London: Massive stimulus plans to drive the world out of recession took center stage on Wednesday with the European Union considering a 200 billion euro boost for its economy. The move came on the heels of an $800 billion credit market bailout from the US Federal Reserve. The European Commission approved a package aimed at giving the sagging European economy a sharp, temporary boost with a 200 billion euro ($260 billion) spending plan across the 27-nation bloc, an EU source said. The plan, higher than initially thought, calls for a targeted and temporary fiscal stimulus of 1.5 percent of EU gross domestic product. National measures would account for around 170 billion euros, or 1.2 percent of GDP, and EU and European Investment Bank budgets around 30 billion euros. The Commission wants the European Union’s 27 member countries to unite on a two-year dash for growth, even if it means that it comes at the cost of breaking the region’s national deficit targets. — Reuters

Volcker to head economic advisers

CHICAGO: President-elect Barack Obama chose former Federal Reserve Chairman Paul Volcker Wednesday to head a new White House panel to help create jobs and bring stability to the ailing financial system. Volcker, 81, will head the President's Economic Recovery Advisory Board. The board's top staff official will be Austan Goolsbee, a University of Chicago economist, Obama said at a news briefing. Volcker is no stranger to economic crises. He became Fed chairman in 1979, a time of high inflation and high unemployment. He helped tame inflation by raising interest rates, a move that helped plunge the economy into recession. He was later credited with reviving the economy by getting inflation under control. Volcker served as Fed chairman until 1987. He returns as an adviser with the nation facing increasing unemployment, a growing federal budget deficit and a financial system in turmoil. It was Obama’s third news conference in as many days dealing with the economy. On Monday, he announced New York Federal Reserve President Tim Geithner as his treasury secretary. — AP

AIG CEO to get token $1 salary

CHARLOTTE: American International Group Inc. said Tuesday it is limiting how much it pays its top executives, including granting a $1 salary for this year and the same for 2009 to its Chief Executive Edward Liddy. The decision is one of many broader moves made by the troubled New York-based insurer, which has been under pressure to restrict executive pay since accepting billions in government assistance to save it from collapse. AIG has received about $150 billion so far, more than any other company. It was once the world’s largest insurer with customers around the globe, and regulators feared the possible effect an AIG collapse would have had on the world’s financial system. The company said there will be no 2008 annual bonuses and no salary increases through 2009 for AIG's top seven officers and no salary increases through 2009 for the 50 next-highest AIG executives. In addition to his $1 a year salary, Liddy will be getting an unspecified amount of stock. “We believe these actions demonstrate that we are focused on overcoming our financial challenges so AIG can return value to taxpayers and shareholders,” Liddy said. — AP

Porsche pushes back VW takeover

STUTTGART: German luxury sports car maker Porsche said Wednesday it would push back a planned takeover of Volkswagen, the biggest European auto group, after being hit by falling sales. “In view of the current economic climate it is more and more unlikely that we will achieve the goal this year” of raising its stake in VW from the current 42.6 per cent to more than half, Porsche chief Wendelin Wiedeking said. “Our aim remains to increase our stake to over 50 per cent... as quickly as possible. But we have always said that we would not do anything unreasonable,” he told a news conference in southwestern Stuttgart. Wiedeking said his goal was to build “a global alliance” able to resist the financial and economic crisis, “because the world is not going to be simple.” “In the past weeks, dramatic changes have taken place in auto markets,” he noted. Porsche estimated that its unit sales had dropped by 18 percent to 25,200 vehicles in the August-November period compared with the same period a year earlier. Revenues were also expected to have lost 15 per cent in the same period. — AFP

LandAmerica files bankruptcy

new york: Title insurer LandAmerica Financial Group Inc said it has filed for bankruptcy protection and its bigger rival Fidelity National Financial Inc will buy two of its underwriting units. The recent termination of a merger agreement with Fidelity National Financial and the closure of its 1031 Exchange Company’s business caused it to accelerate these actions, LandAmerica said. On Friday, Fidelity National Financial withdrew its $126 million stock offer for LandAmerica. The title insurer said along with the company, its unit LandAmerica 1031 Exchange Services Inc also filed for bankruptcy protection in order to facilitate the sale of its two principal title underwriting subsidiaries. Fidelity National Financial said it would buy LandAmerica’s underwriting units Lawyers Title Insurance Corp and United Capital Title Insurance Co. Also, Chicago Title Insurance Co will buy LandAmerica's Commonwealth Land Title Insurance Co for $158.6 million, Fidelity said. Both Lawyers Title and Commonwealth units are entirely solvent and none of the other many businesses are seeking bankruptcy protection, LandAmerica said. — Reuters

US economic data signals shrinkage

washington: A series of grim economic reports Tuesday suggested the US economy is sinking fast into recession, with tight credit choking activity by consumers and businesses. One report showed US consumer spending dropped 1.0 per cent in October, the steepest fall since September 2001. The Commerce Department report showed the sharp drop in spending came even as incomes rose 0.3 per cent in the month. The report showed a dismal beginning of the fourth quarter for the US economy, which relies on consumer spending for around two-thirds of economic activity. Ian Shepherdson, economist at High Frequency Economics, called the report ‘horrible’ and said much of the drop was linked to weak auto sales. But because of falling prices — an inflation index linked to the report showed a 0.6 per cent decline — Shepherdson said “The fall in real spending was 0.6 per cent after rounding, not quite as massive as the nominal plunge.” Other reports were equally grim. The Commerce Department said orders for big-ticket durable goods fell a whopping 6.2 per cent in October. — AFP