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Leaders of the Group of Eight rich nations said Friday that international development banks could give more than $20 billion to Egypt and Tunisia to support countries that overthrew dictators this year and are trying to establish free democracies.

President Barack Obama and other G-8 leaders meeting in France said in a final statement that their countries will also “mobilize substantial bilateral support to scale up this effort.” The statement did not provide breakdowns of what aid specific G-8 countries would provide.

The leaders encouraged other countries, including rich Arab world nations, to contribute as well to shoring up economies in Egypt and Tunisia, where uprisings this year overthrew dictators but also scared away tourists and investors.

“In the short term, our collective aim is to ensure that instability does not undermine the process of political reform, and that social cohesion and macroeconomic stability are both sustained,” the declaration said.

The more than $20 billion in aid from multilateral development banks is aimed at “suitable reform efforts” from now through 2013, the statement said, without elaborating. Some euro3.5 billion would come from the European Investment Bank.

They did not lay out exactly what the money would go for, or whether the figure includes money already promised for the region. U.S. and European officials had said that it’s too early to come up with firm dollar figures.

After meetings with the leaders of Egypt and Tunisia in the French resort of Deauville, the G-8 leaders launched a partnership program aimed at supporting the countries’ fragile political leadership and fighting corruption and stabilizing the economies.

The G-8 leaders laid out a plan for refocusing the European Bank for Reconstruction and Development _ created to help eastern European economies after the collapse of communism _ to help Arab democracies.

The EBRD was set up 20 years ago, when the sudden collapse of the Soviet Union convinced European leaders of the urgency to provide support to a region emerging from decades of political and economic dictatorship. The idea was to set up a “transition bank” to help lead the way on banking systems reform, price liberalization, privatization and establishing legal property rights in a region just shaking off the effects of almost 50 years of planned economies.

The G-8 leaders are also worried that fighting in Libya and violence against protesters in Syria could derail the pro-democracy movement that has swept around the Arab world since Tunisian protesters rose up against an autocratic regime and forced out their longtime president.

In their final statement, the G-8 leaders said Libyan leader Moammar Gadhafi “must go” and are pressing Syria’s regime to “stop using force and intimidation” against its people.

The G8 leaders say Gadhafi and his government have failed to fulfill their responsibility to protect Libya’s people “and have lost all legitimacy. He has no future in a free, democratic Libya.”

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Iceland closed its main international airport and canceled all domestic flights Sunday as a powerful volcanic eruption sent a plume of ash, smoke and steam 12 miles (20 kilometers) into the air.

The eruption of the Grimsvotn volcano was far larger than one a year ago at another Icelandic volcano that upended travel plans for 10 million people around the world, but scientists said it was unlikely to have the same widespread effect.

University of Iceland geophysicist Magnus Tumi Gudmundsson said this eruption, which began Saturday, was Grimsvotn’s largest eruption for 100 years.

“(It was) much bigger and more intensive than Eyjafjallajokull,” the volcano whose April 2010 eruption shut down airspace across Europe for five days, he said.

“There is a very large area in southeast Iceland where there is almost total darkness and heavy fall of ash,” he said. “But it is not spreading nearly as much. The winds are not as strong as they were in Eyjafjallajokull.”

He said this ash is coarser than last year’s eruption, falling to the ground more quickly instead of floating vast distances.

The ash plunged areas near the volcano in southeast Iceland into darkness Sunday and covered buildings, cars and fields in a thick layer of gray soot. Civil protection workers urged residents to wear masks and stay indoors.

Iceland’s air traffic control operator ISAVIA said the Keflavik airport, the country’s main hub, closed down at 0830 GMT (4:30 a.m. EDT) for the day.

Spokeswoman Hjordis Gudmundsdottir said the ash plume was covering Iceland, but “the good news is that it is not heading to Europe,” blowing northwest toward Greenland instead.

President Barack Obama was flying Sunday night to Ireland, but there was no immediate word on whether the volcano would affect Air Force One’s flight path cheap pay day loans.

Trans-Atlantic flights were being diverted away from Iceland, but there was no indication the eruption would cause the widespread travel disruption triggered last year by ash from Eyjafjallajokull.

In April 2010, officials closed the continent’s air space for five days, fearing the ash could harm jet engines. Millions of travelers were stranded.

The Grimsvotn volcano, which lies under the uninhabited Vatnajokull glacier about 120 miles (200 kilometers) east of the capital, Reykjavik, began erupting Saturday for the first time since 2004.

Gudmundsson said the new eruption was 10 times as powerful as the one in 2004, which lasted for several days and briefly disrupted international flights. Grimsvotn also exploded in 1998, 1996 and 1993, eruptions that lasted between a day and several weeks.

Sparsely populated Iceland is one of the world’s most volcanically active countries and eruptions are frequent. Grimsvotn and Iceland’s other major volcanoes lie on the Atlantic Rift, the meeting of the Euro and American continental plates.

Eruptions often cause local flooding from melting glacier ice, but rarely cause deaths.

Gudmundsson said it was hard to predict how long the eruption would last, but it might already be slowing.

“There are some signs the eruption plume is getting lower now,” he said. “We may be seeing the first sign that it is starting to decline. In two or three days the worst should be over.”

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Portugal’s economy shrank for a second quarter in the three months through March, putting the country back into recession as the government tries to cut spending and raises taxes to narrow its budget deficit.

Gross domestic product dropped 0.7 percent from the fourth quarter, when it fell a revised 0.6 percent, the Lisbon-based National Statistics Institute said in a preliminary report today. Economists expected a decline of 0.3 percent, the median of three estimates in a Bloomberg survey showed. GDP dropped 0.7 percent from a year earlier. Portugal exited its last recession in the second quarter of 2009.

The contraction “reflects an accentuated negative contribution of internal demand, resulting from a reduction in consumer spending of households and public administration, and to a lesser degree, from a reduction in investment,” the institute said.

Finance Minister Fernando Teixeira dos Santos said May 5 the economy will shrink 2 percent this year, twice as much as previously forecast. The government is implementing additional austerity measures to qualify for an international aid package of as much as 78 billion euros ($112 billion) from the European Union and the International Monetary Fund. GDP will also decline 2 percent in 2012, he said.

German Expansion

In the euro area as a whole, Germany and France led economic growth in the first quarter as booming exports fueled domestic spending in the bloc’s core, offsetting the turmoil sparked by sovereign-debt woes in Greece, Ireland and Portugal. German GDP jumped 1.5 percent from the fourth quarter and French GDP rose 1 percent.

Portugal’s aid package calls for the government to implement some austerity measures that parliament rejected in March fast cash without a hassle. Spending reductions for 2012 and 2013, including cuts to pensions, will amount to 3.4 percent of GDP, while revenue increases will represent 1.7 percent of economic output. The plan also earmarks 12 billion euros for Portugal’s banks.

The government will freeze public workers’ salaries and pensions through 2013 and cut pensions of more than 1,500 euros a month. Tax deductions will be limited, and the government is aiming to sell its stakes in companies including EDP-Energias de Portugal SA, the biggest electricity provider, and REN-Redes Energeticas Nacionais SA, the operator of the national power grid, by the end of this year.

The aid program will allow the economy to start recovering in 2013, according to Teixeira dos Santos. Portugal’s unemployment rate will peak at 13 percent in 2013, he said.

The European Commission today forecast Portugal’s GDP will drop 2.2 percent this year and 1.8 percent in 2012. The country’s economic growth has averaged less than 1 percent a year in the past decade, one of Europe’s weakest rates.

The three-year aid plan for Portugal set goals for a budget deficit of 5.9 percent of GDP this year, 4.5 percent in 2012 and 3 percent in 2013. Portugal’s public debt swelled to 93 percent of GDP in 2010 from 68 percent in 2007. The commission forecast that debt will increase to 101.7 percent of GDP this year and 107.4 percent in 2012.

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Finland’s second biggest party demanded further talks Tuesday on the Nordic country’s participation in a European bailout for Portugal, adding more uncertainty to plans to rescue the debt-struck southern nation.

The EU’s top monetary affairs official, meanwhile, said that Portugal will have to pay more than 5.5 percent in interest for its rescue loans _ more than what Greece has to pay for its massive bailout.

Portugal this year has seen its borrowing rates skyrocket on capital markets, leaving it at the mercy of the rescue loans. The yield on the country’s 10-year bond has been above 9 percent for weeks, an unsustainable level that shows investors do not trust Portugal to pay back its longer-term debt.

The European Union and the International Monetary Fund have promised Portugal a total euro78 billion ($112 billion) in rescue loans but EU rules require that all 17 eurozone member nations approve, or at worst abstain from approving, the bailout.

That approval is being threatened by internal Finnish politics. The country’s April 17 election saw a surge in support for the nationalist True Finns party, which opposes Portugal’s bailout package and other help for cash-strapped eurozone members.

Finland’s involvement in all major European Union decisions, including eurozone bailouts, require parliamentary approval. Incoming Prime Minister Jyrki Katainen wants that approval so he can vote for the Portuguese bailout next Monday when eurozone finance ministers meet in Brussels.

But on Tuesday, Finland’s Social Democratic Party said it would not make a decision on bailout terms before more talks with Katainen, which will delay the approval vote in Finland’s Parliament until Friday at the earliest.

Katainen’s conservative National Coalition Party won the Finnish election but he has delayed talks on forming a new coalition government until lawmakers first decide on Portugal’s bailout.

Earlier Tuesday, outgoing Prime Minister Mari Kiviniemi 3/8said her Center Party _ with 35 seats in the 200-seat Parliament _ would back the bailout paydayloans. With the conservatives’ 44 seats that still leaves 22 seats short of absolute majority.

In Strasbourg, EU Commissioner Olli Rehn told reporters the interest rate for Portugal’s emergency aid will be “over 5 1/2 percent, but clearly below 6 percent.”

Eurozone countries and the EU will fund euro52 billion ($74.7 billion) of the rescue package, with euro26 billion ($37.3 billion) coming from the International Monetary Fund. The IMF will charge between 3.25 percent and 4.25 percent for its loans.

Greece currently has to pay just above 4 percent for its euro110 billion ($158 billion) bailout, while Ireland’s interest rate on its euro67.5 billion ($96.9 billion) rescue package is at 5.8 percent.

However, Rehn said that he expected a deal among eurozone states to lower Ireland’s interest rate “shortly.”

The European Commission has long backed lower interest rates for bailed out countries, arguing that the conditions attached to rescue loans are already so tough that no country would seek help unless it absolutely had to. Rehn said the interest rate should instead focus on making it possible for a country to actually repay its debts.

The rate demanded for Portugal’s bailout isn’t far off the returns that investors have recently charged for lending money in the short-term _ although the EU and IMF loans will likely come with a maturity similar to the 7 1/2 years given Ireland and Greece.

Last month, Lisbon paid 5.8 percent to raise euro1.645 billion in a 12-month bond auction.

Filipe Silva, debt manager at Portuguese financial group Banco Carregosa, said the EU’s bailout fund can raise five-year loans at a rate of 2.9 percent, but will loan the cash to Portugal at a much higher rate.

“This means that nobody is going to pay our crisis for us. We’ll have to foot the bill ourselves,” Silva said.

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Barry Hatton in Lisbon contributed to this story.

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Merck & Co. Inc. said Wednesday its board of directors approved the buyback of up to $5 billion in common stock for the drug developer’s treasury.

The company, based in Whitehouse Station, N.J., said the program has no expiration. Overall, the company is now authorized to buy back up to $6.4 billion in common stock.

Merck has about 3.08 billion shares of common stock outstanding.

The move comes ahead of the company’s scheduled release of its first-quarter financial results on Friday.

“Merck has a history of leadership in returning cash to shareholders,” President and CEO Kenneth C. Frazier said in a statement. “Together with our strong dividend, today’s action reflects our confidence in Merck’s strategy and demonstrates our commitment to delivering shareholder value no fax payday loans.”

On Monday, the company’s development pipeline got a boost when the Food and Drug Administration posted a review of the potential hepatitis C drug boceprevir. The review said the drug appears to cure more patients in less time than established drugs that have been used for 20 years. But the agency has questions about how the drug should be combined with older medicines for the maximum effect.

The agency is holding a public meeting Wednesday to consider whether to approve the drug candidate.

Shares of Merck closed at $35.06 Tuesday. The stock has traded between $30.70 and $37.68 over the past year.

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QUOTE OF THE WEEK

“You can’t make jokes about the situation where a lot of people, or even a few people, have died or are dying. You can look at what surrounds an event, but don’t go near the thing itself. There’s nothing funny about nine Afghan villagers getting accidentally killed by an American chopper, but I recently made fun of the dance of Karzai and Petraeus apologizing for that incident. You can look at the crazy machinations of people trying to deny reality; just don’t go up to where the bodies are.”

Existing home sales in the Greater Toronto Area for February were down by 14 per cent from a year earlier, according to figures released by the Toronto Real Estate Board Thursday.

The board reported 6,2766 transactions last month, compared with 7,291 in February of 2010.

The average selling price of a home for February was $454,423, which is 5 per cent higher than the price reported a year earlier fast payday loan.

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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Millions of jobless Americans are no doubt cheering the tax cut deal that President Obama signed into law Friday.

The legislation provides for 13 more months to apply for extended jobless benefits, but not everyone who’s unemployed will be eligible for these extended benefits.

In fact, residents in at least five states won’t have access to the same level of unemployment benefits as their peers nationwide.

That’s because the unemployment rate in those states is improving, so, according to federal law, the jobless there can’t receive checks for as long as those in harder-hit states.

Take Vermont. Only a few months ago, unemployed Vermont residents could collect up to 86 weeks of jobless benefits.

Now, they are eligible for only up to 60 weeks.

The reason is that Vermont’s unemployment rate has dropped below 6%. Good news for those lucky enough to find work, but small consolation to the jobless still looking for a position.

Here’s how the system works: The jobless collect up to 26 weeks of state benefits before shifting to the extended federal program. Federal benefits consist of up to 53 weeks of emergency compensation, which is divided into four tiers, and up to another 20 weeks of extended benefits. The maximum is 99 weeks.

But not everyone can collect benefits for that long. Extended benefits, as well as the last two tiers of emergency compensation, are tied to state unemployment rates. So as their state job picture brightens, the jobless stop qualifying for long-term benefits.

To be eligible for the fourth tier of emergency benefits, which last up to six weeks, the average state’s unemployment rate must be above 8.5% for three months. Similarly, states lose their eligibility for the third tier of benefits, which last up to 13 weeks, if their rate falls below 6%. Extended benefits have a more complicated formula tied to different gauges of unemployment.

There’s a logic to the system: "If the unemployment rate in a state is 6% versus 10%, one can argue you’ll have a better time finding a job," said Richard Hobbie, executive director for the National Association of State Workforce Agencies.

In recent months, those out of work in New Hampshire and Vermont have lost both Tier 3 and extended benefits because the state unemployment rates have fallen to 5.4% and 5.7%, respectively.

Meanwhile, residents of Alaska, Delaware and Massachusetts can no longer receive Tier 4 benefits since their rates are all below 8.5%.

Those in the midst of a tier can continue to collect benefits until they exhaust that tier, but they cannot advance to the next level. This does not sit well with those who cannot find a job.

"It can feel rather arbitrary to certain people," said Andrew Stettner, deputy director of the law project.

Just how long federal jobless benefits should continue was the subject of much debate when Congress was considering the 13-month extension contained in the tax-cut deal. The federal government has already paid out $109 billion in unemployment insurance during this recession.

Those that had opposed continuing benefits say another extension would be too expensive and would dissuade people from finding jobs.

Advocates argue that the safety net has always existed during periods of high national unemployment. The Obama administration echoes their position, saying that people will naturally fall off the rolls as state unemployment rates improve.

"As your unemployment rate goes below various thresholds, the extension itself phases down and the weeks shorten," said Austan Goolsbee, chairman of the president’s Council of Economic Advisers. It "should be determined at the state level, not at the national level." 

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