Slovakian Prime Minister Iveta Radicova, whose country refused to contribute to a 110-billion-euro bailout of Greece, said on Sunday banks had to "pay" for the debt crisis that shook the eurozone.

"We will support proposals to handle the Greek crisis if they include the banks," Radicova said in an interview with Greek daily To Vima.

"It is unacceptable if they do not participate in the financial aid as they are directly responsible for the situation. They must pay," she said.

The parliament of Slovakia, the eurozone's poorest member, in August voted against contributing to the European Union and International Monetary Fund (IMF) bailout of Greece agreed in May.

According to Radicova, if the country had loaned the 800 million euros (one billion dollars) that was requested, its budget deficit would have reached 9.5 percent of gross domestic product.

The Slovakian premier said blame for the crisis rested with previous Greek governments, as well as "credit rating agencies and the lack of control at European institutions".

The European Commission has expressed its regret over Slovakia's refusal to contribute to the bailout. Link

China should end preferential policies for automotive companies in order to curb over-capacity in an industry where sales jumped 55 percent in August, a government official said.

Chen Bin, a top official at China's economic planning agency, said booming auto sales were leading to blind investment in the industry, which could result in annual production capacity of over 31 million units by 2015.

"Serious overproduction capacity will lead to negative market competitiveness a loss in enterprise efficiency, factory stoppages and other problems," Chen said at an automotive symposium on Saturday.

"Judging from our understanding of the situation as reported by local governments and related departments, production capacity will far outstrip market demand for the coming period (ending in 2015)," he said in a report on the website of the National Development Reform Commission.

Last year, China became the world's largest auto market when over 13.6 million vehicles were sold.

Sales have boomed this year, jumping 55.7 percent in August year-on-year, as the government rolled out a new subsidy scheme for energy-saving vehicles.

In order to curb overcapacity, local governments should stop pushing manufacturers to increase production and end preferential tax and land policies aimed at spurring production, Chen said.

He said the industry's penchant for using preferential energy-saving policies to ramp up production of traditional automotive products should also be curbed.

China announced a trial programme in June to subsidise environmentally-friendly vehicles in five cities as part of efforts to reduce emissions, save energy and spur the development of green technology.

Under the trial project, the government offers subsidies of up to 60,000 yuan (8,850 dollars) for hybrid and electric cars and 3,000 yuan for fuel-saving models. Link

The world's seventh-largest steelmaker, Tata Steel, is in talks with banks for a 5.4-billion-dollar loan for its British unit Corus, a report said Saturday.

The Economic Times newspaper said BNP Paribas, HSBC Holdings and Royal Bank of Scotland may be among the banks contributing funds for the 3.5-billion-pound (5.4-billion-dollar) loan.

The report noted that Tata Steel chief financial officer Koushik Chatterjee said last month that the Mumbai-based steelmaker planned to refinance as much as 6.5 billion dollars of its long-term debt.

Tata Steel took loans to fund its 13-billion-dollar acquisition of Anglo-Dutch steelmaker Corus in 2007, just before the global financial crisis hit demand for steel.

There was no immediate company comment on the report, which cited unidentified sources with direct knowledge of the matter.

In August the company posted a consolidated net profit for the three months to June of 18.25 billion rupees (388 million dollars) against a loss of 22.08 billion rupees a year earlier.

Tata Steel, whose shares have fallen 13 percent this year, issued a cautious outlook with its results, saying the long-term sustainability of its recovery was "highly dependent on future growth in the European construction sector." Link

The German government will lift this year's growth forecast to 3.0 percent, up from the previous 1.4 percent, due a stronger than expected recovery, a German newspaper reported on Saturday.

Berlin also expected an improvement in the job market with the number of unemployed dropping below three million, Neue Osnabrucker Zeitung reported quoting senior figures in Chancellor Angela Merkel's Christian Democratic Union party.

In April, the federal government left its growth forecast unchanged at 1.4 percent, but last month the central bank revised its forecast to "around 3.0 percent", up from 1.9 percent.

In the second quarter, the Eurozone's top economy recorded growth of 2.2 percent, the highest since reunification in 1990.

The number of unemployed stood at 3.19 million, or 7.6 percent, in August.

"In 2011, the government sees clear signs of continuing growth and positive developments in the job market, even if the growth rate is less strong than this year," Georg Schirmbeck, a budget expert for the party, told the newspaper. Link

Swiss luxury watchmaker Swatch will create several hundred new jobs as it expands production to meet strong global demand, its chairman said in comments published on Saturday.

"We are in the process of increasing our capacities to meet growing demand," Nick Hayak said in an interview with Le Temps newspaper.

"We have purchased several pieces of land in different parts of Switzerland to build new factories," he said.

Hayak said Swatch, the world's largest watch group, would create new jobs in the expansion, but he did not give a total figure.

""For example at ETA (a subsidiary that produces watch movements) we are looking for 150 people. Omega, alone, needs 30 more watchmakers. Not tomorrow, but today," he said.

Swatch's turnover is expected to pass 6 billion Swiss francs (4.6 billion euros/5.9 billion dollars) this year, according to Hayek

Sales are expected to increase by 5 to 10 percent in the next year, despite uncertainties in the global economy, he said. Link

A fresh batch of US unemployment figures on Friday will provide Americans with a crucial litmus test for the sputtering economic recovery and President Barack Obama's policies.

The Labor Department will unveil its estimate of August unemployment levels, anxiously awaited by Wall Street, the White House and millions of unemployed Americans looking for signs their plight will improve.

They are likely to be disappointed.

Economists predict the unemployment rate has risen to 9.6 percent, one tenth of a percentage point above July levels. While that would still be a better outcome than a high of 10.1 percent in October, around 120,000 jobs are expected to have disappeared in August amid still-sluggish hiring.

"Given the anemic pace of payroll growth... in recent months, we have been lucky that the unemployment rate has stayed at 9.5 percent, and it may be asking too much to dodge that bullet yet again in August," said Stephen Stanley of Pierpont Securities.

But this week has also provided some small hope that the outlook may not be quite as bleak as it once seemed.

On Thursday, the Labor Department reported that the number of Americans filing new claims for jobless benefits fell faster than expected last week.

And economists have predicted the new unemployment numbers would show the private sector continues to create jobs, although not fast enough to offset the government releasing temporary census workers.

The fact that the economy may not plunge back into recession will offer little solace as the recovery continues at a painfully slow pace.

"The big risk for the US economy is not necessarily another round of job losses, but maintaining the 50,000 per month pace on private payrolls," said Societe Generale's Aneta Markowska.

"This falls short of the pace of labor force growth, and could cause unemployment to drift higher."

Even moderately good news will throw up challenges for the White House and the Federal Reserve as they struggle to help the jobs market to its feet.

The White House has ruled out an "extraordinary" new economic stimulus plan to fire up the slowing recovery, but has said that Obama is scouting new ideas to boost jobs and growth.

Next week, the president's agenda will feature a heavy slate of economy-themed events, with Obama due to travel to parts of the hard-hit Midwest to highlight his economic recovery plans before holding a press conference next Friday in a bid to seize control of the political agenda after a tough few months.

But with many lawmakers fretting ahead of November's mid-term elections and public concern mounting over the forecast 1.4-trillion-dollar budget deficit, Obama's leeway is limited, shifting the spotlight onto the Federal Reserve.

The Fed's top rate-setting panel has become increasingly split on why unemployment remains so high, complicating the chances of taking any action.

Until recently, most economists argued that firms were still rebuilding and were not yet ready to hire, but that they would soon.

That consensus is slowly being questioned as the jobless recovery drags on despite firms regaining their fighting weight.

"The things that normally drive employment growth -- profits and production gains -- have certainly been in place during this recovery cycle," said Markowska.

Some prominent Fed members now ask whether high unemployment may be a structural problem, with firms being unable to find skilled workers locally.

Other members have argued that the crisis prompted businesses and American consumers to retrench, saving more and acting more cautiously than before the crisis.

"If much of unemployment is structural, then (the) Fed can't do anything about it and shouldn't even try," Markowska said.

While that may put Obama back in the spotlight, the prospect of more government action might hamper hiring and investment, said Stanley of Pierpont Securities.

"People don't know what crazy new policy initiative might come down the pike next, they can't quantify their health care expenses, their tax rates or the most probable regulatory stance going forward, and thus they hold off on big-ticket decisions." Link

A fresh batch of US unemployment figures on Friday will provide Americans with a crucial litmus test for the sputtering economic recovery and President Barack Obama's policies.

The Labor Department will unveil its estimate of August unemployment levels, anxiously awaited by Wall Street, the White House and millions of unemployed Americans looking for signs their plight will improve.

They are likely to be disappointed.

Economists predict the unemployment rate has risen to 9.6 percent, one tenth of a percentage point above July levels. While that would still be a better outcome than a high of 10.1 percent in October, around 120,000 jobs are expected to have disappeared in August amid still-sluggish hiring.

"Given the anemic pace of payroll growth... in recent months, we have been lucky that the unemployment rate has stayed at 9.5 percent, and it may be asking too much to dodge that bullet yet again in August," said Stephen Stanley of Pierpont Securities.

But this week has also provided some small hope that the outlook may not be quite as bleak as it once seemed.

On Thursday, the Labor Department reported that the number of Americans filing new claims for jobless benefits fell faster than expected last week.

And economists have predicted the new unemployment numbers would show the private sector continues to create jobs, although not fast enough to offset the government releasing temporary census workers.

The fact that the economy may not plunge back into recession will offer little solace as the recovery continues at a painfully slow pace.

"The big risk for the US economy is not necessarily another round of job losses, but maintaining the 50,000 per month pace on private payrolls," said Societe Generale's Aneta Markowska.

"This falls short of the pace of labor force growth, and could cause unemployment to drift higher."

Even moderately good news will throw up challenges for the White House and the Federal Reserve as they struggle to help the jobs market to its feet.

The White House has ruled out an "extraordinary" new economic stimulus plan to fire up the slowing recovery, but has said that Obama is scouting new ideas to boost jobs and growth.

Next week, the president's agenda will feature a heavy slate of economy-themed events, with Obama due to travel to parts of the hard-hit Midwest to highlight his economic recovery plans before holding a press conference next Friday in a bid to seize control of the political agenda after a tough few months.

But with many lawmakers fretting ahead of November's mid-term elections and public concern mounting over the forecast 1.4-trillion-dollar budget deficit, Obama's leeway is limited, shifting the spotlight onto the Federal Reserve.

The Fed's top rate-setting panel has become increasingly split on why unemployment remains so high, complicating the chances of taking any action.

Until recently, most economists argued that firms were still rebuilding and were not yet ready to hire, but that they would soon.

That consensus is slowly being questioned as the jobless recovery drags on despite firms regaining their fighting weight.

"The things that normally drive employment growth -- profits and production gains -- have certainly been in place during this recovery cycle," said Markowska.

Some prominent Fed members now ask whether high unemployment may be a structural problem, with firms being unable to find skilled workers locally.

Other members have argued that the crisis prompted businesses and American consumers to retrench, saving more and acting more cautiously than before the crisis.

"If much of unemployment is structural, then (the) Fed can't do anything about it and shouldn't even try," Markowska said.

While that may put Obama back in the spotlight, the prospect of more government action might hamper hiring and investment, said Stanley of Pierpont Securities.

"People don't know what crazy new policy initiative might come down the pike next, they can't quantify their health care expenses, their tax rates or the most probable regulatory stance going forward, and thus they hold off on big-ticket decisions." Link

British oil giant BP said Friday that the devastating Gulf of Mexico oil spill disaster has cost about eight billion dollars (6.2 billions euros) so far.

"The cost of the response to date amounts to approximately eight billion, including the cost of the spill response, containment, relief well drilling, static kill and cementing, grants to the Gulf states, claims paid and federal costs," BP said in a statement.

The April 20 spill was triggered when an explosion ripped through the Deepwater Horizon rig in the Gulf of Mexico, killing 11 workers and sinking the huge offshore platform two days later. The flow of oil into the sea was not fully stemmed until July 15.

BP has forecast that the worst environmental catastrophe in US history will cost the group a total of about 32.2 billion dollars, after pushing the group into a record 16.9-billion-dollar loss in the second quarter.

The company repeated on Friday that it had agreed in June to set up a 20-billion-dollar compensation fund for residents affected by the spill.

BP added that operations were underway to replace the Deepwater Horizon's damaged blowout preventer (BOP) -- a large piece of equipment that failed to stop the disaster.

On Thursday, the group had removed the massive cap which had stemmed the flow of oil from its ruptured well deep in the Gulf of Mexico in a key step toward killing the well once and for all, officials said.

The damaged BOP will be raised to the surface to be examined and held as evidence in an official investigation, following the removal of the cap.

The ruptured Macondo well was plugged with heavy drilling fluid and then sealed it with cement last month, but the so-called "bottom kill" operation to permanently seal the well was delayed until the blowout preventer is replaced.

The "bottom kill" involves intercepting the crippled well with a relief well, which then pumps heavy drilling oil and cement into the oil well to permanently plug it.

BP said Friday that the replacement of the blowout preventer will "allow operations to complete the relief well to resume".

The company hopes that the relief well will reach the damaged well by around mid-September, depending on weather conditions.

In early morning trade on Friday, the company's shares rose 0.51 percent to 394.60 pence.

However, BP's share price has collapsed as a result of the disaster, shedding about 40 percent in value since the explosion on April 20.

The catastrophe also sparked the resignation of BP chief executive Tony Hayward in July

Hayward was forced out following a string of gaffes as the public face of the firm in its battle to stop oil leaking into the Gulf of Mexico. Link

China on Friday offered a rare glimpse into its foreign exchange reserves, confirming that they are overwhelmingly allocated in dollars, while a central banker said the mountain of cash could face depreciation risks.

The Chinese government's currency reserves, the world's largest such stockpile at $2.45 trillion (1.59 trillion pounds), are held roughly in line with what was described as the global average: 65 percent in dollars, 26 percent in euros, 5 percent in pounds and 3 percent in yen.

The report in the China Securities Journal, an official newspaper, cited unnamed reserve managers.

The allocation of Chinese foreign exchange reserves is considered to be a state secret, but analysts have long estimated that about two-thirds are invested in dollar assets.

Separately, Hu Xiaolian, a vice governor with the People's Bank of China, warned that depreciation loomed as a risk for foreign exchange reserves held by developing counties.

"Once a reserve currency's value becomes unstable, there will be quite large depreciation risks for assets," she wrote in an article that appeared in the latest issue of China Finance, a Chinese-language magazine published under the central bank.

She reiterated China's long-standing discomfort with a global financial system dominated by a single currency in the dollar.

"The outbreak and spread of the global financial crisis has highlighted the inherent deficiencies and systemic risks in the current international currency system," she said.

"A diversified international currency system will be more conducive to international economic and financial stability," she added.

To that end, developing countries must speed up reform of their financial markets, and China would work to promote greater cross-border use of the yuan, she said.

DIVERSIFICATION

There have been signs in recent months that Beijing has stepped up the pace of diversification of its foreign exchange reserves away from dollar assets.

Chinese net buying of Japanese debt has surpassed 1.7 trillion yen this year, far surpassing its record of 255.7 billion yen in 2005.

China has also raised holdings of South Korean bonds by 2.48 trillion won ($2.11 billion) in the first seven months of this year from 1.87 trillion won at the end of last year. However, Chinese investors only started buying South Korean bonds in the middle of 2009.

At the same time, China has slightly cut back its vast holdings of U.S. Treasuries, from $894.8 billion at the start of the year to $843.7 billion in June, according to the most recent data. China remains the biggest single holder of U.S. government debt.

But analysts have also warned against reading too much into the apparent shifts in the flow of cash from China. Like any investor with commercial interests in mind, Beijing has shown a readiness to shift its strategy depending on what it sees as good buys at the time.

The China Securities Journal laid out the prospects for a shift back to the dollar in the near term.

"It is unlikely that China will increase purchases of Japanese bonds in the coming months because the yen might weaken at any time," the newspaper said.

"China is very likely to increase purchases of U.S. Treasuries in September. The possibility for China to buy more Korean bonds can't be ruled out," it added. Link

While the use of guaranteed bonuses to attract banking talent is declining, using such incentives to attract critical and senior hires shows no signs of abating, according to Mark O’Reilly, director at financial recruiter Astbury Marsden.

Today’s Financial Times reports on data from lobby group the Institute of International Finance which shows that guaranteed bonuses, where employees are awarded incentive payments irrespective of performance or business profitability, accounted for 5% of bonuses in 2009, down from 10% in 2008 and 8% in 2007.

But O’Reilly told Recruiter that banks and financial institutions including asset managers and hedge funds are still using guaranteed bonuses to recruit for key strategic hires and senior level roles.

“Previously a guaranteed bonus was a relatively common way to attract a mid-senior level candidate as they were walking away from accrued financial earnings from their current employer.

“Post-financial crisis, doing this has been seen as a politically contentious issue so insititutions have been reluctant to use them for fear of negative publicity. Clients have been very cautious about using guaranteed bonuses in all but the most senior/strategic hires. Senior candidates will not move without them as you would be asking a director-level candidate to be walking away from six-figure sums.” Link