That would set it up for a possible spinoff as a separate company. 
Aluminium Corporation of China has signed a joint venture deal with Anglo-Australian mining company Rio Tinto to develop one of the world’s biggest iron ore deposits in the west African country of Guinea.
BMW has said it expects a significant rise in pretax profit this year.
That would come from demand for new models like its 5 Series and the four door, four-wheel drive Mini Countryman SUV.
It also forecast better results in all three of its businesses – cars, motorcycles and loans to buyers.
BMW, which made a loss in its car division last year, expects sales of more than 1.3 million vehicles.
Shares in France’s Renault and Germany’s Daimler rose on Tuesday, following reports that they were in talks about each acquiring shares in the other as part of a possible longer-term partnership.
The two were already discussing working together to cut costs, share technology and build economies of scale in response to the industry’s recession
Neither Renault nor Daimler would comment on the reports.
Air Berlin has cancelled firm orders for Boeing 1.25 billion euros.
Germany’s second-biggest airline said that was done to cut its financial obligations amid uncertainty over whether it would expand the number of its long-haul flights.
It now plans to buy 15 of the planes rather than 25.
It also deferred delivery of nine other Boeing aircraft.
The world’s biggest car-maker Toyota has slashed production of its hybrid-powered Prius model according to a source within the group.
Sales in the United States plummeted about 40 per cent last month, leading a worldwide slowdown in sales from a peak last year.
Two factories in Japan had been building 50,000 cars a month on average – according to the source that will drop to 45,000 from this month.
Lehman Brothers used accounting gimmicks to hide billions in debt and was insolvent for weeks before it filed for bankruptcy in September 2008.
That is the finding of a more than year-long investigation by a court-appointed examiner.
Ernst & Young, which audited Lehman’s accounts is criticised as possibly “negligent” and the examiner says it may face claims for “professional malpractice.”
Lehman’s collapse was the largest bankruptcy in US history and deepened the global financial crisis.
The report suggested that those who are working to complete Lehman’s bankruptcy could pursue claims through the courts against banks like JPMorgan and Citigroup for taking some 16 billion dollars in collateral out of Lehman’s coffers as it struggled to stay afloat.
Lehman’s ex bosses could also face claims.
And the examiner found that creditors’ claims could be made on assets held by Lehman affiliates that were transferred to British bank Barclays which bought Lehman’s core US brokerage after it filed for bankruptcy.
The Italian oil and gas group Eni has lowered expectations for production growth.
It said investors would have to wait until 2011 to see any growth in output or dividends.
Eni, which is the world’s seventh-biggest listed oil company, now anticipates production expanding annually by an average of more than 2.5 percent over the next three year.
Its previous target was 3.5 percent.
Air China’s shares soared to a two-year high as it announced it will raise 690 million euros by selling new stock.
Investors believe Air China, which is the world’s largest in terms of market value, will use the money to buy up or take strategic stakes in other Asian airlines.
Earlier this week, rival China Southern announced it is to sell 1.1 billion euros worth of new shares.
The number of households in the United States with a net worth of at least one million dollars jumped last year according to calculations based on surveys carried out by industry consulting group Spectrem.
The increase came as US stock markets bounced back from the 2008 meltdown.
Last year there were 16 percent more millionaires households; an estimated total of 7.8 million. That was still way down on the record 9.2 million in 2007.
The numbers of ultra high net worth families – those worth at least five million dollars – also jumped 17 percent last year.
The ranks of the rich were considerably thinned by the recession and dropped 27 percent in 2008.
And it seems wealthy Italians have grown richer during the economic crisis according to a PricewaterhouseCoopers study.
The reason – 85 billion euros returned to Italy from secret accounts in Switzerland and other countries last year when the government granted a generous tax amnesty.
IATA, the airline industry association, has said that things are starting to turn around after the economic crisis.
It has halved its forecast for airline losses this year as passenger numbers pick up along with the amount of freight being flow.
IATA said losses this year will likely come to 2.1 billion euros. In December it was talking about twice that amount.
It is now forecasting passenger demand would rise by 5.6 percent and 
cargo demand would jump 12 percent.
Last year passenger numbers fell 2.9 percent and cargo demand slumped 11 percent.
IATA’s Director-General Giovanni Bisignani said the recovery is much better than expected.
The recovery is good news for both the industry and the global economy as a whole, indicating that exports are reviving, he said.
China’s economy continues to race ahead and consumer inflation hit a 16-month high in February: it was up 2.7 percent from a year earlier.
That had economists suggesting the government might soon move to prevent overheating.
China’s central bank could increase commercial banks’ required reserves for a third time this year and perhaps even raise interest rates or let the yuan appreciate.
The European Commission has raised the spectre of protectionism in the transatlantic refueling tanker plane affair.
European industry as well said the Pentagon changed the contract rules on a 26 billion euro tender to supply the US air force. Boeing looks set to win it, after the American Northrop Grumman and its European partner EADS dropped their joint offer.
France’s minister for Europe, Pierre Lellouche, in Paris called it a serious matter, and said his country would respond, though without going into detail. He said Europe’s credibility was at stake.
Berlin also warned it would not take it lying down.
The Pentagon, however, insists that the bidding process was fair. The Air Force chose Northrop and EADS over Boeing for its refueler in 2008, but Boeing complained. Brussels calls the latest development “highly regrettable” and says it is extremely concerned.
Air France is angry at low-cost Irish carrier Ryanair which it said is getting unfair subsidies from European regional governments to use their airports. It has complained to the European Commission. That complaint was made last November, but details have only just emerged.
The French airline said “open-ended subsidies” in the form of discounts, preferential treatment and marketing help violated European competition rules.
Ryanair hit back saying Air France had received state aid whereas it had not
BP, Europe’s second-largest oil company, has agreed to pay US producer Devon Energy five billion euros for assets in Brazil, Azeri and the Gulf of Mexico.
BP is also selling Devon a 50 percent stake in its Kirby oil sands interests in Alberta, Canada.
Analysts said it is hard to tell whether BP is paying a good price as the deal includes fields whose reserves are unknown as they are still being explored.
Belgium-based insurance group Fortis said it returned to profit last year.
As a result it resumed paying a dividend to shareholders.
Net profit was almost 1.2 billion euros from a massive 28 billion euro loss in 2008.
Fortis – which is about to change its name to ageas – was rescued and split up by the Dutch, Belgian and Luxembourg governments in late 2008 which sold off the banking arm.
The German media giant Axel Springer has posted lower profits and sales for last year due to a “massive” fall in advertising spending.
Restructuring and extra marketing costs pulled its net profit down 40 percent to 152 million euros.
The publisher of over 170 newspapers and magazines in 35 countries said it did manage to outperform the overall market.
Europe’s aeronautic defence giant EADS has withdrawn its bid for the US Air Force’s 25-billion euro tanker programme.
The decision by its American partner Northrop Grumman Corp leaves Boeing as the only bidder for the contract.
The Pentagon re-issued bid requests last month for the third time in nine years to replace its fleet of KC-135 refuelling tankers.
EADS had complained that the draft proposal appeared to favour a smaller plane offered by its Chicago-based rival.
Although its bid had won the contract before, this time the firm warned that the US Air Force’s new requirements would impose serious “financial burdens.”
A scrappage scheme has started in Russia to try to boost new car sales.
The government is offering 200,000 vouchers – each worth 1,200 euros – to people who scrap their old car and buy a new one built in Russia.
Sales in Russia reportedly slumped by 56 percent last year to 1.4 million vehicles.
However there are concerns that corruption and red tape may undermine the scheme.
Royal Dutch Shell and PetroChina have confirmed that they have formed a partnership to try to buy Australia’s Arrow Energy. The price would be the equivalent of around 2.2 billion euros.
Arrow has Australia’s largest reserves of coal-seam gas, that is natural gas trapped in seams of coal. Its shares soaring by nearly half, indicating investors expect a higher bid.
Opening a Paris conference, French President Nicolas Sarkozy has urged a massive expansion of nuclear energy by emerging nations.
European Commission President Jose Manuel Barroso told the conference nuclear is now part of a mix of power sources that states need to develop to ensure their energy security.
Sarkozy also called for rating of international reactors on safety: “I would like to see an independent body under the auspices of the International Atomic Energy Agency establish an international analysis model on an incontestable scientific and technical basis, and I ask the director of the IAEA Yukiya Amano to classify reactors offered for sale on the market according to their safety and not price.”
Sarkozy said it was “a scandal” that the World Bank and international development banks do not finance the building of nuclear power plants in developing countries.
France is one of the world’s largest users of nuclear energy and is actively seeking to sell its nuclear technology to countries around the world.
Partners in the troubled A400M military transport plane have reportedly reached a basic agreement on financing its cost overruns.
A source told Reuters that painfully drawn-out negotiations have finally borne fruit.
Problems in developing the plane’s huge turbo-prop engines have pushed Europe’s largest defence project over budget by billions of euros, forcing seven European NATO customer nations to step in with a mixture of direct aid and guarantees.
This comes as it was reported that Spain and Britain were heading for a clash over the location of hundreds of high-skilled production jobs on the plane.
Spain was said to be pressuring the UK to surrender those aviation jobs.
Madrid’s argument was that Britain does not deserve the jobs if it will not contribute its full share of a 3.5 billion euro government bailout package for the project.
The Greek Prime Minister started a diplomatic tour to get international support for his government’s response to the crisis in Luxembourg.
There George Papandreou was told that the group of countries using the euro has ruled out any immediate financial aid for his debt-ridden country.
Luxembourg’s Prime Minister Jean-Claude Juncker, who is also chairman of the 16-country Eurogroup, said the tough measures taken by the Athens government pave the way for Greece to exit the situation it is in.
And he dismissed the idea of an International Monetary Fund bailout: “As I said publicly as the chairman of the Eurogroup I’d like to exclude any further involvement of the IMF. What we need is technical assistance from the IMF, but I don’t think that the IMF should take a lead, this is a problem of the euro area.”
After Luxembourg, Papandreou’s next stop was Berlin to meet with Chancellor Angela Merkel. She’s offering political, not financial, support. Her economy minister said: “The German government does not intend to give a single cent.”
French utility Veolia is pledging to boost its profits over the next three to five years by disposing of a billion euros in assets annually and cutting costs faster than previously planned.
The world’s biggest listed water group, which also runs waste management and transport businesses, said net profit for last year rose 44 percent to 584 million euros, though that figure was boosted by disposals of assets.
Analysts were disappointed with the company’s targets and its shares fell.
WPP, the world’s largest advertising agency has said it believes the worst of the advertising recession is over.
The group, which cut jobs last year to reduce costs, forecast unchanged revenues for 2010 after they fell 8.1 percent last year.
WPP, with big name clients including Unilever, Vodafone, HSBC and Ford, said it was looking to emerging markets and digital sales to help it maintain earnings.
The world’s biggest brewer, Anheuser-Busch InBev, has said says it is facing a challenging start to the year, with sales in the United States under particular pressure.
Its fourth-quarter 2009 earnings were mixed, but boosted by a sharp increase in Brazilian sales.
The maker of Budweiser, Stella Artois and Becks said it expected to sell slightly more beer this year than last, but with limited profit growth in the early months.
The European Central Bank’s policymakers have started to take steps towards reversing the loose monetary policy brought in to help the euro zone economy climb out of recession.
ECB President Jean-Claude Trichet said conditions for making some short term loans to banks will be tightened up: “We have continued to gradually and (in a timely manner) phase out the non-conventional measures that we had taken. I would say that these decisions have been taken on the basis of an overwhelming consensus.”
But forecasting a fragile and uneven recovery, the ECB held interest rates at a record low level of one percent.
Trichet also had praise for Greece’s efforts to cut spending and bring its deficit under control. He said: “Greece today is in a much better state – taking into account its own activity, its own output – than it was before”
The draconian measures announced by Athens to help put its finances in order included pay cuts, a pensions freeze and tax increases.
That angered Greek unions, but did help it sell five billion euros worth of 10-year government bonds.
There was strong demand for the bonds, but Greece had to offer a better rate of return, because investors remained nervous about the possibility of default.
Unemployment in France jumped to its highest level in 10 years in the final three months of last year, as companies cut jobs in reaction to sluggish economic growth.
The jobless rate was 9.6 percent of the working population, up from 9.1 percent in the previous quarter.
Young people are suffering worst with nearly a quarter of under 25s out of work.
France does not produce a monthly jobless rate, but the European Union’s statistics office said this week that French unemployment rose to 10.1 percent in January.
Investors defrauded by US swindler Bernard Madoff will not be able to pursue Swiss bank UBS for compensation.
They had put their money into the LuxAlpha fund. UBS was the custodian but did not run it.
A court in Luxembourg has ruled that the investors have to try and get their cash back through the fund’s liquidators.
The verdict could have direct implications for many cases pending against UBS involving billions.
A strike by civil servants has hit schools, courts, hospitals and social security offices across Portugal.
The stoppage is in protest at a freeze on public sector wages this year.
The Socialist government said spending cuts were needed in response to the deep economic downturn that has taken unemployment in Portugal to its highest in a quarter of a century.
Union leader Manuel Carvalho da Silva of the General Confederation of Portuguese Workers said: “We need jobs and workers being better paid in order to overcome this crisis”
The unions are threatening more strikes if the wage freeze continues.
They said 70 to 90 percent of public service workers were on strike but the government insisted participation was much lower.
The State Secretary for Public Administration, Castillo Dos Santos, told reporters: “A majority of public employees in this country has accepted a message of realism and responsibility, which is the message we need, and the majority did not participate in the strike”
The Lisbon government’s efforts to cut the deficit are being closely watched by investors who are concerned that Portugal is the next weak link in the euro zone after Greece, even though its debts and deficit are much lower than Greece’s.
With sales unpredictable, the world’s carmakers are keen to drive up interest by showing off new green technologies at this year’s Geneva Auto Show.
Companies that were hit hard by the recession have been surviving with the help of government funded incentive schemes designed to boost sales, but those are ending and the underlying recovery remains far from certain.
As well as a focus on more environmentally friendly cars the manufacturers are looking to growth markets like developing nations.
Patrick Pelata, Renault’s Chief Operating Officer, told euronews: “We see the world car market growing very weakly, but with a lot of contrasts. Asia on the rise, Latin America on the rise, perhaps Russia rising and Europe falling. We reckon sales in Europe are going to decline by around 10 percent this year.”
The once dominant Toyota is reeling from recalls and criticism over its safety failings; its sales have been sliding sharply, but the company’s top man in Europe, Didier Leroy, said they will not cut prices to lure buyers back.
Leroy added: “The recent recalls had the effect of making us respond to our customers. The first thing was to reassure them and then to deal with the problem, as quickly as possible, as we’re doing now right across Europe.”
Toyota was the pioneer of hybrids and that trend is spreading this year at Geneva, even luxury car makers are going greener with the likes of Mercedes rolling out models fitted with electric motors as well as the main engine to cut fuel consumption.
They join a growing range of smaller eco cars aimed at taking advantage of tighter emissions legislation and attracting drivers looking for greater fuel efficiency.
Summing up, euronews correspondent Fabien Farge said: “The car market needs perking up, which is the goal of every manufacturer at the Geneva Auto show: somewhere over the rainbow we can perhaps forget the gray days of the crisis. Green is the colour, for low emission vehicles, from hybrids to electric powered one, from Peugeot to Audi, and even the most unlikely carmakers such as Ferrari and Porsche, green is the way to go in Geneva this year.”
The Greek government has approved even more spending cuts to try and rein in its bulging budget deficit and secure European financial support.
Prime Minister George Papandreou presented the third austerity programme in as many months to the country’s president.
It includes public sector pay cuts and tax increases.
An extra 4.8 billion euros will be trimmed off government budgets.
Papandreou said: “I informed the president of the difficult decisions we took, decisions that were a necessity for the survival of our country and our economy so the country can escape the speculators and the defamation, so we can breathe and fight, along with the Greek people, for a more just society, for the big changes that will bring development, jobs, and prospects to the country.”
He added that Greece is now awaiting strong support from the European Union.
The measures include freezing state-funded pensions this year and angry pensioners protested in Athens holding banners blaming banks for Greece’s financial woes:
One man said: “Things are going to be really difficult for both pensioners and workers, it’s going to be really bad.”
While a woman railed against the bankers: “They should be ashamed they have ruined Greece, the Greek people have made so many sacrifices and fought so many battles, they should leave.”
Despite the noisy demonstrations, recent opinion polls showed majority support for the government’s response to the crisis.
And financial support has come from one of the country’s best known singers.
Nana Mouskouri said she will donate to the Greek treasury the pension she gets as a former member of the European parliament until the crisis is over. That is 14,700 euros a year.
The 75-year-old Mouskouri – who has sold over 300 million records – said the offer was her “duty to the country.”
Daimler has said it may have to take a significant charge in the current business year because of losses by Airbus on the A400M military transport plane.
The German luxury carmaker holds 22.5 percent of the votes in Airbus’ parent company EADS.
In its 2009 annual report, Daimler warned of a potential heavy non-cash accounting loss by the end of this month from writedowns by EADS.
Adidas, the world’s second largest sporting goods company, has posted a weak finish to 2009 and its outlook for the current year is less optimistic than investors were hoping for.
Net profit last year was 245 million euros.
It is counting on the World Cup and the revival of its Reebok brand for a return to growth this year anticipating a net profit of as much as 450 million euros.
Standard Chartered has reported a 13 percent jump in 2009 profit – in line with analysts’ expectation.
Strong investment banking growth in its core Asian markets offset a jump in bad debts in the Middle East.
The bank also said it would pay out more than 800 million euros in management bonuses, unlike many of its rivals.
It said that was necessary to retain talented staff in the face of “red hot” competition.
General Motors has tripled the mount of money it will put into the restructuring of its European arm Opel and Vauxhall and reduced the amount of state aid it wants.
European governments – particularly Germany – had been cool to the idea of funnelling taxpayer funds into Opel.
The US carmaker had now said it will provide nearly two billion euros in equity and loans and is asking for about the same from European countries.
Spain’s job centres got busier in February. The number of people registered as jobless increased by more than 82,000, the seventh consecutive monthly rise. The total is now just over 4.1 million.
The Madrid government pointed out the rise was significantly less than the same month last year, when the economic crisis was at its worst.
But that was of little comfort to jobseekers. One man in a long queue outside a Madrid employment office said: “I see a very dark future for this country. Because very few people have jobs now. It’s the same thing here every day.”
Another frustrated woman said: “We’ve been waiting here for three hours until those guys give us a piece of paper with a number like in the supermarket. As far as the numbers go, and the if they run out, people have to come back the day after and so on, and so on and so on.”
In the past year the number of jobless has risen by nearly 20 percent.
Over half of the jobs lost in February came from the services sector, followed by construction with just over 10 per cent.
Euro zone consumer prices rose by a smaller-than-expected 0.9 per cent year-on-year in February.
That is according to the first estimate from the European Union’s statistics office.
It slowed from January’s one percent gain.
There are no details or breakdown available with the flash estimate.
The main factor was energy prices which declined from a year earlier.
The European Central Bank wants to keep inflation just below two per cent in the medium term.
ECB policymakers meet to decide on interest rates on Thursday.
German Chancellor Angela Merkel and Spanish Prime Minister Jose Luis Zapatero have opened the CeBIT trade fair in Hanover, the world’s biggest such event for telecommunications and information technology companies.
Zapatero was there because Spain is CeBIT’s official partner this year.
The show’s theme is “Connected Worlds” and the Spanish leader called for a “single digital market” for the European Union.
The electronics industry has suffered from the recession, but the German technology and telecoms association Bitkom, which organises the fair, is upbeat.
Bitkom’s President, August Wilhelm Scheer, said: “Consumers are buying computers, buying mobile phones, buying flat screen TVs. The ind
EU Economic and Monetary Affairs Commissioner Olli Rehn has urged Greece to quickly announce further austerity measures to tackle its debt crisis.
Rehn made the call after his first round of talks with Greek officials including Finance Minister George Papaconstantinou.
He promised EU help for Athens to overcome the problem that has shaken the euro zone.
Rehn said: “Additional consolidation measures are necessary to ensure that the four percent target of deficit reduction for this year 2010 is met.”
Prime Minister George Papandreou appeared to be preparing Greeks for more sacrifices in broadcast remarks at a cabinet meeting appealing for public support.
“The crisis in our country is not limited to our fiscal problem. It is only the tip of the iceberg. It is extremely urgent to deal with it because it has assumed dramatic dimensions,” Papandreou said.
Reportedly, euro zone governments are discussing possible mechanisms to support Greece if necessary on the international bond markets.
The region’s biggest economy, Germany, would bear the brunt of any joint action but Chancellor Angela Merkel said: “We have a [European] treaty under which there is no possibility of paying to bailout states in difficulty. That means we can only help Greece for the moment by supporting Greece in getting its affairs in order.”
A German member of the European parliament has said that Germany, France and the Netherlands are planning to buy Greek government bonds through state-owned financial institutions and Merkel did not explicitly rule that out.
Prudential, the British insurer, says it is in "advanced" talks to purchase AIA, the Asian arm of US insurance company AIG, in a deal that would create the biggest insurer in Southeast Asia.
A source close to the deal said late on Sunday that AIG had agreed to sell its Asian division to Prudential for around $35bn.
"The board of Prudential plc notes the recent press speculation regarding a possible transaction involving AIA Group Limited," the London-listed Prudential said in an official statement on Monday.
"Prudential confirms that it is in advanced discussions with AIG Inc regarding a possible combination of its business with that of AIA."
'No certainty'
The statement, however, gave no mention of the possible price that Prudential was willing to pay for AIA.
Also, Prudential said: "There can be no certainty that these discussions will lead to any agreement or as to the terms or timing of any such agreement".
The deal, if approved, will transform Prudential into the world's biggest non-Chinese insurer by market capitalisation, ahead of major competitors Allianz and AXA.
AIG on Friday reported a worse-than-expected fourth quarter net loss of $8.9bn, although the shortfall was nearly 10 times less than in 2008, when AIG recorded $99.2bn in losses.
Prudential will be transformed by the deal to buy AIA, which will double its size.
The company, founded in 1848, currently has a market capitalisation of about $23bn.
Sales in Asia already make up half of new contracts for Prudential across a number of countries including China, India, Indonesia, Malaysia and Thailand.
The company also has a strong presence in Britain and the US.
Prudential stepped in as AIG was planning an initial public offering for its Asian arm in Hong Kong in April.
Estimates had valued the market flotation at around $10bn, which would have been the largest on global markets this year.
AIG was forced into giving up some of its assets after the company's near collapse in the depths of the financial crisis led the US government to hand it a bailout of around $180bn.
The Wall Street Journal reported that some of the proceeds from the sale of AIA to Prudential were already earmarked for US government coffers.
The president of embattled Japanese carmaker Toyota is to speak in China about the company's safety woes.
Akio Toyoda is to give a news conference at a Beijing hotel on Monday, his spokeswoman, Ririko Takeuchi, said.
The visit by Toyoda, who is also the chief executive, appears aimed at improving the company's image after a recent spate of recalls across the world.
It comes on the heels of a US congressional hearing last week where legislators grilled the grandson of Toyota's founder over the company's safety recalls.
Toyota announced a recall of 75,552 units of its RAV4 sport-utility vehicle in China in late January.
The recall, due to an accelerator pedal problem, was a relatively small number out of the 8.5 million vehicles it has recalled worldwide since October for faulty accelerator pedals, floor mats and glitches in braking software.
Key market
But the Japanese car giant has ambitious plans for growth in China and the company has said its plans to expand in the Chinese market remain unchanged, with sales in the country expected to rise to 800,000 vehicles this year, up from 709,000 in 2009.
China's overall vehicle sales increased by 45 per cent last year to 13.6 million, overtaking the US as the world's biggest vehicle market.
And Toyota, which started relatively late in the country, remains behind competitors such as General Motors, Volkswagen and Nissan in vehicle sales.
Toyota rolled out its first made-in-China Camry in May 2006, in partnership with Guangzhou Automobile Group based in the southern Chinese market near Hong Kong.
It also has a partnership with FAW Group, another state-owned carmaker based in northern China.
Toyoda's move to visit China, despite the limited number of recalls there, appears to reflect the company's eagerness to restore its reputation for high quality that is its key advantage there.
"China is the biggest market for automakers, so Toyota can't ignore its importance," Mamoru Kato, an analyst at Tokai Tokyo Research Centre in Nagoya, told the Associated Press news agency.
"They have to hurry to overcome anxiety about the quality of their cars."
At the congressional hearing in Washington last week, Toyoda admitted that his company's rapid expansion may have led to the recalls.
He added that "priorities became confused" as the carmaker grew.
So far, China's state-controlled media has made little comment on the recalls and the problem is mainly viewed as an example of the potential downfalls for China's nascent car industry.
George Papandreou, the Greek Prime Minister, has warned that his country risks bankruptcy unless strict austerity measures are enacted fast to cut the deficit.
Greece's government overspending reached 12.7 per cent of output in 2009 as the global downturn sent public deficits through the roof.
The deficit ordeal has put government bonds under pressure, weakening the euro and pushing the eurozone into crisis.
Greece is widely expected to issue government bonds next week and experts believe it could resort to selling them directly to a few large institutional customers rather than auction them off on capital markets.
In his efforts to seek a way out of the financial crisis, Papandreou held talks with Josef Ackermann, Deutsche Bank CEO on the country's debt crisis on Friday.
He also accepted an invitation to meet German Chancellor Angela Merkel on March 5, government officials said.
The crunch talks were scheduled ahead of a visit next week by EU Finance Commissioner Olli Rehn to inspect Greece's budget reforms, in view of a March 16 EU deadline to show fiscal improvement or face further spending cuts.
Relations with Germany
Tensions between Greece and Germany over the debt crisis have been played down by officials.
"There is clearly a slight disagreement" between Berlin and Athens, Stefan Bredohl, a foreign ministry spokesman, told a regular briefing.
The German ambassador sought to offer "clarification" to Greece after a Greek consumer association, enraged by the cover of a German magazine, called for a boycott on German goods.
The cover of this week's Focus magazine showed the ancient Greek statue the Venus de Milo making an obscene hand gesture with the caption: "A cheat in the euro family."
The association, Inka, demanded an apology from Chancellor Angela Merkel, who will hold clear-the-air talks with Prime Minister Papandreou in Berlin next Friday.
The talks will cover "all topics relating to bilateral relations, European policy and other international questions," Sabine Heimbach, a government spokeswoman said, adding that "current events" would also be tackled.
But adding to bilateral tensions is a decades-old spat over war reparations, reheated by Athens as concerns over its debt mountain sent the euro spiralling downwards on the foreign exchange markets.
The mayor of Athens, Nikitas Kaklamanis, said: "You owe us 70 billion for the ruins you left behind."
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