Economic Summit on the Agenda

By Reuters - Print this article Print

Excitement about the election of Democrat Obama as the first black U.S. President was tempered by an awareness of the challenges he faces as the world's biggest economy labors in recession.


Obama takes office on January 20, leaving outgoing President George W. Bush to host a summit of world leaders in Washington on November 15 to discuss the global financial crisis which has its roots in the collapse of the U.S. housing market.

That summit will tackle new ways to regulate the world's financial sector as the world heads into recession.

Authorities are trying to soften the impact of the downturn with support for banks, cheaper lending and stimulus measures, which have already amounted to around $4 trillion.

Germany's cabinet agreed a package of measures on Wednesday to give Europe's biggest economy a 50 billion euro ($64.2 billion) boost and protect about 1 million jobs, following a 500 billion euro bank rescue package last month.

It includes extra funds for small and medium-sized firms to borrow, tax breaks on new cars and funding for infrastructure projects and building work.

Italy will approve a plan to support banks next week, which could use convertible bonds or preferred shares, Prime Minister Silvio Berlusconi said.

The Italian government is also working on measures to help families and businesses, and Unicredit will announce an extra 5 billion euros of loans available to small and medium-sized firms.

Gloomy data from Britain and the 15-nation euro zone added to expectations of hefty interest rate cuts on Thursday.

British manufacturing output fell for the seventh month running to mark the longest stretch of declines in 28 years.

In the euro zone, service sector activity touched a fresh decade low in October while retail sales declined in September.

The Bank of England and the European Central Bank are expected to cut their rates on Thursday by at least 50 points, having cut four weeks ago as part of a coordinated round.

This article was originally published on 2008-11-05
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