World financial news

Search teams found at least 10 bodies Friday near where a Russian-made jetliner crashed into the side of an Indonesian volcano while on a demonstration flight for potential buyers from airlines, an official said.

All 45 aboard the Sukhoi Superjet-100 are feared dead.

The search team used ropes to climb up to the wreckage on the near-vertical slopes of Mount Salak, search and rescue agency spokesman Gagah Prakoso said. The 10 bodies they found are being prepared to be transported from the crash site by helicopter.

Local television showed what appeared to be the plane’s tail with the blue-and-white Sukhoi logo, part of a wing and bits of twisted metal scattered along the slope like confetti.

The jetliner slammed into the dormant volcano Wednesday at nearly 800 kph (480 mph). Russian and French investigators have arrived to join the ongoing investigation into the cause.

The Superjet-100 is Russia’s first new model of passenger jet since the fall of the Soviet Union two decades ago and was intended to help resurrect its aerospace industry business cards.

The ill-fated Superjet was carrying representatives from local airlines and journalists on what was supposed to be a 50-minute demonstration flight. Just 21 minutes after takeoff from a Jakarta airfield, the Russian pilot and co-pilot asked for permission to drop from 10,000 feet to 6,000 feet (3,000 meters to 1,800 meters). They gave no explanation, disappearing from the radar immediately afterward.

It was not clear why the crew asked to shift course, especially since they were so close to the 7,000-foot (2,200-meter) volcano, or whether they got an OK, officials have said.

Communication tapes will be reviewed as part of the investigation, but it’s unlikely they will be released to the public any time soon.

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Germany’s ZEW survey of investor optimism unexpectedly rose in April for a fifth straight month in another upbeat sign for Europe’s biggest economy despite recurring turmoil from the debt crisis hitting the 17 countries that use the euro.

The survey’s index, released Tuesday, rose to 23.4 from 22.3 in March. Analysts had expected a dip to 19.0, with some predicting a figure as low as 15.0.

The upbeat views run counter to the recent concern about bond market pressure on Spain and Italy, and were gathered from 275 financial experts between April 2 and April 16, during which the interest rate on those countries’ bonds rose _ a sign of financial distress.

Germany’s economy, driven by strong exports to Asia and North American, is expected to outpace the eurozone economy as a whole this year. The Bundesbank, the country’s national central bank, forecasts growth of 0.6 percent this year and 1.8 percent next year.

The eurozone economy as a whole is expected to shrink by 0.3 percent, according to estimates by the European Union’s executive commission.

Cutbacks in government spending in indebted countries including Greece, Ireland, Portugal, Spain and Italy are weighing on growth and boosting unemployment in large parts of the shared currency bloc.

ZEW President Wolfgang Franz said the data for Germany showed that “financial market experts have maintained their positive outlook for the next half year. “

He said the small size of the increase suggested that optimism was beginning to run up against concerns about possible risks. “The fact that the indicator is running in place shows, however, that the optimism about the real economy has been held back by significant risks, such as for example cyclical weakness of important trade partners and the debt crisis in the eurozone.”

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SAN FRANCISCO

Employers in the U.S. added fewer jobs than forecast in March, underscoring Federal Reserve Chairman Ben S. Bernanke

The 17 countries that use the euro should boost their crisis firewalls to at least (EURO)1 trillion ($1.3 trillion) to help the struggling currency union return to growth, the head of the Organization for Economic Cooperation and Development said Tuesday.

Angelo Gurria, the head of the Paris-based international development body, said current commitments to the rescue funds, which are limited to (EURO)500 billion ($664 billion), are not enough to restore market confidence in the eurozone.

“A credible firewall will provide governments with the breathing space they need to focus on revitalizing Europe’s economic growth and competitiveness,” Gurria said in a statement linked to the release of the OECD’s annual report on the eurozone economy.

According to the report, which also spells out a raft of economic reforms for individual countries, vulnerable states may need more than (EURO)1 trillion in aid over the coming two years.

Gurria said eurozone finance ministers should take a decision to boost their bailout funds at their meeting in Copenhagen later this week.

Germany, the bloc’s largest economy, signaled on Monday that it would only support a temporary increase to around (EURO)700 billion ($929 billion) instant payday loans.

But that falls below the recommendation of the International Monetary Fund and the European Commission, the European Union’s executive. It may also not be enough to convince other large non-euro economies, such as China and the U.S., to help in the beefing up of Europe’s defenses by sending more money to the IMF.

International institutions argue that a big and credible bailout fund would restore confidence in vulnerable countries like Italy and Spain and prevent them from actually having to seek help.

Gurria said it could also allow weak economies to focus on kickstarting growth by reforming their economies.

“Europe is stalling,” he said. “It needs to get out of first gear and make growth number one priority.”

However, countries like Germany fear that easy access to financial support could stop countries from implementing reforms.

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Holland Construction Services Inc. completed building the Center for Orthopedic and Neurosciences at Memorial Hospital in Belleville, which recently opened and is offering medical services.

The 85,000-square-foot building is the third office building and the first free-standing structure on Memorial Hospital’s campus in Belleville. In addition to providing additional office space for doctors, the $24 million building offers pain management, physical, occupational, hand and speech therapy, sports medicine and other services.

ACI/Boland Inc. provided architectural services for the project.

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Aurora Bank is closing a loan office in Chesterfield in April that employs 146 people.

The Delaware-based bank operates its Corresponding Lending business unit at 390 South Woods Mill Road in Chesterfield. The unit is part of the bank’s residential mortgage servicing business.

It is unknown whether the Chesterfield employees have been offered other positions at Aurora. A bank official did not immediately return calls for comment.

On its website, Aurora Bank posted a message that says that it is closing its residential lending unit, which includes its Correspondent Lending business. The bank said it will continue to service its current customers no credit check payday loans. “We will continue to be staffed to support your needs and ensure a seamless experience for you and your customers,” the message said.

Aurora Bank submitted a WARN notice to the state of Missouri on Thursday that says the office is closing April 30. The federal Worker Adjustment and Retraining Notification Act requires employers to give advance notice of layoffs or closures.

Aurora Bank is based in Wilmington, Del.

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French bank Credit Agricole SA reported a euro3.07 billion ($4.06 billion) net loss in the fourth quarter on Thursday, as an intensifying European debt crisis drove down the value of its Greek bonds and shaved billions off the bank’s bottom line.

Credit Agricole _ hit by the Greek debt crisis largely through its ownership of Greek bank Emporiki _ said fourth-quarter net profit plunged nearly tenfold from a loss of euro328 million in the last quarter of 2010. It also posted a net loss for 2011 of euro1.47 billion.

Investors dumped the bank’s stock on the news, driving the share price down nearly 4 percent in early afternoon trading Thursday.

As part of an effort to drastically reduce Greece’s unsustainable debt burden and avoid a chaotic default on the country’s bonds in March, private bondholders are being asked to take substantial losses on their Greek bonds. They hope that if Greece’s finances can be righted, they can draw a line under Europe’s debt crisis, which has threatened to drag down bigger economies like Italy.

In anticipation of the losses on Greek debt, European banks have been writing down the value of those bonds. BNP Paribas and Societe Generale _ French banks that also have substantial Greek holdings _ saw their fourth-quarter profits plummet as they discounted their Greek bonds by 75 percent, roughly in line with what European leaders are asking of private institutions.

Credit Agricole has now taken similar measures. The bank said the overall net loss from Greece _ including losses at Emporiki and the writing down of Greek debt _ was euro2.38 billion for 2011.

Credit Agricole said it was also reducing the amount of money it lends to Emporiki.

However the bank’s problems go beyond Greece. Credit Agriocle said a wide-range of factors had dragged down its bottom line, including “the slowdown in the European economies, the downgrades in European sovereign debt ratings, a particularly difficult situation in Greece and tensions in the financial markets.”

Banks across Europe are also facing European Banking Authority requirements that they keep more funds in case of further market turmoil and are struggling to get the overnight loans they use to fund day-to-day operations on fears that one of them could collapse.

While the European Central Bank has stepped in to offer unlimited funding to banks, Credit Agricole said it was reducing its exposure to U.S. dollar denominated debt which is becoming increasingly expensive for some European banks as U.S. banks pull back on loans.

Despite the large losses, Jean-Paul Chifflet, chief executive of the bank, still called the results satisfactory, underscoring that the bank was now better positioned to operate in the tough economic times, noting in particular it had trimmed its investment banking division, where net income plunged 27 percent in 2011. Net income at its French retail banks, by contrast, was up more than 5 percent.

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The Federal Reserve appears open to the idea of a third round of bond purchases to boost a still-modest recovery. But members remain divided over when or whether to take that step.

Minutes of the Fed’s Jan. 24-25 meeting show that some Fed officials thought such bond purchases should begin soon because unemployment remains high and inflation low.

Others said such a step should be taken only if the economy weakened further or if inflation stayed below the Fed’s target rate of 2 percent.

The debate took place at a meeting in which the Fed decided to hold its benchmark interest rate at record lows until at least late 2014. One Fed official argued that the central bank might need to consider abandoning that plan to keep inflation low.

Fed Chairman Ben Bernanke said at a news conference after the January meeting that the Fed hadn’t ruled out a third round of bond buying to help boost the economy.

Bernanke also said the Fed would provide more information on the central bank’s balance sheet of bond holdings in the future.

Few economists expect the Fed will announce a bond buying program after its next meeting on March 13. That’s because the outlook for hiring _ and the broader economy _ is looking better since the Fed’s meeting.

The economy added 243,000 net jobs in January, the most in nine months. And the unemployment rate fell for the fifth straight month, to 8.3 percent. The government reported the figures one week after the Fed met cash advance no faxing.

Many analysts believe those reports have pushed a possible round of bond buying further into the future. And some believe that unless there is a shock to the U.S. economy, such as a deeper crisis in Europe, the Fed will not go forward with more bond purchases.

Still, Bernanke told a Senate panel last week that the declining unemployment rate doesn’t capture the plight of millions who have stopped looking for work.

His cautious view suggests the Federal Reserve plans to stick with the three-year time line, even if the unemployment rate continues to gradually decline.

At the January meeting, the central bank for the first time released forecasts for where individual Fed officials expected the key interest rate to be in the future. Those forecasts showed that some members foresee super low rates beyond 2014, while six members saw the increases starting in either 2013 or 2014.

The rate forecasts were an effort to provide more explicit clues about the Fed’s plans to give financial markets greater assurances that rates will stay low for some time to come.

The forecasts support a broader Fed effort to make its communications with the public more open.

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President Barack Obama feels he has struck just the right budget balance between providing more short-term support for the economy while putting forth a long-term plan to get control of the government’s soaring budget deficits.

Republicans vehemently disagree, attacking his 2013 budget as a replay of the failed economic policies they say have resulted in an economy growing at subpar rates and government debt soaring to record highs.

Both parties would agree that Obama’s latest budget, released Monday, will feature heavily as a debating point in the November elections to determine who will win the White House and whether Democrats or Republicans win control of the House and Senate.

Republican Mitt Romney, who is campaigning for the GOP nomination to challenge Obama in the fall, called the budget Obama released Monday “an insult to the American taxpayer.” GOP candidates Rick Santorum, Newt Gingrich and Ron Paul are all advocating bigger spending cuts to control the deficits, and all the GOP candidates oppose Obama’s tax increases.

Treasury Secretary Timothy Geithner, the administration’s chief economic spokesman, was scheduled to testify before the Senate Finance Committee on Tuesday in what will be the first of four congressional appearances this week by Geithner to explain and defend Obama’s budget plan.

Judging from the GOP reaction Monday, Geithner could be in for some sharp questioning.

“The president’s budget is a gloomy reflection of his failed policies of the past, not a bold plan for America’s future,” House Speaker John Boehner, R-Ohio, said. “The president offered a collection of rehashes, gimmicks and tax increases that will make our economy worse.”

Democrats in Congress were for the most part supportive of the president’s proposals. Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee, said Republicans forget that Obama inherited an economic mess when he took office, with the economy struggling to emerge from the worst economic downturn since the 1930s.

“The reality is that the president inherited a fiscal and economic disaster,” Conrad said Monday. “The only true way forward is through a comprehensive and balanced deficit-reduction agreement. We need to come together on a plan that modernizes our tax system, reforms our entitlement programs and attacks wasteful spending.”

Republicans are arguing for deeper spending cuts and a frontal assault on the biggest drivers of the deficit, the soaring costs of Medicare and Medicaid, whose already sizable costs are projected to double in future years as baby boomers retire.

Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, said Monday that he expected the Republican-controlled House would in coming weeks pass an alternative to the Obama budget that would gain control of the deficit, not by raising taxes but by curtailing Medicare and Medicaid.

“President Obama’s irresponsible budget is a recipe for a debt crisis and the decline of America,” Ryan said.

Obama’s cuts in Medicare and Medicaid avoid cuts in benefits and instead make modest trims in payments to health care providers. In contrast, the Republican House last year approved Ryan’s plan, which would essentially transform Medicare into a voucher system in which future seniors would get a fixed amount to buy medical insurance.

The Obama budget proposes spending $3.8 trillion in the 2013 budget year, which begins Oct. 1. It would achieve $4 trillion in deficit cuts in part through restraining the growth of many government programs, adhering to the agreement Congress approved in August for spending caps to achieve $900 billion in deficit reduction over a decade.

Obama’s plan also proposes additional deficit reduction in order to avoid $1.2 trillion in across-the-board cuts scheduled to take effect next January.

But the president relies on $1.5 trillion in tax increases, mainly by allowing the Bush-era tax cuts to expire on families making more than $250,000 per year, imposing additional taxes on those making more than $1 million per year and eliminating various corporate tax breaks.

The tax increases all have been rejected by Republicans.

With both parties holding entrenched positions, it is very likely that no solution will be found before the November elections, with both sides preferring to use the debate to score political points.

If that occurs, Congress will probably be back in Washington after the November elections for a lame-duck session to resolve the battle over taxes and spending cuts.

Lawmakers are facing end-of-the-year deadlines when the Bush-era tax cuts on all taxpayers expire and across-the-board spending cuts will go into effect if lawmakers can’t agree on $1.2 trillion in further deficit reduction over the next decade.

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