Greece beats budget targets so far this year

ATHENS, Greece — Greece is beating its budget targets by a wide margin so far this year, a sign its painful cost cuts and tax increases, combined with international aid, are paying off.

The economy, however, remains deep in recession and unemployment at a record high.

Deputy Finance Minister Christos Staikouras said Monday that preliminary figures show the state budget had a primary surplus — which excludes interest payments on debt — of 2.6 billion ($3.5 billion) euros for the January-July period.

That is a far better result than its target of a 3.1 billion euro ($4.2 billion) deficit, and marks the first time the government has logged a significant primary surplus.

The actual deficit, including interest payments, came in at 1.9 billion euros, also better than the targeted 7.5 billion euros deficit, the finance ministry's figures showed. In the same period last year, the country posted a 13.2 billion-euro deficit.

The deficit now stands at 1 percent of gross domestic product, from 6.8 percent in the same period last year, Staikouras said.

Greece has depended on international rescue loans since 2010. In return, it has pledged to overhaul its economy, and has imposed repeated waves of austerity measures. It has reduced spending across the board, including cuts to state salaries and pensions, and increased taxes.

The improvements in the budget this year were achieved by a combination of cutting spending and increased revenues in some taxes.

It was also helped by a one-off payment of about 1.5 billion euros from other European central banks. The money came from Greek government bonds that the European Central Bank had bought earlier during the financial crisis. Rather than keep the money accrued on the bonds, the ECB handed it down to the 17 national central banks in the eurozone, who in turn gave it to the Greek government.

Despite the improvements, however, the economy remains mired in the sixth year of a deep recession that has seen Greece's economy shrink by about a quarter. Figures released by the statistical authority Monday show economic output shrank by 4.6 percent in the second quarter of 2013, compared with the same three months last year. The figures were not seasonally adjusted.

Unemployment is also painfully high, at a record 27.6 percent as of May. Almost two-thirds of young people without a job.

Separately, the country also completed the sale of a 33 percent stake in its gambling monopoly, OPAP, to a Czech-Greek investment fund, Emma Delta. The sale is part of an ambitious but long delayed privatization program that is part of the country's bailout conditions.

Greece sold the stake in OPAP for 654 million euros ($874.59 million), the country's asset development fund said in an announcement.

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Rights group: Angola must drop journalist charges

JOHANNESBURG — A rights group on Monday called on Angola to drop criminal defamation charges against an investigative journalist who wrote a book on human rights abuses in Angola's diamond-rich region.

Rafael Marques de Morais attended a hearing on July 31 for 10 new lawsuits that were brought against him, along with one pre-existing suit, Human Rights Watch said. The lawsuits revolve around a book that alleges Angolan generals own a diamond company and a security firm that carried out killings and the torture of workers toiling in the southern African nation's mines.

Marques is one of Angola's most prominent investigative journalists, who has also exposed corruption cases and human rights violations through his blog, the group said. Several high-ranking Angolan generals brought the suit against Marques. The journalist had filed a criminal complaint against the plaintiffs in 2011, which were shelved.

The rights group called on Angola to repeal its criminal defamation laws, which are the basis for the charges against Marques. Neither Marques nor his lawyer were allowed to review the materials related to the lawsuits, Human Rights Watch said.

"Angola has found its criminal defamation laws very useful to try to squelch reports about corruption and human rights violations," said Human Rights Watch deputy Africa director Leslie Lefkow. "Angola should be investigating these reports of serious human rights violations instead of trying to silence the bearers of bad news."

A number of journalists have been prosecuted in recent years by senior government officials for defamation, which is a criminal offense in Angola, the group said.

Marques was sentenced to six months in prison and payment of damages after being convicted of defaming President Jose Eduardo Dos Santos in 2002. The U.N. Human Rights Committee ordered Angola in 2005 to pay damages to Marques for wrongful conviction, though the government has yet to carry out those orders, Human Rights Watch said.

In February, Portuguese prosecutors threw out a libel suit brought by nine Angolan generals against Marques. His book, "Blood Diamonds: Corruption and Torture in Angola," was published in Portugal, Angola's former colonial ruler.

The Lisbon Attorney General's office issued a ruling that said it decided the book falls within the scope of legitimate use of a legal right — freedom of expression and information — which is constitutionally guaranteed.

Angola's government is accused of corruption and mismanagement of the country's oil and diamond riches.

The country was a Cold War battlefield for 27 years, with Cuban soldiers and Soviet money supporting dos Santos' government and apartheid South Africa and the United States backing UNITA. Half a million people died in the war, and more than 4 million — a third of the population — were displaced and much infrastructure was destroyed.

Since the war ended in 2002, Angola has dominated the list of the world's fastest growing economies and is sub-Saharan Africa's second-largest oil producer, after Nigeria. Oil-backed credit lines from China — Angola is China's No. 1 oil supplier and its second biggest importer is the United States — have fueled a building boom of houses, hospitals, schools, roads and bridges.

But 87 percent of urban Angolans live in shanty towns, often with no access to clean water, according to UNICEF, and more than a third of Angolans live below the poverty line. Meanwhile, human rights activists accuse government and military officials of looting their country's oil and diamond wealth.

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Campbell negotiating to sell European business

NEW YORK — Campbell Soup says it's in final negotiations to sell its European business to private equity firm CVC Capital Partners for an undisclosed sum, the latest move by CEO Denise Morrison to reshape the company.

The proposed sale includes the company's soups, sauces and other products that are sold under a variety of names in Belgium, Finland, France, Germany and Sweden. The deal, which is not yet final, doesn't include products in the United Kingdom, Ireland, the Middle East or Africa, or the export of its Pepperidge Farm baked goods.

The announcement is just the latest structural change for the soup maker since Morrison took over two years ago. Morrison has vowed to right the company's struggling canned soup business in the U.S. and has been moving to diversify with the type of fresher products that are growing in popularity.

Campbell Soup Co. recently purchased Bolthouse Farms, which makes premium juices, salad dressings and baby carrots, as well as Plum Organics, which makes food for babies and kids.

The company noted that the proposed sale of the European brands, which includes four plants, is subject to regulatory approvals.

"It's not a definitive agreement, therefore we can't provide any more detail," said Carla Burigatto, a Campbell representative. She did not immediately know whether any of the company's namesake products are sold in the countries named in the deal.

Campbell, based in Camden, N.J., says the brands included in the deal generate annual sales of $530 million. That represents about 7 percent of the company's net sales last year. Among the brands being sold are Devos Lemmens and Royco in Belgium, Liebig and Royco in France, Erasco in Germany and Bia Band in Sweden.

Campbell's European business is based in Belgium and employs around 1,300 people, according to CVC Capital.

Campbell said deal would be expected to close in the first quarter of its fiscal 2014.

Its stock was down almost 1 percent at $47.35. Shares are up almost 39 percent over the past year.

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CEO to take Dole Food private in $1.21B deal

WESTLAKE VILLAGE, Calif. — Dole Food said Monday its CEO will take it private, in a deal that values the company at approximately $1.21 billion.

Dole shareholders will receive $13.50 per share, a 5 percent premium to its $12.81 Friday closing price. This is a sweetened bid for the fresh fruits and vegetable business, up from the $12 per share Chairman and CEO David Murdock offered in June.

Dole currently has about 89.9 million outstanding shares, according to FactSet.

The company put the transaction's total value at about $1.6 billion, which includes debt.

Dole Food Company Inc.'s stock jumped 64 cents, or 5 percent, to $13.45 in morning trading. The shares have traded in a 52-week range of $9.25 to $15.19.

Dole has gone through a number of major changes recently.

It sold its packaged foods and Asia fresh business for $1.69 billion in a deal that closed in April. That allowed Dole to become solely an international commodity produce company, with a narrower focus that also makes its earnings more volatile.

In May, Dole said it would indefinitely suspend its $200 million share repurchase program and use its cash instead to update its shipping fleet to enhance growth prospects. The company said that another factor in the suspension of the repurchase plan was the drag on earnings, due to recent losses in its strawberry business.

The acquisition will be financed with cash and equity from Murdock and financing committed by Deutsche Bank, Bank of America and The Bank of Nova Scotia.

Dole's board unanimously approved the offer, which still needs the approval of at least a majority of outstanding shares held by stockholders other than Murdock and his affiliates. Murdock abstained from the board vote.

Dole, which is based in Westlake Village, Calif., will have a 30-day go-shop period in which it can actively seek out alternative bids from other parties.

The deal is expected to close in the fourth quarter.

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Slower Japanese growth weighs on markets

LONDON — Weaker-than-expected economic growth in Japan weighed on markets Monday on what is a fairly light day on the global economic calendar.

The main indicator of the day was the 2.6 percent annualized second-quarter growth rate recorded in Japan, the world's third-largest economy. The number was below the 3.8 percent rate recorded in the first quarter and the 3.6 percent predicted by analysts and dented sentiment around the world.

Investors are concerned that the big monetary stimulus that is being pursued by the government may not be reaping the rewards hoped for. Japan is trying to come out of a two-decade economic stagnation. The Nikkei 225 index slid back following the news, to end the day 0.7 percent lower at 13,519.43, while the yen fell. The dollar was up 0.5 percent at 96.72 yen.

The slower growth could make it difficult for Prime Minister Shinzo Abe to carry out plans to raise the sales tax by 3 percentage points in April to improve public finances. The tax is now 5 percent.

"Raising the consumption tax is key to long-term fiscal consolidation in Japan," said Lee Hardman, an analyst at Bank of Tokyo-Mitsubishi UFJ. He said that if Abe doesn't raise the tax as planned, he "would risk undermining foreign investor confidence" in his policies.

Following the Japanese news, stock markets in Europe and the U.S. were lackluster amid a dearth of economic data.

Britain's FTSE 100 shed 0.2 percent to 6,573 while Germany's DAX rose 0.1 percent to 8,351. The CAC-40 in France was 0.2 percent lower at 4,067.

In the U.S., the Dow Jones industrial average was down 0.1 percent at 15,358 while the broader S&P 500 index fell 0.1 percent to 1,685.

Last week, U.S. stocks suffered their worst week since June amid worries over when the U.S. Federal Reserve will start to reduce its monetary stimulus. Recent comments from a raft of Fed officials have indicated that it may start as soon as September.

This week's U.S. economic data, including retail sales figures for July, will be assessed in the context of when the Fed will begin the so-called tapering.

Michael Hewson, senior market analyst at CMC Markets, said it seems investors are becoming concerned about the Fed's timing and reluctant to push stock indexes any higher.

"Given the proximity to all-time highs it appears that prudence is taking precedence over risk, with little in the way of new factors to stimulate new buying," he added.

In Europe, the main point of interest will be Wednesday's second-quarter economic growth figures for the 17-country eurozone. Most analysts think that the region will post modest growth, which will mean it emerged from recession.

Earlier in Asia, a possible upswing in China's economy helped boost stocks in Hong Kong and on mainland China.

Data released Friday showed a 9.7 percent rise in China's industrial production for July. Some other indicators such as auto sales also showed improvement. Analysts said the figures added weight to the argument that the recent soft patch in the world's second-largest economy may have come to an end.

Hong Kong's Hang Seng jumped 2.1 percent to 22,271.28. The Shanghai Composite Index rose 2.4 percent to 2,101.28. The smaller Shenzhen Composite Index rose 1.3 percent to 1,009.13.

Elsewhere, the euro was 0.3 percent lower at $1.3289 while a barrel of benchmark New York crude oil was 23 cents lower at $105.74.

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Report: Bundesbank sees new Greece bailout in 2014

BERLIN — German news weekly Der Spiegel reports that the country's central bank believes international creditors will have to agree a new bailout for Greece by early next year.

The move would come months after Germany's Sept. 22 general election. Chancellor Angela Merkel's conservative government has been at pains to appear firm on Greece's international bailout, which is unpopular with many Germans.

Der Spiegel reports Sunday that the Bundesbank told Germany's Finance Ministry and the International Monetary Fund that a recent 5.7 billion euros ($7.62 billion) payment to Greece was approved "due to political constraints."

The central bank reportedly also described the risks of the current rescue program for Athens as "unusually high" and the performance of the Greek government as "hardly satisfying."

A Bundesbank spokeswoman declined to comment on the report.

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Retailers keeping tabs on consumers' return habits

WASHINGTON — It's not just the government that might be keeping tabs on you. Many retailers are tracking you, too — or at least your merchandise returns.

The companies say it's all in the name of security and fighting fraud. They want to be able to identify chronic returners or gangs of thieves trying to make off with high-end products that are returned later for store credit.

Consumer advocates are raising transparency issues about the practice of having companies collect information on consumes and create "return profiles" of customers at big-name retailers such as Best Buy, J.C. Penney, Victoria's Secret, Home Depot and Nike.

They say consumers should know upfront when they buy an item that they may later have their returns tracked if they bring back the merchandise.

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Rhode Island lawmakers seek answers on 38 Studios

PROVIDENCE, R.I. — It's taken more than a year, but Rhode Island lawmakers are trying to find out what led up to the state's costly gamble on Curt Schilling's now-defunct video game company, sifting through thousands of documents in hopes of learning how to avoid similar debacles.

The House Oversight Committee began its review last week of some 15,000 pages from emails, letters, meeting records and other documents relating to the state Economic Development Corp.'s $75 million loan guarantee awarded to 38 Studios. The committee is now considering whether to ask key figures involved in the deal to testify — with the option of subpoenaing any individuals who say no.

Questions about the state's involvement in 38 Studios continue to reverberate around the Statehouse about the company's decision to file for bankruptcy, making the state responsible for $90 million in outstanding debt. The EDC is now suing Schilling, former EDC Deputy Director Michael Saul, former EDC Executive Director Keith Stokes and others involved in the deal, alleging they withheld information about 38 Studios' finances from the board and gave it false information.

For lawmakers and other individuals still upset about the bad investment, several questions loom: Did top lawmakers support legislation creating the loan guarantee program knowing 38 Studios would be the largest beneficiary? Did officials at the EDC know that 38 Studios would need additional money to succeed? Did the EDC board, former Gov. Donald Carcieri and top lawmakers do their homework on 38 Studios before pushing for the state's investment?

Lawmakers approved the $125 million loan guarantee program in 2010, but rank-and-file lawmakers have said they weren't told that 38 Studios was involved. Yet documents released as part of the oversight process show clearly that efforts to help 38 Studios were behind the proposed loan guarantee program.

In the minutes from an EDC executive session in June 2010, an EDC attorney briefed the board on the loan guarantee program legislation, which was then pending in the General Assembly. The attorney said, "The legislature is aware of the Schilling matter and has done some due diligence in its consideration of this program," according to the minutes.

In a letter to Neil Steinberg, president of the Rhode Island Foundation, Stokes wrote that 38 Studios was a "catalyst for the $125 million Job Creation Guaranty Program. Without the tangible prospect of a company like this coming to Rhode Island, the opportunity to create the program would likely not have materialized."

The documents led state Rep. Karen MacBeth to accuse legislative leaders of misleading her and other lawmakers.

"We're taking votes based on untruths or lies," said MacBeth, D-Cumberland. "These documents absolutely show without a doubt that the key players here did know about it."

House Speaker Gordon Fox has said he knew of efforts to lure 38 Studios to Rhode Island, but the loan guarantee program was a separate discussion. His spokesman Larry Berman said the EDC — not top lawmakers — was behind efforts to pass the loan guarantee legislation to aid 38 Studios.

"The legislature was aware of the Schilling matter — at least some of the members were," Berman said. "We created the program that would provide the funding, but whether 38 Studios qualified for that funding, that was left up to the EDC."

The oversight committee could invite former executives from 38 Studios or former EDC officials to testify at the committee. But committee chairman Michael Marcello, D-Scituate, said it's unlikely those individuals would want to speak in light of the pending litigation.

"If I were their lawyer, I would tell them not to testify," he said.

The committee could vote subpoena witnesses, but the subpoenas would require Fox's approval.

Sen. Dawson Hodgson, R-North Kingstown, said it's vital that the committee attempt to ask questions of the individuals involved. Hodgson called for a special investigative committee to look into the 38 Studios episode, but his proposal failed in the General Assembly.

"I'm glad we're seeing some kind of serious post-mortem of 38 Studios, but no real oversight will be complete without calling in the principal actors," he said.

Schilling, the former EDC officials and former executives at 38 Studios are seeking to dismiss the EDC's lawsuit. Messages were left with several individuals involved in the deal. Stokes declined to comment, citing the lawsuit.

Critics of the oversight process note that it comes more than a year after 38 Studios filed for bankruptcy. They also question whether the committee will look closely at questions about the General Assembly's own role in passing the loan program that benefited 38 Studios.

"I don't think many people in the state buy the idea that they didn't know," said Randall Rose, who as a member of the group Occupy Providence has called on the state to default on the 38 Studios debt. "This may be an effort to run out the clock."

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Home-mortgage interest deduction may be in danger

WASHINGTON — Since Congress has taken off on its annual summer recess, you might assume that nothing is happening on Capitol Hill that could affect the taxes you pay on your home. Quite the reverse.

Members of Congressional tax-writing committees are putting together legislative drafts that may determine the fate of real estate's most prized tax benefits: first and second home-mortgage interest deductions, property tax write-offs, capital gains exclusions and others.

Committee chairs have promised major tax reform proposals. They've been evaluating deductions, credits and loopholes in terms of revenue costs and economic benefits, including the more than $70 billion yearly expense of the mortgage interest writeoff. The process represents the most serious effort to simplify and reorganize federal tax law since the Tax Reform Act of 1986.

On the Senate side, Finance Committee Chairman Max Baucus (D-Mont.) asked colleagues in both parties to submit recommendations on which tax preferences should be preserved, starting from a "blank slate" where all current benefits are eliminated. To provide senators political cover and deniability, the committee put all recommendations under a 50-year top-secret classification, and restricted access to them to just 10 staff members.

On the House side, Ways and Means Committee Chairman Dave Camp (R-Mich.) instructed staff to move ahead with drafts during the recess, allowing the committee to consider a final tax reform bill in October. That would tee up the legislation for a possible full House floor vote.

So what's really on the chopping block? Is there a possibility that as part of a comprehensive tax reform bill, preferences for home ownership could be reduced or phased out?

Here's a quick overview: The House bill under construction seeks to reduce individual and corporate marginal tax rates across the board. Camp has said he wants to clear out deductions, exclusions and other longtime tax code subsidies enough to lower individual taxes to a top marginal rate of 25 percent, down from the current 39.6 percent. He also wants to eliminate the alternative minimum tax and slash corporate tax rates.

The problem, though, is that lowering tax rates to these levels would cost trillions of dollars in lost revenues over the coming decade and would only be partially paid for by eliminating or cutting the vast majority of current tax preferences, including for homeowners. Lowering the top marginal rate for individuals to 28 percent — instead of the proposed 25 percent — would help, some analysts say, but still might not close the lost-revenue gap.

Another complication: Major tax benefits that have been in existence for decades, such as the mortgage interest and property tax deductions, are so welded into the system that eliminating them, or sharply reducing them, would shock the national economy.

The Tax Foundation, a Washington-based think tank that describes itself as nonpartisan, released a study at the end of July projecting that an elimination of the mortgage interest write-off would cut the gross domestic product (GDP) by $254 billion based on incomes in 2012, and would result in the loss of 659,000 jobs. In a separate study, the Tax Foundation projected that elimination of homeowner property tax deductions would lower GDP by $94 billion and trigger the loss of 216,000 jobs.

Findings such as these lead housing proponents to believe that neither the House nor the Senate bill can afford to make drastic reductions to long-standing homeowner tax benefits.

Other industry analysts aren't so sure. Not only did a panel of prominent economists slam the housing write-offs as inefficient and heavily tilted to benefit higher-income taxpayers, but Camp's own make-or-break income tax cut targets could take precedence over retaining current deductions.

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Lobstermen union meets for 1st time

BANGOR, Maine — Lobstermen who want to form a union to lobby for them in Augusta and to negotiate prices for their catch are meeting for the first time.

Fishermen who are forming the Maine Lobstering Union are gathering Sunday in Bangor at the Ramada Inn. Opening remarks will be open to the public, then the meeting will be closed to begin the process of nominating officers and beginning a process for nominating officers.

The International Association of Machinists and Aerospace Workers has been recruiting fishermen fed up with low prices for their catch and growing expenses.

The Maine Lobstermen's Association, a trade group with about 1,200 members, has questioned whether negotiating lobster prices would run afoul of federal antitrust laws.

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