A Cypriot bank employee holds official sealed bags containing local euro coins at a bank in Nicosia.

NICOSIA, Cyprus, Jan. 1--Cyprus and Malta became the latest economies to embrace the euro, increasing membership of Europe’s common currency to 15 and giving the two island nations a say in shaping European Central Bank policy.
Hundreds of people in the capital cities of Nicosia and Valletta celebrated with fireworks and music as the Cypriot pound and Maltese lira followed the French franc and German mark into the history books, Bloomberg reported.
“We’re sorry to say goodbye to the pound but it’s with joy that we welcome the euro,“ Cypriot President Tassos Papadopoulos said in a ceremony at the country’s Economy Ministry in Nicosia.
The Mediterranean islands cut budget deficits and borrowing costs to prepare for the euro, attracting international investment and tourism that has spurred economic growth. Entry will also earn the countries seats on the European Central Bank’s governing council, which sets interest rates.
Cyprus and Malta are respectively the wealthiest and smallest of the 10 mostly eastern European nations that joined the European Union four years ago. They become the first to adopt the euro since Slovenia a year ago.
The currency celebrated its ninth birthday on Jan. 1, driving an economy with a gross domestic product of 8.8 trillion euros ($13 trillion), 2 trillion euros more than at its inception and 440 times the combined economies of Cyprus and Malta.
The euro has climbed in all but one of the past six years, reaching a record $1.4967 on Nov. 23. The currency accounts for 26.4 percent of global foreign-exchange reserves, up from about 18 percent in 1999, the International Monetary Fund said last week.
While Cyprus’s 15 billion-euro and Malta’s 5 billion-euro economies will barely lift the region’s output, membership in the single currency has financial and political ramifications. The ECB’s governing council grows to 21 from 19 with the arrival of Bank of Cyprus Governor Athanasios Orphanides and Maltese Central Bank Governor Michael Bonello.

RIYADH, Saudi Arabia, Jan. 1--The six oil-rich Persian Gulf Arab monarchies ushered in the new year on Tuesday by setting up a common market with a combined economy of $715 billion.
“The new regional economic grouping should ensure economic equality for Persian Gulf Cooperation Council citizens,“ PGCC Secretary General Abdulraham al-Attiyah said.
He described the launch as “historic“ 26 years after the common market was first announced as an objective when the PGCC was established in 1981.
In addition to allowing the free flow of capital, the common market should give PGCC nationals freedom of movement, residency and employment--in both the private and public sectors--in any of the six countries.
“The common market... will allow the citizens of PGCC member states to benefit from opportunities offered by the Persian Gulf economy and will open important areas to common and foreign investments,“ Attiyah told a PGCC summit ahead of the launch.
The initiative “will increase investments and common trade between members,“ PGCC economic chief Mohammad al-Mazroui told AFP, adding that it will also “strengthen the position of member states in free-trade talks,“ mainly with the European Union.
Some 35.1 million people live in the PGCC, although citizens of the member states represent around only 60 percent of the total population, with the remainder foreign expatriates working there.
Kuwaiti economist Hajjaj Bukhbur said the common market would boost PGCC negotiating power. “This will place the Persian Gulf Arab states as one of the largest global economies,“ he told AFP.
Qatar’s Al Watan newspaper warmly welcomed the launch of the market, calling it a “strategic step towards complete economic integration.“
The PGCC groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, which together account for a total surface area of 2.6 million square kilometers (1.04 million square miles).
Sitting on 484 billion barrels of oil, they also represent more than half of the oil reserves of the Organization of Petroleum Exporting Countries (OPEC).
The six formed a customs union agreement in 2003, a condition set by the European Union, the PGCC’s main trading partner, for a free trade agreement between the two blocs.

TOKYO, Jan. 1--Japan took over the presidency of the Group of Eight club of the world’s leading economies Tuesday, with Prime Minister Yasuo Fukuda vowing to put a focus on climate change and environmental issues.
The world’s second biggest economy after the United States, Japan is also the home of the Kyoto Protocol, the landmark 1997 treaty that really launched the fight against global warming, AFP reported.
So when leaders of the rich club convene for a summit in July in Toyako, a northern resort in the Japanese island of Hokkaido, it will be with climate change on their mind.
“Environmental issues will be a big agenda“ item at the summit, Fukuda said in a New Year statement.
It has announced four main issues for the summit: environment and climate change; the world economy; development and Africa; and broad political issues such as nuclear non-proliferation and the fight against terrorism.
Fukuda plans a “global climate change“ summit immediately before the Group of Eight leaders meet and has reportedly invited the leaders of China, India, South Korea and Indonesia.
Last week, Fukuda vowed to use Japan’s presidency to promote eco-friendly technology, saying “we must promote our technologies to the rest of the world. That should benefit Japan and the rest of the world.“
Japan has proposed a goal of cutting global emissions by half by 2050 from what they were in 1990. But Tokyo is far behind on its own Kyoto obligations to slash emissions by six percent by 2012 as its economy recovers from a recession in the 1990s.
Fukuda, who returned Monday from his first four-day trip to China as prime minister, signed an agreement which would see Tokyo help Beijing work to combat global warming.
Japan will invite about 50 Chinese researchers each year over the next four years to be trained in the technology and science of fighting climate change.
Still, green groups criticized Japan for siding with the United States at last month’s UN climate change conference in Bali. That final document lacked an EU-led call for a specific goal on how far to cut greenhouse gas emissions after Kyoto’s obligations expire in 2012.

NEW YORK, Jan. 1--World foreign exchange reserves exceeded $6 trillion (4.08 trillion euros) at the end the third quarter of 2007, with the amount held in dollars shrinking slightly, according to data released by the International Monetary Fund.
The data indicated that of the $3.8 trillion (2.58 trillion euros) in allocated reserves, about 63.8 percent was held in US dollars, down from 65 percent at the end of the second quarter this year, AP reported.
About 75.5 percent of total reserves are now in the coffers of governments of developing countries, the IMF said.
“While the percent of (allocated) reserves held in (dollar)-denominated assets fell to a record low 63.8 percent at end third-quarter 2007, it appears that decline is heavily influenced by the declining valuation of those assets as the dollar falls,È said an e-mail note from currency strategists at Bank of America Corp.
“Adjusting for currency movements suggests the decline in allocation to (dollar)-denominated assets has been relatively small this decade,“ the note stated.
The strategists also pointed out the increase in official holdings “has been dominated by the growth in reserves among developing countries, particularly in Asia.“
Since the fourth quarter of 2003, official holdings among industrialized countries have increased nearly 32 percent to about $350 billion (237.76 billion euros). However, official holdings among developing countries have increased $2.654 trillion (1.8 trillion euros), a 139 percent rise that has brought the percentage of total official reserves held by developing countries to over 75 percent, from just below 60 percent in early 2000, the strategists said.
“We continue to believe that fears about a massive ’dumping’ of dollar-denominated assets by official institutions is highly unlikely,“ the note said.

A security guard stands next to oversized images of Venezuela's new currency, 'Bolivar Fuerte,' or 'Strong Bolivar' at the central bank in Caracas in this ,Dec. 5, 2007 file photo.

CARACAS, Venezuela, Jan. 1--Venezuela launched a new currency with the new year, lopping off three zeros from denominations in a bid to simplify finances and boost confidence in a money that has been losing value due to high inflation.
President Hugo Chavez’s government says the new currency--dubbed the “strong bolivar“--will make daily transactions easier and cure some accounting headaches. Officials also say it is part of a broader effort to contain rising prices and strengthen the economy, AP reported.
“We’re ending a historical cycle of ... instability in prices,“ Finance Minister Rodrigo Cabezas said Monday, adding that the change aims to “recover a bolivar that has significant buying capacity.“
Prices have risen as Chavez has pumped increased amounts of the country’s oil income into social programs, reinforcing his support among the poor and helping to drive 8.4 percent economic growth in 2007.
The Central Bank is promoting the new monetary unit with an ad campaign and the slogan, “A strong economy, a strong bolivar, a strong country.“
Some Venezuelan critics, meanwhile, have dubbed the new currency the “weak bolivar,“ noting its predecessor, the bolivar, has seen its purchasing power suffer in an economy where inflation ran roughly 20 percent in 2007--the highest in Latin America.
Venezuelan economist and pollster Luis Vicente Leon said that while the new currency may provide “the perception of stability“ for some, it is largely a “cosmetic change.“
Government officials say the change is overdue to bring Venezuelan denominations into line with those of other countries in the region. Instead of denominations in the thousands, the largest new Venezuelan note will be 100 strong bolivars.
“It was necessary to leave behind the consequences of a history of high inflation,“ Central Bank president Gaston Parra said in a televised year-end speech.
The new money was distributed to banks and automated teller machines nationwide ahead of Tuesday’s launch and will be phased in during the next six months. But while the strong bolivar’s official exchange rate will be fixed as 2.15 to $1, the black market rate has hovered around the equivalent of 5.60 to $1 recently.
With the new currency, the government is also resurrecting a 12.5-cent coin, called the “locha,“ which existed during Chavez’s childhood but has not been used since the 1970s.

BEIJING, Jan. 1--Chinese President Hu Jintao has vowed “forceful measures“ to curb rising food prices and address a booming real estate market that has seen property prices sky-rocket, AFP said Tuesday.
“The central government attaches great importance to commodity prices and has made it an important task to stabilize them,“ China Central Television quoted Hu as saying during a New Year’s Eve visit to the northern port city of Tianjin.
Inflation hit an 11-year high of 6.9 percent in November, according to official statistics. The spike was propelled by an 18.2-percent rise in food prices.
He also vowed to curb rising housing prices to help low-income families, and to provide them with better health care benefits, two other top concerns of ordinary Chinese.
“The (Communist) Party and government are very much concerned about the housing problem of the low-income masses,“ Hu said.
“The central government has made arrangements to speed up the low-rent housing system, improve the affordable housing system, and ease the housing difficulties of urban low-income families.“
Hu made the comments as he visited a family at their small rental home in Tianjin and a retirement facility in the city.
The privatization of housing in China over the last two decades has led to a booming real estate market that has left homes unaffordable to not only low-income earners, but also to many ordinary working families.
Official figures show that property prices in 70 Chinese cities rose 9.5 percent year-on-year in October, up 0.6 percentage points from September, with prices in the eastern metropolis of Shanghai up 7.9 percent.

WASHINGTON, Jan. 1--Rising US food inflation, now a 25-year high, is reminiscent of the 1970s and will continue for the next five years, a top food economist said.
The growth is due to growing world economies, increased food demand and a sharp expansion of corn-based ethanol production.
“What happened in the early ’70s and what is happening today is that we have moved food input price to a new plateau. Ultimately, the consumer is going to have to absorb those increased costs,“ said Bill Lapp, president of Advanced Economic Solutions, who has released a study that looked at food inflation data going back to the 1960s.
Futures prices on the Chicago Board of Trade, the benchmark for commodity grain and soy markets, have risen to multi-year highs this year. Wheat hit an all-time high of $9.81-3/4 a bushel just on Friday. Soybeans on Friday reached over $11.60 a bushel, a price not seen since 1973, and corn rose to $4.37-1/4 in February, the highest level in a decade.
“The underpinnings for the higher commodity prices are world economic growth, a weak dollar and increased use of our corn crop for the production of ethanol,“ Lapp told Reuters in an interview.
While most of the US corn crop, or 43 percent is fed to livestock to produce meat, dairy products and eggs, an increasing percentage is being used to produce ethanol. Twenty-four percent of this year’s corn crop will be turned into ethanol, up from just 14 percent two years ago.
The higher cost of raw commodities contributed to the Consumer Price Index for food, a broadly used gauge for inflation, which rose to an annual rate of 5.4 percent during the first 10 months of 2007, a level not seen since 1980, according to Advanced Economic’s study.
“During the next five years, food inflation is forecast to increase by an average of 7.5 percent, well above the 2.3 percent average of the past 10 years.
“The US experienced a similar period of rising commodity prices and food inflation in the 1970s. Commodity prices doubled ... this ultimately resulted in food inflation from 1972 to 1981 averaging 8.2 percent,“ the study said.