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When Don Boyes was driving up north last week, heading to a cottage where he had never been before, he brought along his iPhone.

Armed with an app that serves as a GPS device, he could manoeuvre all the right turns along the roads.

Suddenly at one point, where cellphone service became spotty, he lost his connection, and his directions. But Boyes, a senior lecturer in the geography department at the University of Toronto, wasn

More signs of economic weakness triggered a global sell-off in stocks Thursday. The Dow Jones industrial average fell more than 400 points in a return to the wild swings in the market last week.

In the United States, there were reports that more people joined the unemployment line last week than a week earlier, gasoline prices contributed to higher inflation and manufacturing slowed in the mid-Atlantic.

In Europe, bank stocks slid on worries about the region’s debt problems. In Asia, Japan’s exports fell for the fifth straight month.

The U.S. and European economies are “dangerously close to recession,” Morgan Stanley economists wrote in a report. “It won’t take much in the form of additional shocks to tip the balance.”

The Dow Jones industrial average was down 409 points, or 3.6 percent, to 11,001 at noon. The Dow was down by as much as 528 points about a half-hour into trading.

The Standard & Poor’s 500 index fell 46 points, or 3.9 percent, to 1,147. The Nasdaq composite fell 105, or 4.2 percent, to 2,406.

Last week was one of the wildest in Wall Street history. The Dow moved more than 400 points on four straight days for the first time.

But stocks had been relatively stable this week because investors were calmed by strong earnings reports. The Dow had fallen 76 points Tuesday and risen four points Wednesday _ the first time this month that the average rose or fell by less than 100 points on two straight days.

That ended Thursday. And with stocks down big, money flooded into U.S. Treasurys and gold, both considered safer investments.

The yield on the 10-year Treasury note briefly fell below 2 percent for the first time, before recovering to 2.07 percent. Low yields show that investors are willing to accept a lower return on their money in exchange for safety. Demand for government debt has stayed high, and yields low, even after Standard & Poor’s stripped the United States of its top credit rating.

Gold rose $26.30 per ounce to $1,820.30 after earlier climbing to a record of $1,829.70. That’s up from $1,400 at the start of the year and more than double the price several years ago. The price of gold has set one record after another, with some investors looking for stability and others simply looking to cash in.

The Morgan Stanley economists cut their forecast for growth in developed economies this year to 1.5 percent from 1.9 percent. Over the past 20 years, growth for developed economies has been closer to 2.3 percent.

Among the disappointing U.S. economic news:

_ 408,000 people applied for unemployment benefits last week, up from 399,000 the week before and the most in four weeks payday loans.

_ Inflation at the consumer level rose 0.5 percent in July, the highest since March. It had fallen 0.2 percent in June.

_ Manufacturing has sharply weakened in the Philadelphia region, according to a report from the Federal Reserve. Manufacturing had been one of the economy’s strongest industries since the recession ended in 2009, but its growth has slowed this year.

_ The National Association of Realtors said the number of people who bought previously occupied homes dropped in July for the third time in four months.

The fresh signs of economic weakness underscore the challenge for the Federal Reserve as it tries to help the economy with prices rising and the job market weak, said Jack Ablin, chief investment officer at Harris Private Bank.

“Every time the economy got the sniffles, we had the Federal Reserve standing by with tissues,” Ablin said. “This time around, I think the box is empty, and we’re going to have to go through this alone. I think we can do it. It’s just not something we’re accustomed to.”

The Fed has already said it will keep short-term interest rates super-low into 2013. But the risk of further stoking inflation may keep it from taking additional steps, such as an additional round of massive bond-buying.

In the meantime, worries about European debt hang over the markets. A default by any country would hurt the European banks that hold European government bonds, plus American banks that have loans to their European counterparts.

“Europe is the big question in the market, and nobody really knows what happens from here,” said Scott Brown, chief economist at Raymond James.

On Thursday, stocks in industries that depend on a growing economy fell the most. Industrial stocks in the S&P 500 fell 5.4 percent, technology stocks 5.1 percent and financial stocks 4.6 percent.

Crude oil fell $4.11 per barrel to $83.47 on worries that a weaker global economy will mean less demand. Falling prices for crude oil should work their way to the gas pump, though, and bring household budgets at least some relief.

Asian markets started Thursday’s drop. Japan’s Nikkei 225 index fell 1.3 percent. South Korea’s Kospi stock index fell 1.7 percent, and India’s Sensex index fell 2.2 percent.

The declines extended to Europe. In London, the FTSE 100 index fell 4.5 percent after a report showed that growth in British retail sales slowed more than economists expected last month. Germany’s DAX index fell 6.5 percent.

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Even a solid jobs report wasn’t good enough to calm financial markets.

The Dow Jones industrial average turned lower Friday as traders focused on Europe’s latest efforts to contain the region’s debt crisis. The Dow had jumped as many as 171 points shortly after the opening bell on a report that U.S. hiring picked up last month. By midmorning it was down more than 100 points.

European leaders are calling emergency meetings and seeking to reassure markets that a large nation such as Italy or Spain won’t become the latest country in the region to need a financial backstop.

The U.S. economy added 117,000 new jobs in July, and hiring in May and June were not as bad as reported previously, the Labor Department reported. The unemployment rate inched down to 9.1 percent from 9.2 percent, partly because some unemployed workers stopped looking for work. Health care providers and manufacturers added jobs.

About twice as many jobs as that must be created every month in order to rapidly reduce the unemployment rate. That rate has topped 9 percent in every month except two since the recession officially ended in June 2009. Many economists still fear that the economy might dip back into recession.

The solid report failed to lift the spirits of traders a day after the Dow Jones industrial average plunged 513 points. It was the worst day for the Dow since 2008.

In late morning trading the Dow Jones industrial average fell 117 points, or 1 percent, to 11,266. The Standard & Poor’s 500 index fell 15, or 1.3 percent, to 1,184. The Nasdaq composite index fell 43, or 1.7 percent, to 2,512.

Italy’s borrowing costs shot higher, escalating fears that Europe’s third-biggest economy might need a bailout that the rest of the continent won’t be able to afford. European leaders interrupted their vacations to consult on the debt crisis, seeking a way to keep the turmoil from pushing Spain and Italy into financial collapse.

Overseas markets also fell. Tokyo, Hong Kong and China all closed down 4 percent. Taiwan lost 6 percent. In Europe, shares recovered some of their losses after plunging to their lowest levels in more than a year. Germany’s DAX index fell 1.4 percent. Other indexes showed smaller losses.

Thursday’s sell-off was the Dow’s ninth-worst day on record in terms of points lost. It wiped out the Dow’s remaining gains for 2011. U.S. markets have entered a correction, falling 10 percentage points from their highs this spring cashadvance.

Traders have focused on a torrent of bad economic news since the U.S. government struck a deal last weekend to raise the nation’s borrowing limit, averting a debt default. Manufacturing and the service sector are barely growing. The economy expanded in the first half of the year at its slowest pace since the recession ended in June 2009.

Economists at Bank of America Merrill Lynch estimate there is a 35 percent chance of another recession within the next year. Only three of the three S&P 500’s ten industry groups are up for the year: Health care, utilities and consumer staples. Traders consider those companies to be relatively recession-proof.

The market’s decline continues two weeks of almost uninterrupted selling on Wall Street. If the Dow closes lower, it will have fallen all but one of the past 11 trading days. By one broad measure kept by Dow Jones Indexes, part of CME Group Inc., almost $1.9 trillion in market value has disappeared.

The Vix, one measure of investor fear, has doubled since July 1.

Economic fears pushed benchmark West Texas Intermediate crude for September delivery down by 64 cents on Friday to $85.98 per barrel on the New York Mercantile Exchange. On Thursday, crude tumbled $5.30 to $86.63.

The yield on the 2-year Treasury note fell to 0.29 percent, after brushing a record low of 0.26 percent earlier Friday. Frightened investors are buying bonds, sending their prices higher and yields lower. The yield on the benchmark 10-year Treasury note rose to 2.48 percent after hitting a low since last year of 2.34 percent.

Procter & Gamble’s stock opened higher but was flat in late morning trading. The consumer products company’s fourth-quarter revenue and income jumped on strong sales in emerging markets.

Viacom Inc. fell slightly after the firm said its income and revenue increased more than analysts expected in the second quarter because of strong advertising sales and fees from cable companies.

Priceline.com Inc. surged 8 percent, the most in the S&P, after the company reported that it earned far more than expected in the second quarter as travel bookings on the website increased.

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Regulators have rejected a Pfizer Inc. pain drug that is designed to discourage abuse.

The New York drugmaker said the Food and Drug Administration asked for more information about the drug, called Remoxy. In May it said approval of Remoxy could be delayed because of issues with the manufacturing part of its application. Pfizer did not say Friday if the FDA’s decision was related to those problems. Its shares slipped 8 cents to $20.57 in premarket trading.

Shares of Pfizer’s partners on Remoxy, Pain Therapeutics Inc. and Durect Corp., both plunged. Durect shares dropped 89 cents, or 29 percent, to $2.20. Pain Therapeutics stock gave up $4.83, or 52 percent, to $4.41.

Remoxy is similar to Purdue Pharma LP’s pain drug OxyContin. Both drugs contain an extended-release version of the drug oxycodone and both are intended to treat severe pain. OxyContin is one of the most frequently abused prescription drugs, and Remoxy is designed to be more difficult to abuse. The oxycodone in Remoxy is in a thick liquid form, which is designed to make it hard to crush and snort, or be injected, or dissolved in alcohol. Remoxy is a key part of Pfizer’s $3.6 billion acquisition of King Pharmaceuticals, which closed in March.

Purdue began selling a new tampering-resistant version of OxyContin last year. The time-release formula in the original version could be avoided if the drug was crushed or dissolved, which delivered the full dose quickly and created a high similar to heroin.

The FDA has long been concerned about abuse of prescription pain drugs, and in May, the agency called a meeting with drug companies who were studying extended-release opioid pain drugs. They discussed ways to train prescribers and reduce the risks of the drugs. Pfizer said those issues could also complicate approval for Remoxy.

The agency also delayed approval of Remoxy in December 2008, saying it needed more data.

Remoxy was developed by Durect, which licensed it to Pain Therapeutics in 2002. Pain Therapeutics later sublicensed the rights to King Pharmaceuticals, which was acquired by Pfizer.

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Spanish protesters of all stripes _ young and old, working and unemployed _ marched Sunday in Madrid to drive home their anger over high unemployment, bleak economic prospects and politicians they see as inept.

Similar demonstrations were being held later in other cities including northern Barcelona, eastern Valencia and southern Seville. Police were out in force after a Wednesday protest in Barcelona turned violent.

Prime Minister Jose Luis Rodriguez Zapatero said he expected the protests to be peaceful.

“A sacred rule of democracy is that in the exercise of rights you do so peacefully,” he said.

Nearly two years of recession have left Spain with a 21.3-percent unemployment rate _ the highest in the 17-nation eurozone _ and saddled with debt. The jobless rate, which has more than doubled since 2007, jumps to 35 percent for people aged 16 to 29. Many young, highly educated Spaniards can’t find jobs as the eurozone’s No. 4 economy struggles with low growth.

Protests began May 15 and spread to cities across the country, striking a chord with hundreds of thousands fed-up with the wage cuts and tax hikes needed to resolve a financial crisis they see as created by banks and wealthy developers free credit report and score.

Protester Antonio Cortes, 58, said Spain’s workers were being asked to bear the brunt of the financial crisis.

“This crisis was created by the capitalist financial system and we are paying for it. All the cuts shouldn’t be aimed at the working class,” he said.

Marchers departed from six points around Madrid bearing banners saying “Let’s march together against the crisis,” heading to Neptuno square near the country’s parliament building.

Zapatero’s government has tackled the crisis by cutting government spending, freezing pensions, raising the retirement age and making it easier and cheaper for companies to lay people off.

Spain slipped into recession in 2008 after a real estate bubble burst, halting a credit-fueled consumer spending spree.

It has not needed or sought an international bailout like fellow eurozone members Greece, Ireland and Portugal, but its financial troubles strike fear in other European capitals due to the sheer size of its economy.

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Russia offered Friday to mediate the exit of Libya’s longtime leader, cranking up pressure on Moammar Gadhafi as France and Britain seek to intensify their bombing campaign.

“He should leave,” Russian President Dmitry Medvedev said of Gadhafi.

Frustration is mounting in Moscow and Western capitals that the NATO campaign has dragged into its third month with no obvious end in sight. Analysts are skeptical as to whether Russia would have any leverage over Gadhafi, and the leaders of France, Britain and Germany said there’s no point in negotiating directly with Gadhafi himself.

Medvedev, speaking at a news conference at the Group of Eight summit in Deauville, France, said he is sending envoy Mikhail Margelov to the rebel stronghold of Benghazi, Libya, immediately to start negotiating. Medvedev said talks with the Libyan government could take place later.

Medvedev said Russia will use its contacts with both Gadhafi’s government and the rebels to try to negotiate a peaceful end to the conflict.

Russian officials have been critical of Gadhafi but also complain about what they called an excessive use of force by NATO and have urged a quick end to hostilities. Russian Foreign Minister Sergey Lavrov recently held talks in Moscow with representatives of both Gadhafi’s government and the rebels.

Asked whether Russia could offer Gadhafi asylum, Medvedev gave a firm negative answer. He added that a place for Gadhafi to stay and other details could be discussed after he steps down.

Margelov told reporters earlier Friday that it’s necessary to negotiate with all “reasonable” representatives of the Libyan government, including Gadhafi’s sons.

A Libyan rebel spokesman, Abdel-Hafidh Ghoga, said Friday that Russia’s moves to persuade Gadhafi to leave power were too little, too late.

“It’s too late, and it’s not a big deal,” Ghoga, the vice-chairman of the opposition National Transitional Council, told a rally in the eastern city of Benghazi.

A Moscow-based Middle East expert expressed doubt that Gadhafi will agree to step down after Benghazi-based opposition leaders rejected a cease-fire agreement proposed by the leaders of the African Union in late March.

Gadhafi “will fight to the end with unpredictable consequences for everyone involved,” Yevgeny Satanovsky, head of the Moscow-based Middle East Institute, told The Associated Press. “He already agreed to leave, but Benghazi needs his scalp.” Satanovsky said that Gadhafi’s unpredictability leaves little room for a tangible prediction of what will happen if Russia steps in as a mediator.

Rebel fighters clashed with government forces to the south and west of the rebel-held city of Misrata on Friday. Dr. Mustafa Omar of Hikma hospital said five rebels were killed and 26 wounded. It was unclear if any government soldiers were killed.

While rebel fighters have pushed Gadhafi’s troops to the city’s outskirts, the city, Libya’s third largest, has been under siege for months, receiving food and medical supplies only by sea payday loans.

U.S. National Security Council spokesman Tommy Vietor said Russia’s suggestion that it could help mediate Gadhafi’s exit is “a positive development and further proof that the international community is becoming more united in its belief that Gadhafi must go.”

French President Nicolas Sarkozy, hosting the G-8 summit, said Friday there is “great unanimity” about an “intensification of the military intervention” to protect civilians from Gadhafi’s forces. He did not say how, but France and Britain said this week they are ready to deploy attack helicopters in the campaign.

British Prime Minister David Cameron told reporters in Deauville that the deployment of helicopters was “part of the process of turning up the pressure,” on Gadhafi. He said the campaign is entering a “new phase.”

“Now there are signs that the momentum against Gaddafi is really building,” Cameron said. “We know that we’re on the right side, we’re doing the right thing, the pressure is telling.”

On Thursday, Libya’s government for the first time said it is prepared to speak with its rebel adversaries, signaling that months of fighting and NATO bombardment may be closer to forcing some concessions. At the same time, it insisted that Gadhafi would not relinquish power.

In response, NATO spokeswoman Oana Lungescu said “words are not enough.”

The commander of NATO’s operations in Libya said Friday that French and British attack helicopters will operate in Libya under NATO’s command, rather than under separate national command.

Canadian Lt. Gen. Charles Bouchard, speaking by video link from Naples, Italy, would not say how or where the helicopters would be used, saying only that he wanted to develop “an effective, aggressive but safe” operation. He said they could help target military vehicles that are difficult to identify from higher altitudes.

So far, the NATO campaign has relied largely on strike jets dropping munitions from an altitude of about 15,000 feet (4,600 meters). The helicopters, flying much lower and slower, could more accurately identify targets in densely populated areas while risking fewer civilian lives. But such flights would also expose the helicopter crews to greater risks.

Since March 31, NATO has commanded an international operation to protect civilians and enforce a no-fly zone, as Gadhafi has sought to put down a rebellion against his rule.

Bouchard said Friday that forces loyal to Gadhafi have laid land mines near the rebel-held city of Misrata. Previously, NATO had accused the Gadhafi regime of mining the waters off the Libyan coast.

He defended the efficacy of the NATO operation against critics who believe the conflict has become a stalemate, saying that humanitarian aid is moving more freely and many civilian lives have been saved.

“I believe today that Libya is a much safer place than it was on” March 31, Bouchard said.

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Reinsurance Group selling notes

Still angry over the U.S. raid that killed Osama bin Laden, Pakistani lawmakers demanded an end to American missile strikes against Islamist militants on their soil Saturday, and warned that Pakistan may cut NATO’s supply line to Afghanistan if the attacks don’t stop.

The nonbinding parliamentary resolution reflects the precarious state of the U.S.-Pakistani alliance, which is vital to the war effort in neighboring Afghanistan. The bin Laden raid has brought to the fore a longstanding dilemma that U.S. strikes that Washington says kill militants often are seen by Pakistanis as a violation of sovereignty with mostly civilian victims, exacerbating an already-high anti-American sentiment.

The measure was passed after a rare, private briefing in Parliament by Pakistan’s military leaders, who were humiliated by the May 2 U.S. Navy SEAL raid that killed the 54-year-old al-Qaida chief in his compound in Abbottabad, a northwest garrison city. Pakistanis were angry the military allowed it to happen while the U.S. said the proximity to a military academy and the capital, Islamabad, raised suspicion that some security elements had been harboring bin Laden.

Washington also has been unable to get Islamabad to go after militant groups, such as the Haqqani network, who use its soil as hideouts but stage attacks only inside Afghanistan. Analysts say Pakistan may be maintaining ties to some insurgents because it wants leverage in Afghanistan _ and a wedge against archrival India _ once the U.S. pulls out.

During a visit to Afghanistan, U.S. Sen. John Kerry, chairman of the powerful Senate Foreign Relations Committee, called on Pakistan to be a better partner in the fight against terrorists.

“We obviously want a Pakistan that is prepared to respect the interests of Afghanistan, and to be a real ally in our efforts to combat terrorism,” said Kerry, a Democrat from Massachusetts. “We believe that there are things that can be done better.”

Pakistani officials deny links to militant groups, saying they are too stretched battling insurgents attacking the Pakistani state to go after those fighting in Afghanistan right now.

Underscoring the threat, a roadside bomb hit a passenger bus Saturday near Kharian, a garrison town in eastern Pakistan, killing at least six passengers and wounding 20, senior police official Mian Sultan said. The bus was en route to Kharian from the nearby city of Gujrat.

On Friday, two suicide bombers struck a training center for paramilitary police recruits , killing 87 people in the Shabqadar area of Pakistan’s northwest in what the Pakistani Taliban called a revenge attack for the death of bin Laden.

Pakistani military officials insist they did not know bin Laden was living in Abbottabad, and U.S. officials say they have no evidence that the top leadership was involved in hiding him.

Still, the U.S. didn’t warn Pakistan ahead of the raid, and suspicions linger that some elements in its security establishment were helping to hide the terrorist leader.

That has deepened distrust between the two countries, who have had an uneasy alliance since the Sept paydayloans. 11, 2001, attacks. Ties have frayed in recent months over the case of Raymond Davis, a CIA contractor who killed two Pakistanis in January, as well as missile strikes that have allegedly killed civilians.

Davis, who claimed the two Pakistanis were trying to rob him, was eventually freed after the victims families agreed to financial compensation, even as the U.S. insisted he had diplomatic immunity from prosecution.

The U.S. and NATO rely heavily _ though increasingly less _ on land routes in Pakistan to ferry non-lethal material to their troops across the border in Afghanistan. That gives Pakistan some leverage in its dealings with the U.S.

Last fall, after NATO choppers from Afghanistan killed two Pakistani soldiers during a border incursion, Pakistan closed the border to U.S. and NATO supply trucks for nearly two weeks.

The parliamentary resolution called the U.S. raid a violation of Pakistan’s sovereignty and said Pakistan would not tolerate future such incursions. It also criticized the drone strikes and said the government should consider preventing U.S. and NATO supply trucks from crossing over to Afghanistan if they continue.

The measure doesn’t have the force of law, but is likely to be influential because it enjoys broad support from the ruling party and the opposition. It also reflected the political cost in Pakistan of the partnership with the U.S.

It’s difficult to say how much of the anger over missile strikes is real and how much of it is Pakistani officials’ way of appealing to a domestic audience that is largely anti-U.S. The government is widely believed to secretly aid in the missile strikes.

Few Pakistani lawmakers would discuss the confidential session, which began Friday and stretched into Saturday morning. The length alone suggested that the generals were questioned vigorously _ a rarity in a place where the military operates largely out of civilian control.

Intelligence chief Lt. Gen. Ahmed Shuja Pasha admitted negligence in tracing bin Laden, but also noted that Pakistan had cooperated with the U.S. in helping kill or capture numerous bin Laden allies.

When asked why the CIA was able to track bin Laden, the spy chief said the U.S. agency had managed to acquire more sources in Pakistan than the Pakistani agencies because it paid informants far better, according to a lawmaker who attended the session.

“Where we pay 10,000 rupees ($118), they pay $10,000,” one lawmaker described Pasha as saying. The lawmaker described the proceedings on condition of anonymity because the session was supposed to be confidential.

Pasha offered to step down if the political leaders demanded it, but none did, according to the lawmaker. Still, Parliament requested that an independent commission probe the U.S. raid debacle instead of one led by generals.

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A pay increase of A$234,000 ($252,000) at the height of the global financial crisis made Reserve Bank of Australia Governor Glenn Stevens one of the world’s highly-compensated central bankers.

The raise was agreed on by the bank’s board in October 2008 following a review by PricewaterhouseCoopers and the ending of performance bonuses, according to correspondence between the central bank and Treasurer’s office obtained by Bloomberg News under a Freedom of Information request.

Stevens’s 2010 total compensation was A$1.05 million, with an A$805,000 base salary that was 61 percent more than European Central Bank President Jean-Claude Trichet’s and four times that of Federal Reserve Chairman Ben S. Bernanke. Stevens was one of seven central bank chiefs from around the world to receive an ‘A’ grade in a September 2009 Global Finance Magazine survey for navigating their economies through the world’s worst financial crisis since the 1930s.

“Given the national significance of the governor’s position, the Board’s Remuneration Committee, and the board itself, discharges its responsibilities in this area in a disciplined manner,” Donald McGauchie, chairman of the remuneration committee and a member of the board until last month, wrote to Treasurer Wayne Swan explaining the decision.

Trichet, Shirakawa

Spokesmen in the Reserve Bank and Treasurer’s office declined to comment on the correspondence when contacted by Bloomberg News yesterday. Australian offices and markets are closed for the Easter holiday today.

Trichet was paid 367,863 euros ($537,300) last year, 2 percent more than his 2009 salary, according to the ECB’s annual accounts published in March. Bernanke earned $199,700, while Bank of Japan Governor Masaaki Shirakawa’s salary, at 34.4 million yen ($419,410) for the year to March 31, fell 1.5 percent from a year earlier.

Remuneration for Japan’s central bank governor has declined 10.8 percent over the past 10 years as the country grappled with deflation.

Stevens’s salary still trails that of Hong Kong Monetary Authority Chief Executive Norman Chan, who earned HK$7.5 million ($965,000), plus HK$868,000 in benefits last year, according to the HKMA’s annual report published yesterday.

Australia was one of the few economies to skirt the global recession as Stevens slashed the overnight cash rate target to a 50-year low of 3 percent. As the economy rebounded, he raised rates in seven quarter-percentage-point steps from October 2009 to November last year to 4.75 percent, the highest in the developed world.

Surpassing Gillard

The Reserve Bank forecasts Australia’s economy will expand 4.25 percent this year, driven by a mining investment boom and record job growth that helped spur the nation’s currency to the highest level since it was freely floated in 1983 cash advance flexible payments.

“The Australian economy overall has performed very well,” said Edwin Truman, a former director of the Fed’s international- finance division. “It was only mildly affected by the crisis.” The central bank “moved quite aggressively quite early in terms of liquidity support,” he said.

While central bank salaries “can be a political issue like everybody else’s in the financial sector,” the pay increase may be difficult to roll back for Stevens’ successors, said Truman, who’s now a senior fellow at the Peterson Institute for International Economics in Washington. “It’s hard for someone to say ‘I’m not worth that much,’” Truman said.

Stevens’s salary is more than double that of Prime Minister Julia Gillard’s base pay of A$355,264. In correspondence with McGauchie, Swan suggested the governor’s remuneration was too high.

In a letter dated Sept. 15, 2010, Swan said that in the future the Reserve Bank’s Remuneration Committee should “discharge its powers with an emphasis on ensuring that salaries are adjusted to be in line with community expectations of senior officials’ remuneration.”

Swan, in the letter, also said he was advised of the October 2008 decision to increase the governor’s salary in September 2009, “nearly one year after” the move.

Correspondence

The correspondence also included a letter to Swan from Jillian Broadbent, a central bank board member on the remuneration committee, expressing “serious concerns about the possibility that responsibility for the remuneration of senior officers of the Reserve Bank be moved away from the bank’s board.”

She said the current practice, adopted to address the acute staffing difficulties that the bank experienced in the 1980s as personnel were lured by higher-paying jobs in the finance industry, worked “very well” since it was established by then- Treasurer Paul Keating.

Under that framework, it recognized that the relevant comparisons for Reserve Bank remuneration aren’t mainstream government agencies but government business enterprises and other financial institutions.

“Attracting and retaining top financial talent into government in Sydney is a challenge,” she wrote in the letter dated Sept. 17, 2010. “Salary levels and the quality of the bank’s officers are interdependent.”

Swan, in a press conference earlier this month, said he understood community concern related to the governor’s salary, describing the issue as a “matter that’s before the government.”

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European manufacturing growth accelerated to the fastest pace in more than 10 years in February, a further sign the economy is gathering strength.

A gauge of manufacturing in the euro region rose to 59 last month from 57.3 in January, London-based Markit Economics said in an e-mailed report today, confirming a Feb. 21 estimate. That’s the highest since June 2000. A reading above 50 indicates expansion.

European manufacturers have helped bolster the region’s economic growth as export growth countered the impact of austerity measures on consumer demand. Peter Bauer, chief executive officer at Infineon Technologies AG, said on Feb. 17 that the world’s second largest chipmaker is “firing on all cylinders” and that the “volume of orders is excellent.”

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