WASHINGTON, Jan. 19--President George W. Bush on Friday called on Congress to give the US economy a “shot in the arm“ with an election-year package of temporary tax cuts and other measures worth up to $150 billion.
Bush said the United States, where share markets have slumped and unemployment is increasing, faced the risk of an economic downturn but that his advisers still expected continued growth, albeit at a slower pace, Reuters wrote.
He said he wanted Congress to move quickly on a stimulus package that would focus on tax rebates for families and incentives to encourage business investment. The White House said the package could create about 500,000 new jobs.
Treasury Secretary Henry Paulson said the administration hoped for a package worth about $140 billion to $150 billion, which is a little more than 1 percent of the economy’s size.
Economists are talking of a possible recession taking hold before presidential and congressional elections in November and the debate over an economic stimulus has been taken up by candidates campaigning to succeed Bush in the White House.
Meanwhile, stocks tumbled for a fourth day on Friday to close out the worst week for the S&P 500 in five years on worry that a White House effort to boost the economy may not prevent a recession.
Financial firms absorbed the brunt of the selling, again, on worries over spreading subprime mortgage fallout, and were joined in the rout by telecommunications companies after Sprint Nextel announced big subscriber losses and thousands of layoffs.
An early rally of strong earnings from General Electric and IBM, as well as a surprise pickup in consumer sentiment, evaporated after President George W. Bush called for a package worth up to $150 billion in tax cuts and other measures to shore up the economy.
“The fear is that the plan, and even the Fed, may not have enough firepower to turn the path to recession around,“ said Richard Sparks, senior equities analyst at Schaeffer’s Investment Research in Cincinnati.
The Dow Jones industrial average was down 59.91 points, or 0.49 percent, at 12,099.30, its lowest close in 10 months. The Standard & Poor’s 500 Index was down 8.06 points, or 0.60 percent, at 1,325.19, a 16-month low. The Nasdaq Composite Index was down 6.88 points, or 0.29 percent, at 2,340.02, a 10-month low.

Russian President Vladimir Putin (l) and his Bulgarian counterpart George Parvanov in Sofia on Friday.

SOFIA, Bulgaria, Jan. 19--Bulgaria and Russia signed a deal Friday for the 10 billion euros ($14.7 billion) South Stream pipeline to carry Russian gas to Europe, giving Moscow an even greater say on European energy supplies.
The landmark deal was signed at a ceremony attended by Russian and Bulgarian presidents Vladimir Putin and Georgy Parvanov.
It was agreed after intensive last-minute talks between the two former Cold War allies and came about “thanks to the personal intervention of President Putin,“ Bulgarian Prime Minister Sergey Stanishev said.
The South Stream pipeline, being built by Russia’s Gazprom and ENI of Italy, will first cross the Black Sea into Bulgaria and then split into two arms, one going northwest to Austria and the other south to Greece and then west to southern Italy.
Gazprom chief Alexey Miller said the gas giant was also closer to clinching a deal with Serbia on the takeover of its state-controlled oil monopoly NIS.
“We’re close to a final agreement,“ Miller told AFP.
“We’re in the process of wrapping up negotiations with the Serbian side and a draft intergovernmental agreement is being drawn up,“ he said.
In Belgrade, Serbian Prime Minister Vojislav Kostunica said he was confident the deal would be reached with Russia “on strategic cooperation in the energy field“ but gave no timetable for it.
“Everything goes in the right direction,“ Kostunica said in a statement carried by Beta news agency.
Serbian Deputy Prime Minister Bozidar Djilic, whose Democratic Party has so far hesitated to agree on the deal, said talks with Gazprom were ongoing.
“At this moment we are negotiating conditions. When we achieve them, we will make the deal. I hope that we will be able to do it quickly,“ Djelic told B92 television.
Earlier this week, Serbian media said Belgrade was hesitating to give Gazprom full control of NIS because its offer was felt to be insufficient.
In December, Gazprom offered 400 million euros ($595 million) for 51 percent of NIS. It also promised to invest 500 million euros in the company and ensure passage via Serbia of the South Stream pipeline.
With capacity to transport up to 30 billion cubic meters (one trillion cubic feet) of gas annually, South Stream will strengthen Moscow’s grip as the leading supplier to Europe.

Chinese President Hu Jintao shake hands with British Prime Minister Gordon Brown (l) prior to their meeting at Diaoyutai in Beijing on Friday.

BEIJING, Jan. 19--China Investment Corp., the nation’s huge sovereign wealth fund seen as a tool to project Beijing’s economic clout, was invited Friday by Britain’s prime minister to set up its first overseas office.
Gordon Brown extended the welcome on his maiden visit to China as his nation’s leader, AFP wrote.
“We want Britain to benefit from the $200 billion of investment available through the Chinese Investment Corp.,“ he told a gathering of British and Chinese businesspeople in Beijing.
“The UK has benefited from our policy of open trade and investment and remains committed to it, so we would welcome the CIC setting up an office in London.“
Britain, he said earlier after talks with Chinese Premier Wen Jiabao, should become “the first location for Chinese investment, in Europe and in the rest of the world.“
Brown’s visit to China switched to environmental issues on Saturday, as he sought to boost co-operation between the two nations on tackling climate change, senior Downing Street officials said.
Brown, whose focus Friday was on furthering business links with the world’s fastest-growing economy, was looking to secure backing for a new global deal on fighting greenhouse gas emissions for when the Kyoto Protocol expires in 2012.
On a post-Kyoto accord, the London officials said both nations need to intensify their efforts to secure a deal, although negotiations could be fraught because of tensions between developed and developing nations on binding targets.
On Friday the two sides penned agreements to increase collaboration to reduce emissions growth and develop newer and cleaner technologies.
One deal on climate change will see China get at least 50 million pounds ($100 million) from British government funds to back investment in energy efficiency, renewables, clean coal and carbon capture and storage.
Another on sustainable cities pledges Sino-British collaboration on building the low-carbon cities of the future. Brown will see at first hand efforts to construct the world’s first sustainable city at Dongtan, near Shanghai.
The project is a joint venture between the bank HSBC and British design and engineering firm, Arup, which in part also designed Beijing’s Olympic stadium.
Brown has outlined plans to build five new “eco-towns“ on disused industrial land to replenish Britain’s depleted housing stock and encourage low- and eventually zero-carbon communities.

PARIS, Jan. 19--Finance ministers from Britain, Germany, France and Italy met here on Thursday to discuss a common European strategy to confront turbulence on the financial markets.
French Finance Minister Christine Lagarde hosted the talks amid growing concern about the fallout from the US subprime mortgage crisis that has rattled markets since last year and cast a pall over the global economic outlook, AFP wrote.
Lagarde, her British counterpart Alistair Darling, Peer Steinbrueck of Germany and Tommaso Padoa-Schioppa of Italy discussed how to reach “a European strategy on all of the main issues of international finance,“ a French finance ministry official said.
After the meeting, Lagarde told reporters that the fundamentals of the European economy were “good“ and that financial and money markets were in a process of “gradual recovery.“
“We do not predict a pronounced economic slowdown,“ said EU Monetary Affairs Commissioner Joaquin Almunia who also took part in the talks.
Officials said the biggest challenge for the “European four“ was reaching agreement on mechanisms to increase transparency in the markets and in the banking sector, and perhaps even strengthening EU-wide financial regulations.
In an interview with several European newspapers, British Chancellor of the Exchequer Darling said earlier that the financial crisis was “significant“ and required “rapid action.“
The four European governments “share the objective of doing everything possible at government level, and separately by the central banks, to find a solution to the crisis on financial markets and prevent future crises.
“We are facing an enormous problem,“ he said in the interview with the French financial newspaper La Tribune, Germany’s Handelsblatt and the Italian Il Sole 24 ore.
Thursday’s talks came ahead of a meeting of heads of government of the four countries in London on Jan. 29 and another of the G7 finance ministers in Tokyo on Feb. 9.
Other than the four European countries, the G7 includes Japan, the United States and Canada.

FRANKFURT, Germany, Jan. 19--German industrialists estimate that one million jobs are threatened in Germany by European Union plans to fight global warming, a sector leader said Friday in an interview, AFP reported.
“If the German government enacts its 2020 goal of reducing carbon dioxide emissions by 40 percent, I estimate that one million jobs are threatened,“ Federation of German Industries (BDI) president Juergen Thumann told the daily Rheinische Post. “Sectors such as chemicals and steel in particular will have problems,“ he said.
German industrialists have regularly mobilized against projects to fight global warming whether they originate in Berlin or Brussels.
The debate is now focused on a European Commission proposal to sell emissions credits that are mostly provided for free at present.
The measure, which is to be officially unveiled on Wednesday, would have a particularly strong impact in Germany, where heavy industry represents a key part of the economy, which is Europe’s biggest.
German chemical and steel groups have received pledges of support from the government, which intends to contest the EU commission’s plan.
Berlin feels that German car makers will already be unfairly affected by EU plans to reduce automobile pollution.

MADRID, Spain, Jan. 19--The Spanish government said Friday it had approved 5.5 billion euros ($8.1 billion) in international development aid for 2008, up 28.5 percent over last year and its highest-ever amount.
“Every responsible country is called to cooperate and seek a greater distribution of wealth,“ Deputy Prime Minister Maria Teresa Fernandez de la Vega said after a weekly cabinet meeting, AFP wrote.
Just over 40 percent of the aid will go to Latin America while 20 percent will be aimed at sub-Saharan Africa, which has seen funding from Spain rise sharply since 2004.
More than half, 53 percent, will go towards improving infrastructure and helping to provide social services like education and health care.
The amount of aid approved for this year is equal to 0.5 percent of Spain’s gross national product (GNP), the foreign ministry said in a statement.
In September, Prime Minister Jose Luis Rodriguez Zapatero said Spain would raise the amount of development aid which it gives out to the equivalent to 0.7 percent of GNP by 2012 if his Socialist government is re-elected in March.
Polls show the Socialists have a slim lead over the opposition conservative popular Party, which ruled Spain between 1996 and 2004.
The world’s richest nations agreed to provide 0.7 percent of their output in development aid by 2015 as part of the Millennium Development Goals, a series of targets aimed at reducing poverty and living standards around the globe.
Only five nations have far met or surpassed the target: Denmark, Luxembourg, the Netherlands, Norway and Sweden.

Silvio Berlusconi

ROME, Jan. 19--An Italian prosecutor called on Friday for former prime minister Silvio Berlusconi to be tried for corruption for allegedly asking a manager with state television to hire five actresses.
The prosecutor’s office in the southern city of Naples said the conservative politician made the request to Agostino Sacca, head of state broadcaster RAI’s film and TV series division RAI-fiction.
In exchange, Berlusconi allegedly promised Sacca, a member of the former premier’s Forza Italia party, to help him financially and otherwise in his business projects, ANSA reported.
The prosecutor’s request must still be accepted by a judge. Relations between Italian politicians and magistrates have long been tense, especially during Berlusconi’s 2001-6 tenure.
Justice minister Clemente Mastella, embroiled in a corruption probe along with his politician wife, tendered his resignation on Wednesday.
He also withdrew his small centrist UDEUR party from Prime Minister Romano Prodi’s centre-left coalition.

DUBAI, UAE,
Jan. 19--The UAE was the world’s top issuer of Islamic bonds or sukuks during the last seven years, contributing 36.2 percent of global sale value, Kuwait’s Global Investment House said.
Malaysia, which along with the Persian Gulf is one of the world’s Islamic banking hubs, came second, contributing 32.1 percent of Islamic bonds by value, though Malaysia issued far more individual bonds, Reuters quoted that Global as saying.
The world’s largest Islamic bond or sukuk, worth $3.52 billion, was sold in 2006 by Dubai property developer Nakheel.
The Islamic banking industry has boomed as highest number of the world’s 1.3 billion Muslims seek financial services that comply with their beliefs, Global said.
“As a result of the US policy towards certain financial organizations and charitable foundations, the Muslim world has reacted by expanding the demand for more Islamic banking,“ the investment house said in its report.
Persian Gulf Arab investors are also attracted by higher returns from Islamic rather than conventional banking, while Western investors are drawn to Islamic investment products as a way to diversify their portfolios, Global said. There are now at least 300 Islamic financial institutions spread among 75 countries compared with almost none 30 years ago, Global said.
Management consultants McKinsey predicted last month the assets held by Islamic banks would hit $1 trillion by 2010.