doesn’t expect to raise its benchmark rate until late 2014, at the earliest. Rates have been near zero since December 2008. The latest extension means borrowers can expect another three years of low-cost loans and mortgages.

It’s more bad news for savers and retirees depending on investment income, particularly when there’s 3 percent inflation. Investors who value earning stable returns from Treasury bonds end up with little more than satisfaction that they’re faring better than people keeping money in savings accounts.

Consider that investors committing to lock up their money for a full decade were only being paid 1.8 percent for buying U.S. Treasurys last week. And yields have turned negative for investors trading 10-year Treasury Inflation-Protected Securities, or TIPS. On Wednesday, the yield was negative 0.28 percent. In essence, investors are willing to pay Uncle Sam to borrow their dollars for 10 years, because the opportunity to minimize losses is attractive compared with other options.

Here’s a look at three relatively low-risk alternatives to generate some income in this environment:

DIVIDEND STOCKS

Dick Bristol, 74, a retired Air Force major from Biloxi, Miss., counts on dividend-paying stocks for his retirement security. His investment portfolio is nearly 100 percent in stocks that make regular payouts, and he and his wife count on a few hundred dollars of dividends coming in each month quick payday loans.

Of course, dividend-paying stocks are not immune from market drops. And companies often cut dividends when the economy skids. But Bristol is convinced the potential returns are worth the risks.

“Keep in mind that if you invest in something that’s earning 1 to 2 percent, you’re losing out to the 3 inflation we’ve got now,” Bristol says. “Over the long run, nothing pays like dividend stocks.”

HIGH-YIELD BONDS

These bonds are issued by companies with credit problems. High-yield investors expect higher returns because there’s a greater risk of default. And they’ve gotten them recently. Mutual funds specializing in high-yield bonds have produced an average annualized return of 19 percent over the last three years.

Anne Lester, lead manager of JPMorgan Income Builder, has recently been adding to the fund’s holdings in high-yield bonds. They now make up 44 percent of a portfolio. Corporate default rates remain low and high-yields are attractively priced compared with Treasurys and other bonds, Lester says.

MUNICIPAL BONDS

Investments in the bonds of state and local governments won’t make you rich because returns are generally low. But muni bond interest payments are exempt from federal taxes. That protection may extend to state taxes if the munis are issued by the state in which the investor lives. Investors can pocket attractive returns even after taxes, because the tax hit can be sizeable for those in higher income brackets.

“Munis give an investor opportunity,” said Jim Colby, a muni bond analyst with Van Eck Associates.

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Johnson & Johnson said Tuesday that fourth-quarter profit was barely a tenth what it made a year ago as a slew of charges for recalls, litigation and an acquisition dragged down income. But the health care giant’s revenue jumped last year, ending an unprecedented two-year decline.

After two tough years overshadowed by an embarrassing series of product recalls and other problems, the maker of Tylenol, prescription drugs and medical devices managed to beat Wall Street’s forecast for adjusted profit and came in just below its revenue forecast.

The company said net income was $218 million, or 8 cents per share, down from $1.94 billion, or 70 cents a share, a year earlier.

Excluding charges, net income was $3.13 billion, or $1.13 per share.

Revenue totaled $16.26 billion, up from $15.64 billion in 2010’s fourth quarter.

Analysts polled by FactSet, on average, expected earnings per share of $1.09 and revenue of $16.28 billion.

“We delivered solid results for 2011, built on the strong growth of our recently launched pharmaceutical products, and continued the steady momentum of new product approvals across all our businesses,” CEO Bill Weldon said in a statement.

Revenue fell 3.4 percent in the U.S., to $6.99 billion, but jumped 10.2 percent in foreign countries, to $9.27 billion. The U.S. decline was mostly due to an 8 percent drop in sales of prescription drugs.

J&J said it expects 2012 earnings of $5.05 to $5.15 per share, excluding special items. Analysts had expected $5.20 per share.

In morning trading, shares of the company rose 23 cents to $65.23.

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Strong corporate earnings reports and the lowest unemployment claims in almost four years gave investors more reasons Thursday to take risks on stocks, and the market continued its quiet but solid January climb.

The Dow Jones industrial average gained 45.03 points to close at 12,623.98. The Standard & Poor’s 500 index added 6.46 points to close at 1,314.50. Both averages are at their highest since July.

Volume was slightly above average. The market has been subdued this year: The S&P has moved up or down 1 percent or more only twice, and the Dow has moved 100 points only once, a 179-point gain on opening day, Jan. 3.

But the gains have been steady. The S&P has closed higher 12 of 14 days, and all three major averages have recorded healthy advances for the young year _ 3.3 percent for the Dow, 4.4 percent for the S&P and 7 percent for the Nasdaq composite index.

Investors appear ready to believe that the economic recovery is for real and getting stronger.

“The market is screaming loud and clear,” said Doug Cote, chief market strategist with ING Investment Management. “Prices have lagged fundamentals, and now they’re catching up.”

After the market closed, Google stock plunged more than 10 percent after its earnings per share badly missed Wall Street expectations. Intel and Microsoft rose slightly in after-hours trading after more encouraging reports.

In a sign of a bigger appetite for risk, investors moved money out of U.S. debt, a haven during the stock market’s volatile second half of 2011. The yield on the 10-year U.S. Treasury note increased to 1.98 percent from 1.90 percent Wednesday.

The market was led by industries that tend to perform best when the economy is getting stronger _ consumer discretionary stocks, financials and industrial companies.

Of the 10 categories of stocks in the S&P 500, the only one that lost considerable ground was utilities _ a safe play for investors during turbulent times and the best-performing category last year.

Cote said the market’s gains could accelerate as investors begin to focus more on economic fundamentals in the United States instead of worries about their exposure to risk.

And the economic news Thursday was good: The number of people seeking unemployment benefits plummeted last week to 352,000, the fewest since April 2008 payday loans guaranteed no fax. The decline added to evidence that the job market is strengthening.

U.S. consumer prices were unchanged last month, a signal inflation is under control. In the housing market, a third straight increase in single-family home building in December was offset by a drop in apartment construction.

France and Spain also held successful bond auctions, easing concerns about the debt crisis in Europe. As global risk factors subside, Cote predicts that markets will see “a strong snap-back rally.”

Bank of America rose 2 percent and Morgan Stanley rose 5 percent after reporting encouraging financial results. Bank of America returned to a profit in the last three months of 2011, while Morgan Stanley’s loss was much less than forecast.

Renewable Energy Group Inc., the nation’s largest producer of biodiesel, edged up 10 cents to $10.10 on its first day of trading. It was the first initial public offering of stock this year.

Trading was halted in shares of Eastman Kodak, the iconic photography company, after it filed for Chapter 11 bankruptcy protection. Kodak could not find a buyer for its trove of 1,100 digital imaging patents.

The Dow’s gain for the day amounted to 0.4 percent. The S&P’s came to 0.5 percent. The Nasdaq added 18.62 points, or 18.62 points, to close at 2,788.33.

Among other stocks in the news:

_ eBay Inc., the online auction company, rose 3.9 percent after it beat Wall Street earnings forecasts and gave a healthy outlook for the year.

_ Southwest Airlines Co. rose 3.1 percent after it said its fourth-quarter net income and revenue jumped. Southwest said it expects strong revenue in the first quarter too, based on passenger-booking trends.

_ Johnson Controls Inc., an auto parts and building equipment maker based in Milwaukee, fell 8.8 percent. Its profit and revenue fell short of Wall Street forecasts. It also cut its forecasts, blaming weaker auto production in Europe, a lower euro and poor demand for batteries.

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Asian stock markets rose Wednesday as expectations that China will loosen its monetary policy to boost growth overcame nervousness sparked by mixed earnings reports from big U.S. banks.

Benchmark oil rose above $101 per barrel while the dollar fell against the euro and the yen.

Japan’s Nikkei 225 index rose 1.4 percent to 8,579.80. Hong Kong’s Hang Seng added 0.3 percent to 19,685.87. South Korea’s Kospi was down 0.2 percent at 1,888.88 while Australia’s S&P/ASX 200 was up 0.2 percent at 4,223.60.

Benchmarks in Singapore, Indonesia and Malaysia rose while mainland China and Taiwan fell.

Investors cheered news out of China on Tuesday when the government said its economy slowed less dramatically in the fourth quarter than feared _ but still enough of a slowdown to persuade investors that Beijing will pursue a pro-growth monetary policy, analysts said.

“People have been buying stocks in anticipation of a relaxation in monetary policy by the Chinese government,” said Derek Cheung, chief investment officer at Neutron INV Partners Ltd. in Hong Kong. “The market expects this around Chinese New Year. If China doesn’t loosen around the new year, the market may come under pressure.” The holiday begins Jan. 23.

China is one of the biggest importers and slower growth could have global repercussions if it cuts demand for iron ore, industrial components and other goods from Australia, Brazil, Southeast Asia and elsewhere.

It would also mean less demand for U.S. and European capital goods for Chinese factories and construction sites, and smaller profits for U.S. and European companies that do business here. The luxury goods industry would also feel a significant pinch, since China is just about the only growth market for those.

Commodities shares jumped on the growth data out of China. Australian miners Fortescue Metals Group jumped 5 percent and Rio Tinto Ltd Low fee payday loans. added 1.5 percent after both companies reported target-beating production figures Tuesday.

But some financial shares came under pressure on weak quarterly earnings from some U.S. banks, including Citigroup Inc., which said its fourth-quarter income fell 11 percent due in part to lower investment banking income and an accounting charge.

Australia & New Zealand Banking Group fell 1.1 percent and Hong Kong-listed Agricultural Bank of China also lost 1.1 percent.

South Korean high-tech shares also slumped. Samsung Electronics Co., the top global manufacturer of flat screen televisions, memory chips and liquid crystal displays, fell 0.9 percent. LG Electronics shed 1.8 percent, and Hynix Semiconductor was 1.2 percent lower.

European shares ended mostly higher Tuesday on the heels of short-term debt auctions by Spain, Greece and Europe’s bailout fund that drew strong investor demand, despite recent credit rating downgrades by Standard & Poor’s.

Many had feared the downgrades would prevent them from obtaining funds and worsen a sovereign debt crisis in Europe.

On Tuesday, the Dow Jones industrial average rose 0.5 percent to close at 12,482.07. The Standard & Poor’s 500 index gained 0.4 percent to 1,293.67. The Nasdaq composite index added 0.6 percent to 2,728.08.

Benchmark crude for February delivery was up 66 cents to $101.37 per barrel in electronic trading on the New York Mercantile Exchange. The contract finished at $100.71 per barrel in New York on Tuesday.

In currency trading, the euro rose to $1.2779 from $1.2722 late Tuesday in New York. The dollar fell to 76.65 yen from 76.82 yen.

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French President Nicolas Sarkozy on Monday shrugged off his country’s loss of its prized AAA debt rating, saying the downgrade by rating agency Standard & Poor’s would change nothing.

The comments, his first since S&P lowered its score on France and eight European other countries on Friday, followed a successful auction by France of euro8.6 billion ($10.9 billion) in short-term debt Monday. The yields, the interest rates charged by investors on the debt, fell _ a sign investors still see the country as a good bet.

France won a further small reprieve Monday, when the Moody’s agency confirmed that it would keep its top rating. However, the S&P decision could seriously impair Sarkozy’s bid for re-election this spring.

Sarkozy told reporters he was unconcerned with the opinions of ratings agencies.

“We have to react to this (the downgrade) with calm, by taking a step back,” he said at a news conference with the new Spanish Prime Minister Mariano Rajoy. “At the core, my conviction is that it changes nothing.”

Sarkozy won support from Rajoy for a new European tax on financial transactions being pushed by France and Germany. Rajoy’s center-right government took power last month, and had not previously stated its position on the tax.

The French president said the ratings agencies’ decisions would not affect his policies, though he did acknowledge that France has work to do, saying that its deficits and spending were too high and that its growth was too slow.

He also noted that two of the three major agencies still rate France at triple-A, the highest rating. Fitch confirmed the rating last week. The S&P move was especially brutal for France, one of the world’s biggest economies and a financier of bailouts for smaller, poorer eurozone countries.

There are more government auctions in Europe this week, including longer-term offerings from France on Thursday, so the European debt crisis will never be too far from investors’ minds.

The news conference began combatively when Sarkozy refused to answer a question about whether France’s downgrade would affect its ability to lead Europe out of the crisis and if it had any connection with the meeting between the French, Italian and German leaders scheduled for next week being postponed.

Sarkozy and German Chancellor Angela Merkel have taken the lead in proposing solutions to the crisis and major decisions are often hashed out at their meetings ahead of European summits.

“You don’t have the latest information,” Sarkozy blithely told the reporter, apparently referring to Moody’s decision on Monday. The reporter rephrased the question two more times, but Sarkozy again refused to answer totally free credit score.

Later on, in response to other questions, he confirmed that the three-way summit would take place in February and spoke about the S&P downgrade.

Earlier, Sarkozy met with Spanish King Juan Carlos, who said he’s confident France and Spain would help Europe find a way out of the crisis.

The king said the two nations were “struggling together for the advance of a unified and prosperous Europe in solidarity that confronts the crisis with strength.”

Rajoy’s Socialist predecessor also supported the financial tax championed by Sarkozy, but was ousted from office by Spaniards angry about the country’s hurting economy and high unemployment.

The European Commission has estimated that the tax could raise as much as euro57 billion ($72.2 billion) a year, funds that could be used to help reduce the substantial budget deficits crippling European economies.

For the tax to be successful, however, it needs to be adopted by as many countries as possible. Sarkozy has said it might be enough to enact it among the 17-nation euro countries. Italian Prime Minister Mario Monti prefers applying it across the full 27-nation European Union, but that would be more difficult because of U.K. opposition.

Part of the reason for the tax would be to raise funds at a time when governments are struggling with high debts.

Moody’s cited France’s economic strength as a reason for affirming its top rating but said bleak growth prospects in France and the region present “risks to the French government’s fiscal consolidation plans.”

“France, like other eurozone sovereigns, may face a number of challenges in the coming months. The need to provide additional support to other European sovereigns or to its own banking system cannot be excluded,” Moody’s warned.

Moody’s said Monday it “will update the market during the first quarter of 2012 as part of the initiative to revisit the overall architecture of our sovereign ratings in the EU.”

Sarkozy’s challengers for the presidency have seized on the S&P downgrade as evidence that his policies are wrong-headed and ineffective.

It will be a bruising election battle for Sarkozy, a dynamic leader who has a strong international profile but is widely disliked at home. Leftists say he has coddled the rich, while many of those who supported him in his 2007 campaign say he hasn’t fulfilled his promises.

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