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German Chancellor Angela Merkel (ODD ANDERSEN/AFP)
German Chancellor Angela Merkel (ODD ANDERSEN/AFP)

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Germany refuses to bend, warns no 'bazooka' for crisis Add to ...

These are stories Report on Business is following Tuesday, Nov. 22. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.

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Germany squashes hopes Germany continues to dampen hopes that it's going to bend in its opposition to Europe pulling out its big guns to fight its spreading debt crisis.

"We don't have any bazooka to pull out of the bag," Michael Meister, who sits in the Angela Merkel's governing coalition, told Bloomberg News today. "We see no alternative to the policy we are following."

As Brian Milner writes in today's Report on Business, the euro crisis has spread from the periphery countries of Greece, Portugal and Ireland into core nations such as France, which is now operating under a threat from Moody's Investors Service.

Many observers have called for Europe to pull out all the stops, primarily with a eurobond, large-scale bond purchases by the European Central Bank and a move to make the ECB the lender of last resort to ailing governments. The central bank itself is opposed, as well.

Indeed, this has been at the heart of a dispute between France and Germany, which, again today through Mr. Meister's comments, shows no sign of giving in.

Ms. Merkel today repeated her opposition, which, in effect, means it ain't going to happen.

“Again and again, there's a search for the answer that will bring a fast, immediate end to the whole crisis of confidence in the euro,” she said. “And I say yet again, there won't be one.”

This comes amid a disappointing debt auction in Spain, where, despite a new government, borrowing costs spiked, as they have been in other parts of the monetary union.

Marchionne on costs The costs of building vehicles in Canada must fall and match the costs of assembly in the United States, Chrysler Group LLC chief executive officer Sergio Marchionne says.

“You cannot have all things, you cannot have a strong currency, you cannot have an uncompetitive wage rate and then expect Chrysler or all the other car makers in this country to keep on making cars in this country and be disadvantaged,” Mr. Marchionne said today after a speech to the Canadian Institute of Chartered Accountants in Toronto, The Globe and Mail's Greg Keenan reports.

Retail sales climb Canadians are still shopping, and digging deeper than expected at that.

Retail sales in Canada climbed 1 per cent in September, Statistics Canada said today. Not only did sales rise, they did so broadly and marked the biggest gain since last November. September's rise, sharper than economists had expected, was the fifth in six months, the federal agency said.

In terms of straight volume, sales climbed 0.6 per cent. The biggest increase came in sales of new autos, primarily trucks, though sales also rose among used car dealers and parts suppliers. Sales at clothing stores and accessories shops also rose to offset a drop a month earlier.

Note, too, that nine of the 11 groups tracked by the agency chalked up gains, accounting for 90 per cent of all retail sales.

"With September's strong result, retail volumes are up 1.9 per cent annualized in the quarter, an acceleration from [the second quarter] and suggest a healthy contribution from consumption spending to GDP in [the third quarter]" said senior economist Krishen Rangasamy of National Bank. "The good retail volumes complement the strength seen in factories and suggest a decent September. September GDP should come in at around +0.2 per cent, putting Canada on track for a quarterly growth rate near 3 per cent annualized."

U.S. growth revised down The U.S. economy didn't expand quite as quickly in the third quarter as initially estimated.

The U.S. Commerce Department today revised down its estimate of third-quarter growth to 2 per cent from its earlier reading of 2.5 per cent, but this was largely because of how inventories were measured.

"Growth of real final sales remained at the healthy 3.6 per cent originally reported - so the details are not as ugly as the headline would suggest," said Andrew Grantham of CIBC World Markets.

While the report is disappointing, added senior economist Jennifer Lee of BMO Nesbitt Burns, it is a case of looking in the rear-view mirror.

"It is encouraging, to say the least, to see the October data coming in stronger, which is good news for the current quarter."

Campbell Soup slips I never knew there was a soup season, though I guess that makes sense. (Maybe in Canada it's year-round?)

Campbell Soup Co. said today its profit in its first quarter slipped to $265-million (U.S.) or 82 cents a share from $279-million, also 82 cents, a year earlier. Sales dipped 1 per cent to $2.2-billion.

Chief executive officer Denise Morrison said the company plans to invest this year to "establish the foundation" for the phase of growth.

“While it is early in this transition year, our efforts to stabilize U.S. soup profitability are on track," she said.

"As planned, we raised prices in response to inflation and reduced ineffective marketing spending, which led to improved profits despite anticipated volume declines. Specifically, we engaged in significantly less promotional spending. We also commenced our U.S. soup advertising later in the quarter to coincide with the start of soup season. This is part of a planned, full-year timing shift of our media dollars into the soup season where they are most effective.”

Business ticker

In Economy Lab We are now seeing runs on government bonds within Europe, Leonard Waverman writes. If the country currencies were separate, this would be a classic currency run similar to the Asian crisis of 1997.

In International Business The use of gold to fund a euro zone bailout is coming closer to reality, writes Jack Farchy of The Financial Times.

In Globe Careers Networking events are a fantastic way to meet new business prospects, potential partners, and leverage relationships within your existing network for referrals, Lauren Perkins of Forbes.com writes.

In Personal Finance Some ways to reduce the financial sting of donating to your favourite charity.

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