The celestial economy

The Economist

By 2030 China’s economy could loom as large as Britain’s in the 1870s or America’s in the 1970s

IT IS perhaps a measure of America’s resilience as an economic power that its demise is so often foretold. In 1956 the Russians politely informed Westerners that “history is on our side. We will bury you.” In the 1980s history seemed to side instead with Japan. Now it appears to be taking China’s part.

Greece 'integral' to the eurozone, say European leader

The leaders of Greece, France and Germany have said that Greece is an "integral" part of the eurozone.

It follows a telephone call between Greek Prime Minister George Papandreou, French President Nicolas Sarkozy and German Chancellor Angela Merkel.

Geithner to Take Crisis Message to Europe Talks

Bloomberg

U.S. Treasury Secretary Timothy F. Geithner plans to urge European Union finance ministers to step up their crisis-fighting strategy when he meets with them this week in Poland, a euro-area official said.

The official spoke on condition of anonymity because preparations for the meeting, which takes place in Wroclaw, Poland, on Sept. 16 and 17, are confidential. It will be the first time Geithner has attended a session of Europe’s Economic and Financial Affairs Council, known as Ecofin.

Merkel Lessens Fears Over Greece

The Wall Street Journal

German Leader Rejects Suggestions Athens Be Allowed to Default or Leave Currency Bloc, Reassuring Nervous Market

By MARCUS WALKER and NOÉMIE BISSERBE

BERLIN—German Chancellor Angela Merkel rejected suggestions that Greece could be forced into bankruptcy soon or even leave the euro zone, lifting European banking shares and broader financial markets that have been gripped in recent days by fears of an imminent Greek meltdown.

The World Isn't Up to Global Coordination

The Wall Street Journal

By PAUL HANNON

The global economic crisis seemed very far away as the sun blazed down on Marseille's old port Friday. But such is the depth of the gloom surrounding the economic outlook, finance officials from the Group of Seven leading developed economies must have envied the carefree souls piloting their yachts out of the harbor and onto calm blue seas.

Merkel Eschews ‘Uncontrolled Greek Insolvency’

Bloomberg

German Chancellor Angela Merkel said that Greece is taking the right steps to get its next bailout payment, warning against allowing a Greek default because of the risk of contagion for other euro-area countries.

Merkel, in a German radio interview to be broadcast today, said that an “uncontrolled insolvency” would further roil markets spooked by the prospect of a Greek default. The euro region currently has no system for “orderly” insolvency until the permanent rescue fund is established in 2013, she said.

Europe's Galileo sat-nav spacecraft ready to fly

BBC

By Jonathan Amos

Europe's first two Galileo satellite-navigation spacecraft are ready for launch.

The platforms passed a key technical review at the weekend, paving the way for their flight to orbit on a Russian Soyuz rocket on 20 October.

One satellite has already made the journey to the launch complex in French Guiana; the second will ship this week.

Greece Won’t Default, Yet

The Wall street Journal

Germany has been a rich source of saber rattling over Greece, much of it for domestic political consumption.

In the end, Germany will have to give in and let Greece have its September bailout installment, giving Athens until the next tranche in December to see if its new taxes can work off a dangerously widening budget deficit.

Senior IMF officials now acknowledge as much, sympathizing with the headwinds Greeks face with their economic recession. The alternative is too terrible to contemplate, with crumbling European credit markets in recent days giving only a pale hint of what a Greek default would wreak.

Greek default jitters hammer French banks, euro

(Reuters) - Growing fears of a Greek default sent a hurricane through heavily exposed French banks on Monday and hit the euro as investor confidence in the European currency area's ability to surmount a sovereign debt crisis ebbed.

Bad News Could Force Some Real Decisions

The Wall Street Journal

Sometimes the really bad news is good.

Jürgen Stark's decision to resign from the board of the European Central Bank, not too long after Axel Weber quit as Bundesbank president, just might put paid to the dithering that has characterized euro-zone policy making for too long. And the equally disturbing news that the Greek economy is in virtual collapse, shrinking by 7.3% in the last quarter, puts more than a little pressure on euro-zone politicians to abandon the notion that press releases are synonymous with action, and austerity with prudence.

Supercomputer predicts revolution

BBC

Feeding a supercomputer with news stories could help predict major world events, according to US research.

A study, based on millions of articles, charted deteriorating national sentiment ahead of the recent revolutions in Libya and Egypt.

Europe's Markets Slump

The Wall Street Journal

By TOBY ANDERSON

LONDON—European stocks opened sharply lower Monday amid deepening concerns about a possible Greek default, while the euro slumped to a 10-year low against the safe-haven yen.

London's FTSE 100 index was 1.9% lower at 5114.72, Frankfurt's DAX index dropped 2.5% to 5061.87 and the CAC-40 index in Paris fell 3.3% to 2875.28.

Greece Announces New Tax as Unrest Flares

The Wall Street Journal

Property Levy Aims to Close Budget Gap

THESSALONIKI, Greece—The Greek government said Sunday it will impose a new property tax to cover a €2 billion ($2.7 billion) shortfall in budget targets this year, which it has promised its international creditors in exchange for receiving fresh aid.

Making Strength of Zone's Weakness

The Wall Street Journal

Common Euro Bond Issue, Opposed by Many Leaders, Could Create an Investor Haven

The world is short of secure destinations for investment funds, as shown by Switzerland's dramatic efforts this week to deter the floods of capital entering the Alpine safe haven. Here's a solution: euro-zone bonds, debt instruments issued collectively by euro-zone nations that could offer for the first time a real alternative to the U.S. Treasury market. They have another advantage: They could also save the euro zone.

Libyan interim leader Abdul Jalil flies to Tripol

11 September 2011 Last updated at 04:43 GMT

BBC

The head of Libya's interim government, Mustafa Abdul Jalil, has flown to Tripoli for the first time since anti-Gaddafi forces captured the capital.

Mr Abdul Jalil was greeted by hundreds of cheering, flag-waving supporters.

Until now he had remained in the eastern city of Benghazi. His presence in the capital is aimed at sending a message about his authority.

Germany Nominates Asmussen to Succeed Stark at ECB

The Wall Street Journal

By GEOFFREY T. SMITH

MARSEILLE, France—The German government has nominated Jörg Asmussen to succeed Jürgen Stark on the executive board of the European Central Bank, Finance Minister Wolfgang Schaeuble said Saturday.

At a news conference after weekend meetings of the finance ministers and central-bank governors of the Group of Seven leading industrialized nations, Mr. Schaeuble said he hoped that Mr. Asmussen would be able to assume Mr. Stark's duties toward the end of the year.

Greek Leader Vows To Press Changes

The Wall Street Journal

By ALKMAN GRANITSAS

THESSALONIKI, Greece—Prime Minister George Papandreou vowed Saturday that the country would meet its budget targets and press ahead with difficult reforms, even as thousands demonstrated against those reforms on the streets of Greece's second largest city.

ECB Lowers Growth Forecast

The Wall Street Journal

By TOM FAIRLESS

FRANKFURT—European Central Bank President Jean-Claude Trichet warned Thursday that the euro zone's economy will grow more slowly than previously expected, and said risks to medium-term inflation have moderated.

But he stopped short of clearly signalling a change in the bank's interest-rate path.

Switzerland Caps Franc

The Wall Street Journal

By DEBORAH BALL

LONDON—The Swiss National Bank set a limit on how far it will let the Swiss franc rise against the euro, the bank's most aggressive attempt yet to rein in the soaring currency.

Turkey Suspends Defense Trade With Israel

The Wall Street Journal

By MARC CHAMPION

ISTANBUL—Turkey's prime minister, Recep Tayyip Erdogan, said Tuesday that his country was suspending defense trade with Israel and that Turkish naval vessels would be seen in the Eastern Mediterranean more often, as Ankara ratcheted up pressure in a rising dispute with its former ally.

Speaking to reporters in Ankara after giving a speech at the Ankara Chamber of Commerce, Mr. Erdogan repeated plans announced Friday to downgrade diplomatic relations with the Jewish state and suspend military agreements, specifying that the suspension would include trade in defense goods.