Belgian negotiators reach deal in bid to calm markets
BRUSSELS — Belgium's chief negotiator said Sunday the 2012 budget that he clinched after a world-record government stalemate will meet the demands of the European Union and hoped it would calm nervous markets.
EU monetary affairs chief Olli Rehn welcomed the announcement of the breakthrough and said EU officials would soon review the budget text to see if it meets his recommendations of fiscal rigor and increased competitiveness.
Elio Di Rupo said that next year's budget will have a deficit of 2.8 percent of GDP to remain within the EU target. He called the $14.95 billion in austerity measures a step toward assuring a balanced budget in 2015 and the toughest measures taken by the nation in some 70 years.
Mr. Di Rupo is now expected to lead a grand coalition of socialists, Christian democrats and liberals, each split into Dutch- and French-speaking parties. Belgium has had only a caretaker government since June 13, 2010, as a series of negotiators failed to bridge the divide between the country's 6.5 million Dutch-speakers and 4.5 million French-speakers.
But the talks were given much greater urgency late Friday when Standard & Poor's downgraded Belgium's credit rating, potentially leading to increasing interest rates and a downward financial spiral.
Iraq, companies finalize $17 billion natural-gas project
BAGHDAD — Iraq finalized a $17 billion joint venture deal with Shell and Mitsubishi to capture and process gas from its southern oil fields, at a ceremony at the oil ministry on Sunday.
The deal was signed by Shell CEO Peter Voser, Mitsubishi Vice President Tetsuro Kuwabara and Iraqi Oil Minister Abdelkarim al-Luaybi.
"Today's event represents a big change in the oil industry," Mr. al-Luaybi said, adding that the deal constitutes the best use of the gas in line with Iraq's needs.
Earlier this month, the Iraqi Cabinet approved the deal that creates the Basra Gas Company, a joint venture to process associated gas from the Rumaila, Zubair and West Qurna-1 fields.
State-owned South Gas Company will hold a majority 51 percent stake in Basra Gas, while Shell will have 44 percent and Mitsubishi 5 percent, government spokesman Ali al-Dabbagh said. The output capacity of the proposed project will be two billion cubic feet, or 56.6 million cubic meters, per day, he said.
Report: IMF preparing $794 billion Italian bailout
ROME — The IMF could bail out Italy with up to 600 billion euros ($794 billion), an Italian newspaper reported Sunday, as Prime Minister Mario Monti came under pressure to speed up anti-crisis measures.
The money would give Mr. Monti a window of 12 to 18 months to implement urgent budget cuts and growth-boosting reforms "by removing the necessity of having to refinance the debt," La Stampa reported, citing IMF officials in Washington.
The IMF would guarantee rates of 4.0 percent or 5.0 percent on the loan -- far better than the borrowing costs on commercial debt markets, where the rate on two-year and five-year Italian government bonds has risen above 7.0 percent.
The size of the loan would make it difficult for the IMF to use its current resources so different options are being explored, including possible joint action with the European Central Bank in which the IMF would be guarantor.
"This scenario is because resistance from Berlin to a greater role for the ECB in helping states in difficulty -- starting with Italy -- could be overcome if the funds are given out under strict IMF surveillance," the report said.
From wire dispatches and staff reports