World economic developments

LONDON – Vandals attacked the home of former Royal Bank of Scotland head Fred Goodwin, smashing windows at the house of the ex-CEO whose 700,000 pound ($1.2 million) annual pension has prompted public outrage. Police said they were called to the house in Edinburgh, the Scottish capital, early Wednesday. Goodwin resigned as chief executive last year as RBS ran into severe difficulties and had to be propped up by the British government. Last month, RBS reported a loss of more than 24 billion pounds ($35 billion) in 2008, the largest annual loss in British corporate history.

Meanwhile, the British division of HSBC PLC said that it may lay off as many as 1,200 people, or 2 percent of its British work force, following a review of operations. The Unite union claimed that 2,900 staffers would be affected.

Britain’s FTSE 100 stock market index fell 0.3 percent to 3,900.25.

PARIS – Striking French workers for the U.S. manufacturer 3M held their boss hostage amid labor talks at a plant south of Paris, as anger over layoffs and cutbacks mounted. While the situation at the 3M plant outside Pithiviers was calm, workers marched on the presidential palace in Paris and tires were set afire by Continental AG employees whose auto parts factory was being shut down.

Meanwhile, in Strasbourg, the president of the European Union slammed President Barack Obama’s plans to have the U.S. spend its way out of recession as “a road to hell,” underscoring European differences with Washington ahead of a crucial summit next week on fixing the world economy.

France’s CAC 40 stock index climbed 0.7 percent to 2,893.45.

BUCHAREST, Romania – Crisis-hit Romania will receive €20 billion in loans from a group of lenders led by the International Monetary Fund. The money will bolster government finances hard hit by the world financial crisis. The IMF agreed to a two-year bailout loan of €12.95 billion ($17.49 billion). Another €5 billion will come from the European Union, €1.5 billion from the World Bank, and the rest from the European Bank for Reconstruction and Development. Romania is the third EU member to receive an IMF-led bailout loan after Hungary and Latvia. Eastern Europe has struggled with falling growth, sagging currencies and political turmoil from the crisis.

BERLIN – German chemical company BASF SE said that it will reduce production because of weak order levels. The new cuts follow earlier reductions of more than 25 percent worldwide.

Meanwhile, a key gauge of German business sentiment fell in March to its lowest level since November 1982, a sign that the recession in Europe’s biggest economy continues unabated. The Ifo Institute said its business climate index slipped to 82.1 points in March from 82.6 points in February.

Germany’s DAX stock market index closed up 0.9 percent to 4,223.29.

TOKYO – Japan’s exports fell by nearly half in February from a year earlier – a record drop – dragged down by plunging auto shipments to the U.S. and Europe. Exports tumbled 49.4 percent, the sharpest decline since the Ministry of Finance began compiling comparable data in 1980 but generally in line with economists’ expectations.

The Nikkei 225 stock average dipped 0.1 percent to 8,479.99. Elsewhere in Asia, Shanghai’s index retreated 2 percent to 2,291.55, ending a seven-day rally of nearly 10 percent. South Korea’s Kospi rose 0.5 percent, Australia’s key index gained 0.8 percent and Taiwan’s market jumped 2 percent.

DUBAI, United Arab Emirates – Cargo handler DP World said that business at its ports dropped 8 percent in the first two months of this year as global trade evaporates because of the global economic slump. The slowdown shows no signs of easing. The CEO of the Dubai-based company, one of the world’s biggest and most geographically diverse port operators, said market conditions are changing on an almost daily basis, making it impossible to predict how badly business might suffer this year.

OSLO – Norway’s central bank lowered its key interest rate by half a percentage point to 2 percent, citing a deteriorating outlook for the global economy.

WARSAW, Poland – Poland’s central bank cut its key interest rate by a quarter of a percentage point to 3.75 percent. The National Bank of Poland’s key rate is now at its lowest level since 1990, when decades of communism gave way to a market economy.

HONG KONG – Citic Pacific Ltd., the Hong Kong arm of a Chinese government investment firm, said it suffered it first annual loss in years after making bad currency bets, but maintained its finances were secure. Its stock plunged 8 percent.

Hong Kong turned in Asia’s worst performance as the Hang Seng sank 2.1 percent to 13,622.11.

MUMBAI, India – Standard & Poor’s downgraded the credit rating of India’s Tata Motors, two days after the splashy launch of the ultracheap Nano. The move underscores analyst and investor skepticism that the Nano, which sells for as low as $2,200, will be able to shore up the finances of Tata Motors.

India’s Sensex gained 2.1 percent to 9,667.9.

AMSTERDAM – The Dutch government will spend €5.5 billion ($7.4 billion) to help the economy as part of a plan in which labor unions have agreed to ease their wage demands.

WINDHOEK, Namibia – Namibia’s government has agreed that Namdeb, its diamond mining joint venture with De Beers, should halt production for up to four months because the global economic downturn has slashed demand, officials said.

BELGRADE, Serbia – Serbia and the International Monetary Fund are close to agreeing on a €3 billion bailout loan to help the Balkan country fight the effects the global financial crisis, officials said.

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