BERLIN (Reuters) – Germany may widen a ban on speculative trades in financial stocks to cover all shares, a draft finance ministry document showed on Tuesday.

The draft said a raft of measures aimed at stabilising financial markets would include a “ban on naked short selling of shares, including derivatives referring thereto.”

The document did not state whether the proposals were aimed at all shares or specific companies, and finance ministry officials were not immediately available for comment.

One government source, speaking to Reuters on condition anonymity, said it was intended to apply to all shares traded in Germany.

A week ago, Germany caught markets and its European Union partners unawares when the government’s financial watchdog announced a ban on naked short-selling of shares of Germany’s top 10 financial institutions, and of euro government bonds and related credit default swaps.

Tuesday’s news, by contrast, had little market impact.

The finance ministry draft did not list specific shares to be affected.

BERLIN/ROME (Reuters) – Germany may widen its ban on speculative financial trades to cover all shares, a leaked government document showed on Tuesday, as fears about the euro zone’s debt crisis sent stocks and the euro plunging further.

The Finance Ministry draft said planned measures aimed at stabilizing financial markets would include a “ban on naked short selling of shares, including derivatives referring thereto.”

Berlin stunned markets last week, drawing widespread criticism from its global partners, by unilaterally suspending naked short selling in euro sovereign bonds and credit default swaps as well as stocks in some financial companies.

Investor worries that the euro zone debt crisis may turn into a banking crisis drove European stocks and the euro sharply down on Tuesday while safe-haven German bonds hit a record high.

Highly indebted Italy was the latest euro zone country set to announce a two-year austerity plan worth 26 billion euros ($32 billion) despite concern that Europe-wide retrenchment may harm global economic growth.

The Italian cuts will hit public sector pay and recruitment, health spending and road building, and mean later retirement for some state workers and less funding for local government.

The pan-European stock index fell by as much as 3.4 percent at one point to a nine-month low, with banking stocks hardest hit on jitters over the Bank of Spain’s weekend takeover of a small savings bank, CajaSur, after a failed merger with another regional lender.

BERLIN/ROME (Reuters) – Germany may widen its ban on speculative financial trades to cover all shares, a leaked government document showed on Tuesday, as fears about the euro zone’s debt crisis sent stocks and the euro plunging further.

The Finance Ministry draft said planned measures aimed at stabilising financial markets would include a “ban on naked short selling of shares, including derivatives referring thereto.”

Berlin stunned markets last week, drawing widespread criticism from its global partners, by unilaterally suspending naked short selling in euro sovereign bonds and credit default swaps as well as stocks in some financial companies.

Investor worries that the euro zone debt crisis may turn into a banking crisis drove European stocks and the euro sharply down on Tuesday while safe-haven German bonds hit a record high.

Highly indebted Italy was the latest euro zone country set to announce a two-year austerity plan worth 26 billion euros (22 billion pounds) despite concern that Europe-wide retrenchment may harm global economic growth.

The Italian cuts will hit public sector pay and recruitment, health spending and road building, and mean later retirement for some state workers and less funding for local government.

The pan-European stock index fell by as much as 3.4 percent at one point to a nine-month low, with banking stocks hardest hit on jitters over the Bank of Spain’s weekend takeover of a small savings bank, CajaSur, after a failed merger with another regional lender.

BERLIN (Reuters) – Germany’s cabinet on Tuesday backed plans to stump up 123 billion euros in loan guarantees to support the euro, two days after international policymakers agreed on a $1 trillion package to restore calm to markets.

The cabinet’s rapid approval of the euro plan in a special session follows criticism that Merkel took too long to back a rescue for Greece, stoking market tensions and rendering the final bailout much more expensive than it would have been.

“The measures are a clear signal that the financial markets can count on the financial stability of the euro area,” government spokesman Christoph Steegmans told a news briefing, adding he hoped the plan could clear parliament by June 4.

Chancellor Angela Merkel’s ministers signed off the draft law which would see Germany provide loans valid until mid-2013 to countries deemed to be insolvent by other euro states, the International Monetary Fund and the European Central Bank.

Loans would be contingent on countries agreeing measures with the IMF and the ECB to tackle their deficits.

Steegmans said the government had held the special meeting of the cabinet — one day earlier than normal — to underline its commitment to the package as quickly as possible.

Speaking on condition of anonymity, another member of the government said Germany’s contribution to the package could be raised by up to 20 percent with the approval of the German Bundestag lower house of parliament’s budgetary committee.

BERLIN (Reuters) – Chancellor Angela Merkel said on Monday her cabinet aimed to push through quickly Germany’s part of a $1 trillion emergency rescue package to stabilize the euro despite suffering a crushing state election defeat on Sunday.

Merkel said the cabinet would meet on Tuesday to approve Germany’s contribution to the package thrashed out by European Union finance ministers and the IMF at the weekend to prevent a sovereign debt crisis spreading through the euro zone.

Speaking just hours after her alliance of conservatives and pro-business Free Democrats (FDP) lost a state election in North Rhine-Westphalia (NRW), Germany’s most populous state, Merkel said the rescue plan was needed to defend the euro.

“The member states of the European Union yesterday showed that we have the common political will to do everything for the stability of our common currency,” she said in Berlin.

The package — 440 billion euros in guarantees from euro states plus 60 billion euros in a European instrument — may prove another potential headache for Merkel, who already has a mounting list of problems in Berlin.

The chancellor has come under fire across the political spectrum for taking too long to approve aid to bail out Greece, a rescue which was unpopular in Germany and resonated strongly in the final phase of the NRW election campaign.

The Greek aid eventually got fast-track approval from parliament despite concerns it could be derailed by internal wrangling over the details and by a lawsuit by German academics.

BERLIN (Reuters) – Lawmakers in Berlin and other euro zone capitals on Friday backed emergency aid for Greece, clearing key hurdles for a package that German Chancellor Angela Merkel has said will determine the future of the European Union.

After an accelerated legislative process, 390 deputies in Germany’s lower house of parliament, the Bundestag, voted in favor of a bill that could see the country lend Greece 22.4 billion euros over three years. A total of 72 lawmakers voted against and 139 abstained.

In a separate sitting, the Bundesrat upper house also approved Germany’s contribution to a 110 billion euro rescue plan that was agreed by the International Monetary Fund (IMF) and euro zone members last weekend.

Politicians in Spain and Portugal — two of the countries the market views as most at risk of contagion from Greece’s spiraling debt crisis — approved their governments’ smaller contributions.

In Den Haag, the Dutch parliament effectively granted approval for the country’s 4.7 billion euro ($6.3 billion) contribution, by rejecting a motion against it [ID:nWEA0965].

Up against debt servicing costs that are rising almost daily, Greece faces a race against time to start tapping the rescue package ahead of a May 19 deadline for refinancing an 8.5 bln euro bond.

A potential delay to payments from the package’s biggest contributor Germany came via a lawsuit filed in the country’s highest court by a group of academics. The suit, which had been expected, is thought to have little chance of success.

BERLIN (Reuters) – German lawmakers on Friday backed a bill to provide billions of euros in aid for Greece, clearing a major hurdle for the package which Chancellor Angela Merkel has said would determine the future of the European Union.

After an accelerated legislative process, the Bundestag lower house of parliament passed the unpopular bill with 390 deputies voting in favor, 72 against, and 139 abstaining. The Bundesrat upper house is due to vote on it later on Friday.

In an emotional speech urging Germany to remember its historical responsibility toward Europe, Finance Minister Wolfgang Schaeuble led calls in support of the bill that could see Germany lend 22.4 billion euros to Greece over three years.

The Bundesrat is also expected to approve Germany’s part of the 110 billion euro rescue plan agreed by the International Monetary Fund (IMF) and euro zone members at the weekend.

German President Horst Koehler, a former IMF managing director, must then sign the bill into law.

As expected, a group of German academics filed a lawsuit at the country’s highest court against the Greek aid. Legal experts have been skeptical about the suit’s chances of success.

Schaeuble, 67, said the aid would uphold Germany’s postwar legacy of serving peace in Europe, 65 years after World War Two, an event he referred to as Germany’s “darkest chapter.”

ATHENS/BERLIN (Reuters) – Greece’s economic crisis sent shivers of fear through global markets on Thursday over concern it could spread like wildfire through Europe and beyond.

German Chancellor Angela Merkel said Europe’s fate was at stake. France declared the euro was under speculative attack but said such a move would fail. And the Greek government vowed not to retreat a single step despite violence on the streets of Athens.

Anxiety the crisis may spread sent stocks tumbling worldwide. The euro sank to its lowest level in over a year, falling below $1.28 in Asia and down over 10 percent since the start of the year.

Japan’s Nikkei average fell more than 3 percent to its lowest level in nearly two months as the market caught up with the global selloff following a three-day holiday this week.

Asian shares outside Japan as measured by the Morgan Stanley Composite Index dropped 2 percent and the world stock index has now given up all of its gains so far in 2010 following the steep selloff this week.

“The focus stays on the euro as the contagion trade persists,” said JP Morgan in a morning note. “Today’s ECB meeting has grown immensely in importance as the redeployment of some form of credit crisis tools seems increasingly possible.”

The European Central Bank holds its monthly meeting later on Thursday and, while it is expected to keep rates unchanged at 1 percent, it is likely to try to assure markets that it can prevent the Greek debt crisis spreading.

ATHENS/BERLIN (Reuters) – European leaders warned on Wednesday that the euro zone debt crisis could spread like a bushfire beyond Greece, and investors sold stocks and the euro as Greek anti-austerity unrest claimed its first lives.

German Chancellor Angela Merkel said Europe’s fate was at stake and France declared the euro was under speculative attack but said it would fail, while the Greek government vowed not to retreat a single step despite violence on the streets of Athens.

Three people, including a pregnant woman, choked to death when rioters set an Athens bank ablaze during a protest against wage and pension cuts that were the price of the 110 billion euro ($146.5 billion) EU/IMF bailout agreed on Sunday.

A general strike shut down Greek airports, tourist sites and public services and about 50,000 demonstrators marched against the planned public spending cuts and tax rises, demanding that tax cheats and corrupt politicians be put on trial.

Hundreds of protesters threw stones and bottles at police who responded with tear gas in easily the biggest demonstration since Prime Minister George Papandreou took office last October.

“We are deeply shocked by the unjust death of these three people, our fellow citizens, who were victims of a murderous act,” Papandreou, who is trying to reform an uncompetitive economy plagued by corruption, told parliament.

Greek civil servants will strike again next week to protest against austerity, public sector union ADEDY said.

ATHENS/BERLIN (Reuters) – European policymakers warned of the risk of “contagion” spreading the euro zone debt crisis beyond Greece, as unrest in Athens claimed its first lives and investors fled to the safe haven of the dollar.

Three people burned to death when protesters set a central Athens bank ablaze on Wednesday during a demonstration against austerity measures that are the price of the 110 billion euro ($146.5 billion) EU/IMF bailout agreed on Sunday.

Public and private sector workers shut down airports, tourist sites and public services in a general strike and tens of thousands of demonstrators marched against the planned cuts to wages and pensions and tax increases.

A giant plume of dark grey smoke rose over central Stadiou Avenue where a two-storey building housing a branch of Marfin bank was burning. Hundreds of protesters threw rocks and bottles at police who responded with tear gas.

German Chancellor Angela Merkel told parliament in Berlin Europe’s fate was at stake in the most serious crisis of the single currency’s 11-year lifetime, and other euro countries could be hit unless the rescue for Greece succeeds.

European Monetary Affairs Commissioner Olli Rehn said it was vital to stop the crisis spreading beyond Greece.

“It’s absolutely essential to contain the bushfire in Greece so that it will not become a forest fire and a threat to financial stability for the European Union and its economy as a whole,” he told a news conference.