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President Obama opened the G8 summit with a dinner for the world leaders

President Obama has welcomed world leaders to Camp David near Washington for the G8 summit, where the eurozone crisis is likely to dominate talks.

Investors fear a Greek eurozone exit could trigger a fresh global crisis.

At Friday’s opening dinner Iran and North Korea’s nuclear ambitions and Syrian unrest were discussed, with broad consensus, officials said.

North Korea faces further isolation, the G8 leaders agreed, if it “continues down the path of provocation”.

On Iran, leaders agreed that the onus was on the government in Tehran to prove the claim that its nuclear programme was peaceful.

On Syria, a US official said the leaders, including Russia’s Prime Minster Dmitry Medvedev, were in agreement that the UN-backed peace plan had yet to be fully implemented and that there was now a need to move towards a political transition.

None of these issues is simple, says the BBC’s Steve Kingstone in Washington, but Friday evening was arguably the more straightforward part of the summit.

Earlier, Mr Obama and the new French President, Francois Hollande, made it clear that they wanted a focus on economic growth.

Mr Obama said that tackling the debt crisis in Europe was an issue of extraordinary importance.

‘False’ report

Greece said that German Chancellor Angela Merkel had suggested on Friday morning that the country could hold a referendum on whether to remain in the eurozone when it votes in national elections next month.

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Analysis

The new spokesman of the caretaker Greek government, Dimitris Tsiodras, told me he had nothing to add since the earlier statement that Angela Merkel had discussed the referendum proposal with the Greek president.

If Chancellor Merkel indeed suggested a referendum on euro membership, it would be an astonishing about-turn. Last November, the then Greek PM George Papandreou formally proposed a referendum – ostensibly on the bailout, but it would have turned out to be on euro membership.

The idea caused outrage from Mrs Merkel and then French President Nicolas Sarkozy, furious that the Greek government could play such a potentially dangerous game with the euro. Mr Papandreou was forced to row back on the proposal – and it ultimately cost him his premiership.

Could Mrs Merkel’s suggestion – if it stands (her office denies it was made) – be part of a high-stakes game of brinkmanship? Possibly. Berlin and others are obviously aware that the vast majority of Greeks want to stay in the euro, according to opinion polls. And they are using that fact to their advantage.

• Read more from Mark Lowen

A statement from the office of Greece’s interim prime minister said that Mrs Merkel had raised the subject during a telephone call with President Karolos Papoulias.

The German chancellor “conveyed thoughts about a vote parallel to the election with the question to what extent do the Greek citizens wish to remain within the eurozone”, said the statement.

“However, it is clear that the matter is beyond the competence of the caretaker government.”

However Berlin denied such a proposal had been made.

“This is false and we completely dismiss this,” a German government spokeswoman said.

Greece’s caretaker government was sworn in this week after elections failed to produce a viable coalition to run the country. New elections have been scheduled for 17 June.

The result of the poll could determine the fate of austerity measures which Greece’s international creditors are insisting on.

Investors fear any refusal by Athens to impose deep spending cuts agreed under a bailout deal could result in the country quitting the bloc of 17 countries that use the euro.

Larger countries such as Spain or Italy that are struggling to ease their debt loads might then become vulnerable, potentially triggering wider eurozone upheaval and even a global financial crisis to rival the one of 2008.

‘Decisive action’ needed

The eurozone is expected to top the agenda when the leaders of the US, Germany, France, Britain, Japan, Russia, Italy and Canada hold a full day of talks on Saturday at their annual summit, at President Barack Obama’s retreat near Washington DC.

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Francois Hollande and Barack Obama have met for the first time at the White House

Iran’s nuclear programme and Syria’s crackdown on dissent are also expected to be discussed further.

On Friday, Mr Obama welcomed Francois Hollande to the White House to discuss economic matters.

The French president, who took office this month, said he and Mr Obama shared “the same conviction that Greece must remain in the eurozone”.

Mr Obama said the situation was of great importance not only to Europe, but for the whole world.

The US president said he looked forward to “fruitful” discussions with other G8 leaders, with a strong focus on economic growth.

Mr Hollande also met British Prime Minister David Cameron at the British embassy in Washington.

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Mr Cameron said that Greece must decide if it wanted to remain in the euro.

“We need decisive action from eurozone countries in terms of strengthening eurozone banks, in terms of a strong eurozone firewall and decisive action over Greece. That has to be done.”

Meanwhile, there was another contradiction as European Union Trade Commissioner Karel De Gucht said the bloc’s officials were working on contingency plans in case Greece left the eurozone.

He was contradicted by his own colleague, Economic Affairs Commissioner Olli Rehn, who said in a statement: “We are not working on the scenario of a Greek exit.”

That however still does not rule out the possibility of contingency planning, says the BBC’s Matthew Price in Brussels.

After the G8 summit ends on Saturday evening, most of the leaders will decamp to Chicago to join a larger group of international officials for a Nato summit on Sunday and Monday, at which Afghanistan is expected to be the main item on the agenda.

Article source: http://www.bbc.co.uk/news/world-us-canada-18126840#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa

CAMP DAVID, Md. (AP) — President Barack Obama and other leaders of the Group of Eight industrial nations expressed hope Saturday that Greece will remain in the Eurozone, anxious to keep its economic troubles from spreading around the world. The leaders said all of the nations have an interest in the success of efforts to strengthen the eurozone and help Europe’s economy grow.

Obama said the leaders agreed that Europe’s financial crisis must be addressed with a mix of growth and austerity measures, as they huddled for a shirt-sleeve discussion that also covered world concerns about ups and downs in oil prices.

Germany’s Angela Merkel, for her part, said growth and deficit cutting reinforced each other “and that we have to work on both threads, and the participants have made that clear, and I think that is great progress.”

The G-8 leaders, in a joint statement from the rustic presidential retreat, reflected both hope and a recognition of the daunting economic challenges they face.

“The global recovery shows signs of promise, but significant headwinds persist,” they said.

The summit brought together leaders of the United States, Germany, France, Canada, Italy, Britain, Russia, and Japan in an effort to figure out how to tame Europe’s debt crisis while also increasing the demand for goods and spurring job growth.

Their statement conceded some points to Merkel’s push for austerity, saying budget deficits needed to be closed. But it added that budget cutting should “take into account countries’ evolving economic conditions and underpin confidence and economic recovery.” That suggested a willingness to let indebted countries take more time to reduce their deficits in line with eurozone rules in order to lessen the deadening impact of cuts on the economy.

“The right measures are not the same for each of us,” their statement said.

The leaders called for “investments in education and in modern infrastructure” which would involve more government spending. European leaders have talked about increasing funding for their development bank and making more use of unspent infrastructure funds. Those funds amount to significant sums in Greece and Portugal — 7 and 9 percent of GDP — but come with rules and condition that make them hard to tap in a hurry.

Obama chose the secluded Camp David setting in part to give leaders a chance for an intimate and freewheeling discussion out of sight of most media and far from the raucous protests that have accompanied previous meetings of the G-8. Obama and his counterparts emerged briefly at midday for a group photo, strolling down from the rustic presidential cabin straddling a golf green with a sand bunker.

“Everybody give them one wave,” Obama instructed the assembled leaders as they lined up for their official photo. “Let’s look happy.”

On the sidelines of the summit, Obama convened a lunch meeting of G-8 leaders and the leaders of Benin, Tanzania, Ghana and Ethiopia to discuss ways of improving food security in Africa. Obama said all of the G-8 leaders were committed to fulfilling the terms of a food security initiative developed in 2009 that led to $22 billion in government-backed pledges. “We’re looking to go beyond what we agreed to three years ago,” Obama said.

Obama’s argument for additional stimulus measures alongside belt-tightening was primarily aimed at Germany, the strongest member of the union that uses the common Euro currency.

Merkel, speaking about efforts to promote growth, said that “we have some investments for the future under consideration” in research and development, Internet networks and infrastructure. But she said “this doesn’t mean stimulus in the usual sense.” She added that “we are certainly open” to more use of the EU’s development bank and infrastructure funds for Greece, but that Greece must keep to the strict terms of its bailout loans.

The G-8 session sets the stage for a far more consequential European summit in Brussels next week where the countries that share the euro as their currency hope to come together on specific steps to fight rising debt while spurring a recovery.

The Camp David gathering opened with a Friday evening discussion focused on global trouble spots Iran and Syria. Obama said the session also touched on North Korea’s aggression and hopeful signs of democratic change in Myanmar.

“We are unified on our approach to Iran,” and hopeful of progress ahead of a diplomatic meeting with Iran next week, Obama said Saturday.

Iran may have a peaceful nuclear energy program but misuse of that program for a nuclear weapon is unacceptable, Obama said. Ever-tighter economic sanctions cannot be loosened while the world encourages Iran to rein in its program, Obama said.

“All of us are firmly committed to continuing with the approach of sanctions and pressure in combination with diplomatic discussions,” Obama said. “And our hope is that we can resolve this issue in a peaceful fashion that respects Iran’s sovereignty and its rights in the international community, but also recognizes its responsibilities.”

On Syria, Obama said the group supports a United Nations cease-fire plan that has yet to be honored in full. He said a statement to be issued at the close of the G-8 summit will reflect that support for the plan brokered by envoy Kofi Annan, but also say that the plan has not taken hold fast enough.

Most of the leaders are part of overlapping international coalitions formed to address the Iranian nuclear problem and the newer crisis in Syria, where an estimated 9,000 people have died in more than a year of violence that arose from the pro-democracy Arab uprisings.

Faced with implacable Russian opposition to significant new United Nations punishments on the Syrian regime, U.S. officials are trying to get consensus among other allies about ways to promote the ouster of Syrian President Bashar Assad’s ouster.

“We all believe that a peaceful resolution and political transition in Syria is preferable,” Obama said Saturday.

A senior U.S. official said one goal of the closed-door discussions at Camp David was to impress on Russian Prime Minister Dmitry Medvedev that other nations that share Russia’s usual role at the forefront of international diplomacy are seeking ways to address the Syria debacle without Russian help.

Later Saturday the leaders were returning to foreign affairs topics with discussion of Afghanistan and the Middle East.

For Obama, Europe’s fate is critical to his own political survival. An economic recession that spreads to the U.S. could damage an already slow recovery and boost the argument by his Republican challenger, Mitt Romney, that the United States economy needs new leadership.

There is a get-acquainted aspect to the session as well.

The Camp David gathering, the largest collection of foreign leaders ever at the presidential retreat, is the first G-8 meeting for just-elected French President Francois Hollande, for Italian Prime Minister Mario Monti and for Japanese Prime Minister Yoshihiko Noda. In what has been widely viewed as a snub, Russian President Vladimir Putin is skipping the G-8. He sent Prime Minister Dmitry Medvedev in his place.

___

AP’s Jamey Keaton contributed to this report.

Article source: http://finance.yahoo.com/news/g-8-leaders-hope-greece-164452071.html

Facebook founder Mark Zuckerberg met investors in New York in the run up to the flotation

Facebook shares will begin trading in New York on Friday in one of the most eagerly-anticipated share flotations in recent stock market history.

Demand is set be high as this week the social networking site said it would be selling 25% more shares than planned.

The sale is expected to value the company at about $100bn (£63bn), the same as internet shopping giant Amazon.

But questions remain about the firm’s ability to generate profits and take advantage of mobile phone platforms.

There are also concerns that once the company has to answer to shareholders, there may be a greater emphasis on advertising to generate profits.

Limited say

The actual share price will be announced later on Thursday.

Earlier this week, the company indicated the price would be between $34-$38 a share, with about 421 million shares up for sale.

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Sir Martin Sorrell talks to Rory Cellan-Jones about the value of Facebook

This would represent one of the highest value share sales, or initial public offerings (IPOs) in US history.

However, the new shareholders will not have much of a say in how the company is run.

The shares on offer are “A” shares, which carry one vote per share, whereas the current owners’ shares are “B” shares, which carry 10 votes each.

They will control more than 96% of the votes after the public listing, with founder Mark Zuckerberg holding just under 56% of the voting power of the company.

Mr Zuckerberg, who owns about 25% of the company, stands to gain the most from taking Facebook public. Fellow founders Dustin Moskovitz and Eduardo Saverin will also become paper-billionares overnight, as will Napster founder and former employee Sean Parker.

US venture capital firm Accel Partners and Russian internet investment group Digital Sky Technologies also hold significant stakes in Facebook, while Microsoft and U2 frontman Bono also stand to make a huge profit on their investment in the company.

Revenue growth

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Analysis

The numbers behind Facebook are staggering: more than 900 million users, 300 million photos uploaded everyday, available in more than 70 languages and a valuation of close to $100bn.

Here is one more to add to that list.

Zero: which is its share of the world’s biggest internet market, China.

It is a statistic that Facebook may struggle to ignore, especially as it will be looking to expand to justify its valuation and China has some 500 million internet users.

Analysts say the longer Facebook takes to enter China, the harder it will become for the firm to crack the market.

• Can Facebook crack China?
• Facebook feature growth timeline
• Facebook: Behind the likes and pokes

The social networking site has transformed the way in which hundreds of millions of people around the world communicate. It is also transforming the way companies advertise to existing and potential customers.

But Facebook’s 900 million users helped the company generate just $1bn in profit last year, and there are concerns about its ability to grow profits in the future.

For while it holds a depth of personal information advertisers dream about, Facebook only generates about $5 a year per user.

This has led a number of commentators to question the company’s valuation.

“Facebook will need to generate annual revenue of $30bn-$40bn in order to justify the likely valuation of the business,” said Victor Basta at Magister Advisors.

“This is a tenfold increase over the revenues that it currently generates. The question is ‘where from?’”.

The potential revenue from online advertising is huge.

“We know our industry is $1tn worldwide,” Martin Sorrell, chief executive of advertising giant WPP, told the BBC.

“We know internet advertising is currently 20% roughly [of the total]. We know people are spending almost a third of their time online in one way or another, so there’s a vast opportunity for Facebook.”

Generating greater revenues from this potential market is the first key challenge facing the company, both in terms of its own business model and in the face of strong competition from the likes of Amazon, Apple and Google.

‘Knife edge’

Facebook has identified mobile devices, phones and tablet computers as key areas for revenue growth, but observers say this will not be easy.

“[Facebook is] the holy grail for advertisers. It holds the minutiae of everybody’s lives, the perfect concoction of information – age, sex and what you like,” technology analyst Ernest Doku told the BBC.

“[But] so many people are engaged for so long, it’s very difficult to lure them away to what you’re trying to sell them.”

The second big challenge is not alienating users while trying to maximise revenue.

“[The company] is balancing on a knife edge between servicing its users and pleasing its investors,” Mr Doku said.

“It has been able put the user experience first and foremost, but now investors are going to want [a return].”

Article source: http://www.bbc.co.uk/news/business-18105608#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa

NEW YORK (AP) — Fears that Greece will need to leave the single currency union is pushing the dollar to a four-month high against the euro.

Greece will be holding another round of elections on June 17, after politicians failed to create a new government following an election in early May.

Greek voters gave support to anti-austerity parties at that election. Traders are worried that if those parties win in June the country may drop out of euro zone, which could hurt the euro’s credibility and roil financial markets.

The euro fell to $1.2720 in afternoon trading from $1.2725 late Wednesday. The euro fell to $1.2665 earlier, its lowest point since Jan. 16.

The British pound fell to $1.5820 from $1.5917. The dollar fell to 79.39 Japanese yen from 80.29 yen.

Article source: http://finance.yahoo.com/news/dollar-rises-against-euro-worries-175918462.html

German industry is the powerhouse of the eurozone economy

The eurozone has narrowly avoided returning to recession after recording zero growth in the first three months of the year, figures have shown.

The stronger-than-expected performance was in large part due to growth of 0.5% in the German economy.

In the final quarter of 2011, the eurozone shrank by 0.3%, and many analysts expected further contraction.

The French economy recorded zero growth in the first quarter of 2012, while the Italian economy contracted by 0.8%.

The Italian economy shrank by 0.7% between October and December last year, and it has now contracted for three consecutive quarters. The country is struggling as the government cuts back on spending, raises taxes and reforms pensions in an attempt to cut debt levels.

The figures from Eurostat also showed that Spain’s economy shrank by 0.3% in the first quarter.

Separately, the Greek national statistics office said the nation’s economy had contracted by 6.2% in the three-month period. Greece is implementing drastic austerity measures to cut its deficit and comply with the terms of a massive bailout from the European Union and the International Monetary Fund.

These measures have proved hugely unpopular with Greeks, the majority of whom voted against austerity in elections earlier this month. On Tuesday, politicians admitted defeat in their attempts to form a working coalition, meaning Greece will go the polls again next month.

News of the breakdown in talks pushed Greek stocks down almost 6%, which in turn dragged major European exchanges lower. However, investors soon recovered some composure, with the Athens exchange down about 3.5% and the main London, Paris and Frankfurt indexes about 0.5% lower by mid-afternoon trading.

‘Weak consumption’

The German statistics agency, Destatis, said the country’s economic growth was due to a rise in exports and higher domestic consumption.

The return to growth means Germany has avoided a so-called double-dip recession, confounding the predictions of a number of commentators.

“This is a very strong comeback. The decline in the fourth quarter was not the start of a recession but just an economic dip,” said Joerg Kraemer at Commerzbank.

“Germany is faring better than the rest of the eurozone. But I do not believe that it will continue at this speed.”

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In contrast, the French growth figures failed to outperform analysts’ expectations, and the growth figure for the final quarter of last year was revised down to 0.1% from 0.2%.

“There was no good surprise,” said Philippe Waechter at Natixis Asset Management. “There was weak consumption [and] no investment.”

Some analysts believe that the first quarter may prove something of a temporary respite as many eurozone economies continue to struggle amid weak demand, high unemployment and dramatic cutbacks in government spending.

“Looking ahead, the situation will only get worse as the periphery remains mired in recession and German exports falter,” said Capital Economics.

“Indeed, eurozone business surveys like the composite Purchasing Managers Index (PMI) already point to a contraction of about 0.3% in the second quarter.”

The closely-watched PMI survey published earlier this month showed one of the steepest monthly contractions in the eurozone’s private sector for almost three years.

A survey of German investors published on Tuesday also suggested confidence was weakening, with the Zew poll of economic sentiment dropping to 10.8 in May from 23.4 in April.

Case for growth

The French growth figures came on the day of the inauguration of the new French President Francois Hollande, who has vowed to boost economic growth.

In the run up to the presidential election, in which he ousted Nicolas Sarkozy, he campaigned hard for measures focusing on stimulating the economy alongside the austerity measures that have been adopted across the eurozone.

He will speak personally to German Chancellor Angela Merkel in Berlin later on Tuesday to make the case for growth.

Mr Hollande believes that growth rather than austerity is the best way for governments to reduce their debts, a view that is being discussed more widely as the eurozone economy continues to struggle and increasing numbers of Europeans voice their anger at austerity.

Article source: http://www.bbc.co.uk/news/business-18068747#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa

NEW YORK (AP) — The euro fell to a four-month low against the dollar after Greek leaders failed to form a new government and said a new election will be held next month.

Greek politicians have been in a political deadlock since voters gave support to anti-austerity parties in elections May 6. Traders are worried that if those parties win in June the country could drop out of the euro currency union, which could weaken the euro’s credibility.

The euro fell to $1.2769 in Tuesday afternoon trading from $1.2847 late Monday. The euro fell as low as $1.2752 earlier, its lowest point against the dollar since Jan. 18.

In other trading Monday, the British pound fell to $1.6021 from $1.6105. The dollar rose to 80.15 Japanese yen from 79.86 yen.

Article source: http://finance.yahoo.com/news/euro-sinks-4-month-low-165358992.html

Yahoo has acknowledged Scott Thompson does not have a computer science degree

The chief executive of computer firm Yahoo is to step down after accusations that a fake computer science degree was included on his CV, reports say.

According to the blog AllthingsD, Scott Thompson will quit his post in the wake of the controversy.

He is likely to be replaced by Yahoo’s global media head Ross Levinson.

The blog says Yahoo is also close to settling with activist shareholder Daniel Loeb, who discovered Mr Thompson’s mistake.

AllthingsD, the Wall Street Journal’s technology blog, reported that Yahoo will say Mr Thompson is stepping down for personal reasons.

The firm has already acknowledged that its CEO, who took up his post in January, does not have a computer science degree.

Yahoo is also expected to appoint new directors and a new chairman in the wake of Mr Thompson’s resignation.

Just last month, the company, which is based in Sunnyvale, California, announced plans to make 2,000 employees redundant.

Mr Thompson was previously the president of online payments firm Paypal.

Article source: http://www.bbc.co.uk/news/business-18053577#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa