Actual finance blog

ATHENS—Greece’s prime minister launched efforts to form a coalition government to run the country for the next four months, arguing Saturday the move is vital to securing a mammoth new debt deal and demonstrating commitment to remaining in the eurozone.

George Papandreou won an early morning confidence vote in the Socialist-led parliament on a pledge that he was willing to step aside and form a cross-party caretaker government. But it remains unclear whether the main opposition conservatives and other parties will take part in the talks and drop a demand for an immediate general election.

Hours after winning the vote, Papandreou met with President Karolos Papoulias.

“Cooperation is necessary to guarantee — for Greece and for our partners — that we can honor our commitments,” Papandreou said at the start of Saturday’s hourlong meeting.

“I am concerned that a lack of cooperation could trouble how our partners see our will and desire to remain in the central core of the European Union and the euro,” he said.

Papandreou, midway through his four-year term, was forced into the move by his austerity-weary Socialist party after he abandoned a disastrous proposal to hold a referendum on a new European debt deal. The idea was quickly scrapped this week after throwing world markets into renewed turmoil and drawing an angry reaction from European leaders.

Frustrated with Greece’s protracted political disagreements, the country’s creditors have threatened to withhold the next critical 8 billion euros ($11 billion U.S.) loan installment until the new debt deal is formally approved in Greece.

Greece is surviving on a 110 billion euros ($150 billion U.S.) rescue-loan program from eurozone partners and the International Monetary Fund no fax cash advances. It is currently finalizing a second mammoth deal: to receive an additional 130 billion euros ($179 billion U.S.) in loans and bank support, with banks agreeing to cancel 50 percent of their Greek debt.

“My immediate aim is to do everything I can to create a broad cooperation government … I am not tied to my post,” Papandreou said.

“Cooperation is required for the country. We must not go to elections at this moment because it would have catastrophic consequences for the Greek economy and the livelihoods of Greek citizens,” he said. “The (new debt) agreement is very significant and will relieve much of the burden on the Greek citizen.”

Socialist party officials insisted any new government would need until late February to secure the second deal, warning that a snap poll could scuttle it. They insisted Saturday that Papandreou’s offer to step aside was sincere, and called on Antonis Samaras, leader of the conservative New Democracy party, to urgently reconsider his party’s position.

“If Mr. Samaras were willing to back a new government, the prime minister would resign today,” Yiannis Magriotis, a deputy public works minister, told private Skai television.

Prominent political analyst Ilias Nicolacopoulos argued it would be difficult for Samaras to avoid the coalition talks altogether — even if he remains reluctant to share power with Papandreou.

“There will be a tough game of poker — all of last week was a poker game — to determine what type of government can be formed,” he told AP television.

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SATURDAY

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Thailand’s flood crisis deepened Tuesday after floodwaters breached barriers protecting Bangkok’s second airport, effectively forcing a halt to commercial flights there after airlines using it suspended operations.

It was not immediately clear how much water had entered Don Muang airport. But the news was sure to further erode the credibility of a government that has repeatedly sent mixed signals about its ability to defend the heart of an increasingly anxious capital from the worst floods to hit Thailand in nearly 60 years.

Bangkok’s Suvarnabhumi Airport, the country’s main international gateway, has yet to be affected by flooding and flights there were operating normally. Most of the city has been spared inundation so far.

Budget airline Nok Air suspended operations at Don Muang until Nov. 1 “because water has entered the north side of the airport already,” the company’s CEO Patee Sarasin told The Associated Press. He said all airborne aircraft would be diverted to Suvarnabhumi.

The only other main carrier using Don Muang, Orient Thai Airlines, also said it was suspending flights and would transfer domestic operations to Suvarnabhumi.

An airport official confirmed water had crept inside the airport compound, but he said runways were unaffected. An Associated Press reporter at the airport was not immediately allowed to inspect the area where water had entered.

Don Muang has come to symbolize the gravity of Thailand’s catastrophic floods, which have swamped a third of the country’s provinces and killed 366 people over three months. It houses the government’s emergency Flood Relief Operations Center, and one of its terminals is home to thousands of people who have been forced to flee their homes.

Floodwaters have been pouring into the Don Muang district, located on Bangkok’s northernmost outskirts, for several days payday loans. The waist-high water has entered homes and blocked streets running to the airport.

Don Muang is among seven of the capital’s 50 districts that the government has declared at risk. Those zones, located in the north and northwest, are all experiencing minor flooding.

The latest to be added to the list was the northwestern district of Bang Phlat. Late Monday, Gov. Suhumbhand Paribatra warned residents there to move their belongings to higher ground after water from the Chao Phraya River crept in through a subway construction site.

Also Tuesday, Prime Minister Yingluck Shinawatra’s administration declared Oct. 27-31 public holidays in affected areas, including Bangkok, government spokesman Thitima Chaisaeng said.

Last week, Yingluck ordered key floodgates opened to help drain runoff through urban canals to the sea, but there is great concern that rising tides in the Gulf of Thailand this weekend could slow critical outflows and flood the city.

Late Monday, the flood relief center said water levels in the worst-hit parts of the country _ the submerged provinces north of Bangkok _ were stable or subsiding. But the massive runoff was still bearing down on the city as it flowed south toward the Gulf of Thailand.

While neighborhoods just across Bangkok’s boundaries are underwater, most of Bangkok is dry and has not been directly affected by deluge.

Anxious Bangkokians, though, have been raiding stores to stock up on emergency supplies, and many have been protecting homes and businesses with sandbags. Some have even erected sealed cement barriers across shop-fronts.

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The finance chiefs from the euro’s 17 countries hunkered down Friday to overcome differences over how to strengthen a bailout fund, which is key to preventing the currency union’s debt troubles from spinning out of control.

Giving the euro440 billion ($607 billion) European Financial Stability Facility much more firepower is considered essential before the eurozone can deal with its two other main problems: cutting Greece’s massive debts and forcing weak banks to boost their capital buffers to shore up their defenses against worsening market turmoil.

“Once we have the option for the leveraging (of the EFSF) then _ building on that _ we can develop all other points,” said Austrian Finance Minister Maria Fekter, as the arrived for the meeting in Brussels.

Markets appeared to be giving Europe the benefit of the doubt, trading substantially higher Friday even though a wide-ranging plan to deal with the crippling debt crisis won’t be in time for Sunday’s summit of EU leaders. A second meeting on Wednesday has been scheduled.

“Considering the importance of the discussions and there potential impact upon the European economy, global capital markets and the future of the EU itself a delay of a few days is neither here nor there in the overall scheme of things,” said Gary Jenkins, an analyst at Evolution Securities. “However the suggestions that they are still far apart on how to make best use of the EFSF is of some concern.”

Governments have ruled out increasing their financial commitments, but they acknowledge that with some euro140 billion already going to Ireland, Portugal and Greece, the EFSF isn’t big enough to both help recapitalize weak banks and keep big economies like Italy and Spain from being dragged into the crisis.

A failure to agree on the best way of maximizing the fund’s impact between Germany and France forced European leaders to call another crisis summit for Wednesday _ on top of the two-day talks between finance ministers and a first summit of EU leaders this weekend.

Austria’s Fekter said up to seven technical options for giving the EFSF more leverage were currently on the table and both she and German finance minister Wolfgang Schaeuble ruled out the possibility that the fund will be able to tap into the vast resources of the European Central Bank. That proposal is still being pushed by France, which sees ECB help as the best way of giving the EFSF the necessary force.

A high-ranking German official, who declined to be named, said that a combination of two options had crystallized as the most likely solution.

The first would involve the bailout fund acting as an insurer for bond issues from wobbly countries like Italy. That would essentially compensate investors against a first round of losses and help to support their bonds and keep the borrowing costs from rising too far.

In addition, the International Monetary Fund _ which has already provided about a third of the bailout cash for Greece, Ireland and Portugal _ would supply other stragglers with precautionary credit lines to make sure they have a ready access to cheap money.

Last weekend, at a meeting in Paris, the finance chiefs from the Group of 20 leading economies, opened the door for a larger role by the IMF, but only if the eurozone first does its part.

IMF Managing Director Christine Lagarde, who joined the ministers in Brussels Friday, said that her institution would do everything it could to help Europe.

“We will find solutions,” she said, without going into details.

Europe’s leaders have already told their counterparts in the G-20 that they will have a plan ready to present to them at their next meeting in Cannes, France, in early November.

But Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the meetings of eurozone finance ministers, said the announcement to delay all decisions until the next summit on Wednesday looked “disastrous” to the outside world. He also canceled a press conference that had originally been scheduled for after Friday’s meeting, indicating that hopes were low of having clear results to present.

There appeared to be some progress on finding a solution on Greece, which has been paralyzed for much of this week. Sporadic outbreaks of violence during a two-day general strike against the government’s austerity program claimed the life of one person on Thursday.

The German official said the aim was to bring Greece’s debt down to about 120 percent of economic output, from more than 180 percent it is set to reach next year. That would most likely involve the banks taking a bigger hit on their Greek bond holdings, hence the need for a widespread recapitalization plan.

In nearly identical statements Thursday night, German Chancellor Angela Merkel and French President Nicolas Sarkozy asked Greece to immediately enter into discussions with private creditors on bringing its debt down to a sustainable level.

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Asian stock markets advanced Monday, bolstered by improved U.S. retail sales and Europe’s renewed efforts to contain its debt crisis.

Japan’s Nikkei 225 stock average rose 1.5 percent to 8,881.42, hitting a six-week intraday high at one point.

Hong Kong’s Hang Seng jumped 1.7 percent to 18,824.07, South Korea’s Kospi was up 1.2 percent at 18,824.07 and Australia’s S&P/ASX 200 climbed 1.8 percent to 4,282.30.

Sentiment brightened after stronger retail sales data in the U.S., leading to gains on Wall Street before the weekend. The Dow Jones Industrials rose 1.4 percent to close at 11,644.49 on Friday.

Retail sales, which are a key barometer of consumer spending, recorded the biggest gain in seven months in September and double what economists were expecting. The data added to signs that the world’s biggest economy may avoid another recession.

Worries about Europe’s debt problems also eased following a meeting of Group of 20 finance chiefs over the weekend in Paris.

The group opened the door for the International Monetary Fund to play a bigger role in fighting the escalating debt troubles among countries that use the euro common currency. It also said eurozone ministers will “decisively address the current challenges through a comprehensive plan” to be unveiled on Oct paydayloans. 23.

In currencies, the dollar edged up to 77.24 yen from 77.22 late Friday. The euro fell to $1.3851 from $1.3875.

With the dollar holding above the 77-yen line, investors sent Japanese exporters higher. Sony Corp. surged 4.6 percent, while Toyota Motor Corp. 2.4 percent.

Missing out on the rally was camera and precision instruments maker Olympus Corp., which plunged after firing its British CEO on Friday after just six months.

The issue tumbled more than 22 percent, following a double-digit slide before the weekend. Several ratings agencies issued downgrades, while media reports said Michael Woodford was dismissed after questioning Olympus executives about improper corporate governance and several acquisitions before he arrived.

Benchmark oil for November delivery was up 35 cents at $87.15 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.57 to settle at $86.80 in New York on Friday.

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Gannett Co.’s new CEO took over just in time to discuss third-quarter earnings, which are expected to reflect depressing trends facing the largest U.S. newspaper publisher. The numbers are due out before the stock market opens Monday.

WHAT TO WATCH FOR: Gannett’s results will be broken down by Gracia Martore, who was named the company’s CEO earlier this month after Craig Dubow resigned for health reasons. The biggest concern for investors is whether its long-running slump in print advertising worsened during the July-September period. The owner of USA Today and more than 80 other dailies has already warned investors that advertising revenue in its newspaper division fell in the quarter, extending a decline that began in 2006.

It will be a bad sign if the decline is worse than the 7 percent year-over-year decline that the company’s newspapers suffered in the April-June period.

Gannett’s situation isn’t unusual. As advertisers continue to spend more on the Internet, most major newspaper publishers have struggled. Newspapers have garnered some digital advertising, but those gains haven’t come close to making up for losses on the print side.

Gannett has more of a cushion than some of its peers because it also owns 23 television stations.

To help offset the sharp drop in advertising, Gannett and other newspaper publishers have resorted to layoffs and furloughs.

WHY IT MATTERS: Gannett, which is based in McLean, Va., will be the first major U.S. newspaper owner to report its third-quarter results, giving investors a better sense how the industry is holding up as the economy sputters.

WHAT’S EXPECTED: Analysts polled by FactSet expect Gannett to earn 44 cents per share on revenue of $1.28 billion.

LAST YEAR’S QUARTER: Gannett earned $101 million, or 43 cents per share, on revenue of $1.31 billion.

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Netflix’s Internet video library is adding TV shows from the CW network in an effort to appeal to younger subscribers and help offset the upcoming loss of another contract that supplied customers with other popular entertainment options.

Under a four-year licensing deal announced Thursday, Netflix will have the right to show the previous seasons of TV series that CW airs through the network’s 2014-15 programming window. Netflix will retain the streaming rights to some of the series until 2019.

The previous seasons of several current CW shows, including “The Vampire Diaries” and “Gossip Girl,” will be available in Netflix’s Internet video library Saturday. Other CW series will debut in January.

Financial terms weren’t disclosed. The episodes will be available through a Netflix service that streams video over high-speed Internet connections to TVs, computers and a variety of mobile devices.

The agreement with CW’s owners CBS Corp. and Time Warner Inc.’s Warner Bros. comes at a low point for Netflix Inc. The company is scrambling to overcome a series of setbacks that have hammered the company’s stock price and driven away hordes of subscribers during the past three months.

The trouble began in July when Netflix announced it was raising its prices by as much as 60 percent for U.S. subscribers that wanted to stream video and rents DVDs through the mail. Things got worse last month when Starz Entertainment broke off talks to renew a key Internet streaming deal and Netflix announced plans to spin off its DVD-by-mail service into a separate website called Qwikster.

As part of its damage control, Netflix earlier this week abandoned the Qwikster spin-off. The company, which is based in Los Gatos, Calif., is hoping to minimize the blowback from losing the Starz streaming rights by buying other content that will keep subscribers happy.

Netflix desperately needs to make amends credit reports free. Its stock price has plummeted by about 60 percent since mid-July and its subscribers have been fleeing. When the company releases its third-quarter earnings on Oct. 24, Netflix is expect to report it ended September with about 24 million U.S. subscribers _ 600,000 fewer than it had in June.

Netflix shares rose $4.35, or 3.8 percent, to $117.97 in afternoon trading.

Since the Starz negotiations collapsed, Netflix has gained the streaming rights to TV shows and movies from AMC Networks Inc., DreamWorks Animation and now the CW network. The movies and TV special from DreamWorks won’t be available before Netflix loses the right to stream films from Walt Disney Co.’s studios and other programming when the Startz deal expires early next year.

CW targets younger TV viewers with series that include “Supernatural,” “Nikita” and “90210.” It’s a demographic that Netflix also wants to reach because so many teenagers are growing up watching video on any device with a high-speed Internet connection.

“This is programming for the on-demand generation and we hope this agreement deepens the relationships viewers already have with these powerful entertainment brands,” said Ted Sarandos, Netflix’s chief content officer.

The CW deal also will make Netflix’s Internet video library look even more like a TV rerun service. Netflix says old TV shows account for about 60 percent of the video watched on the streaming service. The company would like to add even more TV programming, but Time Warner so far has staunchly refused to license HBO productions such as “The Sopranos,” “The Wire” and “Deadwood” because it views Netflix as a threat to its pay-TV channel.

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A gender discrimination lawsuit filed two years ago by Francine Katz, a former high-ranking female executive at Anheuser-Busch, will finally go to trial in St. Louis Circuit Court after the Missouri Supreme Court declined the brewer’s request for a transfer.

Katz, a lawyer who formerly worked at the Armstrong Teasdale law firm, joined Anheuser-Busch’s legal division in St. Louis in 1988 and ultimately rose to vice president of communications and consumer affairs for the brewer. She also was a member of the company’s strategy committee. She resigned from A-B after it was acquired by Belgium-based InBev in late 2008. 

Katz filed a gender discrimination lawsuit against A-B in October 2009 that alleged she was given a smaller salary and bonuses than male executives and alleged the company had a “frat party” atmosphere that excluded females from informal social networks, in violation of the Missouri Human Rights Act personal loans for people with bad credit.

Anheuser-Busch sought to have the case go through arbitration rather than a trial, but the Missouri Court of Appeals ruled in Katz’ favor in June, allowing the lawsuit to proceed in the St. Louis Circuit Court. A-B sought a transfer to the state’s highest court, but on Tuesday, the Missouri Supreme Court denied A-B’s request.

Katz is seeking lost wages and compensatory and punitive damages.

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The European banking system is teetering. Congress lurches from one government shutdown crisis to another. Unemployment in the U.S. is stuck at 9 percent with no improvement in sight.

Amid it all, the stock market has gone manic-depressive, jumping one day and tanking the next business card. The Dow Jones industrial average is off 5.7 percent for the year.

That leaves the risk-shy investor yearning for shelter

Austrian lawmakers have voted to expand the powers of the eurozone’s bailout fund, which is designed to help Greece and other potentially struggling countries deal with their debts.

Friday’s passage means that Austria guarantees to provide euro21.6 billion ($29.4 billion) to the fund, compared to euro12.2 billion previously.

If all 17 eurozone nations agree to increase their share, the fund will have euro440 billion ($600 billion) at its disposal.

Parliament’s backing had been expected, with the governing center-left coalition supported by the opposition Greens in backing the measure. Only two rightist parties opposed the bill.

Austria’s endorsement comes a day after German parliamentarians approved beefing up the so-called European Financial Stability Facility.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

VIENNA (AP) _ Austrian lawmakers have voted to expand the powers of the eurozone’s bailout fund, which is designed to help Greece and other potentially struggling countries deal with their debts.

Friday’s passage means that Austria guarantees to provide euro21.6 billion ($29.4 billion) to the fund, compared to euro12.2 billion previously.

If all 17 eurozone nations agree to increase their share, the fund will have euro440 billion ($600 billion) at its disposal.

Parliament’s backing had been expected, with the governing center-left coalition supported by the opposition Greens in backing the measure. Only two rightist parties opposed the bill.

Austria’s endorsement comes a day after German parliamentarians approved beefing up the so-called European Financial Stability Facility.

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