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German Finance Minister Wolfgang Schaeuble said the Greek crisis shows the euro region should consider creating an organization with powers similar to the International Monetary Fund.

“For the internal stability of the euro zone, we need an institution that has the powers and know-how of the IMF,” he said in an interview with Welt am Sonntag published today. “We shouldn’t rule anything out, including the creation of a European Monetary Fund.”

The financial turmoil sparked by Greece’s budget shortfall has highlighted the absence of a single euro-region finance ministry that could tackle the default of a member state or force a country to cut its deficit before it got out of hand. Former Federal Reserve Chairman Paul Volcker said in an interview yesterday that the lack of political union to back up the European Central Bank is a “structural crack.”

Billionaire investor George Soros said Feb. 22 the common currency could disintegrate if the European Union doesn’t act.

“I support a stronger coordination of economic policy in the EU and the euro region,” said Schaeuble, who will publish his own proposals “soon.” He doesn’t support any IMF rescue package for Greece because that “would be an admission that the euro region can’t solve its own problems by itself.”

Euro ‘Football’

Schaeuble, who also said the euro shouldn’t become a “football” for speculators, said that any new organization wouldn’t compete with the IMF. His comments were confirmed by Finance Ministry spokesman Michael Offer.

The comments come after proposals for a European Monetary Fund were put forward last month by Deutsche Bank AG Chief Economist Thomas Mayer and Daniel Gros, director of the Centre for European Policy Studies in Brussels. Countries could draw on funds equivalent to the money deposited at the EMF and exceed that amount if they agreed to a “tailor-made adjustment program” supervised by the European Commission and governments, they said.

The EMF could also ease the disruption caused by the default of a member state by offering investors new EMF bonds in exchange for the defaulted bonds, they said. Bond holders would be required to take a “haircut.”

“Setting up a European Monetary Fund is superior to the option of either calling in the IMF or muddling through on the basis of ad hoc interventions,” Mayer and Gros wrote in an article in the Economist.

The lack of a unified fiscal policy has sparked a divergence of bond yields across the euro region as Greece’s crisis worsened. The extra yield investors demand to hold Greek 10-year debt instead of German equivalents jumped to 396 basis points in January, the highest since 1998. The average gap over the past decade was 34 basis points. The Spanish and Portuguese spreads are about five times their respective 10-year averages.

Greece managed to sell 5 billion euros ($6.8 billion) in government bonds this past week after announcing a new round of austerity measures.

“I have no doubt that Greece will execute its announced measures,” Schaeuble said. “Their current efforts deserve big respect.”

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Sterling Kozlowski, the region's top KeyBank N.A. executive since mid-2006, is leaving Western New York to become president of KeyBank's Maine district.

Kozlowski begins his new job Feb. 16, according to a release issued Monday by the bank. He will replaced retiring Maine district president Dick Lucas.

A search for the district's next president has begun, the bank said.

Kozlowski, a Syracuse native who grew up in Rochester, joined KeyBank in July 2006 after working 23 years at HSBC Bank USA N.A. In his current job, he has been responsible for 1,000 employees, 41 branches and 50 ATMs.

In Maine, he will focus on revenue, expense management, profitability and credit quality, the bank said. He will also work with sales managers to provide banking accessibility to low- to moderate-income individuals and communities.

Kozlowski earned an undergraduate degree in marketing management from Syracuse University. He also graduated from the advanced commercial lending program at the University at Buffalo and the Graduate School of Retail Bank Management at the University of Virginia.

Cleveland-based KeyBank, a subsidiary of KeyCorp, is the third largest bank in Western New York. Four new or renovated branches are expected to open locally within the next couple of years.

Nationwide, KeyBank has about $93 billion in assets and more than 1,000 branches.

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A Stanford University scientist who has co-founded three biotech firms offered five tips for successful business strategies to participants at the Moffitt Cancer Center’s Business of Biotech conference.

It’s important for scientists whose work is being commercialized by newly formed biotech companies to know their role, and be willing to step aside, said Gary Nolan, who sits on the board of directors of Nodality Inc., the firm he most recently co-founded. He’s also professor of microbiology and immunology at Stanford University School of Medicine and director of the Stanford NHLBI Proteomics Center.

He also said the founders of startup biotech firms should hire managers they can trust. The founders should remember that they no longer own the technology that’s the basis of a new firm because they sold it. Nolan advised that “there’s lots you can get for free,” such as legal services, by offering stock in a newly formed firm. And he cautioned against promising anyone anything, advising, “make them work for it.”

Nolan was the keynote speaker at the biotech conference Feb. 1, the fourth such event hosted by the H. Lee Moffitt Cancer Center & Research Institute.

A principal aim of the conference is to foster a life science cluster in Tampa Bay, said Jarrett Rieger, director of Moffitt’s Office of Technology Management and Licensing.

“It’s one thing to have discovery that could be monumental. It’s quite another thing to deliver it,” said Dr. William Dalton, president and chief executive of Moffitt.

Moffitt is playing a critical role in that delivery, he said.

Also attending the conference was H. Lee Moffitt, former speaker of the Florida House of Representatives, who was instrumental in funding the now 24-year-old organization that now bears his name.

“I constantly pinch myself that we’ve come as far as we have,” Moffitt said.

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Knight Security Systems has won a contract with the Texas Department of Aging and Disability Services to install security cameras at the San Antonio State Supported Living Center.

This is a home that cares for 300 mentally disabled people in San Antonio. The video cameras should help ensure residents are being kept safe.

The work is being done in San Antonio as part of a statewide contract between Aging and Disability Services and Houston-based Knight. In all, a total of 12 state-supported living centers will receive the company’s cameras.

The contract is worth $12 million.

Knight will install a total of 3,200 video cameras in 335 buildings.

Founded in 1983, Knight Security Systems has worked with more than 3,000 Texas customers since its inception.

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Finance Minister Hirohisa Fujii’s health deterioration threatens his four-month tenure, exposing a lack of experience in a government that’s struggling to contain Japan’s debt and sustain an economic recovery.

Prime Minister Yukio Hatoyama said yesterday that no decision has been made on whether Fujii, 77, will remain in his job as the government awaits judgment on his medical condition. Fujii told reporters in Tokyo that health issues may prevent him from attending the next session of parliament this month. He is likely to resign, Kyodo News reported today, citing an unnamed ruling party lawmaker.

A Fujii resignation would elevate focus on the two vice- finance chiefs, Yoshihiko Noda and Naoki Minezaki, as well as Deputy Prime Minister Naoto Kan, who heads economic policy, and Yoshito Sengoku, the minister for administrative reform. Investors would examine any successor’s credentials on fiscal matters after Fujii championed avoiding an increase in new bond sales, said Susumu Kato at Calyon Securities in Tokyo

“Hatoyama needs someone who is heavyweight and has expertise, but the DPJ lacks experienced personnel,” said Kato, Calyon’s chief economist for Japan. “Fujii gave a sense of security in a relatively young Cabinet as he’s veteran politician who has already been finance minister.”

Retirement Postponed

Hatoyama asked Fujii last year to postpone retirement and run in the August election that brought his Democratic Party of Japan to power for the first time. Fujii previously headed the Finance Ministry in 1993, and is a former budget examiner at the agency, giving him a deeper background in the area than other lawmakers in the party.

Financial markets indicated little immediate concern over doubts about Fujii’s future, with Japanese government bonds little changed and the Nikkei 225 Stock Average closing at the highest level since October 2008. Yields on benchmark 10-year notes were at 1.325 percent. The yen rose 0.6 percent to 91.92 as of 6 p.m. in Tokyo yesterday.

The Diet is scheduled to convene later this month, when the finance minister would typically face lawmakers’ questions over the proposed record 92.3 trillion yen ($1 trillion) budget.

While the DPJ-led coalition’s majority in the Diet means Hatoyama’s 2010 budget is likely to be little affected by a Fujii departure, it could complicate any effort to compile an additional fiscal stimulus, said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo.

Stimulus Weighed

“There’s a chance that the government may have an additional stimulus” package to submit before elections for the upper house of the Diet in July, Muto said. “If that happens, the government will be in trouble unless it chooses a person who has strong political leadership as a next finance minister.”

The latest warning on the durability of Japan’s recovery from its deepest postwar recession came yesterday from Sony Corp business card templates. Vice Chairman Ryoji Chubachi. He said “there’s a risk of a double-dip recession,” citing the damage of deflation to companies’ earnings. Chubachi spoke at a New Year’s party attended by government officials and business leaders in Tokyo.

Kato at Calyon Securities said a Fujii departure may have an impact on debt markets, depending on the dedication of any successor to avoiding an increase in government bond issuance.

Spending Restraint

In the course of compiling the 2010 budget, Fujii urged ministers to restrain outlays after their requests amounted to an unprecedented 95 trillion yen. He said the government must keep its promise of holding bond sales around 44 trillion yen to contain the world’s largest public debt burden — even after Hatoyama indicated he wouldn’t strictly adhere to the cap should more spending be necessary.

“There’s no finance-ministry type other than Fujii” within the DPJ, said Takahide Kiuchi, chief economist at Nomura Securities Co. in Tokyo. “If Fujii steps down, fiscal discipline may loosen regardless of who takes over the post.”

Fujii, Japan’s fifth finance minister since August 2008, was admitted to hospital on Dec. 28 for high blood pressure and exhaustion, three days after the budget release. “My examination is continuing, and I’ll respect my doctor’s judgment,” he said. He canceled his regular Wednesday press briefing for today.

For Hatoyama, losing his finance chief would come as his public support tumbles. The Cabinet had an approval rating of 50 percent in a Dec. 25-27 poll by Nikkei Inc. and TV Tokyo Corp., down from 75 percent backing in mid-September.

Currency Stance

Some analysts said Fujii wouldn’t necessarily be missed by investors after he indicated he supported a stronger yen, only to later say that the government is prepared to step into the currency market to stem its gains. As finance minister, Fujii is responsible for overseeing Japan’s exchange-rate policy.

The yen climbed to a 14-year high of 84.83 per dollar on Nov. 27, hurting exporters by eroding their profits earned abroad. The currency has since retreated about 8 percent.

“Investor estimation of Fujii’s steadiness isn’t that high because of his currency gaffes,” Hirokata Kusaba, a senior economist at Mizuho Research Institute in Tokyo. “The budget has been already drafted and the government bill will pass because the ruling coalition controls both chambers,” meaning the impact of his departure “will be limited.”

Kusaba said Sengoku or Noda would be the most likely candidates to replace Fujii.

Kiuchi at Nomura said the yen may weaken no matter who succeeds Fujii because he “is labeled as tolerating a stronger yen and opposing intervention.”

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Italian business confidence rose to the highest in 18 months in December on expectations by manufacturers that growing exports will boost the economy’s recovery from the worst recession since World War II.

The Isae Institute’s manufacturing sentiment index climbed to 82.6, the highest since June 2008, from a revised 79.4 in November, the Rome-based research center Isae said today. That compared with a median forecast of 79.7 in a Bloomberg News survey of 8 economists.

The survey showed “a strong recovery in production expectations and in the assessment on orders, the ones from abroad in particular,” Isae said in the report. “Inventories remain stable and below levels considered normal.”

The $2.3 trillion economy expanded 0.6 percent in the three months through September after five quarters of contraction as exports grew. The economy may grow 1.1 percent in 2010, employers’ lobby Confindustria forecast on Dec. 17. Exports to non-European Union countries rose 2.6 percent in November after falling 9.1 percent in October. Economic growth in France and Germany, which emerged from the recession in the second quarter, is also supporting Italian manufacturers.

The rise in confidence in Italy mirrored gains in optimism in Europe’s largest economy. Business confidence in Germany increased to the highest level in 17 months in December as the global recovery supported exports and manufacturing growth, the Munich-based Ifo institute said on Dec. 18.

French business confidence fell in December for the first time in nine months on concern that fading government-stimulus measures may slow the economy’s recovery from its worst slump in six decades, Paris-based statistics office Insee said last week.

Reduced Stimulus

Government incentives across Europe contributed to the recovery of auto and home appliance sales from a global decline caused by the recession. In Italy, they benefited Fiat SpA, whose Italian sales rose 28 percent in November from the previous year.

Italy’s government plans to reduce incentives to trade in old cars for newer models to 300 million euros ($432 million) next year, Il Sole 24 Ore reported on Dec. 27. Italy set aside about 400 million euros to spur sales of more fuel-efficient cars in 2009.

Manufacturers remain pessimistic about the job market on expectations that hiring will lag the economic recovery, today’s report showed. A sub-index measuring expectations on employment held at minus 18 in December.

The jobless rate climbed in the third quarter to the highest in four years, Istat said on Dec. 17. Rising unemployment and reduced stimulus may weigh on consumer spending in coming months.

Isae conducted its latest survey of 4,000 companies between Dec. 1 and Dec. 18. The research center revised its November reading from an initial 78.8.

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Arizona stock performance looks pretty good for the past quarter and since the start of 2009, but looking back to the start of the recession in late 2007 paints a gloomier picture.

Thirteen of the state’s billion-dollar public companies saw stock prices move up during the fourth quarter and 15 posted gains for the year as the market rallied following a recession low for stock indexes in March.

But for the period from Dec. 31, 2007, to Dec. 18, 2009, only four of the 21 companies posted gains, according to a Phoenix Business Journal analysis.

P.F. Chang’s China Bistro (Nasdaq:PFCB) outdistanced the other winners with a 69 percent gain despite the recession’s impact on many retail and restaurant chains.

Also posting gains since December 2007 were: Meritage Homes Corp. (NYSE:MTH), 19 percent; PetsMart Inc. (Nasdaq:PETM), 17 percent; and Tucson’s UniSource Energy Corp. (NYSE:UNS), 6.6 percent.

The recession’s impact has been very industry-specific said Chip Fisher, managing director and head of the Arizona office for Green Holcomb & Fisher. The pet industry has done well, but many in the restaurant industry have had a tough time.

P.F. Chang’s is among winners in the restaurant sector remaining profitable through the third quarter, although seeing profits shrink. The Asian restaurant chain chain has tightened its belt and closed underperforming locations while continuing modest growth, including new sites in the Middle East. In August, the Scottsdale chain announced a deal with consumer products giant Unilever to brand a line of frozen entrees.

Analysts expect to see its earnings per share hit $1.74 for 2009 and rise to $1.90 in 2010, compared with $1.45 in 2008.

But Barry Ziskin, president of Z Seven Fund in Mesa, says those earnings are significantly higher than the more conservative number reported to the IRS. And with the number of closures offsetting growth, the stock price may be ahead of itself.

He also cautions that PetsMart is feeling pressure from online retailers such as Petmed Express as well as veterinarians.

While Meritage Home Corp. stock moved up 19 percent since the end of 2007, it remains a long way from its peak during the housing boom, when it neared $100 a share in summer 2005 payday loans for bad credit.

The Scottsdale homebuilder continues to feel the sting of the industry implosion, with January-September revenue down from $1.1 billion in 2008 to $683 million this year. Net loss for the nine-month period, however, has tightened to $3.52 per share from $7.37 in 2008. Analysts see that number moving down to just 16 cents for all of 2010.

Leading the list on the negative side for the two-year period as well as for the past quarter and all of 2009 was Mesa Air Group Inc. (Nasdaq:MESA). The Phoenix-based short-hop airline’s stock ended 2007 at $3.09 per share but slipped to the penny-stock range a few months later and has not recovered, trading at just 11 cents as of Dec. 18. In 2006, shares had traded at more than $10.

Mesa has faced not only the recession’s tepid travel, but also a prolonged legal push from Delta Air Lines to sever ties and paid $52.5 million in 2008 to settle a dispute with Hawaiian Airlines.

Fisher said 2009 was a difficult year for most public companies, especially those with a limited stockholder base and analyst coverage.

The new year should bring more money into stock markets and improve values for small-cap as well as larger companies, he said, but not to 2007 levels.

“It’s going to be a long time until we return to those values,” said Fisher. A lot of small companies shouldn’t even be public, he said, adding his company has helped a number of those go private or delist from stock markets over the past year.

Green Holcomb has added staff in Phoenix, he said. “We expect the mergers and acquisitions market to be very active in 2010 and beyond.”

The two-year period saw the Dow Jones Industrial Average plummet from 13,265 to a March 2009 pit of 6,440 before starting a comeback to hit 10,329 Dec. 18. The Nasdaq Composite remains down nearly 17 percent for the two-year period closing at 2,212 Dec. 18.

As for the market in general, opinions vary from the nine-month rally topping off to a continued rise before a crash later in the year and worries about the impact of a major event somewhere in the world.

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SUDBURY–Andrea Daily fell to her knees in the grocery store as her young daughter begged one more time for that special granola bar. Tearfully, Daily grabbed her 5-year-old and told her to stop asking because it was an item she could no longer afford.

"When she asks, it’s difficult to say `no’ over and over again," says Daily, 32. "But we have no choice because of the strike."

The strike at Vale Inco hit the Daily household hard.

Her husband, Dave, 34, joined Vale Inco as an apprentice mechanic in February 2008 and earned $27 an hour. She later began working part-time at a spa. They bought a home and a car and looked forward to finally settling down with their two young daughters.

Then Dave Daily’s union, the United Steelworkers, walked out in a contract dispute last summer. His income plunged by more than 75 per cent. It turned the family budget, and their lives, upside down.

"We never had much chance to build any strong savings," she says.

The Dailys are just one of the young families struggling through a strike that has lasted more than five months. A majority of Inco workers are in their late-20s and 30s, with less than three years service. Many have heavy financial obligations.

Before the strike, the Dailys felt financially comfortable enough to donate to the community food bank instant personal loans guaranteed. Now, they are using it.

"We’ve been humbled," she says.

The Dailys have slashed spending. Cable TV is gone. The cellphone disappeared and the couple bunch up numerous errands to save fuel costs. They are stretching their food dollar like never before.

Dave Daily makes some extra dollars fixing cars. Relatives and the union help, but the bills pile up. A student loan remains outstanding.

The bank has shown flexibility on mortgage payments but for every bit of relief, another problem sets them back. The spa reduced her work hours, partially because business has slowed during the strike.

"Christmas is cancelled here," she says, but adds that they’re pulling out some old toys from when her husband was a boy.

Dave Daily voted in favour of the strike. "When I signed up (Vale Inco) told me about the bonus incentive, but now they want to take some of it away," he says. "I don’t know if I want to stay with a company like that any more."

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Bank of America Corp., the nation’s biggest lender, will repay $45 billion of government bailout funds, helping free the bank from U.S. curbs on executive pay that have hampered its search for a new leader.

The bank will repay the Troubled Asset Relief Program using $26.2 billion of "excess liquidity" and $18.8 billion from the sale of securities, according to a statement Wednesday. The firm plans to increase equity by $4 billion through asset sales and will issue $1.7 billion of restricted stock instead of year-end bonuses to some employees.

Bank of America’s two rounds of U.S. funding included $20 billion to help cushion losses tied to the takeover of Merrill Lynch & Co. The repayment will ease the bank’s effort to replace Chief Executive Kenneth D. Lewis, who announced his departure in September.

Dilution for shareholders will be "substantial," said William Fitzpatrick, an analyst at Optique Capital Management in Racine, Wis., which oversees $1 billion, including Bank of America shares. "It looks like this was done for the incoming chief executive," he said. "You take out the compensation restrictions and everything else that went along with the government ownership."

The repayment was negotiated by Chief Risk Officer Greg Curl and Chief Financial Officer Joe L. Price, a person familiar with the matter said. The two executives had approval from the board to close the deal once regulators including the Treasury, the Federal Reserve and the Office of the Comptroller of the Currency agreed to it, the person said, speaking anonymously because the details of the talks aren’t public payday loan lenders.

Curl, 61, is among candidates vying to replace Lewis. His role in negotiating the exit from TARP may enhance his prospects, according to a person familiar with the process.

The repayment saves $3.6 billion a year in dividend payments, the bank said. It also means Lewis, 62, can fulfill his vow to arrange the return of all bailout funds before his tenure ends at the end of the year. Lewis said Sept. 30 that he would step down on Dec. 31 after enduring criticism from lawmakers, regulators and shareholders about his handling of the Merrill Lynch purchase.

"We appreciate the critical role that the U.S. government played last fall in helping to stabilize financial markets, and we are pleased to be able to fully repay the investment, with interest," Lewis said in today’s statement.

Bank of America will also be able to better compete with rivals including JPMorgan Chase & Co., which already repaid its bailout funds, spokesman Robert Stickler said.

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SupportSpace Ltd., which runs a web-based network of independent computer support experts, has raised $10 million in funding.

Founded in 2006 and based in South San Francisco, SupportSpace had previously raised a $14.25 million Series A round of venture capital. The latest round was led by Emergence Capital Partners, with participation from previous investors BRM Group and Gemini Israel.

Kevin Spain, principal at Emergence Capital, has joined SupportSpace's board of directors.

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