ECONOMY

In Brief

Merkel calls for support on 3 pipeline projects German Chancellor Angela Merkel called on European Union member states to support three natural gas pipeline projects instead of focusing on one, contradicting the Czech Republic, which holds the bloc’s rotating presidency. «We have to further intensify our relations to the Caspian region, especially so we can realize the Nabucco pipeline,» Merkel said in a letter to European Commission President Jose Manuel Barroso and Czech Prime Minister Mirek Topolanek. «The Nord Stream and South Stream projects are also important to reliably meet Europe’s import requirements.» Topolanek said on Monday that implementing South Stream, a project promoted by OAO Gazprom, Russia’s gas exporter, would be the «end for Nabucco.» The two pipelines can’t coexist, he said. Merkel’s letter highlights dissent within the EU on the right response to a gas-pricing dispute between Russia and Ukraine that cut shipments to the 27-nation bloc for two weeks this month. «It’s of great importance that these projects are desired politically and supported by all EU member states,» Merkel said. (Bloomberg) Spreads seen coming under pressure The difference in yield, or spread, between some euro-region government bonds and benchmark German debt may widen, according to ING Groep NV, the largest Dutch financial services company. «Spreads will come under pressure again within the coming months,» Wilson Chin, a fixed-income strategist in Amsterdam at ING, wrote in an e-mailed report yesterday. Still, «there is more short-term convergence potential versus Germany in Greek, Portuguese and Irish issues relative to Italian issues,» which have outperformed, Chin said. (Bloomberg) Fourlis on target Fourlis, the Greek franchise of furniture giant Ikea, is confident it will meet its 2008 profit targets, as its affordable home goods business is weathering the impact of the global downturn, its CEO said yesterday. «We did a small change to our guidance in November,» Fourlis CEO Apostolos Petalas told Reuters in an interview. «In the last month of the year, there was a recovery in Ikea sales and we are confident with the guidance we gave.» (Reuters) Producer prices Greek producer prices fell 3.3 percent year-on-year in December, pushed lower by sinking oil prices, data from the National Statistics Service (NSS) showed yesterday. The latest reading brought the 12-month average annual pace of producer price inflation down to 7.8 percent. Consumer price inflation fell in December by nearly a full percentage point to 2.0 percent. The NSS said the sub-index of energy prices dropped 15.9 percent month-on-month in December. «The downtrend continues at a rapid pace, due to the significant drop in energy prices. Weaker demand for manufactured products is reflected in slower intermediate and capital goods price increases,» said National Bank economist Nicholas Magginas. (Reuters) Bond loan Folli-Follie SA, a Greek maker and retailer of handbags and jewelry, said it had agreed to terms for a 231.5-million-euro ($302 million) bond loan, according to an Athens bourse filing. The bond loan will be used for refinancing, the company said. (Bloomberg)