 » The sovereign-debt crisis in the euro zone stepped up a gear. Concerns about Italy led to a rapid rise in the country's government-bond yields and a fall in its stockmarket. Yields on government bonds jumped by nearly a percentage point over two days. Italy has the world's third-largest government-bond market. Its debt stands at 120% of GDP, the highest ratio in the euro area after Greece. This week's anxiety was caused in part by a quarrel between Silvio Berlusconi, the prime minister, and Giulio Tremonti, the finance minister, and by uncertainty over the passage of an austerity budget.
See article Aiding Athens » European leaders, meanwhile, were said to be preparing to meet in Brussels to discuss a deal for a second Greek bail-out. This could involve private bondholders agreeing to roll Greece's debts over and governments helping Greece buy back its bonds. See article » Ireland became the third country in the euro zone to have its credit rating downgraded to junk status. Moody's made the cut on the basis that Ireland will also eventually need another bail-out, provoking more grumbles in Brussels about the role of ratings agencies in the debt crisis. » The weakness of America's recovery was underscored by resoundingly gloomy jobs data. Employers added just 18,000 workers to payrolls last month, the lowest number since America began to pull out of recession. The unemployment rate crept up to 9.2%. » Ben Bernanke assured Congress that the Federal Reserve still had "a number of ways" in which it could act to ease financial conditions, though the central bank had no plans to intervene on the scale of its recently ended $600 billion bond-buying programme.
Good news, sort of » China's economy grew by 9.5% in the year to the second quarter. This was a slightly lower rate than for the first quarter, but the markets took that as a positive sign that China's use of monetary tools to stop the economy from overheating may be working. More tightening is expected as China's central bank continues its fight against inflation. » With Christine Lagarde installed as its managing director, the IMF made other senior appointments. Zhu Min, one of four deputy managing directors, is the first person from China to serve in such a high position at the fund.  » Peabody Energy, based in St Louis and the world's biggest private-sector coal company, launched a new offer for Australia's Macarthur Coal. Peabody was rebuffed by Macarthur's board in a first takeover approach last year. This time it has teamed up with ArcelorMittal in a joint bid worth A$4.7 billion ($5 billion) for the business; the steelmaker already owns a 16% stake in Macarthur. » Saudi Arabia increased oil production by 700,000 barrels a day last month, to reach a total of 9.7m b/d, according to the International Energy Agency. The Saudis upped their output, which is now at a five-year high, after OPEC as a whole declined to raise quotas. » America's Agriculture Department said that more corn will be used this year for making ethanol in the United States than as animal feed and related products. It is the first time that corn demand for biofuel has surpassed that for farming. » Carrefour's proposed merger of its Brazilian business with that of Pão de Açúcar, a Brazilian supermarket chain, collapsed when Brazil's state development bank withdrew its support. The French retailer's bid had already provoked controversy when a big shareholder in Pão de Açúcar had accused Carrefour of conducting illegal takeover talks. The importance of Brazil to Carrefour was highlighted by its quarterly results, which showed strong revenue growth there and in other emerging markets, offsetting weak sales in western Europe. See article » Nestlé continued its acquisition spree in China, saying that it planned to take a 60% stake in Hsu Fu Chi. In April the Swiss group bought a similar-sized holding in Yinlu Foods. Hsu Fu Chi makes chocolate, sweets and biscuits, some with flavours that cater to local tastes. China's confectionery market is only half the size of America's (despite having four times as many people), but it is expected to grow rapidly.
Trouble in store » Amazon stepped up its battle against California's levy of a sales tax on online purchases, proposing to put a referendum to voters to overturn the measure. Most American states do not collect sales taxes on goods bought over the internet, but California wants the money to help plug its budget deficit. Its levy is supported by many bricks-and-mortar retailers, including Walmart and Target, which argue that exemption from the tax hands an unfair advantage to their online rivals. | 
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