Global Economy | featured news

Greece faces another tough year in 2012 but must stick to its program of austerity and reform to stay in the euro, Prime Minister Lucas Papademos said in a pre-recorded New Year's Eve address.

After a year marked by a wave of popular uprisings, deadly natural disasters and continued economic uncertainty, millions around the world are set to ring in 2012 with a party... As the clock strikes midnight around the world Saturday, people are ushering in a new year with fireworks and festivities, purpose and promises -- and a string of resolutions they'll no doubt break.

Just three years ago, the euro was being praised as the can-do currency that had delivered unprecedented prosperity in Europe. Now, it's widely derided as a hugely flawed experiment in the wake of a debt crisis that's threatening its very existence — an uncomfortable backdrop as the currency's notes and coins hit their first decade in circulation on Jan. 1.

The housewives and breadwinners stepping out of a Cairo supermarket with bags of groceries agreed on one thing. “The prices are very high,” said Sabah Fehmi, 58. “The economy has been very bad after the revolution.”

The Federal Reserve said Tuesday that the U.S. economy has improved modestly as hiring and consumer spending have risen, and it's holding off on any new steps to boost the economy. Fed officials cautioned in their statement that unemployment remains high. And it noted that global economic growth has slowed — a reference to Europe's debt crisis. They left open the possibility of taking new steps next year if the economy worsens.

VIENNA (Reuters) - China will remain part of international efforts to help Europe through its crisis, vice foreign minister Fu Ying said on Saturday, dismissing the idea that Beijing was sitting back as the region suffered.

China's services sector cooled in November to its weakest growth in three months, an HSBC purchasing managers' index showed on Monday, the latest data portraying an economy slowing quickly and in need of policy support.

Germany and France clashed on Wednesday over whether the ECB should take bolder steps to stem the euro zone debt crisis, with Chancellor Angela Merkel issuing one of her starkest warnings yet against fiddling with the central bank's strict inflation-fighting mandate.

Chinese factories battled with their weakest activity in 32 months in November, a preliminary purchasing managers' survey showed, reviving worries that China may be skidding toward an economic hard landing and compounding global recession fears.

Greece's new prime minister, Lucas Papademos, won a crucial confidence vote Wednesday on severe austerity measures to be made in exchange for more bailout funds to help the country step back from the brink of bankruptcy.