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Critical last-ditch talks to form a coalition government in crisis-struck Greece foundered once more Sunday, leading the country one step closer to new elections, although the socialist party leader said he retained “existing but limited’ optimism for a deal.

The political uncertainty has alarmed the international creditors who have given Greece billions of euros in bailout loans over the past two years, and has thrown the country’s continued presence in the European Union’s joint currency into serious doubt.

President Karolos Papoulias convened the heads of the parties that came in the top three spots in last Sunday’s inconclusive elections, in an ultimate effort to broker an agreement after a week of talks led to deadlock.

The meeting ended without a solution, but the process continued Sunday evening with the president meeting individually with the leaders of smaller parties that made it into parliament. Those include the extremist right-wing Golden Dawn, whose head, Nikolaos Michaloliakos, caused a furor by giving a fascist salute during an Athens city council meeting last year. The party won 7 percent of the vote in the elections.

Voters furious at the handling of Greece’s financial crisis and two years of harsh austerity measures taken in return for billions of euros in international bailout loans punished the formerly dominant socialist PASOK and conservative New Democracy parties in the elections. The two saw their support crumble to the lowest point in decades, while Radical Left Coalition, or Syriza, made big gains to come in second place after campaigning on an anti-bailout platform.

The PASOK and New Democracy leaders could form a coalition with the smaller Democratic Left party of Fotis Kouvelis _ combined they would have 168 seats in the 300-member parliament. New Democracy won 18.9 percent last Sunday while PASOK garnered just 13.2 percent, compared to nearly 44 percent in the last elections in 2009. Kouvelis’ 6.1 percent put him in a kingmaker position, with 19 seats.

But all three insist any power-sharing deal must include Syriza, led by the 38-year-old Alexis Tsipras, given its strong showing at the ballot box.

Tsipras, however, insists he cannot join or even lend his support to a government that will continue implementing the terms of Greece’s international bailout. In return for euro240 billion in rescue loans from the European Union and International Monetary Fund, Greece has imposed severe spending cuts, including slashing pensions and salaries in the public sector, and repeated rounds of tax hikes. The measures have left Greece mired in a fifth year of deep recession, with unemployment spiraling above 21 percent.

“The three parties that have agreed on a two-year government in order to apply (the bailout) have 168 seats in parliament,” Tsipras said after the meeting. “Let them go ahead. Their demand that Syriza participate come what may in their own agreement is senseless and unprecedented.”

Tsipras insists the terms of the bailout must be cancelled payday loans. PASOK head Evangelos Venizelos, who spent nine months handling the crisis as finance minister, and conservative leader Antonis Samaras, say that position is irresponsible and will force Greece out of the euro. Although Sunday’s meeting convened by the president with the three top party leaders was inconclusive, Venizelos said that “I retain some limited but existing optimism that a government can be formed.”

Samaras appeared more pessimistic.

“I made every effort for the cooperation of all,” he said. “Syriza didn’t listen to the mandate of the Greek people and does not accept not only the formation of a viable government, but not even the tolerance of a government which would in fact undertake to renegotiate the terms of the (bailout) and the loan agreement.”

Tsipras, however, stuck to his position, insisting that supporting a pro-bailout government would be a betrayal of his pre-election platform.

“After today’s meeting it is obvious they are demanding that Syriza become an accessory to a crime,” he said after the discussions with the president. “In the name of democracy, of our patriotic duty, we cannot accept this shared guilt. We call on all Greeks to condemn once and for all the forces of the past and to realize that only one hope remains: unity against blackmail in order to prevent the continuing barbarity.

“Fellow Greeks, we can assure you of one thing: we will not betray you.”

Tsipras will also have his eye on recent opinion polls which show his party would gain strength if Greeks go to the ballot box again next month.

A poll published by To Vima newspaper Sunday indicated Syriza would come first in new elections with 20.5 percent of the vote _ less than the 28 percent an earlier opinion poll published Thursday gave him, but still well ahead of New Democracy. Although it would not be enough to form a government, it would put him in the dominant position to form a coalition with smaller anti-bailout parties.

To Vima’s poll, carried out by Kappa Research, showed New Democracy in second place with 18.1 percent and PASOK losing yet more votes to reach 12.2 percent. The poll was carried out on May 9 and 10, and had a margin of error of 3.09 percentage points.

Attention Sunday night will be focused on the president’s meeting with Kouvelis. First in for the evening round of meetings was Panos Kamenos of the anti-bailout right-wing Independent Greeks party, to be followed by Communist Party head Aleka Papariga and then Michaloliakos.

Papoulias’ mediation to broker a deal could in theory continue until May 17, the scheduled opening date for the new parliament, although they are expected to end sooner. If no agreement is reached, Greece will have to hold new elections next month, most likely on June 10th or 17th.

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Final results from France’s presidential election show Francois Hollande narrowly defeated incumbent Nicolas Sarkozy with 51.62 percent of the vote.

Interior Ministry figures released Monday morning show the outgoing Sarkozy garnered 48.38 percent of the vote, giving Hollande a winning margin of 1.13 million votes.

Voter turnout was 80.34 percent, about the same as in the first round of voting April 22.

Hollande is pledging to buck Europe’s austerity trend and NATO’s timetable for Afghanistan no teletrack payday loan.

His allies are now jockeying for government jobs. Sarkozy’s conservative party is turning its sights to upcoming parliamentary elections to try to hold onto its majority despite a wave of support for the left.

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Economic turbulence has shrunk the market for business jets, and it’s causing an especially bumpy ride for Hawker Beechcraft.

The Wichita, Kan.-based aircraft maker filed for bankruptcy protection this week, seeking approval for a plan that would write an estimated $2.5 billion in debt off its books and eliminate almost $125 million in annual cash interest expenses.

Hawker Beechcraft Corp., which is owned by Onex Partners and GS Capital Partners, a Goldman Sachs private equity fund, has struggled with the sluggish business jet market more than other plane makers because it was purchased in a highly-leveraged deal at the peak of the general aviation market, just before the market tanked.

“It is one badly damaged firm, in a badly damaged market segment _ just a unique set of circumstances,” said Richard Aboulafia, an aviation analyst with Teal Group, a Fairfax, Va.-based aerospace and defense analysis company.

The economic downturn that began in late 2008 hit business jet makers especially hard, as corporate customers that were lining up for their own planes earlier in the decade began looking for ways to trim fat. The public outrage that Detroit auto executives took private jets to Washington seeking bailout money that November reinforced the planes’ image as a symbol of corporate excess. Two months later, the White House pressured Citigroup to cancel the planned delivery of a jet.

Wichita, the self-proclaimed “Air Capital of the World,” is the home of major manufacturing plants not only for Hawker Beechcraft but also for Boeing, Spirit AeroSystems, Cessna, Bombardier and more than a hundred smaller aircraft suppliers. But the business jet segment of industry has struggled as its sales sunk by 56 percent during a global economic downturn. Another blow for Wichita came earlier this year when Boeing announced it was closing its defense plant in Wichita.

“Frankly, given what Wichita has been through, this is unpleasant but relatively small,” Aboulafia said.

More than 13,000 aircraft workers here have lost their jobs since the 2008 start of the Great Recession, which pummeled sales of the small and mid-size business jets made by three of Wichita’s major manufacturing facilities.

“This is definitely another blow, another nail in this situation we have been going through and it is definitely not good news,” said Jeremy Hill, director for The Center for Economic Development and Business Research at Wichita State University.

Since its founding with the highly-leveraged 2007 purchase of Raytheon’s former aircraft unit, Raytheon Aircraft, Hawker Beechcraft has carried a heavy debt burden, reporting a total debt of $2.3 billion at the end of 2011, according to its annual statement to the Securities and Exchange Commission.

Hawker Beechcraft will likely emerge from bankruptcy keeping a majority of its business, although one or two of its product lines could be shut down, Aboulafia said.

“This is a company with good products and a good name,” he said. “They just happen to be carrying a lot of debt and they are going to have to make some tough choices about what they are going to do next.”

In 2009, Hawker delivered 98 business jets. Deliveries plummeted to 51 last year. It has stopped making its Hawker 400XP until demand improves, according to a filing last month.

Hawker Beechcraft sold $2.3 billion worth of business and general aviation planes in 2009. Last year those sales were almost $1 billion lower.

There’s little reason to buy a new jet right now. There are more than 4,000 used business planes on the market right now, said Gordon Blalock, vice president for sales at Omni International Jet Trading. “The market’s so depressed,” he said. “We’re seeing some of these airplanes selling for less than 50 percent of what they sold for brand new.” Several years ago, some planes actually appreciated in value because demand was so high, he said.

Cai von Rumohr, an analyst at Cowen and Co., said Hawker Beechcraft’s financial problems have made it harder to sell jets in the down market, because jet owners want to know that the company that built its plane will be around to service it and make parts.

“They have been losing share in the (business jet) market,” he said. “The crisis of confidence among their customers has been an issue.”

The company also makes trainers and other small planes for the military, but civilian planes are still 56 percent of its revenue, compared to 27 percent for military planes. Hawker has delivered more than 700 T-6 trainers, most of them to the U.S. Air Force and Navy. But that contract is winding down. Hawker is trying to sell a light attack version of that plane to the Air Force, which is reconsidering its initial pick of a competing plane.

For Wichita as well as Kansas, the stakes in the future of Hawker Beechcraft and the aviation industry are high.

Aircraft sales comprise the state’s number one export, accounting for a third of the products it makes, Hill said. In 2008, aerospace accounted for $4.3 billion of Kansas exports _ a number which plummeted to $2.1 billion by 2010. Kansas used to be the sixth largest city among U.S. aviation exporters in 2008, dropping to tenth by 2010.

Hawker Beechcraft employs some 7,400 people, with roughly 4,700 working at its Wichita facility. It also has factories in Little Rock, Ark., Britain and Mexico, as well as more than 100 service centers worldwide.

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MONTREAL

The first time I wrote about Sean Egan and his small, independent credit-research firm, Egan-Jones Ratings Co., was in December 2007 for a column about the bond insurer MBIA Inc. And man, did he nail it.

The three big credit raters — Moody’s Investors Service, Standard & Poor’s and Fitch Ratings — all had AAA ratings on MBIA’s insurance unit, their highest grade. Egan said it deserved much lower. Anyone reading MBIA’s financial reports could see the company was losing money and needed billions of dollars of fresh capital.

By mid-2008, the Big Three had cut their ratings. Once again, Egan, a lonely voice of reason who saw the financial crisis coming, had shown his larger competitors to be incompetent or compromised. It was one of many great calls to come for Egan-Jones. As for MBIA, which had no revenue last quarter, it’s still struggling.

So if you had told me back then that the Securities and Exchange Commission’s enforcement division more than four years later would be accusing Egan, and his firm, of securities-law violations — but not any of the big rating companies — there’s no way I would have believed you. That’s what happened last week, though.

Life isn’t fair, as they say. The big raters, paid by the issuers of securities they grade, so far have gotten a pass, even after helping cause the financial crisis by slapping AAA scores on oodles of subprime-mortgage dreck. Egan-Jones, with fewer than 20 employees, makes its money by selling subscriptions to investors, meaning it’s not beholden to issuers. Yet Egan and his firm are getting pinched, although nothing in the SEC’s administrative complaint indicates investors were harmed.

None of this is to excuse infractions Egan-Jones might have committed. We will have to wait and see if the agency’s claims stick in court. That said, it seems Egan-Jones’ mistake was to seek recognition from the SEC at all.

The allegations mainly concern the application Egan-Jones filed with the agency in 2008 to expand its license as a so-called nationally recognized statistical rating organization. The firm, based in Haverford, Pa., first received that designation in 2007 for rating corporate debt, insurance companies and banks. Its 2008 application, which the SEC approved, sought recognition as a rater of asset-backed securities and government bonds.

Egan-Jones at the time said it had about 150 ratings on issuers of asset-backed securities and about 50 on government-debt issuers. The complaint said those numbers were overstated and that the firm hadn’t made any such ratings publicly available free online credit report. Attorneys for Egan, 54, and the firm say their clients filled out the SEC’s application based on their understanding of what the form required.

Additionally, the complaint accused Egan-Jones of committing numerous book-and-record violations, such as failing to maintain a system for retaining e-mails. It also said the firm let two analysts participate in determining ratings for companies in which they owned securities, in violation of agency rules. An attorney for the defendants, Alan Futerfas, said the claims are without merit.

What about the big rating companies? McGraw-Hill Cos., S&P’s parent, in September said the SEC’s staff had issued S&P a “Wells notice” warning that the agency may seek penalties over its rating of a $1.6 billion collateralized debt obligation in 2007. S&P received its letter the month before Egan got its Wells notice. There’s no telling if the SEC will follow through.

In 2010, the SEC issued an investigative report that said a Moody’s rating committee in 2007 knowingly decided to keep inflated ratings on about $1 billion of notes after discovering an error in one of the firm’s models. Later in 2007, Moody’s applied to the SEC for recognition under the same 2006 federal law that Egan-Jones saw as its chance to join the same club as the Big Three.

The rating process used by Moody’s in that instance violated the policies described in the company’s application, the SEC said. However, the report said the agency decided not to accuse Moody’s of violating any laws, because some of the conduct occurred outside the U.S., presenting jurisdictional hurdles. Lucky break, I guess.

The way Congress and the SEC have rigged this game, nationally recognized credit raters are a unique species of opinion merchants, endowed with sweeping authority and special privileges. Institutional money managers often are required by law to abide by their judgments. The better approach would be to scrap the designation, so investors are encouraged to do their own homework.

Egan-Jones, which has been in business since 1992, could have continued as an independent, not subject to government oversight or control. Instead it chose to play within the Big Three’s system, exposing itself to the whims of the SEC. Now it’s paying the price.

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Governments committed more than $400 billion in fresh money to the International Monetary Fund to help it protect the world economy against deepening debt turmoil in Europe.

That sum is contained in the draft of a statement obtained by Bloomberg News which will be released by Group of 20 finance ministers and central bankers after a meeting now under way in Washington. Specific country contributions will be decided ahead of a Mexican summit of G-20 leaders in June, Brazilian Finance Minister Guido Mantega said.

The near-doubling of the fund

Selling soybeans, iron and copper ore and other commodities to Asian countries has transformed Latin America over the past decade, stabilizing economies despite worldwide crises and lifting tens of millions of people into the middle class. Now, say officials from both Asia and Latin America, a second gold rush is under way.

Asian investors flush with hundreds of billions of dollars in cash now see Latin America as a top business opportunity, and they’re flooding into manufacturing, construction and other industries, particularly in up-and-coming countries such as Brazil, Peru and Mexico. That’s transforming the lucrative relationship that was based primarily on exporting raw materials to Asia, an arrangement that frustrated governments eager to stimulate their own manufacturing.

Government and business officials meeting this week at the World Economic Forum in Mexico said the investment surge means Asia is poised to overtake the United States and the European Union as Latin America’s top trading partner over the next decade. Asian representatives have been an unmistakable presence at the forum, with South Korean, Chinese and Japanese investors making the rounds at this seaside city’s gleaming white convention hall.

“We’re talking about tens of billions of dollars in just Korean banks looking for a destination,” said Kevin Lu, Asia Pacific regional director of a World Bank Group agency that insures foreign investments against political risk. “When I meet with investors, Latin America is in every conversation about this.”

Already, Chinese investment in Latin America has jumped from a few million dollars just a few years ago to about $15 billion in 2010, with most of the money going into mining and other extractive industries in Brazil, Peru and other nations, said Alicia Barcena, executive secretary for the Chile-based United Nations Economic Commission for Latin America and the Caribbean. Chinese investment in the region jumped again last year, to about $23 billion, Barcena said.

Japan, meanwhile, surpassed even that figure last year and displaced China as the region’s top Asian investment and trade partner, Barcena said. She didn’t provide a precise number for Japan’s total.

China already ranks among the top three trading partners with Peru, Brazil, Chile and Argentina, and Asian investment in auto and other manufacturing in Mexican industrial cities has greatly expanded the middle class.

“I don’t have any doubt that Asia will soon become the region’s top trading partner,” said Mexican Economy Secretary Bruno Ferrari Garcia de Alba. “In Mexico, we believe we need to get closer and closer to Asia.”

According to the U.N. economic commission, 17 percent of Latin America’s exports went to Asian-Pacific countries in 2010, more than tripling from 5 percent in 2000 business card design. Over the same span, the share of the region’s total exports that went to the United States dropped from 60 percent to 40 percent.

Ferrari said Asian-Pacific countries buy 31 percent of Mexico’s total exports, amounting to $110 billion, with that number growing by an average of 20 percent annually over the past five years.

Lu, of the World Bank Group agency, said raw material industries in Latin America are now getting only 40 percent to 50 percent of total Asian investment in the region, while the rest goes to manufacturing, construction and other businesses.

He said foreign money flowing into a new region often first goes into buying natural resources because it’s a simpler business than making things, which requires dealing with labor, setting up supply chains and complying with various government rules.

“The Chinese look at natural resources as easier to manage, while manufacturing and construction is a lot more complicated,” Lu said. “It’s a very natural progression for any bilateral trade relationship to start to become broader, and to move into other areas.”

Hanwha, a South Korean petrochemicals company, is considering manufacturing in Latin America rather than continue to concentrate its production in China, said Sang M. Lee, CEO of the company’s U.S. operations.

At the same time, the company is eyeing the Latin American market, especially as it moves into solar energy, Lee said after a Wednesday morning at the World Economic Forum dedicated to the future of Asian-Latin American relations.

“We need that new production because there are a lot of resources in Latin America, and we need more markets,” Lee said. “We’re just at a beginning stage with this.”

To be seen is whether the rising Asian investment will quiet concerns around Latin America that exporting commodities while importing manufactured Asian goods will ruin domestic companies and leave the region vulnerable. Brazil, in particular, has raised import tariffs on manufactured goods to protect its own industries.

Peruvian Trade and Tourism Minister Jose Luis Silva Martinot made clear Wednesday that despite the economic benefits from Asian trade and investment, Peru still sees China and other Asian countries as competitors.

“We can see they’re up scaling the quality of their products,” Silva said. “Three-quarters of our exports are raw materials. It’s something we want to change.”

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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

The leader of Cyprus’ Orthodox Christian Church says it wants to invest in the country’s energy sector.

Archbishop Chrysostomos II said Monday the Church is looking primarily at solar panel manufacturing and building a power plant as part of investment plans that could run in the “tens and possibly hundreds of millions” of euros (dollars).

Chrysostomos II says the Church’s investment is aimed at boosting the country’s economy.

Eurozone member Cyprus is relying on a (EURO)2.5 billion ($3.27 billion) low-interest loan from Russia to see it through this year after a string of credit rating downgrades have left it unable to borrow from international markets.

Officials hope the discovery of a sizable, offshore natural gas field will help turn the economy around.

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