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 European stocks closed little changed, with the Stoxx Europe 600 Index completing its third straight weekly gain, as a report showed US employers added more jobs than economists had predicted.
The benchmark Stoxx 600 rose less than 0.1% to 247.53 at the close of trading, having earlier climbed as much as 0.9% and fallen 0.3%. The gauge advanced 1.2% this week and has rallied 15% (SXXP) from last year's lowest level on Sept. 22 as US economic reports showed the recovery is gathering pace and optimism grew that Euro-area policy makers will contain the region's sovereign-debt crisis.
National benchmark indexes declined in 12 of the 14 western European markets open Friday. Germany's DAX Index slipped 0.6% and France's CAC 40 retreated 0.2%. The UK's FTSE 100 Index rose 0.5%. Markets were closed in Greece, Finland, Sweden and Austria for a holiday.
Euro-area consumer confidence fell to the lowest in more than two years and unemployment remained at a 13-year high, according to data released Friday.
An index of executive and consumer sentiment in the 17- nation Euro area fell to 93.3 in December from a revised 93.8 in November, the European Commission in Brussels said. That was in line with the median of 19 economists' estimates (EUESEMU) in a survey. The unemployment rate held at 10.3% in November, a separate report showed.
GERMANY
German stocks dropped, trimming the DAX Index's third straight weekly advance, as the biggest drop in factory orders in almost three years added to concern Europe's debt crisis is cooling the economy.
BASF and Bayer declined as companies most dependent on economic growth retreated. Deutsche Bank, the nation's biggest lender, fell for a third day.
The DAX slipped 0.6% to 6,057.92 at the close in Frankfurt, having earlier advanced as much as 0.9%. The decline trimmed this week's advance to 2.7%. The wider HDAX Index dropped 0.5% Friday.
The DAX has increased 19% from last year's lowest level on Sept. 12 as US economic data showed the recovery is gathering pace and optimism grew that Euro-area policy makers will contain the region's debt crisis. The gauge is still 20% below its 2011 high as borrowing costs from Spain to Italy jumped, raising concern the European Union will have to bail out more countries.
BASF, the world's largest chemical maker, dropped 1.5% to 55.92 Euros. Bayer declined 1% to 51.77 Euros. Daimler, maker of the Mercedes Benz cars, dropped 1.1% to 36.47 Euros.
Deutsche Bank fell 3.5% to 27 Euros, taking its retreat in the past three days to 12%.
K+S, Europe's biggest producer of potash, climbed 1.7% to 36.71 Euros. Monsanto Co., the world's largest seed company, Thursday reported fiscal first-quarter profit that exceeded analysts' estimates as sales rose in Latin America.
Fraport, operator of the Frankfurt airport, rose 3.5% to 40.07 Euros, the largest advance since Nov. 30. Equinet raised its recommendation on the shares to "buy" from "accumulate," adding that the company is likely to post "significant" growth in sales and earnings in coming years.
The German government successfully raised approximately Eur 4 billion in an oversubscribed 10-year bond auction at the start of the year.
The Bundesbank said it sold Eur 4.057 billion in an issue which received bids for Eur 5.14 billion. The bids exceeded the maximum sales target of Eur 5 billion.
The demand for the issue outstripped supply by 1.3 times. The last 10-year bond issue held on 23 November failed to see adequate demand from investors.
Moreover, the average yield fell to 1.93% from 1.98% logged during the prior auction in November.
German private sector expanded in December as previously estimated, final survey data from Markit Economics showed Wednesday.
The final composite output index, that measures activity in both manufacturing and services, rose to 51.3 in December from 49.4 in November. This matched the flash estimate. A PMI reading above 50 indicates expansion of the sector.
Growth of service sector activity helped offset a marginal drop in manufacturing production during December, Markit said.
The services business activity index rose to 52.4 from 50.3 in November. This was below the flash reading of 52.7. Higher levels of services activity were supported by increased new business volumes, as well as the completion of unfinished work, according to the survey.
December data indicated that service providers finished 2011 with an acceleration of output growth to its strongest since July, Markit said. The index remained above the neutral mark of 50 for a third month in running.
Unemployment in Germany declined more than expected in December, data from the Federal labour Agency showed Tuesday. Concurrently, the jobless rate dropped after holding steady in the past two months.
The number of unemployed declined by 22,000 to 2.89 million, while economists had expected the figure to fall by 10,000. In November, unemployment fell by 23,000.
The number of people out of work in Germany has been declining almost steadily since February last year, despite the prolonged debt crisis that shook the entire Eurozone.
The seasonally adjusted jobless rate fell to 6.8% in December from 6.9% in November. Economists had expected the rate to remain steady. A year earlier, the rate was at 7.4%.
The Federal Statistical Office said on Monday that the unemployment rate in Germany declined for a second consecutive year in 2011. Employment reached an all-time high of 41.04 million, breaching the previous record of 2010.
The positive development was related to the short-term economic upswing that continued for two years, the agency said. The trend was also supported by the fact that the number of employed persons in 2009 remained stable despite the deterioration in Germany's economic performance caused by the global financial crisis.
The latest purchasing managers' survey of the factory sector showed that German manufacturers continued to hire additional staff at a solid pace in December. However, the overall rate of job creation was the weakest since May 2010 as the manufacturing sector contracted for a third month running.
The outlook for the German economy is weak, due to the slowing demand from Europe and slowdown in global growth owing to the debt turmoil in Europe. In its December monthly report, Bundesbank said that economic growth will slow notably next year amid deteriorating global outlook.
The central bank expects the economy to grow only 0.6% in 2012, slower than 3% estimated for 2011. In 2013, the economy is seen expanding 1.8%. German exporters are likely to see a significant impact from slowing demand in Europe, according to the bank.
Germany's Ifo Institute also slashed its forecasts for the economy for both this year and the next, citing weakening world economy and the European debt crisis. Ifo now sees gross domestic product growth at 0.4% in 2012 and 3% this year.
The institute said it expects growth in employment to slow significantly next year, but unemployment will decrease by around 140,000 supported by demographic factors.
FRANCE
In Paris the CAC40 closed the week at 3,137.36, down 0.24%.
French service providers reported an increase in business activity in December, final data from Markit Economics showed Wednesday.
The final services Purchasing Managers' Index rose to 50.3 from 49.6 in November. The reading was slightly above the 50.2 flash estimate. That was its first reading above the 50.0 no-change threshold in three months.
"Conditions nevertheless remain fragile amid the ongoing uncertainty surrounding the Eurozone situation, with firms commenting on delayed client spending decisions and a general sense of hesitancy," said a senior economist at Markit.
At the same time, the composite output index came in at 50, up from 48.8 in November. The flash estimate for December was 49.8.
French consumer spending decreased 0.1% month-on-month in November, the statistical office Insee said Wednesday. Economists were expecting spending to rise 0.4% after increasing a revised 0.1% in October.
There was a decrease in the consumption of textiles and leather products during November. On the other hand, purchases of durable goods increased 1.5% month-on-month, due to a rebound in car sales.
Car purchases rose 3.2% after a 1.1% slump in October. However, expenditure on household durables decreased 0.5%.
Consumption of energy products decreased again in November, falling 0.8% from the previous month. This was mainly due to lower spending on fuel and electricity.
Activity in the French Manufacturing sector decreased slightly less than previously estimated in December, final data from a survey by Markit Economics and CDAF showed Monday.
The purchasing managers index (PMI) for the manufacturing sector came in at 48.9 in December, higher than 48.7 estimated earlier. A PMI reading below 50 indicates contraction in the sector, while one above suggests growth.
The latest reading was the highest in four months. In November, the reading was 47.3.
Production in French factories decreased for the fifth month in a row in December. However, the rate of fall slowed from the previous month, owing to a moderation in the rate of decline in new orders.
French manufacturers raised their workforce in December, though marginally, after reducing slightly in November. Backlogs of work remained almost unchanged in December, after declining in the previous four months.
Input prices dropped for a third consecutive month in December, but the latest decrease was marginal. Output prices continued to grow, though at a slower pace compared to November.
BELGIUM
The Bel 20 in Brussels ended the week at 2,093.27, down 0.17%.
Belgium is prepared to take additional measures to combat its crisis, Prime Minister Elio di Rupo said in a New Year's address.
"The aims of the new government is to come out of the crisis as soon as possible, to relaunch our economy, to shore up our welfare system and reestablish confidence among citizens and businesses," he said in a statement Sunday.
"To do this, we will implement decisions already taken and will take, if necessary, some additional balanced measures."
The prime minister didn't specify the measures that may be needed.
Di Rupo's comments come after Belgium Central Bank Governor Luc Coene said last week that growth in 2012 could be lower than expected and as a result the new government may have to make greater fiscal consolidation efforts.
For Di Rupo, who stitched together a six-party coalition government in late November after months of delicate negotiations, additional fiscal consolidation could prove a tough political balancing act.
Coalition talks nearly broke down over disputes on how to find Eur11.3 billion in savings for next year and took several weeks to complete. Finding additional tax revenue or spending cuts could test the coalition's political mettle.
The 2012 budget is premised on growth of around 0.8%. Coene said growth may be closer to 0.5% this year.
In his message, Di Rupo said the economic downturn of recent years has been "a profound crisis" which has "destroyed entire sectors of the real economy."
"2012 will be a decisive year," he said. "We will have to transform these difficulties into new opportunities," he said.
Savings account deposits at Belgian banks KBC and Dexia Bank Belgium, the nationalised arm of Dexia Group, fell in 2011, business daily De Tijd reported on Tuesday.
Savers withdrew 1.4 billion Euros from KBC and 3.5 billion Euros from Dexia Bank Belgium, a decline of 4.1 and 10.4% respectively, the paper said.
This was partly the result of a successful Belgian retail bond sale in December which raised 5.7 billion Euros and was mostly funded by savings, but also an indication of dwindling trust in these banks, the paper said.
Neither Dexia Bank Belgium nor KBC were immediately available for comment.
Deposits at Belgium's BNP Paribas Fortis were largely unchanged in comparison with last year, while ING Belgium posted an increase of 8.5%, De Tijd reported.
Belgian savers also increased their deposits with smaller players on the Belgian market such as Deutsche Bank and Rabobank, the paper said.
Belgium's 4Energy , which uses discarded wood to generate electricity and to make coal-like pellets, has agreed a new repayment schedule with its banks after breaking debt covenants at its two main plants.
At its plant in Amel, in the east of Belgium, 4Energy's bank KBC has agreed to delay start of repayments of its long-term credit facility by three months to March 31, the company said on Monday.
It is currently looking for a strategic partner for the site to help pay for further investment, after it discovered that more work had to be done to make it work at full capacity.
It also said KBC and ING have agreed to waive the fact that it broke its credit agreement for its plant in Ham, Belgium, which has suffered from a decline in the price of green certificates due to oversupply.
It said in November last year it would not meet the terms of its debt covenants for the Ham operation.
THE NETHERLANDS
In Amsterdam the AEX headed into the weekend on 311.11, down 0.26%.
The Dutch government's borrowing rates fell to near zero% in a pair of short-term auctions Tuesday, in a sign that investors are searching out what they consider to be Europe's safer assets at a time of concern over the level of debts in a number of countries.
Finance ministry spokeswoman Lies Weitenberg said a three-month auction Tuesday raised €3 billion ($3.9 billion) at zero%, while the one-year offering reaped €1.6 billion ($2.1 billion) at 0.05%
She said the extremely low rates were unusual but not unheard of. Last month the government raised a small amount of short-term paper at negative rates, meaning buyers were willing to pay the state for the favour of lending it money.
The Dutch economy and government are not in outstanding shape, but look better by comparison to many European countries.
The Netherlands' economy is believed to have entered a mild recession in the third quarter and government forecasts don't foresee a return to growth until mid-2012.
The conservative government has been cutting spending but still expects the country's deficit to have been 4.6% of GDP in 2011 - above the 3% limit prescribed by European budget rules.
National debt is estimated at a relatively low 65.2% of GDP, with unemployment at just 5.5%. However, Dutch personal debt levels are among the highest in Europe, due mostly to mortgage debt.
Civil service pension fund APB has put American supermarket chain Walmart and oil giant PetroChina on its investment blacklist.
ABP, one of the biggest pension funds in the world, said in a statement it is excluding Walmart because 'its personnel policy conflicts with international guidelines from the ILO, in particular in relation to working conditions and unionisation'.
PetroChina is on the blacklist because of 'the activities of its parent company CNPC in Sudan and Burma', the statement said.
All ABP's investments in the two companies have now been sold, the statement said. The fund stopped investing in weapons companies several years ago. It bases its investment policy on the 10 principles outlined in the United Nations' Global Compact.
ABP has invested assets of some €240bn and takes care of the pensions of 2.8 million civil servants and teachers.
Dutch manufacturing conditions deteriorated at the second-sharpest rate in two-and-a-half years in December, a survey by Markit Economics showed Monday.
The headline NEVI Purchasing Managers' Index for the manufacturing sector registered 46.2 in December, up only marginally from 46.0 in November.
New orders continued to fall at a marked rate during December, as client demand suffered amid a worsening macroeconomic environment.
SWITZERLAND
Zurich's SMI drew a line under the trading week at 6,013.83, down 0.21%.
The president of Switzerland's central bank was under growing pressure to reveal details of private currency trading deals that earned him thousands.
The family of Philipp Hildebrand earned 75,000 Swiss Francs at a time when his bank was acting to depress the value of the Swiss Franc.
The Swiss National Bank tried to quash criticism by releasing an independent auditors' report which concluded that currency deals from his private account were "delicate" but did not break internal guidelines.
It also released its previously secret guidelines for senior officials and said Hildebrand would hold a news conference Friday.
The publication of the documents came hours after the Swiss political weekly Weltwoche claimed Mr Hildebrand had personally authorised the currency deals previously thought to have been conducted by his wife.
The bank said last month that Mr Hildebrand's wife Kashya, a former currency trader who now runs an art gallery in Zurich, bought an unspecified amount of US Dollars for herself and her daughter.
The central bank did not say who authorised the sale, but said its oversight body had concluded there had been no inappropriate transactions nor any abuse of privileged information by those involved.
The PWC auditors' report cites emails indicating that Mr Hildebrand learned of his wife's decision to purchase $504,000 (£389,000) for 400,000 francs on August 16 - a day after the transaction occurred. The audit report does not say whether it was Hildebrand or his wife who, less than two months later, sold $516,000 (£398,000) for 475,000 Swiss francs.
However, between the purchase and the sale of US currency, the Swiss National Bank increased franc liquidity and set the minimum exchange rate of the Euro at 1.20 francs. The two actions helped to sharply raise the value of major currencies against the franc.
Auditors concluded that the purchase of US Dollars two days before the SNB's liquidity decision was "delicate," but since Mr Hildebrand had declared the purchase a day before he had not breached any rules.
But public outcry over the currency deals has grown with media commentators and politicians demanding greater transparency from the SNB and from Mr Hildebrand, whose unblemished image is considered crucial to the credibility of Switzerland's small but powerful central bank.
Swiss retailers Coop and Manor have joined forces to ask for a minimum exchange rate of 1.40 francs ($1.50) per Euro and longer opening hours.
The supermarket and department store titans want the Swiss National Bank (SNB) to intervene again to lower the value of the national currency against the Euro in order to fight retail tourism in bordering countries.
"As long as the Euro is not worth 1.30 francs ($1.39), the retail trade will suffer a competitive disadvantage against other countries," said Bertrand Jungo, head of Manor, in an interview with newspaper SonntagsBlick.
His counterpart at Coop, Joos Sutter, issued a similar message in a column published in the SonntagsZeitung.
"A minimum exchange rate set at 1.45 francs ($1.55) would help us," he wrote, admitting the goal was "not realistic" and that a cap of 1.30 francs ($1.39) per Euro would also be welcome.
On September 6th, the SNB set a minimum exchange rate of 1.20 francs ($1.28) to the Euro in order to stop the "massive overvaluation" of Switzerland's national currency that has been hurting many industries and economic sectors, such as retail and tourism, for the last two years.
But establishing a new cap for the franc is not the only measure proposed by the heads of Coop and Manor to prevent millions of francs from leaking across the country's borders.
Both Sutter and Jungo also argue for an extension of opening hours in Switzerland in order to compete with the longer shopping days on offer at the other side of the border.
The Manor chief cited the example of Germany's opening hours.
"In December, the shops were open until as late as midnight," said Jungo, pointing out that customers can cross the border and continue shopping once stores in Basel have closed.
He stopped short of calling for a full liberalization of opening times, which are set by the individual cantons, instead suggesting that shops be kept open until 8pm from Monday to Saturday.
Sutter proposed another measure to fight shopping tourism: reducing the duty-free limit, currently 300 francs ($321), for goods purchased abroad.
Swiss-Belhotel International has announced the signing of an MOU for a new property under the Swiss-Belinn brand. The new property, Swiss-Belinn Cengkareng is currently under development in Jakarta.
Swiss-Belinn Cengkareng will provide both leisure and business travellers affordable accommodation with the Swiss-Belinn brand's high international standard of services and facilities. The new hotel couldn't be better situated. It is just ten minutes from Soekarno-Hatta International Airport and has easy access to the ring road linking all parts of the city.
AUSTRIA
The ATX in Vienna rounded out the Thursday session (it was closed Friday) and the week at 1,891.18, down 2.43%.
Social Democratic (SPÖ) General Secretary Laura Rudas has defended her party's intention to increase taxes.
The SPÖ wants to raise some taxation rates to restore the budget while its coalition partner, the conservative People's Party (ÖVP), expressed the intention to concentrate on lowering investments. Rudas said Wednesday "all experts" were of the opinion that a well-considered mixture of tax hikes and spending cuts was needed to drag Austria out of the financial danger zone.
Rudas also pointed out that the Social Democrats did not present only a list of possible tax increases but also identified areas where cuts could be made. The general secretary - a rival of SPÖ General Secretary Günther Kräuter but a close political ally of SPÖ Chancellor Werner Faymann and SPÖ Vienna Mayor Michael Häupl - explained several public administration measures could be financially supported less strongly in the coming years.
Rudas' explanations came one day after ÖVP whip Karlheinz Kopf accused the SPÖ of being "driven by ideology". Newspaper commentators claimed the coalition already agreed to raise some taxes when the outspoken opponent of tax hikes said taxation burdens would only be worsened if the SPÖ forced his party to do so. Kopf refused to comment on whether high incomes could be taxed more drastically from next year but made clear that the ÖVP would veto any attempt to set up an inheritance tax.
The latest labour statistic has dished up good and bad news for Austria's lawmakers and employees.
Around 360,500 people had no job last month, according to Statistik Austria. The agency said Monday this was a decline of 0.8% compared to December 2010. It pointed out that the number of people sitting re-education courses organised by the Labour Market Service (AMS) in cooperation with the labour minister of Social Democrat (SPÖ) Rudolf Hundstorfer dropped by nine%.
The domestic construction industry benefited from the extraordinarily mild weather in the country's lowlands. High temperatures and a lack of snow enabled firms to keep operating instead of reporting their staff as unemployed throughout winter. A worrying aspect of the December labour figures is that the number of jobless women soared by 4.1%.
Austria's economic condition is challenged by the high number of people retiring before the regular pension age. Men quit at an average age of 58.9 years instead of 65 while women stop working when they turn 57.5. The regular pension age for women employed in Austria is 60. Women working in the public sector must work until aged 65. Another aspect harming Austria's competitiveness is the decreasing quality of education, according to a string of experts. Education sector researchers appealed to the SPÖ-ÖVP coalition to sharply raise its spending on schools of all kind and the country's universities.
Austria registered 3.3 million employed citizens in December, 1.9% more than in December 2010. The country is doing better than any other European Union (EU) member considering the overall unemployment rate. Around 4.1% of people living in the small alpine country were out of work in October, according to Eurostat.
The European Commission's (EC) statistics authority said Luxembourg took second place at 4.7%, followed by the Netherlands with an unemployment rate of 4.8%.
Austria's merchandise trade deficit increased from last year in October, data released by Statistics Austria showed Wednesday.
The trade deficit increased to Eur501.41 million in October from Eur494.24 million in the same month last year.
Export of goods increased 6.6% on an annual basis to Eur10.54 billion in October. Shipments the European Union (EU) countries moved up 1% annually during the month, while dispatches to non-EU states advanced 21.7%.
Imports advanced 6.4% year-on-year to Eur 11.04 billion. Arrivals from EU27 rose 2.2% year-on-year, while imports from the non-EU countries climbed 17.4% in October.
In the January-October period, the trade balance was a deficit of Eur 6.61 billion. Exports climbed 13.5% annually in the ten-month period, while imports rose 16.3%.
SWEDEN
The OMX in Stockholm completed a hectic trading week on Thursday on 1,002.17, down 0.41% - the market was closed Friday.
The head of Sweden's central bank has said he expects Sweden's interest rates to remain at their current low level in 2012, but warned banks that they must be more open about how much they earn from lending to customers.
Governor Stefan Ingves defended the Riksbank's policies, despite concerns that banks are not passing on lower interest rates to borrowers:
"Our interest rate decisions have an impact, even if they do not have an immediate effect. The monetary policy of Riksbanken is still effective in terms of capital management," Ingves told the Dagens Nyheter daily.
But, he said, banks should have "clearer policies as to how they declare their margins.".
Concerns were raised after last December's interest rate cut, as banks were slow to follow suit and cut mortgage rates.
On the broader economic outlook, Ingves said Swedish banks' reliance on international loans made it harder to maintain stability. However, he said Swedes had reason to be optimistic about the year ahead, despite great financial turmoil in the world.
"Sweden has a steady position with low debts and a balanced government budget. Expectations both for inflation and long-term inflation remain under control. Meanwhile, financial growth and productivity have developed well," he told DN.
While Sweden's export figures represent half of its gross domestic product it also has strong capital flows, which strengthens the positive outlook, according to Ingves.
Swedish tax officials have told Finnish utility firm Fortum to pay around 415 million Swedish crowns ($61 million) in back taxes, citing improper tax deductions by subsidiaries in 2009.
Swedish authorities raised the 2009 tax assessment on Fortum Sweden and Fortum Nordic, tax official Jan Amnebler said on Tuesday.
Fortum's Sweden-based business did not have the right to make deductions for certain interest rate costs, the official said.
Activity in Sweden's manufacturing sector decreased less than economists expected in December, data from a survey by Swedbank showed Monday.
The purchasing managers' index (PMI) for the manufacturing sector came in at 48.9 in December, higher than 47.8% economists expected. A PMI reading below 50 indicate contraction in the sector, while one above suggests growth. In November, the reading was 47.6.
The slowdown in the rate of contraction reflected positive contributions from industrial production, improved delivery times and employment.
New business received by manufacturers decreased marginally during the month, mainly reflecting weaker demand in the domestic market.
Employment in Swedish factories remained largely unchanged in December. The requirement for new employment in the industry is expected to remain limited in coming months, the agency said.
In the dark days between Christmas and New Year, Swedes gather their families, celebrate the season and - buy package holidays to the sun. For 2012 the numbers of holidays sold is at a record high.
The rush to buy holidays started already on Christmas Day and during the days leading up to New Years Eve the pressure has been on for Swedish travel agencies.
Travel agency Apollo has already sold 39% more summer holidays than during the same period last year.
Competitor Ving reports that they are experiencing the same boom, as was recorded last year, selling for a whopping 110 million Kronor ($16 million) a day.
The days between Christmas and New Year, as well as the month of January, are traditionally the year's strongest sales period for travel agencies in Sweden.
DENMARK
Copenhagen's OMX closed out the Friday trading session on 398.42, 0.31% down for the day.
Denmark's central bank said on Wednesday that the government's domestic bond issuance requirement for 2012 had fallen to 28 billion Danish Crowns ($4.91 billion) from an estimate of 38 billion given in its debt management strategy.
"The strategy for 2012 is unchanged," the Nationalbank said in a statement.
"In order to reduce the government's refinancing risk the strategy is to begin to finance the issuance requirement for 2013 in 2012 and continue an active buy-back policy," it said.
A surge in demand for Danish bonds and bills from investors seeking to escape Europe's debt crisis is allowing the Nordic nation to get paid to borrow. Local buyers aren't as enamored.
The country last week sold 2.02 billion Kroner ($351 million) in two-month and five-month bills at negative yields. A central bank report Thursday showed foreign ownership of government debt rose to 35% in November, the most since October 2000, as investors outside Denmark raised their holdings by 49% to 267 billion Kroner from a year earlier.
Denmark on Dec. 29 sold 1.8 billion kroner of 59-day bills and 220 million kroner of 151-day bills at negative yields of 0.21% and 0.07%, respectively. At the end of November, foreigners owned 56 billion kroner in Danish T-bills, 94.5% of the total, according to central bank data.
"It's the first time that the Danish state has issued notes at a negative yield," Ove Sten Jensen, a spokesman for the central bank's debt office, said in a phone interview Thursday. "There are some investors who are very eager to place their money in papers where they are very certain to get the principle amount back."
The yield on Denmark's 2-year bond fell five basis points to 0.09%Friday. The country's 10-year notes yield 26 basis points less than German debt with a similar maturity. Danish government debt returned 13.45% last year.
Shares in Vestas Wind Systems have fallen sharply after the world's biggest wind turbine manufacturer by market share warned that order delays and production problems would wipe out last year's operating profits.
Ditlev Engel, chief executive, said the company had suffered €125m of cost overruns and deferred €400m of revenues into 2012 wiping out €130m of profit and triggering the latest downgrade of its targets.
Its expectations for earnings before interest and tax for 2011 were reduced from €255m to "approx €0" as ebit margin was also reduced from 4% to zero, Vestas said. At the end of October, the company had already downgraded its ebit margin forecast from 7 to 4%.
Since then poor weather in Europe had delayed the transfer of risk on a number of installations and delayed Vestas's ability to book revenues under revised accounting policies.
Mr Engel said high winds in northern Europe in December had exacerbated weather-related delays, particularly in Germany, which accounted for €210m of deferred revenues. He argued that much of the deferrals could be recovered in the first quarter of 2012.
However, he also admitted that Vestas had been over-optimistic with its predictions of wind turbine demand in China last year, while the company was also preparing for a likely downturn in the US market this year and next.
If the US did not agree to the extension of wind turbine subsidies, "2012 will become a very challenging year for the wind turbine industry due to a significantly reduced US market", said Mr Engel. He added: "In 2011 in particular, the Chinese market as not developed at a speed anticipated when the year started."
Mr Engel and Henrik Nørremark, chief financial officer, have already signalled Vestas's intention to shave at least €150m from its cost base in the coming year. They declined to comment further on the outcome of an organisational review launched in the wake of its previous profit warning but confirmed the announcement of the details would be brought forward from February to January 12.
Denmark's industrial sector expanded in December, after contracting for two months in a row, data from a survey by DILF showed Monday.
The purchasing managers index (PMI) increased to 59.8 in December from 48.2 in November. A PMI reading above 50 indicates expansion in the sector, while one below suggests decline. In October, the reading was 43.7.
New orders received by Danish firms increased significantly in December, after falling in the previous two months.
Reflecting the robust order growth, firms increased production markedly during the month, and the pace of growth accelerated from November. Employment in the sector grew modestly in December, recovering from the previous months' decline.
FINLAND
In Helsinki the OMX finished the week at 5,513.83, up 0.11% on the day Thursday; the market was closed Friday.
Nokia are relocating their Singapore Apac' HQ to Beijing it was revealed this week.
"Nokia's APAC HQ will be relocated to Beijing as part of our strategy to adapt our operations to the business environment to ensure our competitiveness. This includes an increasing focus on assembly in Asia, close to our suppliers. The structure of the region is therefore being aligned to support the execution of the company's strategy and savings target we announced last year, in bringing efficiencies and speed to the organization" the company said in a statement.
Finland's trade deficit narrowed sharply in November due to an increase in exports, data from the National Customs Board showed Thursday.
The trade gap totaled Eur 260 million compared to a revised Eur 621 million a month ago. During the same period of last year, the deficit was Eur 196 million.
Exports of goods rose around 10% from a month ago to Eur 4.88 billion. At the same time, imports climbed about 2% to Eur 5.14 billion. On a yearly comparison, exports rose 1% and imports climbed 2% in November.
Talvivaara Mining, a Finnish nickel miner, rose the most in more than three years in London trading after meeting its 2011 output target.
The company produced 16,087 metric tons of nickel last year, compared with a forecast of 16,000 tons, it said Thursday in a statement. Zinc output totaled 31,815 tons.
Production last year was curtailed by extended maintenance in April and May at Talvivaara's plant in Sotkamo, eastern Finland. On 7 October, the company lowered its 2011 output target to 16,000 tons from an April estimate of 22,000 to 28,000 tons and Chief Executive Officer Pekka Pera announced he would quit.
Talvivaara reached a production record of 4,769 tons of nickel and 10,524 tons of zinc in the fourth quarter, it said in Friday's statement.
"The availability of the metals recovery plant improved significantly during the quarter and after both production lines were brought back online in mid-October, was effectively at the level required to meet the 2012 production targets," it said.
Talvivaara plans to produce 25,000 tons to 30,000 tons of nickel this year, the Espoo-based company said on 17 November. It's targeting zinc volumes of 50,000 tons to 60,000 tons.
2011 marked a new record year for OP-Kiinteistökeskus real estate agents, which recorded a total of around 17,200 home and real property sales, or some 200 transactions more than in 2010.
Although Finnish consumers and home buyers have been bombarded with bad economic news since last summer and their future confidence have been put to the test, property and home sales have remained relatively buoyant, says Kenneth Sandberg, Vice President, Estate Agent Services of OP-Pohjola.
Mr Sandberg states that the reasons for the lively market include historically low borrowing costs, stabilised price development, steady employment, spending power that has remained relatively steady, and the fact that home and real property sales and purchases are based on a real need.
The market has remained active in the Helsinki Metropolitan Area and growth poles, but for OP-Kiinteistökeskus real estate agents, no regions or towns differ in their market activity level in any special way. Sales also remained relatively steady throughout the year.
For OP-Kiinteistökeskus real estate agents, the time that it takes to sell a flat remained at the same level throughout the autumn, or an average of 66 days. In comparison with the average time reported for the second quarter, the time frame has lengthened only by four days. The time did not lengthen over autumn 2010 either, says Sandberg.
Only the most expensive homes and real properties have actually seen longer selling periods, their time frame lengthening by up to 20 days compared with that in early summer 2011, averaging some 110 days.
NORWAY
Oslo's OBX pulled the curtains on the trading session Friday at 363.88, down 0.30%.
Norway's capital requirements are not transparent enough and place its banks at a competitive disadvantage in the Nordic region, DNB ASA Chief Financial Officer Bjoern Erik Naess wrote in an opinion article in Dagens Naeringsliv.
Norwegian banks have higher risk-weighting on lending than Swedish banks, Naess wrote in the Oslo-based newspaper. Methods of calculating and risk weightings should be harmonized throughout the Nordic region, he said.
Norway's central bank is offering an F-deposit facility for Jan. 5-16 at a maximum rate of 1.75%, the bank said on its page on Thursday.
The central bank regularly offers short-term fixed-rate lending and deposit facilities known as F-loans and F-deposits, to manage liquidity and provide a predictable environment for the bank sector.
The facilities are the bank's most commonly used tools for money market operations.
House prices in Norway are likely to grow at a slower pace in 2012, owing to increased housing construction, the effects of the global financial turmoil and the tighter credit policy, the Norwegian Association of Real Estate Agents (NEF) said Monday.
Prices of houses are expected to grow at 4% in 2012, slower than the 9% growth recorded in 2011, the group said. The agency said house price increase in urban areas is expected to be faster than average, while in rural areas it seen as subdued. Meanwhile, living expenses of Norwegian households would remain moderate during the year, given the low interest expenses and an expected wage growth.
According to NEF, the impact of the Eurozone debt crisis could be significantly small on Norway's residential property market, compared to the other European countries.
Latest data showed that house prices in Norway rose a seasonally adjusted 0.5% in December. Year-on-year, house prices advanced 8.5% during the month.
Norway's manufacturing activity contracted further in December, survey results from the Fokus Bank and the Norwegian Association of Purchasing and Logistics showed Tuesday.
The seasonally adjusted Purchasing Managers' Index fell to 46.6 in December from 48.5 in November. This was the lowest level since October 2009. A reading below 50 suggests contraction in the sector.
The production index dropped to 48.8 in December from 51.0 in November. The indicator fell below the neutral 50 mark for the first time since November 2009. At the same time, the orders index dipped to 40.8 from 47.4 last month.
The employment index was unchanged at 44.7 in December, indicating a fall in manufacturing employment in the fourth quarter. Inventory came in at 51.4, up from 49.4 in November.
SPAIN
The IBEX in Madrid drew to a close Friday on 8,289.10, a drop of 0.49% for the day.
Spain's unemployment increased for the fifth consecutive month in December, data released by the labour Ministry showed Tuesday.
In December, unemployment rose by 1,897 or 0.04% from a month ago. But the rate of increase slowed from the prior month. The number of unemployed totaled 4.42 million. During December 2010, the unemployment was down 10,221 on a monthly basis.
In 2011, unemployment increased by 322,286 or 7.86%.
Data showed that registered unemployment in agriculture dropped by 5,636 in December, while it increased 9,034 in industry. Unemployment in construction rose by 23,778 and dropped 12,465 in services.
Spain's services activity continued to contract in December, but the rate of decline slowed from a month ago, data from Markit Economics revealed Wednesday.
The headline seasonally adjusted Purchasing Managers' Index rose to 42.1 in December from the 32-month low of 36.8 in November. Still, the reading signals substantial contraction.
"The Spanish service sector ended 2011 on a grim note, with the average activity index reading for the fourth quarter the lowest since Q1 2009," said an economist at Markit and author of the report.
Business activity in the service sector decreased throughout the last six months. New orders declined sharply as clients were reluctant to proceed with new projects amid economic uncertainties. Falling new work led companies to concentrate resources on the completion of existing projects.
Companies continued to lower their staffing levels in line with falling workloads. Input costs increased at a solid pace, while service providers registered a further considerable decrease in output prices.
Spain's export price inflation eased in November after stabilizing in the previous month, data released by statistical office Ine showed Wednesday.
The export price index increased 4.4% on an annual basis in November, slower than the 5.3% growth seen in October, which was unchanged from the previous month.
Export prices of consumer goods advanced 3.7% year-on-year, while prices of capital goods rose 1.4%. There was a 4.3% annual growth in export prices of intermediate goods during the month, and a 22.1% growth in energy prices.
Month-on-month, export prices decreased 0.3% in November, reversing the previous month's 0.1% increase.
At the same time, the import price inflation slowed to 8.8% in October from 9.8% in the previous month. From October, import prices rose 0.2% during the month, recovering from the previous month's 0.1% decrease.
PORTUGAL
Lisbon's PSI General concluded the week Friday at 2,211.03, up 1.66%.
Portugal has paid a markedly lower interest rate to borrow €1 billion ($1.3 billion) amid a government austerity program aimed at winning back market confidence.
Portugal's government debt agency said it sold 3-month Treasury bills at a rate of 4.346%, down from 4.873% in a similar auction last month. It was the lowest rate in eight months on those bills.
The agency said there was demand for more than double the amount on offer in Wednesday's auction.
Portugal is one of the Eurozone's frailest members and is stuck in recession. It needed a €78 billion bailout in May last year as investors turned their backs on the ailing country.
The government is enacting a tough program of tax hikes and pay and welfare cuts to restore fiscal health.
Property for sale in Portugal has seen a fall in demand, prices and supply, the November Royal Institution of Chartered Surveyors (Rics)/Ci Portuguese Housing Market Survey (PHMS) has revealed.
The survey showed that November experienced the fastest decline in sales activity since the report began in September 2010.
In particular, the survey notes that new property in Portugal is undergoing a change, with prices falling more rapidly than they were prior to September.
During November, prices for new homes dropped faster than those for existing domiciles.
This trend was previously seen in October's PHMS, which suggested that demand for lettings would increase due to consumers' lack of mortgage finance.
Investors planning to purchase Lisboa property or residential buildings elsewhere in Portugal may therefore have the opportunity to take advantage of these market developments.
Portugal's solar market remains one of the hottest for investors able to build systems under that country's installations cap, according to Lux Research's latest Solar Demand Forecaster. The country's internal rates of returns (IRR) for the six major solar technologies remain high in 2011 along with Cyprus and Greece, though the financial crisis in Europe could significantly hinder that market.
"Uncertainty surrounding Europe's financial situation and its countries' ability to pay out incentives will prevent wild growth - keeping that market relatively constant," said Matt Feinstein, the Lux Research Analyst who led the Demand Forecast. "However, a number of Asian markets have high returns going into 2012 - notably Malaysia at 24.1%, the Philippines at 22.6%, and Japan at 20.9%. They will push demand toward that region in 2012 and 2013."
IRR is the discount rate at which the net present value (NPV) of future cash flows from a capital investment equals zero. Capital expenditure is the primary factor in determining a market's IRR, along with incentives and operating expenses. Put simply, it provides an apples-to-apples metric for investors to compare demand and project growth for solar across disparate markets. Top 5 Locations by IRR (1Q12)
1. Portugal
2. Cyprus
3. Hawaii
4. Greece
5. Israel
ITALY
The FTSE Mibtel in Milan closed the week on 14,645.60, down 0.82%.
Italy's annual inflation, measured under the EU methodology, remained unchanged in December, preliminary data released by statistical office Istat showed Wednesday.
The harmonized index of consumer prices (HICP) increased 3.7% on an annual basis in December, unchanged from the previous month. Economists expected prices to rise 3.5%.
Month-on-month, the HICP moved up 0.3% in December, faster than the 0.2% growth economists forecast.
At the same time, the consumer price inflation remained unchanged at 3.3% in December, while economists expected inflation to ease to 3.2%. From November, consumer prices rose at a faster rate of 0.4% in December than the 0.3% growth economists forecast.
Activity in Italy's services sector fell more than economists expected in December, data from a survey by Markit Economics and ADACI showed Wednesday.
The seasonally adjusted purchasing managers' index (PMI) for the services sector dropped to 44.5 in December from 45.8 in November, marking the seventh consecutive decline. Economists expected a reading of 45.3. A PMI reading below 50 indicates contraction in the sector, while one above suggests growth.
New orders received by Italian service providers decreased at the fastest pace since April 2009. Reflecting the sharp fall in orders, production dropped at a faster rate.
Input price inflation accelerated to a series-record high during the month, after easing in the previous month. Meanwhile, output prices decreased. Service providers reduced employment further, and the rate of job-cut was the sharpest since July 2009.
The Italian purchasing managers' index, that measures the health of the country's manufacturing sector, increased unexpectedly in December, the latest survey result from Markit Economics showed Monday.
However, the PMI reading of 44.3 for December still remained well below the no-change mark of 50, suggesting a marked contraction in activity in the sector. Manufacturing activity declined throughout the past five survey periods.
In November, the PMI scored 44 and the economists were expecting the reading to fall to 43.8 in December.
New orders received by Italian factory sector fell for a seventh month in a row. New export orders also dropped markedly since the previous survey period. Firms continued to shed jobs but at the weakest rate for three months.
GREECE
In Athens, the Athex Composite ended both the session and the week Thursday (closed for a holiday Friday) on 647.58, down 2.22%.
French bank Crédit Agricole said Wednesday it had pumped a further €2 billion ($2.61 billion) into its ailing Emporiki Bank of Greece unit to support it against the country's continuing economic woes.
Crédit Agricole said the capital increase won't hurt it financially as it involves converting an advance made previously to the Greek bank. "This capital increase has no impact on the solvency ratio of the Crédit Agricole group. This is an internal operation, which consists in converting shareholders' advances and which started back in 2010," a Crédit Agricole spokeswoman said.
Emporiki has been a drain on Crédit Agricole's finances since it took control of the bank in 2006 as part of an international expansion plan. It has weighed particularly hard on the French parent's earnings since the Euro-zone sovereign-debt crisis deepened last summer.
The Greek bank plunged into the red during the financial crisis and Crédit Agricole said in July that its aim to turn a profit in 2012 was in doubt. Crédit Agricole injected €1 billion worth of capital into Emporiki in late 2009.
Greek banks are reeling from a slumping economy, rising bad loans, a steady outflow of deposits and face huge losses from a planned debt write-down the government is negotiating with its private-sector creditors.
The Greek government is expected to conclude talks with those creditors by the end of this month with a deal aimed at slashing by half the €206 billion it owes them. The write-down is an integral part of a new €130 billion bailout promised to Greece in October by its European partners and the International Monetary Fund.
Emporiki posted a €954 million loss in the first nine months of 2011, hit by a slowdown in activity, rising financing costs and the need to set aside more provisions against bad loans.
Crédit Agricole, which has been struggling due to its heavy exposure to Greece, launched a restructuring plan that will see it cut 2,350 jobs globally, including 850 in France, retreat from 21 out of the 53 countries where it operates, while discontinuing its equity derivatives and commodities activities.
The bank's total exposure to Greece stood at €2.7 billion at Sept. 30 while the value of Greek sovereign debt held on its banking book was €150 million at the end of October.
"The approximately €2 billion capital increase will further fortify Emporiki's competitive position in the domestic market," Emporiki said in a statement, adding that the move reaffirmed the parent bank's support for the Greek unit.
Greece may be forced out of Euro if Eurozone leaders failed to agree on the second bailout package in three months, reports said citing a television interview of a Greek government spokesperson.
"The second bailout agreement must be signed otherwise we are out of the markets, out of the Euro," reports quoted spokesman Pantelis Kapsis as saying in an interview to television channel Skai.
European leaders have proposed a second loan package worth Eur 130 billion to Greece as the first Eur 110 billion bailout proved insufficient to stabilize its public finances. Greece's debt inspectors, the International Monetary Fund, the European Union and the European Central Bank, are expected to visit Athens in mid-January to assess the progress of the fiscal program and to decide whether to provide further financial aid to the Euro member.
In his new year message on Sunday, Greek Prime Minister Lucas Papademos said the country must continue its efforts with decisiveness, to stay in the Euro. He also said that the next three months will be especially crucial.
Activity in the Greek manufacturing sector decreased at a slower pace in December, data from a survey by Markit Economics showed Monday.
The purchasing managers' index (PMI) for the manufacturing sector rose to a three-month high of 42 in December from 40.9 in November. A PMI reading below 50 indicates contraction in the sector, while one above suggests growth.
New orders received by manufacturers decreased sharply, while backlogs of work fell substantially during the month. Reflecting the fall in new orders, firms reduced their workforces for the forty-fourth consecutive month in December.
Input price inflation remained heightened during the month, as prices of imports, energy and fuel all increased. Meanwhile, output prices dropped for the tenth successive month, as manufacturers found it difficult to pass on their increased cost burdens to clients. | 
