A look at economic developments around the globe

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Associated Press

Posted on June 25, 2012 at 2:01 PM

A look at economic developments and activity in major stock markets around the world Monday:

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MADRID — Spain formally asked for a loan from international creditors to help clean up its troubled banking sector, but didn't specify how much of its $125 billion loan package it will request.

Economy Minister Luis De Guindos said recently the figure will be made known July 9 when Spain and its partners in the euro currency region agree on the terms of the loan.

Last week, two audits said Spain's banks could need up to $78 billion to survive if the economy were to suffer an extreme deterioration.

The Spanish government and Spanish banks are perilously co-dependent. The financial strength of one hinges on the other, and right now both are struggling for survival.

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ATHENS, Greece — A leadership vacuum loomed for Greece as the designated finance minister resigned for health reasons just three days after he was rushed to the hospital and before he even had time to be sworn in.

Meanwhile, Prime Minister Antonis Samaras was discharged from another hospital following eye surgery to repair a detached retina over the weekend.

The health problems of Greece's five-day-old government have already forced the country's international debt inspectors to postpone their Monday visit to Athens and prompted Germany to warn that a European Union summit later this week would be unlikely to produce any major decisions on Greece.

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LONDON — World stocks fell amid concern that a critical European summit later this week will not yield a deal that might restore confidence in the future of the 17-country euro currency.

Investors worry that Europe's piecemeal approach to its spreading government debt crises could backfire, causing the banking system of a large country like Spain's to collapse. That could send shock waves through tightly connected global financial markets.

European leaders are gathering at the end of this week in Brussels for another summit aimed at reining in the crisis, but market players remain skeptical that Germany will sign off on efforts to quell the crisis.

Britain's FTSE 100 fell 1.1 percent, Germany's DAX slid 2.1 percent and France's CAC-40 dropped 2.2 percent. Spain's benchmark IBEX 35 closed down 3.7 percent.

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TOKYO — Earlier in Asia, Japan's Nikkei 225 index closed down 0.7 percent, Hong Kong's Hang Seng dropped 0.5 percent, South Korea's Kospi slid 1.2 percent and Australia's S&P/ASX 200 fell 0.5 percent.

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NICOSIA, Cyprus — Cyprus has formally requested a bailout package from its partners in the European currency union to help it shore up its banks. Cyprus is the fifth eurozone country to seek foreign aid from other countries using the euro.

Ratings agency Fitch downgraded Cyprus to "junk" status, and the country's benchmark declined 7.2 percent.

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CAIRO — Egypt's benchmark stock index closed up 7.6 percent, its largest single-day gain in nine years, following the declaration of a victor in presidential elections.

Mohammed Morsi of the Islamist Muslim Brotherhood beat out Ahmed Shafiq, the last prime minister of deposed leader Hosni Mubarak.

Many feared the announcement would trigger violence, but so far celebrations by Morsi backers have dominated the streets.

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