Economy, Europe | featured news

U.S. President Barack Obama and German Chancellor Angela Merkel discussed the eurozone crisis and financial-market turbulence on Saturday and vowed action to bolster the global economy, the White House said in a statement.

Stock markets in Asia opened sharply lower Friday amid signs of a possible U.S. recession and renewed worries over the financial health of Europe's banks.

French economic growth ground to a halt in the second quarter, raising pressure on the government to cut spending and abolish tax breaks to convince turbulent financial markets it will deliver on debt reduction targets.

As markets continued to hammer Italy, Prime Minister Silvio Berlusconi rebutted calls for his resignation, saying Italy’s economic fundamentals were strong.

European leaders are holding an emergency summit on Greece's debt crisis, trying to prevent a meltdown for the euro and a global economic slump.

European risk assets remain under pressure as investors digest the latest round of bank stress tests by the European Banking Authority.

The world economy should expand steadily this year and next thanks mainly to prospering emerging powers, a Reuters poll showed, but fiscal troubles lurking in Europe and potentially the United States risk blowing this view apart.

Cutting Greece's debt will not solve the country's problems, ECB policymaker Jens Weidmann was quoted as saying on Sunday, adding Athens needed to raise its productivity instead.

The Italian austerity budget worth nearly 48 billion euros was approved by the upper house of parliament on Thursday, overcoming its first parliamentary hurdle.

Fitch Ratings on Wednesday downgraded Greece deeper into junk territory, citing the absence of a new and fully funded financing program for the country.