The deal was won, however, after the EU agreed to
raise its initial 40.3 billion euro financial package for the 10
"A new Europe is being born," declared
Danish Prime Minister Anders Fogh Rasmussen who steered the milestone
summit to its successful conclusion. Brushing off eleventh-hour haggling
over cash, Rasmussen said leaders had closed "one of the darkest
and bloodiest chapters in European history."
Added German Foreign Minister Joschka Fischer:
"It's the definite end of the cold war."
Future EU members will be Cyprus, the Czech Republic,
Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and
As Europe opened its arms to the 10 future members,
Turkey was rebuffed by EU leaders over its demands for a 2003 date for
The EU said it would wait until December 2004 before
deciding whether or not to set a date for starting Turkey's accession
In a last-minute improvement, however, Ankara got a
promise that these negotiations would begin "without further
delay" - provided Turkey implemented key political reforms.
MORE GLOOM FOR JAPAN'S ECONOMY
Japan has lowered its economic outlook for a second
consecutive month, blaming weaker industrial production and exports.
"As movements towards an incipient recovery are
weakening, the state of the economy remains roughly flat," the
government Cabinet Office said in its monthly report on the economy.
"Exports are declining somewhat and industrial
production has become flat."
Industrial output in October, the latest month for
which data is availble, fell 0.2% from September owing to slowing demand
at home and overseas.
Last month's assessment indictated that while the
economy was showing signs of recovery, the pace was slowing.
The government last lowered its economic assessment
for two consecutive months in May and June last year.
However, the Cabinet Office upgraded its assessment
of corporate profits and said earnings could improve further.
The Bank of Japan's quarterly "tankan"
survey of business confidence last week reported companies expect
profits to rise in the coming financial year.
But with few positive indicators, the government
remained cautious on the economic outlook.
"The environment, such as concerns over the
future of the US and other economies, and sluggish domestic stock
prices, continues to be severe, and there are concerns over downward
pressure on final demand," it said.
The report was also downbeat on the labour market,
after unemployment hit a record 5.5% last month.
US-AUSTRALIA PACT 'DANGEROUS'
Australia's drive to sign a free trade pact with the
US could do more harm than good by undermining Australia's relationship
with China, critics are warning.
The proposal, unveiled in November by US Trade
Representative Robert Zoellick, reflects the increasingly warm
relationship between the two countries built on Australia's unstinting
support for the US "War on Terror".
But signing up with the US will simply close
lucrative doors elsewhere to Australian trade, critics suggest.
At particular risk, they say, is the relationship
with China and Hong Kong, which absorbed the second-biggest share of
Australia's exports in the year to September.
Australia's former ambassador to Beijing, Ross
Garnaud, has accused the government of pursuing the pact for political
purposes in the face of economists' advice.
US INSURER IN THIRD-BIGGEST BANKRUPTCY
Conseco has naming rights to Indianapolis' Fieldhouse
Insurance and loans giant Conseco has filed the third biggest US
bankruptcy after WorldCom and Enron, with $6.5bn (£4bn) in outstanding
The company, which was founded by encyclopaedia
salesman Stephen Hilbert, had already defaulted on bank and bond debts
and had been expected to go bust.
Conseco warned last month it might file for
bankruptcy protection after reporting a quarterly loss of $1.8bn.
Insurance subsidiaries were excluded from the filing
and would continue to honour policies.
The holding company was de-listed from the New York
Stock Exchange in the summer and faces an investigation by stock market
regulator, the Securities and Exchange Commission.
BANK OF ENGLAND SPLIT ON INTEREST RATES
Two of the nine people who set the UK's interest
rates still think the state of the economy calls for borrowing to be
The minutes of the last meeting of the Bank of
England's monetary policy committee, on 4 and 5 December, show that the
two believe soaring house prices in the UK are less of a risk than the
world economic slowdown.
The two members, Stephen Nickell and Christopher
Allsopp, have now voted for a cut three months in succession.
But the majority still fear that the rampant housing
market, and the spike in consumer debt, mean higher inflation is too
much of a risk to drop interest rates from their current 38-year low of
But they are fighting shy of taking action to
puncture the house price boom, saying it would be
"inappropriate". The fact also remains that manufacturing
output is falling, and higher rates could handicap investment.
JAPAN EASES UP ON BUSINESS LOANS
Japan's central bank is trying to make it easier for
businesses to borrow money from the country's debt-ridden banks, in the
hope of preventing further economic crisis.
The Bank of Japan (BoJ) said after its regular
meeting on Tuesday that it will expand the range of collateral that
companies can use to get access to loans.
Registered financial institutions can act as conduits
for loans from the BoJ to businesses, but the sheer weight of bad debts
clogging the financial system has slowed lending to a crawl.
The Bank hopes that by allowing shorter-term deeds to
be used as collateral the bottleneck can be eased.
"The Bank expects today's decision will make it
easier for financial institutions to refinance (loans) to business
firms, thereby facilitating smooth corporate financing," the BoJ
said in a statement.
S KOREA WINNER LOOKS TO US
The winner of South Korea's presidential election has
vowed to work closely with the United States to peacefully resolve
concerns over North Korea's nuclear weapons programme.
Speaking the morning after his victory, Roh Moo-hyun
said the nuclear issue was "shadowing the entire Korean
He also said he would press for changes in the
agreement with the United States covering the 37,000 American troops
based in the country, following recent anti-American protests, but added
that nothing would be "drastically changing".
US ENERGY FIRMS FINED $5M
Dynegy's marketing and trade unit and West Coast
Power have been jointly fined $5m (£3.1m) to settle charges of
attempting to manipulate gas prices.
NIGERIA WINS $1BN GAS DEAL
Leading finance houses from around the world have
pledged $1bn (£630m) towards a major new gas initiative in Nigeria.
It is part of a $2bn project being undertaken by
Nigeria LNG, which liquefies natural gas for export to Europe and the
CHINESE SHOPPERS QUEUE FOR GOLD
China has allowed its citizens to buy gold bullion
for the first time since the Communist Party took power in 1949.
Shoppers queued on Thursday to look at gold bars on
sale in department stores in Beijing and the southern city of Nanjing.
SOLVENCY FEARS FOR AUSTRALIAN STOCKS
Australia's financial watchdog has found that
one-fifth of the firms listed on the country's stock market are at risk
It ordered a check up on the accounts filed by listed
firms after the collapse of former US market darlings Enron and WorldCom
amidst auditing scandals.
But the regulator said the review found no reason to
worry about similar sharp practices by the auditors in Australia.
UK SLAPS RECORD FINE ON SWISS BANK
Investment bank Credit Suisse First Boston
International (CSFBi) has been hit with a record fine for trying to
mislead Japanese tax and regulatory authorities.
The £4m ($6.2m) fine is the largest to be imposed by
the UK regulator, the Financial Services Authority (FSA), so far.
FUEL CRISIS MAKES ZIMBABWE DIG DEEP
Zimbabwe is spending US$15m (£8.7m) of its
desperately scarce foreign currency reserves on fuel imported from
Kuwait and South Africa, to alleviate a shortage which has almost
brought the country to a standstill.
RAY OF LIGHT FOR TECH INVESTORS
Mini-computer maker Palm and software giant Oracle
have lifted technology investors' spirits with better than expected
Palm, the world's biggest manufacturer of
pocket-sized computers, posted a profit of $3.5m for the second quarter
of the financial year, bouncing back strongly from a $25.2m loss one
SIBNEFT WINS RUSSIAN OIL GIANT
Russia has auctioned off its last major state-owned
oil company, Slavneft, in what has been billed as one of the largest and
most open privatisations in the country's history.
Sibneft, an ambitious but controversial Russian oil
firm founded in 1995, beat off competition from seven bidders to snap up
the government's 75% stake in Slavneft for for $1.86bn (£1.2bn).
MUGABE EYES OIL FIRM ASSETS
Zimbabwean President Robert Mugabe has threatened to
take over petrol stations owned by oil giants BP, Mobil and Caltex.
Mr Mugabe promised to handle the fuel crisis
personally as chronic fuel shortages worsened over the weekend.
VAN HEUSEN TO BUY CALVIN KLEIN
The US' biggest shirt maker Phillips-Van Heusen has
agreed to buy fashion house Calvin Klein for more than $400m (£248m).
BUSINESS GLOOM DEEPENS IN GERMANY
German business confidence has slipped for the
seventh consecutive month, despite a half-point interest rate cut
earlier this month. The Ifo economic institute said its western German
index had fallen to 87.1 in December, from 87.3 in the previous month.
The continuing fall in sentiment comes as the German
government, facing weak growth and a widening budget deficit, has
proposed increasing taxes and social contributions, as well as cutting
Economists closely watch the Ifo survey because it
gives an indication on future investment plans.
STOCKHOLM SETS EURO VOTE QUESTION
Sweden has announced the wording of the question to
be put in a referendum next year on whether to adopt the euro - to the
anger of some opponents.
The decision was made after talks involving all of
Sweden's political parties represented in parliament.
The question - "Do you think that Sweden should
introduce the euro as its currency?" - will be answered either by
"yes" or "no".
AFGHANISTAN ASKS FOR LONG-TERM AID
Afghan President Hamid Karzai has asked international
donors at a conference in Norway to focus on long-term infrastructure
projects rather than short-term aid such as food and medicine.
Members of the Afghan Support Group pledged about
$1.7bn in aid for next year, the same amount pledged for 2002 and
significantly more than the United Nations requested.
Economists fear unemployment is still on the rise.
More people are working in Britain than ever before thanks to a rise in
part-time jobs, according to official figures.
The Office for National Statistics (ONS) said almost
28 million people were now employed in Britain, an all-time high.
UK INFLATION HITS FOUR-YEAR HIGH
Inflation in the UK has risen to 2.8%, its highest
level for more than four years.
Rising house prices helped push the figure above the
Bank of England's 2.5% target rate.
JAPAN BANK RESCUE 'IMPOSSIBLE'
The construction industry is responsible for much of
the debt Government plans to halve the massive bad debt burden crippling
Japan's banks by March 2005 are doomed to failure, according to the
leader of Japan's biggest business organisation.
The comments from Hiroshi Okuda, head of the
Keidanren, or Japan Employers' Federation, reflect increasing concern
that the banks' bad debts exceed even the 50 trillion yen estimated by
GROWTH AT RISK IN HONG KONG
Hong Kong's economy is likely to under-achieve for
the next four years, its top finance official has warned.
In a briefing to legislators delivered on Monday,
financial secretary Anthony Leung said that sky-high unemployment and
falling retail sales were playing havoc with economic forecasts.
"March's forecast for 2003 to 2006 of nominal
GDP growth of 4.4% may not be attainable," he said.
The prediction had been made in Mr Leung's budget
speech, before the current predicament took hold.