Debt Crisis

Stock and bond markets in the U.S. were closed Monday for the Martin Luther King Jr. holiday, but trading took place in the rest of the world. European stocks rose while German bonds declined as European finance ministers met for the first time this year to discuss the debt crisis. The Stoxx Europe 600 Index added 0.3%, with the volume of shares changing hands 34% less than the 30-day average. In Japan, the yen rose from a two-year low, strengthening 0.5% to 89.64 yen per dollar.

LONDON -- European officials Thursday took two more steps in their fight against the region's lingering debt crisis, agreeing on a deal to put big banks under the oversight of a single supervisor and releasing desperately needed loans for Greece to pay its mounting bills. The plan to have the European Central Bank supervise the Eurozone's major financial institutions lays the foundation for a deeper "banking union" across the 17-nation currency bloc, or a harmonization of rules governing the finance sector.

LONDON - Turmoil engulfed Italy on Monday as the country braced for the imminent resignation of its prime minister, the intended comeback of his disgraced predecessor and the prospect of months of political and financial instability after a period of relative calm. Elections originally expected to be held around April are now likely to take place in February, cutting short the present government's time to enact measures aimed at reviving Italy's moribund economy and bringing down its enormous public debt.

That most Gallic of pursuits - drinking lots and lots of wine - doesn't seem to have quite the appeal for the French that it used to. The average French adult consumed 57 liters of wine - or about 15 gallons - in 2010, according to a new report from the French Ministry of Agriculture division FranceAgriMer. That's still far more vin than their peers in the U.S. and Britain drank, but just a trickle compared with the 160 liters the French consumed in 1965. In a country famous for its wine and wine drinkers, it's a record low. In 1980, more than half of French people older than age 15 drank wine every day. Vino was served at half of all meals.

WASHINGTON - In a grim new forecast, a leading international economic group sharply cut its outlook for U.S. and global growth next year and warned that the debt crisis in Europe and fiscal policy risks in America could plunge the world back into recession. As it stands now, the industrialized world is looking at a muted and uneven recovery over the next two years, according to the Organization for Economic Cooperation and Development. The Paris-based OECD projected gross domestic product across its 34 member nations - which include the U.S., Japan and the 17-nation Eurozone - to grow a sluggish 1.4% next year.

WASHINGTON -- Saying that the global recovery hangs in the balance, a leading international economic group called for "decisive policy action" to ensure that the fiscal risks in the U.S. and the ongoing debt crisis in Europe do not plunge the world back into recession. As it is, major developed economies in the world are looking at a muted and uneven recovery over the next two years, according to the Organization for Economic Cooperation and Development. The Paris-based OECD, in its latest economic outlook released Tuesday, sees the U.S. continuing its modest growth, the 17-nation Eurozone stuck in recession well into next year, and Japan, the world's third-largest economy, trudging along at a lumbering pace.  Quiz: How much do you know about the fiscal cliff?

MADRID -- Millions of workers went on strike and joined anti-austerity protests throughout much of southern Europe on Wednesday, in the first joint labor action across countries suffering the worst of the continent's debt crisis. Workers walked off the job in Spain, Portugal, Italy and Greece, with smaller protests in France, Belgium and Cyprus. Tens of thousands of people packed Madrid's wide avenues, waving trade union flags and forming picket lines around shops that remained open.

BEASAIN, Spain - The Spanish countryside is littered with unfinished condos, stillborn reminders of the country's disastrous construction boom gone bust. But the verdant valleys and Atlantic cliffs of the northern Basque Country are virtually free of that blight. Why? For decades, terrorist attacks by the Basque separatist group ETA meant no one wanted to build here. Now with a cease-fire that's held for two years, the region is casting off its reputation for terrorism and garnering one for something else: Economic growth unseen in the rest of Spain.

Stocks closed down 2.4% Wednesday, a sharp slide in the first trading session after  President Obama's reelection.  Wall Street again focused on two looming crises -- the "fiscal cliff" and European debt crisis. “We're back to our same old issues," said Andy Brooks, head of U.S. equity trading at T. Rowe Price. The Dow Jones industrial average lost 313 points, finishing at around 12,933. The broader Standard & Poor's 500 index ended the day down 34 points, or 2.4%, closing at 1,395.

WASHINGTON - Financial markets plunged as concerns about Europe's economy combined with the morning-after reality that the U.S. elections left the same gridlocked politicians to deal with the fast-approaching fiscal cliff. The Dow Jones industrial average fell 313 points, or 2.4%, on Wednesday to its lowest level in three months. The broader Standard & Poor's 500 index also ended the day down 2.4%, and the Nasdaq was off 2.5%. Investors worried that another recession loomed next year unless newly reelected President Obama and still-strong congressional Republicans could stop the large tax hikes and government spending cuts that kick in Jan. 1. "We've gotten certainty on the presidency and now we move into the uncertainty of where we were before - the fiscal cliff," said Quincy Krosby, market strategist at Prudential Financial.