Monday Business Edition

Domininque Strauss-Kahn, who has played a key role in striving to tame Europe’s debt crisis, had been due at the talks that start from 1300 GMT.

Replaced by his number two John Lipsky as acting International Monetary Fund chief as he battles to clear his name, Strauss-Kahn’s arrest — just as he was leaving to meet German Chancellor Angela Merkel — saw the euro wobble badly before recovering in Asian trade.

The bombshell news of the veteran French politician’s arrest left the International Monetary Fund reeling, coming ahead of critical talks grappling with the painful fallout of the debt crisis sweeping the euro zone.

Strauss-Kahn, 62, was expected to be arraigned later Sunday by a New York judge, after being yanked off an Air France flight on Saturday minutes before take-off and grilled through the night in a Harlem police cell.

The veteran French politician denies allegations of attempting to rape the maid in a luxury hotel, lawyer Benjamin Brafman told reporters.

“He intends to vigorously defend these charges and denies any wrongdoing,” Brafman said outside the courthouse where the IMF chief will appear on Monday.

The United States is due to hit the $14.29-trillion ceiling set by Congress on Monday, creating a cash crunch that puts the country’s credit standing at risk as politicians battle over its long-term deficit.

“If investors around the world thought that the full faith and credit of the United States was not being backed up, if they thought that we might renege on our IOUs, it could unravel the entire financial system,” Obama warned at a CBS town hall meeting last week that was broadcast on Sunday.

US President Barack Obama warned if no deal is brokered on raising the $14.29 trillion debt ceiling set by Congress then the United States risked plunging back into recession.

“If investors around the world thought that the full faith and credit of the United States was not being backed up, if they thought that we might renege on our IOUs, it could unravel the entire financial system,” Obama warned at a CBS town hall meeting broadcast on Sunday.

“We selected Athens as the venue for our 12th Congress because it is the eye of the storm which threatens Europe and the euro,” confederation secretary general John Monks, a British national, told journalists Sunday.

“Greece was the cradle of Western civilisation, now it’s the cradle of Europe’s economic crisis,” Monks, 66, added.

The 17-nation eurozone and the other 10 European Union states will hold a series of meetings alongside International Monetary Fund managing director Dominique Strauss-Kahn during which a 78-billion-euro ($110 billion) rescue package for Portugal — like Greece mired in debt — is also expected to be voted through.

The European ministers are also set to recommend Italian central bank governor Mario Draghi as the successor to France’s Jean-Claude Trichet as president of the European Central Bank.

Economic expansion across the 17-country currency bloc almost trebled to 0.8 percent in the first quarter of 2011, from 0.3 percent in the last three months of 2010 — compared to US growth of 0.4 percent quarter-on-quarter.

However, Italy, the eurozone’s third-largest economy, fell in with Mediterranean laggards, growing by just 0.1 percent in the first quarter, as the outlook for crisis-hit Greece worsened amid talks on a second Athens bailout due in Brussels on Monday.

The C$48 per share offer for TMX from a consortium calling itself the Maple Group Acquisition Corp topped a $3 billion friendly bid for the exchange operator from the London Stock Exchange.

Maple Group includes banks that have opposed the LSE deal, arguing it would put control of TMX into foreign hands and threaten Toronto’s growing status as a world financial center.

If LSE boss Xavier Rolet were to better his terms, it would undermine any claim that the LSE and TMX are equal merger partners in the $3 billion deal, something he has stressed in the past to soothe nationalist nerves in Canada.

“If the LSE puts cash in, or takes a stake in TMX, it feels less like a merger of equals. That is a red flag for regulators,” said a banker familiar with the transaction, speaking on the condition of anonymity.

A bid from the Canadian financial institutions could represent a more palatable alternative for opponents of the LSE proposal, many of whom are concerned about control of the country’s largest stock market falling into foreign hands.

Legislators and other elected officials in Ontario, the province where Toronto is located, want assurances that the city will not lose its status as a world financial center. The latest proposal, announced by TMX in a statement on Saturday, could address those concerns.

Strauss-Kahn’s place in the Brusssels talks will be taken by International Monetary Fund Deputy Managing Director Nemat Shafik, the organization said.

The meeting was also expected to pressure Greece to announce more austerity steps to secure further emergency funding. A senior Greek official said on Sunday the arrest of Strauss-Kahn may cause some delays to its EU/IMF bailout plan.

Spyker Cars (SPYKR.AS), the Dutch owner of Saab, announced a deal with China’s Pangda Automobile Trade Co Ltd (601258.SS) on Monday which it said would secure Saab’s medium-term funding needs and allow production to resume within days.

Saab will immediately receive 30 million euros from Pangda for vehicles destined for sale in China, allowing it to repay suppliers and restart production soon, CEO Victor Muller said.

Chrysler executives, led by Chief Executive Sergio Marchionne, have been meeting with potential investors since early March to market a $3.5 billion term loan and $2.5 billion of second-lien bonds, with the target of completing the loan transaction by May 18.

But the U.S. automaker is likely to reduce the size of the loans from $3.5 billion after potential investors have been slow to commit as they weigh up the facility’s large size and the company’s business prospects, people familiar with the matter said.

Declines in oil and metals prices are being seen by an increasing number of fund managers and strategists as a signal to get out of riskier areas of the equity market. And that means avoiding things like Chinese IPOs and sticking to the boring stuff, like utilities.

The growing concern is that stocks had priced in an overly optimistic economic path, and the recent breakdown in commodities and shift in equities to safer industries such as health care, suggest a reckoning in coming months.

As that view, espoused by Chairman Ben Bernanke himself, gains support, investors may find further hints this week in minutes from the Fed’s April meeting that officials intend to keep official rates at record low levels for quite a while.

The prospect of continued easy money from Washington may help offset concern among investors, already anxious about signs of slower economic growth in many countries, that the weekend arrest of the head of the International Monetary Fund will further complicate the euro zone’s debt crisis.

“Over the last two years, I too, received a great education, facing crises and making decisions — many of them very difficult,” Pandit told graduating business students at the University of Pennsylvania’s Wharton School on Sunday.

He told the students the only way they could have learned more about the American economy and global economics over the last two years “is to have lived it — an experience, that I can assure you, was not full of pure enjoyment.”

Gamers and security experts had criticized Sony for its handling of the incident, which sparked lawsuits and cast a shadow over its plans to combine the strengths of its content and hardware products via online services.

The Japanese electronics and entertainment giant apologized to customers for the outage, and said a range of new security measures had been introduced. These included an early warning system that could alert the company to any attempt to penetrate the network.

Analysts said the handover of Alipay, an online e-commerce payment system similar to eBay Inc’s PayPal, to Alibaba Chief Executive Jack Ma has reduced the value of Yahoo’s 43 percent Alibaba stake. Alibaba also operates China’s largest e-commerce company, Alibaba.com Ltd.

Yahoo said it had been blindsided by the deal, while Alibaba countered that Yahoo was aware of the transaction by virtue of having a board seat, now held by former Yahoo Chief Executive Jerry Yang, who is also a Yahoo director.

The battle between drug traffickers and the army near the city of Monterrey last week was the sort of violence that is frightening U.S. companies away from new investments south of the border, where organized criminals are increasingly turning to kidnappings, extortion and cargo thefts despite a government offensive against drug cartels.

“These acts of violence are not happening in a vacuum; they’re happening in the street that could be right out in front of your building. Bullets get shot and they have to stop somewhere,” said Dan Burges, a senior director at Freightwatch Inc., an Austin-based cargo security firm.

One group – defensive stocks – is doing just fine. Utilities, health care and consumer staples are all considered a good defense against a slowdown because they tend to have stable profits no matter what happens in the broad economy. The items they sell aren’t ones people stop buying when their budgets are tight. And for the last six weeks, investors have been putting money into stocks of companies like Aetna or Kraft Foods that cater to everyday needs, like health insurance or coffee.

Each of the defensive industry groups has gained more than 5 percent this quarter. Health care – the best of the three – is now up 14.2 percent for the year, after lagging sectors like energy and industrials during the first quarter. What’s more, the number of shares exchanging hands in defensive industries is also increasing. Higher volume often signifies that a stock on the rise will continue to rise – or that a declining stock will keep falling – because it reflects increased investor interest in a stock. The daily trading volume of the SPDR Consumer Staples Select ETF, for example, is double the rate it was in January.

The 62-year-old Strauss-Kahn has topped French opinion polls for months as the man most likely to become this nation’s next president, consistently outshining the little-loved conservative incumbent, Nicolas Sarkozy.

Yet on Sunday, Strauss-Kahn’s allies and rivals alike struggled with shock at news that he was hauled off an Air France flight minutes before takeoff, arrested and facing charges of attempted rape and a criminal sex act. In cafes and outdoor markets, French voters shared that disbelief.

Most residents heeded the warnings and headed for higher ground, even in places where there hasn’t been so much as a trickle, hopeful that the flooding engineered to protect New Orleans and Baton Rouge would be merciful to their way of life.

Days ago, many of the towns known for their Cajun culture and drawling dialect fluttered with activity as people filled sandbags and cleared out belongings. By Sunday, some areas were virtually empty as the water from the Mississippi River, swollen by snowmelt and heavy rains, slowly rolled across the Atchafalaya River basin. It first started to come, in small amounts, into people’s yards in Melville on Sunday. But it still had yet to move farther downstream.

Gov. Luis Fortuno has made the $450 million project a central goal of his administration and he insists it is a safe, environment-friendly way to lower utility bills. Critics say the 92-mile (148-kilometer) pipeline will tear up lush green mountains and expose people living near it to deadly explosions.

The pipeline proposal, which Fortuno has dubbed “The Green Way,” also has sparked corruption allegations. The largest contract so far has gone to an engineering firm with no pipeline construction experience that is owned by a childhood friend of the governor. Fortuno has denied any conflicts of interest.

Unlike other teenagers, Deck’s account became a sensation. Deck, under the handle (at)OMGFacts, tweeted random bits of celebrity gossip and quirky trivia. In less than a year, he had attracted more than 300,000 followers.

Now Deck, 17, is suing a business partner who promised to take OMG Facts to the next level, but who the Northern California teen says deceived him into turning over the rights to his creation.

Oil prices have fallen, with gas soon to follow. Demand for farm commodities, like the corn used in everything from cereal to soda, has dropped. And businesses remain slow to pass along higher costs because customers aren’t getting raises and might walk away.

Inflation may be approaching its peak.

But the sense of good will has quickly dried up as the community reacts to news that the company will close the plant in September 2013 and move its operations to a new facility in neighboring Pennsylvania. Bordentown, with almost 4,000 residents, will lose about $1 million in tax revenues and utility contributions, according to the city’s commissioner.

The factory’s 250 employees will have to decide whether to move with the company or find new jobs.