US unveils revamped aid to AIG

Ar, Wcuhingron

The government on Monday unveiled a revamped rescue package to insurance giant .American International Group and will provide the troubled company another $30 billion on an "as needed" basis.

The new package comes as the company has burned through cash and has been unable to find buyers for pieces of its company that it hoped to sell to repay the government on its existing aid package, which totals some $150 billion.

Under the new package, the Federal Reserve will take stakes in two International units.

Instead of paying back $38 billion in cash with interest that it has used from a Federal Reserve credit line. AIG now will repay that amount with equity stakes in Asia-based American International Assurance Co and American life Insurance Co, which operates in 50 countries.

It marked the fourth time the government has stepped in to help AIG. Its initial lifeline came in September. The action was announced jointly early Monday by the Treasury Department and the Federal Reserve.

The new package is designed to enhance the company's capital and liquidity to facilitate the "orderly completion of the company's global divestiture program," the agencies said.

They said the company continues to face "significant challenges" due to the rapid deterioration in certain financial markets in the last two months of the year. "The additional resources will help stabilise the company and in doing so help stabilise the financial system," the agencies said.

Reject protectionism, EU chief warns govts

AFP, Prague

Governments must not head down the path of protectionism as they battle the deepening global economic crisis, European Commission President Jose Manuel Barroso said on Monday.

"As businesses fail and job losses mount, the siren voices of economic nationalism are making themselves heard again, as if we have learned nothing from the 1930s," Barroso said in the Czech Republic, which is currently at the helm of the 27-nation European Union.

"But there is one small problem for those hoping economic nationalism will protect them. It will not," he said.

"The single market, on the other hand, with its free movement of goods, capital, services and people, has delivered plenty of growth and jobs. A strong single market is the way out of the crisis," he added.

Barroso was speaking at a conference taking stock of the five years since the EU's largest-ever expansion -- 10 countries, most of them ex-communist states like the Czech Republic, joined in 2004.

Barroso did not spotlight any individual governments over their alleged protectionism.

'Unbridled greed1 to blame for economic woes: Malaysian PM

AFP, Jakarta

Malaysian Prime Minister Abdullah Ahmad Badawi blamed "unbridled greed" Monday for the global financial meltdown as business people from across the Islamic world gathered to discuss the crisis.

Badawi called for a new financial system to replace the Wall Street model as he spoke at the opening of the World Islamic Economic Forum (WIEF) in Jakarta alongside Indonesian President Susilo Bambang Yudhoyono.

"We have inherited a system where people can trade what they do not own and the resulting inflationary pressure in the global market has caused immense damage to the economic well-being of the world's poor," he said in a speech.

"Such is the impact of unbridled greed in the financial system where there is no accountability on money lending... The world is beginning to appreciate the need for alternative financial arrangements."

He said Islamic finance - which shuns interest and avoids profiting from industries such as alcohol and gambling - was"gaining credibility as an alternative."

Japan's automobile sales plunge

AFP, Tokyo

Sales of new vehicles in Japan plunged last month, figures showed Monday, underlining the industry’s deepening woes as the economic downturn causes a slump in consumerspending.

Car, truck and bus purchases dropped 32.4 percent from a year earlier to 218,212, the steepest decline for the month of February since 1974, the Japan Automobile Dealers Association reported

The seventh straight monthly decline comes as Asia's biggest economy struggles to cope with its worst recession in decades.

"The downturn in the Japanese market is accelerating," said Mamoru Kato, auto analyst at the Tokai Tokyo Research Centre.

"With the economic crisis, people are worried about their jobs and pay cuts. People are more cautious about spending and consumption is cooling, as reflected in the newcar sales figure," he said.