Two Key Lebanese Leaders Meet
Saad Hariri, the Sunni Muslim leader of Lebanon's March 14 coalition, the largest bloc in Congress, and the Shiite Parliament speaker, Nabih Berri, a major opposition leader, met late Thursday night to discuss ways of ending the country's political crisis. The meeting was widely seen as a significant break in the months-long stalemate that has brought Lebanon to a virtual halt.
Hariri and Berri met for the first time in four months at Berri's headquarters amid heavy security. Though unlikely to produce a final deal between the sides, the meeting was seen as a major step toward easing Lebanon's growing political and sectarian tensions and a precursor to a possible deal.
The session followed a meeting last Saturday between President Mahmoud Ahmadinejad of Iran and King Abdullah of Saudi Arabia to discuss ways of settling the growing sectarian and political crises in parts of the Middle East. Lebanon was central to that discussion, and rumors have since circulated both in Riyadh and Beirut that a deal was imminent in Lebanon.
European Central Bank Raises Benchmark Rate
The European Central Bank raised its benchmark interest rate by one-quarter of a percentage point on Thursday, to 3.75 percent, and made clear that it was willing to tighten credit further, possibly by the summer, in a strong European economy that could generate inflation.
The bank's president, Jean-Claude Trichet, pointed to the possibility of spikes in energy prices and big pay increases in major European wage settlements as reasons that the threat of inflation might require a response.
"I didn't say we are at a peak," Trichet said. "Full stop."
The European bank's colleagues at the Bank of England chose to keep their benchmark interest rate at 5.25 percent after increasing it three times in the last six months. There, central bankers are trying to gauge whether they have headed off inflation amid a booming real estate market and robust consumer demand that is allowing British retailers to charge higher prices.
Having hinted strongly at more rate increases to come, Trichet left open the question of how much and when. Many analysts say the answer depends on whether the economy of the euro zone, which grew 2.6 percent last year, the fastest in six years, keeps up that pace this year.
On Thursday, the central bank forecast growth this year of 2.1 percent to 2.9 percent, slightly higher than its prediction three months ago, reflecting brisk growth toward the end of 2006.