BERLIN – Germany was seeking to secure an independent future for ailing General Motors Corp.’s Opel unit, with the country’s foreign minister saying “the lights must not go out” as its U.S. parent headed for a bankruptcy filing. Chancellor Angela Merkel was gathering German and U.S. officials, along with representatives of GM and of Opel’s suitors at her office in Berlin for a meeting aimed at putting Opel on the road to safety.
Meanwhile, thousands of employees of troubled retailer Arcandor AG demonstrated in front of Germany’s Economy Ministry in support of the company’s bid for hefty government loan guarantees. The ver.di union estimated that some 7,000 people took part in the protest. Economy Minister Karl-Theodor zu Guttenberg told the demonstrators the government would examine the demand carefully. Preliminary German government figures show that the country’s annual inflation rate has dropped to zero for the first time in 22 years.
VIENNA -Saudi Oil Minister Ali Naimi says there is no need for OPEC to reduce production of oil. Naimi’s comment reinforces sentiment that OPEC oil ministers will decide at their meeting Thursday to continue pumping oil at present levels. The Saudis account for close to a third of total OPEC production and what they say is usually informal policy for the rest of the 12-nation group.
AMSTERDAM – Royal Dutch Shell PLC unveiled a major overhaul of its businesses and management that will affect thousands of jobs, part of a shake-up ordered by the incoming chief executive.
TOKYO – Japan’s export slump eased in April, adding to growing evidence that the recession is loosening its grip on the world’s second-biggest economy. Exports in April fell 39.1 percent from a year earlier, less than the 45.6 percent decline posted in March. The export drop moderated across all major regions and sectors. That led to an unexpected trade surplus of 68.95 billion yen ($727.1 million) – Japan’s third straight month in the black. Meanwhile, Toyota Motor Corp. said it is revving up production of its hit Prius to meet better-than-expected demand for the latest version of the world’s top-selling hybrid.
However, private credit research agency Teikoku Databank said more than 100 Japanese companies face possible bad debts if General Motors Corp. files for bankruptcy. GM has close business ties with 102 Japanese companies, such as auto parts suppliers and makers. Separately, Moody’s Investors Service lowered its long-term debt rating on Sony Corp. by a notch to “A3,” citing concerns about slumping electronics demand and intensifying competition.
BEIJING – China’s government tried to ease public fears that money from its 4 trillion yuan ($587 billion) stimulus might be stolen or wasted, saying it has found misspending and sloppy accounting but the overall effort is going well. In markets, Chinese shares rebounded ahead of a two-day holiday, prompting talk the government might be buying to boost the market before the possible resumption of initial public offerings. Regulators announced last week they were considering ending an eight-month ban on IPOs as early as June. Such a step might depress prices by flooding the market with new shares. The benchmark Shanghai Composite Index rose 44.35 points, or 1.7 percent, to close at 2632.92, ending the month up by 6.3 percent.
LONDON – The pound rose through the $1.60 level for the first time since November despite ongoing worries about Britain’s massive borrowing. Meanwhile, net mortgage lending in Britain hit the lowest level in eight years in April while savings growth remained subdued, the British Bankers Association said, suggesting the Bank of England’s massive cash injections into the economy have yet to boost credit activity.
That was echoed in a statement by a major mortgage lender, which said it saw no decisive upturn in the housing market and that it expects mortgage and savings markets to contract in 2009-2010. Separately, British telecom BT Group PLC scrapped pay rises and most bonuses for 2008, the company said, after two profit warnings from the unit that provides network services to multinationals.
MUMBAI, India – India’s new government is committed to restoring high economic growth, while ensuring that hundreds of millions of poor Indians share the gains of rising prosperity, the new finance minister said.
ZURICH – UBS AG’s decision to raise the basic pay of some staff was “necessary” to stop them defecting to rivals, Chief Executive Oswal Gruebel said before a Swiss parliamentary debate on whether to put in place a salary cap for the bank. UBS slashed staff bonuses last year in the wake of massive losses and a government bailout of more than $42 billion. Reports that the Zurich-based bank has increased the basic salary of some staff to make up for the loss of bonuses provoked anger in Switzerland. The country’s upper chamber is to discuss a proposal that would limit UBS salaries in the same way as other government-backed companies.
BRUSSELS – The EU said the European Central Bank’s president should head a key new oversight agency to monitor risks to the European Union economy and help prevent a repeat of the financial crisis that has dragged the region into recession. It proposed giving the chief euro-zone central banker a say over EU countries that don’t use the euro, including Britain. London, the center of a once-vibrant and lucrative financial services industry, has for decades fiercely opposed more EU oversight of its financial sector.
KIEV, Ukraine – International auditors will probe the actions of Ukraine’s central bank during the ongoing financial crisis in an effort to counter accusations of mismanagement and corruption at the bank, a bank official said.
KUALA LUMPUR, Malaysia – Malaysia’s economy shrank a sharper-than-expected 6.2 percent in the first quarter, the central bank said, setting the scene for the government to forecast a deeper recession this year.
WELLINGTON, New Zealand – New Zealand’s Fonterra Cooperative Group, the world’s biggest dairy exporter, forecast a 12.5 percent cut in its milk payment to dairy farmers, a move that will strip hundreds of millions of dollars from the nation’s recession-mired economy.
SANTIAGO, Chile – A U.N. body said foreign direct investment in Latin America may plunge 45 percent this year as the world economic crisis stalls capital flows. The commission said investment reached a record $123 billion in Latin America in 2008, but is now expected to plummet.