Finance news. My opinion.

New Zealand had its first trade surplus in seven months in January as record-high commodity prices buoyed exports of milk powder and lumber, while imports fell to an 11-month low.

Exports outpaced imports by NZ$11 million ($8 million) from a revised NZ$264 million deficit in December, Statistics New Zealand said today in Wellington. The median estimate in a Bloomberg News survey of six economists was for a NZ$25 million deficit.

Rising exports, which make up 30 percent of the economy, may help New Zealand’s economy this year after an earthquake in Christchurch that will likely subtract from growth. The magnitude 6.3 temblor struck the nation’s second-biggest city on Feb. 22, killing at least 147 people and reducing many central business district buildings to rubble.

“Encouragingly, export values are getting a head of steam up, reflecting record high commodity prices,” said Sharon Zöllner, a senior economist at ANZ National Bank Ltd. in Wellington, wrote in a report after the release. “This data is important in that it highlights that the fundamentals for the export sector remain strong.”

New Zealand’s dollar was little changed after the report. It bought 75.05 U.S. cents at 10:53 a.m. in Wellington from 75.00 cents immediately before the data were released.

Exports rose 4.3 percent from the year-earlier month to NZ$3.29 billion, today’s report showed. Imports were NZ$3.28 billion, the lowest since February last year.

Commodity Prices

Commodity prices rose 3 Online payday loans.8 percent in January from December to a record, according to an index released earlier this month and calculated by ANZ National Bank Ltd. From a year earlier, the index increased 27 percent.

Dairy exports, which make up a fifth of overseas sales, exceeded a billion local dollars for a second month, rising 9.8 percent from the year-earlier month to NZ$1.04 billion.

Last week, Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, raised its forecast payment to New Zealand milk suppliers by 8.7 percent, citing higher international prices.

Meat, lumber and fish exports also increased from the year- earlier month, according to today’s report.

Exports of all goods to China, the second-largest market for New Zealand after Australia, increased 26 percent to NZ$453 million in January, the report showed. Sales to Australia gained 2.8 percent to NZ$694 million.

Imports were led higher by purchases of mechanical machinery and equipment, including turbines, the statistics agency said. Parts for wind-powered generators buoyed electrical imports. Passenger car imports fell to a 16-month low.

New Zealand posted a trade surplus of NZ$865 million in the 12 months ended Jan. 31 from a revised NZ$1.13 billion in the year through December. Economists expected a 12-month surplus of NZ$860 million.

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Britain’s economy shrank more than initially estimated in the fourth quarter, complicating the task of the Bank of England as a split deepens among policy makers on whether to withdraw stimulus.

Gross domestic product fell 0.6 percent from the previous three months, compared with an initial estimate for a 0.5 percent drop, the Office for National Statistics said today in London. The statistics office said its “best estimate” for the impact of cold weather on the data remains 0.5 percent. The slump was led by construction and investment.

The coldest December in a century hampered the recovery, dragging the economy to its worst performance in more than a year. The Bank of England kept its key interest rate on hold this month as inflation at twice the 2 percent target led to a four-way split among officials. Recent surveys suggest the contraction may have been a temporary setback, with services resuming growth in January and manufacturing strengthening.

“There has been a significant slowdown in the economy, even outside of weather effects at end of last year,” said James Shugg, the Westpac Banking Corp. economist who was the only economist in the Bloomberg News survey to correctly predict the a downward revision. “I’m still pretty cautious about the U.K.” and “at the margin this adds to the case for a bit of caution on the rate side.”

Pound Drops

The pound fell as much as 0.4 percent to $1.6069 today. It remained lower against the dollar after data showed the U.S. economy grew slower than previously calculated in the fourth quarter. It traded at $1.6090 as of 1:53 p.m. The yield on the 10-year government bond was up 1 basis point at 3.63 percent.

Figures from the Commerce Department in Washington showed that the world’s largest economy grew at a 2.8 percent annual rate in the fourth quarter, compared with a 3.2 percent estimate issued last month. The euro-area economy expanded 0.3 percent in the period, a report earlier this month showed, less than the 0.4 percent pace forecast by economists.

In the U.K., consumer-spending growth fell 0.1 percent in the fourth quarter from the previous three months, its first decline since the second quarter of 2009. Government spending rose 0.7 percent on the quarter, the statistics office said.

Investment dropped 2.5 percent, while construction output also fell by that amount. Exports rose 2.3 percent and imports increased 3 percent.

‘Disappointing’

Chancellor of the Exchequer George Osborne said the U.K. data were “disappointing and today’s revision doesn’t change that fact,” the U.K. Treasury said in an e-mailed statement. “It also doesn’t change the need to deal with the nation’s credit card — the country is borrowing more this year than is spent on the entire National Health Service.”

The statistics office said the downward revision to quarterly GDP was due to data on industrial production, services and retail sales. The annual GDP deflator was 2.8 percent. From a year earlier, the economy grew 1.5 percent.

Dechra Pharmaceuticals Plc, a U.K. veterinary drugs and services company, said on Feb. 22 that first-half profit fell after taking a charge for two acquisitions and adverse weather in the U.K.

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Orders for long-lasting manufactured goods outside of transportation fell in January by the largest amount in two years.

The Commerce Department says that orders for durable goods excluding transportation fell 3.6 percent last month, the biggest drop since January 2009.

A key category viewed as a proxy for business investment spending was also down by the largest amount in two years.

Total durable goods orders rose 2.7 percent but that increase was driven by a huge rebound in orders for commercial aircraft totally free credit score.

Manufacturing has been one of the standout performers during this recovery and economists expect that to continue despite the January weakness. January orders totaled $200.5 billion, considered a healthy level by economists and 25 percent above the recession low hit in March 2009.

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The number of applications for U.S. mortgages rose last week, led by more refinancing as mortgage rates fell to the lowest level since the end of January.

The Mortgage Bankers Association’s index of loan applications increased 13 percent in the week ended Feb. 18 after dropping the prior week to the lowest point since November 2008. The group’s refinancing measure jumped 18 percent and the purchase gauge rose 5.1 percent.

“Refinancing is more sensitive to fluctuations in rates” than are purchases, Paul Dales, a senior economist at Capital Economics Ltd. in Toronto, said before the report. Still, he said he expected refinancing to “remain soft” with sales at “historically depressed levels for perhaps two or three years.”

The average rate on 30-year fixed mortgages dropped to 5 percent as turmoil in the Middle East and North Africa led investors to seek the safety of U.S. Treasury securities, which are benchmarks for some consumer loans, pulling down their yield. Still, mounting foreclosures, falling prices and 9 percent unemployment mean it will take time for demand to pick up.

The 30-year rate fell from 5.12 percent the prior week. It reached 4.21 percent in October, the lowest since the group’s records began in 1990.

At the current 30-year rate, monthly payments for each $100,000 of a loan would be $536.82, in line with the same week the prior year, when the rate was 5.04 percent.

Rates Fall

The average rate on a 15-year fixed mortgage fell to 4.28 percent from 4.34 percent.

The share of applicants seeking to refinance a loan rose to 65.7 percent from 64 percent the prior week.

The housing market is struggling to gain traction after a homebuyers’ tax credit expired last year and as more properties fall into the foreclosure pipeline. Combined sales of existing and new homes in December were at a 5.61 million annual unit pace, down from a July 2005 record of 8.53 million.

A report from the National Association of Realtors today may show existing home sales fell 1.1 percent to a 5.22 million annualized rate in January, according to economists’ estimates. Sales of previously owned homes last year totaled 4.91 million, the lowest level since 1997.

Builder Losses

Homebuilders are still posting losses. D.R. Horton Inc., the second-largest U.S. homebuilder by stock-market value, on Jan. 27 reported a fiscal first-quarter loss that was wider than analysts projected.

“I think 2011 will be a marginal, weak year in the homebuilding industry,” D.R. Horton Chief Executive Officer Donald Tomnitz said during a conference call the same day. “Given the weak macroeconomic conditions, high levels of existing homes for sale and tight mortgage availability, we remain cautious and realistic in our expectations.”

The Washington-based Mortgage Bankers Association’s loan survey, compiled every week, covers about half of all U.S. retail residential mortgage originations.

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Chancellor Angela Merkel’s party suffered its worst defeat in Germany’s richest state since World War II, the first of seven state elections this year that threaten to limit her scope to tackle Europe’s debt crisis.

The loss in Hamburg, the city-state of Merkel’s birth, underscores the challenge she faces trying to balance public opposition to bailouts for debt-wracked states against pressure from investors and fellow euro countries to lead the way in stemming the debt contagion. Merkel faces three more state ballots next month either side of a March 24-25 European Union summit called to form a comprehensive plan for the crisis.

“It’s a warning to Merkel,” said Carsten Brzeski, an economist at ING Groep NV in Brussels. “If she has to draw any lesson, it probably will be to get tougher at the European level to show something to German voters,” he said. “There is no room for Merkel to come home from Brussels on March 25 with anything that could look or smell like a defeat.”

Portuguese government bonds declined for a second week before the vote, leading securities of high-deficit countries including Greece lower. The 10-year yield dropped 2 basis points to 7.22 percent at 3:10 p.m. in Berlin today, holding above 7 percent for the 12th trading day in a row.

Peripheral Bond Risk

“There’s a risk to peripheral bonds if Germany is seen not to be displaying support for the countries that are in trouble,” said Orlando Green, assistant director of capital- markets strategy at Credit Agricole Corporate & Investment bank in London. “The market would have been hoping that a deal would have been struck already” before the elections.

Merkel’s Christian Democratic Union took 21.9 percent in yesterday’s election, its worst result in the port city since the first postwar vote in 1946 and half its score in 2008, preliminary results showed. The Social Democrats, the main national opposition party, took 48.3 percent, enough to end the CDU’s 10-year rule in Hamburg and form a majority government without need of a coalition partner.

“We have to acknowledge that this was a stinging defeat,” Merkel told reporters in Berlin today. Outgoing CDU Mayor Christoph Ahlhaus said the results were “painful,” and congratulated his Social Democratic opponent Olaf Scholz, a former Labor Minister in Merkel’s first-term government.

‘Massive Collapse’

The CDU suffered “a massive collapse of support in this booming city that must set off hand-wringing in Berlin,” said Hans-Juergen Hoffmann, managing director of Hamburg-based pollster Psephos. “Merkel will surely be concerned now that this disaster won’t be repeated in upcoming state elections.”

German state ballots follow in Saxony-Anhalt, Bremen and Mecklenburg-Western Pomerania, home to Merkel’s electoral district, and culminate in Berlin in September. A double-header looms next month in Rhineland-Palatinate and Baden-Wuerttemberg, the southwestern state ruled by her party for more than half a century. Both votes are on March 27, two days after the EU summit, in a “Super Sunday” for Merkel, Brzeski said.

In Hamburg, the Greens took 11.2 percent and the Free Democrats, Merkel’s national coalition partner, 6.6 percent, enough to win seats in the state parliament for the first time since 2004. The anti-capitalist Left Party won 6.4 percent.

Greece Blame

Hamburg was the first electoral test of Merkel’s policy since her party lost a state election last May, a result that she blamed on voter anger over bailing out Greece. The defeat cost her control of parliament’s upper house in Berlin, the Bundesrat, where regional administrations are represented. The Hamburg result, if confirmed, would cost the CDU 3 seats in the Bundesrat, further limiting her ability to pass legislation.

Merkel’s main European policy challenge this year is getting the EU debt-fighting deal through parliament and “for her, Baden-Wuerttemberg is the test,” said Holger Schmieding, chief economist at Joh Berenberg Gossler & Co. in London.

Germany, Europe’s largest economy, is already the biggest country contributor to last year’s 110 billion-euro ($151 billion) bailout of Greece and the rescue fund for debt-stricken states.

Merkel’s room to maneuver is also curtailed by her FDP coalition partner as it seeks to counter waning support. The FDP resists any attempt to top up the rescue fund, make it more flexible or relax the terms of bailout aid. It also insists that parliament has a say in any attempt to provide more aid.

While the CDU “can live” with the defeat in Hamburg, “for the FDP, it’s a good result after some very weak opinion polls,” said Schmieding. “A party less wounded is more able to make a deal.”

The Christian Democrats went into the Hamburg vote after a spate of negative headlines for Merkel. Axel Weber, her candidate to be the European Central Bank’s next head, dropped out of the race on Feb. 11 in what the best-selling Bild newspaper called “a blow to the chancellor and to the euro.” Defense Minister Karl-Theodor zu Guttenberg, Germany’s most popular politician, is denying allegations that he stole parts of his doctoral thesis.

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Jay Lassiter is no longer “in a relationship.”

Let’s clarify that: Lassiter, a media adviser for political campaigns who lives in Cherry Hill, N.J., is still with his partner of nearly eight years, Greg Lehmkuho. But since Thursday, when Facebook expanded its romantic-status options, Lassiter’s profile there echoes his relationship’s legal status: “Domestic partnership.”

It may not be a life-altering change. After all, you can call yourself anything you want on a social network. And Facebook is merely that.

But, Lassiter notes: “I’m no different from all those other Facebook users whose identity is tied up with their Facebook pages, for better or for worse.”

And so, he says: “It’s high time. It’s an affirming gesture. It’s sort of one tiny step for gays, but a giant leap for gay rights.”

Facebook’s addition of civil unions and domestic partnerships to the list of relationships its users can pick from came after talks with gay rights organizations, including GLAAD, the Gay & Lesbian Alliance Against Defamation.

The social network has “sent a clear message in support of gay and lesbian couples to users across the globe,” said GLAAD’s president, Jarrett Barrios. “By acknowledging the relationships of countless loving and committed same-sex couples in the U.S. and abroad, Facebook has set a new standard of inclusion for social media.”

He added that the new status options, available to Facebook users in the U.S., Canada, Britain, France and Australia, will serve as an important reminder that legal marriage is not an option for gay couples in most states.

Only Iowa, Vermont, New Hampshire, Massachusetts, Connecticut and Washington, D.C. allow same-sex marriages. Hawaii will soon become the seventh state to permit civil unions or similar legal recognition for gay couples.

Of course, there’s also a Facebook option to say “It’s complicated” _ and that’s exactly how some users felt about the new changes. Because, for people both gay and straight, more options mean more decisions to make: What exactly is my relationship, and what should I call it?

“You go into a store and there are 27 kinds of soda, and sometimes it would be easier if there were just Coke and Pepsi,” explains Erik Rueter, who works in marketing at an educational nonprofit institution in Pittsburgh.

To Rueter, the essence of his relationship is crystal clear: He and his partner, Robb, will be together forever. “We complete each other’s sentences,” he says. “We’ll be sitting there in the nursing home, gumming up each other’s food, chasing each other in our wheelchairs.”

Two years ago, Rueter, 34, proposed to his partner on bended knee, despite the fact that in Pennsylvania they cannot marry. They’ve been engaged ever since, and that’s been his Facebook status _ until Thursday, when he changed it to domestic partnership.

But Rueter is conflicted about the change Payday advance.

“Part of me wants to go back to ‘engaged’ _ because I still am,” he says. “Part of me wants to say ‘married,’ as in, ‘I don’t care what the law says.’ And part of me says, ‘It’s just Facebook!’”

And then ANOTHER part of Rueter tells him just how powerful and influential Facebook is, with well over 500 million users across the globe. “Just having the option to say, ‘This is what my relationship is’ is a really good thing,” he says.

It can be a good thing for some straight Facebook users, as well. Michael Stimson, a Scot who lives in Marseille, France, is not married to his partner, Izzy (short for Isabelle), but they live together and have a young son. He’s just changed his status from blank to domestic partnership.

For Stimson, it helps to clarify to other users with whom he’s chatting that he is not, well, available. “People do flirt with you on the Internet,” he says. “I like to put them in the picture a wee bit, so there’s no confusion.”

Izzy approves of his decision. “Most people that you speak with on Facebook are people you don’t know,” she says, speaking in French from home in Marseille. “This makes things more clear.”

Of course, there are no political overtones to the couple’s change in status. In the United States, though, there is a passionate debate over gay marriage. Lassiter, the campaign adviser from New Jersey, changed his status from “in a relationship” to “married” last year in an act of political defiance, he says, when the state legislature rejected a bid to recognize gay marriage.

But it just didn’t feel right, and he changed it back to “in a relationship” months later. Besides the fact that “married” wasn’t accurate, “I’m not really the marrying type,” he says. “Me and my partner have an equilibrium as things are.”

But “in a relationship” made it sound like a high-school relationship, rather than one that’s lasted a number of years.

So the new status feels better, says Lassiter. And he’s been encouraged by the positive feedback he’s gotten on just the first day from Facebook friends _ including people from as far back as high school _ giving him a thumbs-up.

Lassiter also thinks the change is most important for gay people _ especially younger ones _ living in areas of the country where their sexual orientation is less accepted than in the liberal Northeast.

“For those people, it legitimizes being in a gay relationship,” he says.

And so, maybe a social network can be something of an agent of social change.

After all, Lassiter says, “As Facebook goes, so goes the world.”

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Associated Press Writer Geoff Mulvihill in Philadelphia contributed to this report.

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The world’s strongest economies will find themselves in a new crisis if they fail to address the dangerous imbalances in the world economy, France’s finance minister warned Friday.

But Christine Lagarde also recognized that governments have sought starkly divergent paths out of the financial crisis and their “vested interests” could endanger agreement. She spoke as finance ministers and central bank governors of the Group of 20 industrialized and fastest developing nations gathered for their first meeting this year in Paris.

The status quo of some countries building up huge surpluses while others run steep deficits “leads us straight into the wall of another debt crisis,” Lagarde said at a financial conference that kicks off the G-20 meeting.

The world’s top financial officials hope to draw up a list of indicators that best measure dangerous imbalances in trade deficits, surpluses, budget deficits or levels of debt. Inflation and national savings rates are also likely to be considered as part of the range of possible yardsticks.

“We will focus on how to use those indicators to achieve better collaboration and cooperation,” Lagarde said, adding that the G-20 meeting hosted by France would be about “more stability, less volatility, less excesses, and world governance.”

Lagarde has the difficult task of picking up the pieces of last November’s G-20 summit of heads of state in Seoul, which ended without any meaningful agreement on how to defuse long-standing tensions over trade and currency imbalances.

Her warning of the danger of imbalances was echoed by U.S. Federal Reserve Chairman Ben Bernanke. In the years before the financial meltdown of 2008, countries with trade surpluses plowed money into mortgage and other investments in the United States, helping escalate their value, Bernanke said in his speech at the conference.

The Fed chairman called on surplus countries like China to let their exchange rates float freely, and urged nations like the United States needed to narrow their budget shortfalls and save more.

“If there is no stabilizing system, then you can have situation where like today, you have a two-speed recovery and demand is not optimally allocated around the world,” Bernanke said.

Emerging markets like China and Brazil have emerged from the financial crisis much stronger than some of the more traditional powers such as the U.S, Europe and Japan.

While there is widespread agreement among financial policymakers that smoothing out imbalances is key to getting the global economy back in track, how that should be done is more divisive.

The mere existence of the imbalances points to vastly different growth models among the world’s biggest economies, with each arguing that changing its strategy _ whether based on exports, exchange rate controls, or the free flow of money _ would hurt its recovery.

Officials will not even get to the more difficult question of setting thresholds for these indicators. The even more tricky question of how to enforce any thresholds that leaders eventually sign up to is yet further off the agenda.

“Name and shame” policies like those used in the fight against international tax havens would be one, albeit toothless, possibility.

Lagarde said reducing imbalances will “require cooperation, understanding of each other’s positions and vested interests.” She said the talks on Friday and Saturday should help G-20 members “move from understanding to cooperating and collaborating.” Finance ministers will meet several more times this year before France’s G-20 presidency culminates with a heads of state summit in Cannes in November.

“It’s going to be quite a task, but that’s where we need to go,” Lagarde said

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The closure of Egypt’s banks for two of the past three weeks has added strain on an economy already reeling from the evaporation of tourism and a prolonged stock market closure caused by the political upheaval that ousted longtime leader Hosni Mubarak.

The closures were ordered after protests and strikes by poorly paid bank workers, some of them demanding a purge of executives they accused of corruption. Concerns over a lack of security also factored into the decision. Most police disappeared from the streets a few days after the revolt began on Jan. 25 and many have not returned.

The bank shutdown and the draining of ATM machines have paralyzed businesses and left ordinary people scrambling for cash. The economy has been crippled by the unrest, which has forced many businesses to shut and factories to halt production. More than 150,000 tourists fled, dealing a blow to one of Egypt’s top sources of foreign revenue.

The stock market is not set to open again at least until Sunday, which would make it a three-week shutdown. The benchmark stock index fell about 17 percent in two sessions before it closed on Jan. 28. Initially, trade was halted while authorities put in place measures to curb any more sharp and sudden drops amid the instability. Then the strikes and bank closures prolonged the shutdown.

“We are in an environment of a revolution,” said Tarek Amer, board chairman of the National Bank of Egypt, the country’s largest public sector bank. “Companies are not able to conduct their business in the best manner,” added Amer, who is also on the Central Bank’s board. “If this continues, it could affect investor confidence.”

The protests by bank workers are just a small slice of the labor unrest rekindled by the uprising against Mubarak’s regime. Virtually every sector has seen stoppages or protests, from the airlines to textiles and steel to ship repair services along the Suez Canal.

The ruling military council that took power from Mubarak on Friday has issued two statements in the past three days calling for all labor unrest to end immediately. That has raised expectations that the council may soon ban all protests and strikes, something that would almost certainly raise tensions at a time when many are already feeling anxious about Egypt’s uncertain future.

“If, of course, workers demand more and, as a result, they strike and these strikes continue over a period of time, this will have a destabilizing factor,” said John Sfakianakis, chief economist with Banque Saudi-Fransi in Saudi Arabia. “It will impact on the confidence and reputation of the Egyptian banking sector,” he added. “It could have ripple effects for … the private and public economy.”

Banks remained open the first few days of the 18-day democracy uprising. But after a weekend of looting, arson and lawlessness on Jan. 28-29, they closed for a week and many ATMs were damaged or ran out of cash. The following week, the banks closed. They reopened the week of Feb. 6-10 and this week on Sunday _ the first weekday after Mubarak’s ouster. They closed again on Monday amid growing labor unrest and the central bank ordered them to remain shut at least until the start of next week on Sunday payday advance.

Companies and individuals are feeling the pinch.

ATM machines are running out of money. Executives with some companies say the unrest, compounded by the bank closures, have made it difficult to secure credit, pay suppliers and maintain operations.

Analysts and bank officials downplayed Egyptian media reports that the bank closures are linked to top businessmen trying to get their money out of the country as anti-corruption momentum builds. Top officials in Egypt are widely suspected of having siphoned off billions of dollars in state revenues through shady deals over the past three decades of Mubarak’s rule and some former ministers have had their assets frozen pending investigation into corruption allegations.

In part to stave off such capital outflows, the Central Bank had capped all transfers at $100,000.

Amer said banks and regulatory bodies are now scrutinizing wire transfers to ensure the money is clean.

The military-led caretaker government has sought to re-establish a measure of normalcy after Mubarak’s ouster. Banks reopened on Sunday and officials breathed a sigh of relief when a much-feared run on them did not materialize. Factories flipped the switch to start operations, and millions of Egyptians who had been unable to head to work, collect salaries or go about daily life got back to routines. But all that was quickly disrupted by burgeoning strikes and protests over a range of grievances.

The crisis has already exacted a heavy toll on the economy, although the full weight will only be revealed with time.

A week ago, Credit Suisse estimated that the unrest had cost the country at least $310 million per day, and predicted the Egyptian currency would come under heavy pressure as investors shifted to dollar deposits or pulled their money out entirely.

The projections for economic growth this year were quickly revised down from 6 percent to between 2 and 4 percent.

The government will face pressure to increase spending to mollify the masses while key revenue sources such as tourism, foreign direct investment and taxes take a beating.

And the unrest could scare away investors who view Egypt as too unstable for now. That poses a particular problem for the financial sector.

The country’s banks had long been a source of pride for the Mubarak regime, which argued that a strong regulatory environment and their lack of investments in the kind of toxic assets that hammered Western banks helped Egypt weather the worst of the global financial meltdown.

But two weeks ago, Moody’s Investors Service downgraded its credit ratings for five Egyptian banks.

Still some remain optimistic. Wael Ziada, head of research at Mideast investment bank EFG-Hermes said Egyptian banks remain “quite stable.”

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Associated Press writer Karin Laub contributed to this report from Cairo.

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Portuguese Finance Minister Fernando Teixeira dos Santos criticized his euro-area counterparts’ foot- dragging on a plan to end the debt crisis, saying delays risked a new round of market turmoil.

“The discussions are taking longer than desirable and delays and hesitations affect the euro zone and the stabilization on the euro,” Teixeira dos Santos said in Brussels today before a meeting of European Union finance ministers. “Each country by itself cannot alone face the challenges of this crisis. We need to do our job, but we also need the community instruments for stabilizing the euro.”

The Portuguese official’s comments came after euro finance ministers yesterday said they saw no need for immediate steps to shield Portugal from the fiscal crisis and instead focused talks on a plan that takes effect in two years. They decided that the aid mechanism opening in 2013 will be able to lend 500 billion euros ($675 billion), twice the amount in the fund set up in the wake of Greece’s near-default last year.

“They only want to talk about the future, and not the present,” said Carsten Brzeski, an economist at ING Group NV in Brussels. “EU leaders seem to be trying to ring-fence the current crisis and not address its pressing issues.”

Bonds in Portugal, Greece and Italy slipped for a second day as Germany opposed a stepped up rescue effort until European governments take fresh measures to bolster the competitiveness of the 17-nation economy. The maneuvering pushed the near-term crisis management into the background.

Portugal’s 10-year yield rose 4 basis points to 7.46 percent today. The extra yield over benchmark German bonds, a measure of investors’ doubts about Portugal’s fiscal health, widened to 415 basis points, the highest since Jan. 7.

‘Worrying’ Situation

“The situation on the sovereign-debt markets remains worrying,” Luxembourg Prime Minister Jean-Claude Juncker said after leading the meeting of European ministers yesterday. “The Portuguese authorities did take effective actions. If this action would reveal itself as not having been sufficient, other measures will have to be taken, but I have no indications that this has to be done in the short term.”

German Finance Minister Wolfgang Schaeuble said the “stable” situation in the markets enabled the EU to play for time, sticking to a late-March timetable for measures to bolster the current rescue fund and prevent future deficit overruns.

“The markets are so stable right now that it’s better not to unsettle them with superfluous discussions,” Schaeuble said.

German Politics

Germany, the biggest contributor to last year’s 110 billion-euro rescue of Greece and 67.5 billion-euro aid for Ireland, is under domestic pressure to hitch the rest of Europe to Germany’s low-inflation, low-deficit orthodoxy.

With her party facing elections in seven of Germany’s 16 states this year, Chancellor Angela Merkel is seeking to reassure voters that Europe’s largest economy is getting something in return for handouts to debt-strapped governments.

Merkel’s coalition allies, the Free Democrats, are trying to counter a slump in the polls by opposing more generous bailout terms or using the fund to enable distressed countries to retire debt at a discount.

Backed by French President Nicolas Sarkozy, Merkel struck a blow for German-style economic management with a Feb. 4 proposal for a “competitiveness pact” including caps on wages and spending as well as a extending the retirement age. The proposal, one of Germany’s conditions for expanding the euro- support operations, was criticized for overlapping with policies already pursued at the European level.

‘I’m Not Sure’

“Almost everybody is in favor to improve competitiveness, but what’s the way to do it? I’m not sure the Franco-German proposal is the best way,” Finnish Finance Minister Jyrki Katainen said.

The pact will be aired at a special March 11 summit called at Merkel’s bidding. Finance ministers may hold an extra meeting on March 21 to prepare for a March 24-25 summit designed to unveil a “global response” to the debt crisis, Juncker said.

Germany has put the focus on getting the full potential out of the temporary fund, known as the European Financial Stability Facility. While nominally worth 440 billion euros, collateral rules that underpin its AAA credit rating limit the fund’s lending capacity to about 250 billion euros.

The permanent fund will take effect in mid-2013, with its size adjustable at two-year intervals. While there was no word on how the EU will achieve the higher lending capacity, Luxembourg Finance Minister Luc Frieden said more of the burden will fall on the bloc’s six AAA states.

AAA ‘Solidarity’

“All member states will be called on to make a contribution out of solidarity,” Frieden said as the meetings resumed today with all 27 EU finance chiefs.

As with the current mechanism, the International Monetary Fund will kick in 50 cents for every euro from European governments, under what EU Economic and Monetary Commissioner Olli Rehn called an “unwritten understanding.”

German politics will complicate the permanent rescue facility as well, after legal experts in the lower house of parliament concluded yesterday that it will require a two-thirds majority to win Germany’s endorsement. Merkel would have to fall back on opposition support.

Finland’s politics also intruded. Katainen, a candidate in Finland’s April 17 elections, invited Europe’s conservative prime ministers to a March 4 meeting in Helsinki to prep next month’s summits. The socialist leaders of Greece, Spain and Portugal were left out.

While European officials have said direct purchases of struggling countries’ bonds in the primary market are likely to be part of the current fund’s upgraded toolkit, other pieces — such as Ireland’s plea for lower interest rates on aid — have yet to fall into place.

Rate Struggles

“The interest-rate facility is higher, is designed to give a profit to other member states, and there is an issue about whether the interest rate should be reduced to reflect the need to have sustainability,” Irish Finance Minister Brian Lenihan said in Brussels.

The opposition in Ireland’s Feb. 25 election has made the average 5.8 percent rate a campaign issue, promising to cut it in case of victory. The EU might approve lower rates starting next year, not for 2011, Rehn said.

It is “essential to respect” the arrangements for this year, Rehn said. “Concerning outer years, there is more room for maneuver.”

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President Hugo Chavez said Sunday that he has no intention of ceasing his efforts to make Venezuela a socialist country, and he expressed confidence that his allies would take the reins of his “Bolivarian Revolution” if he died or decided to step down.

“There’s no end here, this is going to continue,” said Chavez, referring to the political movement he named after 19th-century independence hero Simon Bolivar.

Chavez, a former paratroop commander who was first elected in 1998, said his close confidants would undoubtedly assume power and continue his efforts to steer Venezuela toward socialism if he were to die or retire from politics.

“I don’t fear death,” Chavez said during an interview broadcast on the local Televen television channel, adding that he believed a younger generation of revolutionary-minded allies would persevere in Venezuela’s ongoing political tug-of-war.

Critics ranging from opposition leaders to representatives of the Roman Catholic Church claim Chavez has become increasingly authoritarian and poses a threat to the South American country’s democracy by aspiring to cling to power for decades to come unsecured personal loans.

Chavez vowed on Sunday to win Venezuela’s next presidential election in 2012.

“If they don’t kill me or if some kind of catastrophe does not occur, I’m sure _ there will be much work to be done _ that I’ll be re-elected for six more years,” he said.

Opposition lawmaker Alfredo Ramos said that a coalition of opposition parties has decided to choose a contender for next year’s vote through a primary, which will be held at the end of this year or in early 2012.

“I don’t have the slightest doubt that Hugo Chavez will be defeated in 2012 because the people, not the political parties, are going to pick a candidate,” Ramos said in a telephone interview. “Chavez doesn’t have a chance of winning.”

Chavez remains Venezuela’s most popular politician despite his administration’s failure to resolve pressing problems: a severe shortage of housing for the poor, widespread violent crime, economic stagnation, and Latin America’s highest inflation rate.

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