EUROPEAN UNION

Asian stocks were on course on Tuesday for their worst quarterly performance since the end of 2008, as the tepid nature of rich world's recovery from global recession keeps investors on the defensive.

Budget austerity plans will not drag the euro zone economy into stagnation, European Central Bank President Jean-Claude Trichet was quoted on Thursday as saying.

The European Union formally requested in a letter on Wednesday that the world's largest economies explore the introduction of a global tax on financial transactions. Writing to the G20 before a summit in Toronto on June 26-27, Herman Van Rompuy, the president of the EU Council which represents EU member states, said the world needed a level playing field on bank levies and transaction taxes.

European Central Bank policymakers pressed governments on Monday to follow stricter budget rules and open their books to external monitoring as they urged a new carrot-and-stick approach to fiscal policy.

European Union leaders moved toward agreement on Thursday on ways to strengthen budget discipline and economic policy coordination among the 27 member states to contain a euro zone debt crisis.

David Cameron was all smiles when he began his first European Union summit as Britain's prime minister on Thursday but was quick to say he would defend national interests firmly.

Stocks were set to fall at the open on Wednesday as FedEx warned about higher costs, housing starts fell to a five-month low and new concerns surfaced over Spain's fiscal problems.

A modest economic recovery is taking shape in the euro zone but its countries face two major challenges: reducing their deficits and reinforcing growth, European Central Bank Governing Council member Guy Quaden said.

European policymakers sought to squash talk of a euro zone rescue for Spain on Tuesday as the country saw its borrowing costs rise in a debt auction ahead of an EU summit to discuss steps to fix the currency bloc.

Spain said on Monday that foreign banks were refusing to lend to some of its banks in the latest twist to the euro zone debt crisis, but denied it was on the brink of seeking a Greek-style European financial rescue.

It was after 1 a.m. on Monday May 10 when a little-known Dutch civil servant made the suggestion that may have saved the euro. European finance ministers had come together in Brussels late on the Sunday afternoon to thrash out a rescue package to stabilize the common currency. Unconvinced by a 110 billion euro deal for debt-laden Greece eight days earlier, the markets had knocked the euro 4 percen...

The European Central Bank will maintain its bond-buying program until financial markets stabilize, ECB Governing Council member Ewald Nowotny told Japan's Nikkei newspaper in an interview published on Sunday.

The dollar surrendered gains against the yen on Friday after data showing a surprise drop in U.S. retail sales last month dented risk appetite and raised questions about the strength of recovery.

The euro zone does not risk relapsing into recession and markets are overly pessimistic about Europe's common currency, members of the European Central Bank said on Friday.

The European Central Bank, Germany's constitutional court and China's pension fund gave a triple boost to efforts to stabilize the euro zone on Thursday, lifting the single currency and European stocks.

The European Central Bank, Germany's constitutional court and China's pension fund gave a triple boost to efforts to stabilize the euro zone on Thursday, lifting the single currency and European stocks.

* ECB extends unlimited liquidity, bonds buying to continue

The euro rose on Thursday as strong demand at a Spanish debt auction eased concerns about how the country will fund its large debt, but caution before a European Central Bank policy decision capped gains.

The euro rose on Thursday after the head of China's national pension fund said the currency would weather Europe's debt crisis, though caution before a European Central Bank policy decision capped gains.

Asian stocks rose on Thursday on higher-than-expected Chinese exports and assurances from Federal Reserve Chairman Ben Bernanke that the U.S. economic recovery was on solid footing, but European stocks were expected to open lower, tracking Wall Street's fall overnight.

The European Commission welcomed German and French calls for new measures to clamp down on speculators in government debt on Wednesday but the likelihood of a bloc-wide ban still appears remote.