ECONOMY

In Brief

Portuguese leaders agree on new measures LISBON (Reuters) – Portuguese leaders agreed tough new austerity measures yesterday, joining a coordinated eurozone push that has so far calmed the markets’ worst fears of a Greek-style debt crisis spreading. Portuguese Prime Minister Jose Socrates and opposition leader Pedro Passos Coelho drew up steps to reduce the budget deficit by about 2 billion euros, half from spending cuts and half from increases in sales, income and profits taxes, a source close to the talks said. The cabinet was expected to meet to approve the program later in the day. At the weekend, Portugal’s government had said it would cut its 2010 deficit by one percentage point to 7 percent of GDP. Like the harsh steps announced by Spain on Wednesday, the measures are the painful price indebted eurozone states must pay for protection by the 750-billion-euro ($952.7 billion) safety net announced by the EU and IMF at the weekend. Serbia central bank may move to support dinar Serbia’s central bank may sell more euros from its currency reserves to support the dinar and ward off any effects from the Greek financial crisis, Ivan Nikolic of the Belgrade-based Economic Institute said. The Narodna Banka Srbije in Belgrade sold more than 550 million euros ($692 million) this year, including 20 million euros on May 7, to fortify the dinar. The currency has lost 3.5 percent against the euro in 2010, extending a 7 percent drop in 2009. International investors want to «wait and see» where the Greek crisis goes and «the bank will be probably forced to intervene more in the coming weeks,» Nikolic said by phone. Serbia was forced to take a 3-billion-euro bailout from the International Monetary Fund to prop up the economy. (Bloomberg) Ship sale Louis Plc, the biggest tourism company in Greece and Cyprus, said it agreed to sell one of its cruise ships as part of a fleet-renewal strategy. The Greek-flagged Aegean Pearl is to be sold for $19.5 million to a «foreign» company and will be delivered on June 23, Nicosia-based Louis said yesterday in a statement to the Cyprus Stock Exchange. The transaction is likely to result in an accounting loss of about 1 million euros ($1.3 million), according to the statement. Aegean Sea cruise routes sailed by the ship will be taken over on June 21 by the company’s Calypso vessel. After the sale, Louis’s fleet will comprise 10 ships that operate in the Mediterranean and Aegean. (Bloomberg) Help late European Central Bank Executive Board member Lorenzo Bini Smaghi said European Union countries should have helped Greece back in February. «If a decision to sustain Greece had been clearly made in February, the bill would have been lower and we would have avoided three months of instability,» Bini Smaghi wrote in an opinion piece in Corriere della Sera, an Italian newspaper. (Bloomberg) Romanian energy Romania’s regulated gas prices and a government plan to consolidate its state power producers are hurting market competition and scaring off foreign investors, the head of utility E.ON Romania said yesterday. Frank Hajdinjak, head of the Romanian unit of German utility E.ON, also said Romania badly needed to reform its energy sector and open up its markets or run the risk of seeing investors look to other countries in the Southeast European region to develop projects. Uncertainty over fiscal policies in the European Union state struggling to shore up its finances and keep alive a 20-billion-euro aid deal with the International Monetary Fund was also adding to investors’ concerns, he told an energy seminar. «My fear is that in a few years we’ll manage to bring this industry which is very healthy right now to a bad situation,» Hajdinjak said. «Romania has all advantages to become a major energy player, but there are many things to be done.» He also criticized a controversial government plan to consolidate its power producers into two energy firms, something he said would limit competition. (Reuters)