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News Wrap: Future of Eurozone Uncertain as Greek Credit Rating Drops

May 17, 2012 at 12:00 AM EDT
In other news Thursday, questions kept coming about the future of the eurozone. By all accounts, money was flowing out of Greece where far-left leaders are agitating to break a bailout agreement and end austerity measures. Also, a fight over solar panels flared into the open between the U.S. and China.
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KWAME HOLMAN: The trading losses at JPMorgan Chase are getting worse.

A report in today’s New York Times said they have surged at least 50 percent in recent days. Bank chairman and CEO Jamie Dimon had originally estimated the losses at $2 billion over the last six weeks. With the additional losses, the total is now at least $3 billion. Still, analysts say the bank’s overall health is strong.

The questions kept coming today about the future of the eurozone. By all accounts, money was flowing out of Greece, where far-left leaders are agitating to break a bail-out agreement and end austerity measures. Meanwhile, the prime minister of Britain warned against letting the 17- nation eurozone break up.

We have a report from Alex Forrest of Independent Television News.

ALEX FORREST: It’s not quite time to time hit the panic button yet. But today in Manchester, David Cameron admitted these are perilous economic times, and with the Greek crisis overshadowing everything, the prime minister laid out again the stark choice facing eurozone leaders.

DAVID CAMERON, British prime minister: The eurozone is at a crossroads. It either has to make up or it is looking at a potential breakup. Either Europe has a committed, stable, successful eurozone, with an effective firewall, well-capitalized or regulated banks, or we are in uncharted territory, which carries huge risks for everybody.

QUESTION: Given what you have said, do you think now that the eurozone is doomed to fail?

DAVID CAMERON: We have to be clear that it’s in our interests for there to be a working eurozone and a working euro. I think what’s damaging is the uncertainty of there not being the right clarity about what needs to be done.
ALEX FORREST: But the left-wing leader who could hold the key to Greek power in next month’s election says austerity leads only one way.

ALEXIS TSIPRAS, Syriza Party leader: Everybody now understands that with this policy we are going directly to the hell, and we want to change this way.

ALEX FORREST: He will certainly get some sympathy from the new French president, who met with his cabinet today. But even socialist Francois Hollande must be wondering how the eurozone will get out of this mess.

KWAME HOLMAN: The trouble was compounded by rumors of a run on a newly nationalized bank in Spain. All of that helped drive stocks down across Europe, adding to losses over the past two weeks.

Wall Street had a rough day, too. Fears about Greece were compounded by disappointing reports on manufacturing and estimates of future growth. The Dow Jones industrial average lost 156 points to close at 12,442, its 11 decline in 12 days. The Nasdaq fell 60 points to close at 2,813.

For the first time, Facebook stock will be traded publicly tomorrow. Its opening price was set late today at $38 a share.

A fight over solar panels flared into the open today between the U.S. and China. The Commerce Department ruled Chinese companies are dumping solar products in the U.S. at cheap prices subsidized by the Chinese government. The ruling called for import tariffs averaging 31 percent. Several American firms sought the ruling, but most warned it could lead to a trade war.

Republican Mitt Romney has begun to narrow his fund-raising gap with President Obama. New figures today showed Romney’s campaign, along with the Republican National Committee, brought in just more than $40 million in April. President Obama and the Democratic National Committee raised $43.6 million in the same period. The totals do not include hundreds of millions of dollars collected by so-called super political action committees.

President Obama nominated a new ambassador to Myanmar today, the first in 22 years. Derek Mitchell currently serves as special envoy to Myanmar, also known as Burma. His nomination today was the latest sign of fast-thawing relations with the Southeast Asian country. Secretary of State Hillary Clinton hosted Myanmar’s foreign minister today, and welcomed his government’s reforms, after years of military rule.

SECRETARY OF STATE HILLARY CLINTON: This is a moment for us to recognize that the progress which has occurred in the last year towards democratization and national reconciliation is irreversible, as the minister said to me. The United States wants to do everything we can to be sure that is the reality.

KWAME HOLMAN: The U.S. also is easing restrictions on trade and investment in Myanmar.

Government troops in Yemen made new advances today toward a key al-Qaida stronghold in the south. The expected assault on Zinjibar is part of a larger offensive, aiming to uproot militants who’ve taken control in parts of the region. Also today, Yemeni officials reported three militants were killed and two wounded in a missile strike by a U.S. drone aircraft.

In the Netherlands, an international tribunal suspended the war crimes trial of Ratko Mladic, the Bosnian Serb army commander, a day after it began. The judges said prosecutors made significant errors in failing to disclose evidence to the defense. Mladic faces 11 charges of genocide, crimes against humanity and war crimes tied to the Bosnian civil war in the 1990s.

Prosecutors in Florida have released evidence showing Trayvon Martin had marijuana in his urine and blood when he was killed. That finding comes from the autopsy on the teenager. He was shot to death in February by George Zimmerman, a neighborhood watch volunteer. Zimmerman is charged with second-degree murder, but claims he acted in self-defense. Prosecutors also released a photo today taken after the confrontation showing Zimmerman with a bloody nose.

Those are some of the day’s major stories.