A look at global economic developments

A look at economic developments and activity in major stock markets around the world Wednesday:

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BRUSSELS _ European Union countries should act jointly to regulate so-called naked short-selling of shares and investments to reduce volatilty in financial markets, the European Commission said.

A day after Germany unilaterally imposed such a ban, EU Internal Market Commissioner Michel Barnier said eurozone finance ministers should coordinate their efforts at a special meeting on Friday in Brussels.

Britain's FTSE 100 index of leading shares fell 2.8 percent, Germany's DAX dropped 2.7 percent and the CAC-40 in France lost 2.9 percent.

In Asia, shares also dropped in the wake of the German decision. Japan's benchmark Nikkei 225 stock average dropped 0.5 percent, South Korea's Kospi index lost 0.8 percent, Australia's S&P/ASX 200 index was off 1.9 percent, benchmarks in Singapore, India and Indonesia all fell more than 1 percent and Hong Kong's Hang Seng index lost 1.8 percent.

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BERLIN _ German Chancellor Angela Merkel called for tougher regulation aimed at stock and bond traders along with a crackdown on government debt to contain the continent's financial crisis, warning that the future of the euro itself was at stake.

Urging lawmakers to pass Germany's share of a new euro750 billion ($1 trillion) eurozone rescue package, Merkel said that defending the currency is "about no more and no less than the preservation of the European idea."

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SHANGHAI _ The uncertainties brought on by the financial crisis in Europe add urgency to strategic China-U.S. talks next week, the U.S. commerce secretary said as he appealed for a more open and fair Chinese trade regime.

As the European financial crisis deepens, Beijing appears to be pulling back from expected moves to loosen its currency's peg to the U.S. dollar, saying the euro's slide to four-year lows against the dollar is putting too heavy a burden on its own exporters.

China has kept the yuan at a rate of about 6.83 per dollar for nearly two years, seeking to cushion its exporters from the global financial crisis. Some economists reckon the yuan is undervalued by up to 40 percent against the dollar, giving Chinese exporters an unfair advantage in overseas markets.

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ATHENS, Greece _ Cash-strapped Greece managed to pay off its creditors, warding off bankruptcy in the nick of time, by using billions of euros from the EU-led rescue package aimed at containing the debt crisis.

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LONDON _ Members of the Bank of England's rate-setting panel are increasingly concerned about inflation but uncertain how a new government, a euro debt crisis and other developments will affect consumer prices, according to minutes of its most recent meeting.

The Bank's Monetary Policy Committee, which is responsible for adjusting interest rates to keep inflation at or near 2 percent, had voted unanimously to leave the base interest rate at an all-time low of 0.5 percent.

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MADRID _ Spain will raise taxes for high-income earners to help chip away at the country's outsized deficit, the prime minister said.

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KUALA LUMPUR, Malaysia _ Malaysia's government announced plans to issue its first Islamic bonds in eight years, marking a return to tapping funds from the international capital markets amid the country's economic recovery.

The bond sale is likely to be bigger than its first $600 million issuance in 2002 and will be a boost for Malaysia's ambitions to become an Islamic financial center, bankers said.

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LONDON _ Iceland says it has reached a deal to buy krona-denominated assets held in Luxembourg, reducing the country's external debt by more than 3.5 percent of gross domestic product.