BUSINESS BRIEFS
Facing 'deep' recession, EU cuts growth forecasts
Advertiser News Services
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BRUSSELS, Belgium — The European Union said yesterday it is facing a "deep and protracted recession" and slashed growth forecasts, while Britain announced its second massive bank bailout in just over three months in another wave of bad economic news in Europe.
European Central Bank President Jean-Claude Trichet said this year would be "very difficult" and an economic rebound might not come until 2010.
The economy in the 16 nations that use the euro will shrink by 1.9 percent in 2009, with the entire EU contracting 1.8 percent, the European Commission said. That is a drastic cut from its earlier forecasts of 0.1 percent for the euro zone and 0.2 percent for the EU.
The 27-member bloc said 3.5 million jobs will disappear in the EU in the year ahead as business and household spending fall and banks tighten lending.
FIAT SPA DISCUSSES STAKE IN CHRYSLER
AUBURN HILLS, Mich. — Fiat SpA is holding discussions with Chrysler LLC about taking a stake in the U.S. carmaker and creating a partnership that would allow the Italian automaker to build and sell its small cars in the United States, two publications reported yesterday.
Unnamed officials familiar with the discussions told The Wall Street Journal and Automotive News that Chrysler would have access to the Turin-based automaker's engine and transmission technology as part of a potential deal.
Chrysler spokeswoman Lori McTavish said "in today's economic environment, talks are going on between companies in all industries — ours is no different."
S. CALIFORNIA HOME PRICES DROP 35%
LOS ANGELES — The median home price in a six-county region of Southern California dropped nearly 35 percent in December from a year ago, but home sales rose steadily as buyers snapped up foreclosures, a real estate tracking firm reported yesterday.
The median price for homes and condos tumbled to $278,000 last month from $425,000 in December 2007, San Diego-based MDA DataQuick said. The median price for the area peaked at $505,000 in mid-2007.
There were 19,926 homes sold last month, up 19 percent from November. Foreclosures made up 55.7 percent of December's sales in Southern California.
ANALYSIS: $825B EFFORT TO BE SLOW
WASHINGTON — Much of President-elect Barack Obama's $825 billion effort to rebuild roads and other infrastructure won't hit the economy for years, according to an analysis by congressional economists.
Less than half of $30 billion in highway construction funds detailed by House Democrats would be released into the economy over the next four years, concludes the analysis by the Congressional Budget Office. Less than $4 billion in highway construction money would reach the economy by September 2010.
The CBO analysis doesn't cover tax cuts or efforts by Democrats to rush aid to cash-strapped state governments. But it illustrates just how difficult it can be to use public investment to rush money into the economy.
