Syria has decided to slash public sector spending in a bid to head off a crisis for an economy that has taken a beating due to months of unrest and sanctions, media said on Tuesday.

Prime Minister Adel Safar has issued an order for the public sector to reduce spending by 25 percent in a move designed at "limiting waste", Al-Baath newspaper reported.

Australia's central bank on Tuesday said there was a "non-trivial" possibility of a severe contraction in the Eurozone economy, leaving the door open for further interest rate cuts in 2012.

The Reserve Bank of Australia (RBA) said downside risks to the global economy from Europe's sovereign debt woes had increased of late "though the timing and magnitude of any effects... remained very difficult to predict".

Japan is preparing to buy Yuan-denominated bonds issued by the Chinese government under a proposed bilateral currency and financial agreement, according to the Nikkei business daily.

Japanese and Chinese officials are working out plans to have the pact signed when their premiers hold summit talks in Beijing on Sunday, the brief dispatch said on Tuesday.

Western sanctions have taken such a toll on Iran over the past 18 months that now -- as the screw is about to be tightened yet further -- Tehran's studied insouciance is slipping, with officials admitting the economic damage being felt.

"War-time conditions" demanded dramatic policy reactions, the head of Tehran's chamber of trade and industry, Yahya AlEshaq, told Sunday's Iran Daily newspaper.

The Swiss franc rose further against the euro on Monday despite last week's decision by the central bank to maintain its cap on the exchange rate.

At 2:45 pm (1345 GMT) the Swiss currency stood at 1.219 francs against the euro -- a high since the end of November -- compared to 1.2204 late on Friday.

The British government will Monday accept in full recommendations to split banks' retail and investment units in a bid to avoid a repeat of the financial crisis, business minister Vince Cable said.

A report by the government-appointed Independent Commission on Banking, published in September, recommended measures to protect retail operations as part of sweeping reforms to be brought in by 2019.

United Arab Emirates airline, Etihad, is to pay 72.9 million euros ($95 million) to become the biggest shareholder in Germany's second-largest airline, Air Berlin, the German group said on Monday.

Etihad, which already held 2.99 percent in the German carrier, is to buy 31.6 million more shares in a capital increase, thereby raising its stake to 29.21 percent, Air Berlin said in a statement.

Europeans are tightening their belts and spending less on Christmas gifts this year as they struggle with incomes hit by austerity measures or fear the economy could worsen in 2012.

Mother Nature is helping retailers in many countries this year as there have been no snow storms keeping consumers home and playing havoc with deliveries.

Saab cars filed for bankruptcy on Monday, a Swedish district court told Agence France Presse, bringing to an end two years of efforts to rescue the iconic brand.

The final desperate efforts to organize help in China were obstructed by General Motors over licenses.

Alitalia has held high-level talks on a possible merger with Air France-KLM, which already holds a 25 percent stake in the Italian airline, the daily Il Messaggero reported Saturday.

"Alitalia's mission to Paris for a wedding with Air France," read the headline on a report that said Alitalia managers had a meeting in Paris on Friday with Air France chief executive Jean-Cyril Spinetta.