Nov. 2 - Summary of business headlines: Greece may not get next bailout payment until vote; Italy rushes to soothe investor worries; Federal Reserve holds rates but cuts growth forecast; Wall Street gains as economy improves. Conway G. Gittens reports.
Greece will not get the next payout of an international bailout until a planned Greek referendum is held, according to European Union and International Monetary Fund board sources. IMF sources say the board wants Greece to prove it can stick to the terms of the bailout before dishing any more cash. Meanwhile, the Italian government is rushing to shore up confidence in its austerity measures. President Silvio Berlusconi is facing pressure to resign as global investors fear Italy will be the next country engulfed in the debt crisis. Italian minister Gianfranco Rotondi heading into hastily called meetings had this to say. SOUNDBITE: ITALIAN MINISTER GIANFRANCO ROTONDI (ITALIAN WITH ENGLISH TRANSLATION) SAYING: "We, as the government, are doing everything that was agreed with Europe. Naturally we need to establish the limits for what public policies can reach, in a crisis which has its roots far away from the Italian austerity measures, this is a crisis that comes from the collapse of the American banking system." Despite the worries about Europe's fiscal situation, a China Central Bank official says Europe remains a key investment area for the foreseeable future. The European debt crisis was on the minds of policymakers at the Federal Reserve. Following a two-day meeting, the group said downside risks to the economy remain, taking particular note of strains in global financial markets. Policymakers lowered their growth forecasts and pledged to keep rates exceptionally low until the middle of 2013. Turning to the markets, investors welcomed signs of incremental improvement on the labor front - sending stocks higher for the first time in three sessions. Europe also saw a rebound as investors awaited word from emergency evening talks between Germany, France, and Greece, held ahead of the G20 meeting in Cannes. Conway Gittens, Reuters