Morning Business Memo

Jan 4, 2012 7:02am

This may be a new year, but the toughest challenge for the global economy is still the same: Europe’s financial crisis. A tough set of talks will begin tomorrow in Greece. Workers will be asked to take pay cuts and make other concessions. Prime Minister Lucas Papademos will hold negotiations with trade unions. This comes ahead of a visit in mid January from “the troika” — representatives from the IMF, European Commission and European Central Bank. Greece is still negotiating terms of its second bailout. Yesterday government spokesman Pantelis Kapsis warned that Greece could have to leave the euro if it fails to finalize the details of the $169 billion bailout and that more austerity measures may be needed.

The number of new prescription drug shortages in 2011 shot up to 267, well above the prior record and about four times the number of medication shortages in the middle of the last decade. Figures just released by the University of Utah Drug Information Service, which tracks national drug shortages, show there were 56 more newly reported drug shortages in the U.S. last year than in 2010. By contrast, there were only 58 drug shortages reported in 2004. As the drug shortages worsen, so does their impact on patient care, particularly in hospitals. The inability to get crucial medicines has disrupted chemotherapy, surgery and care for patients with infections and pain.

The Dow Jones index opens for business this morning at its highest level in more than five months – just shy of 12,400 after yesterday’s rise of almost 180 points. Investors reacted to a strong report on US manufacturing from the Institute for Supply Management. Markets are also looking for positive results from today’s Commerce Department report on factory orders and the automakers’ car and truck sales.

Homeowners’ insurance premiums are starting to rise after tornadoes, hail, winds and lightning slammed company balance sheets last year. USA Today reports insured losses in the U.S. in the first half of 2011 were $17.8 billion, more than the $13.6 billion insurers paid in all of 2010, according to Munich Re, a giant European reinsurance company.

Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc

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