European shares had their biggest weekly decline in eight weeks

European shares had their biggest weekly decline in eight weeks as concern mounted peripheral euro area countries can not pay their debts and North Korea fired missiles in South Korea for the first time since the 1950-53 war.

Banks and insurers led the decline as investors waited to see how many loans Ireland European bailout fund, as the cost of insuring the Portuguese government debt rose to a record. Bank of Ireland Plc fell 45 percent, the biggest weekly fall in the benchmark Stoxx Europe 600 Index. Banco Santander SA fell 12 percent and BNP Paribas lost 8.5 percent.

The benchmark Stoxx 600 fell 1.1 percent last week, the biggest weekly decline since September. The meter has yet met the 15 percent from its low this year in May, investors speculated that the world economy will grow after the companies reported better than expected results and U.S. central banks Japan announced more measures to stimulate economic recovery to shore.

"After Ireland, Portugal is a likely candidate for aiding Spain's close," said John Plassard, head of European equities at Louis Capital Markets LP. "Amid these problems, the geopolitical problem between the two Koreas is the icing on the cake in a bad week."

Korean conflict

North Korea threatened a "terrible rain of fire" as the U.S. sent the nuclear-powered aircraft carrier USS Washington for the Yellow Sea for joint military exercises with South Korea. On 23 November, North Korea bombed a community of South Korean fishing and the military base on the island Yeonpyeong highly flammable ammunition that killed four people, including two construction workers, blew the windows of a school and burned houses.

In Europe, the cost of insuring the debt of the Portuguese and Spanish government against default rose to record levels, according to data provider CMA. Portuguese Finance Minister Fernando Teixeira dos Santos said that EU governments can not impose a rescue plan in his country even when speculation mounted that Portugal will eventually have to request one. Most governments in the euro region and the European Central Bank are urging Portugal to accept a rescue plan to halt the contagion spread to Spain, the Financial Times Deutschland reported on Friday.

Ireland Rescue

Irish officials hurried to complete a deal for an international aid package before financial markets reopen next week with talks focused on the situation of the bondholders in the largest banks in Ireland, amid concern that the government require that debt holders to share the cost of bailing out financial statements of the system. Finance ministers plan area to finalize an agreement on 28 November, a European Union official said on condition of anonymity.

The Bundesbank President Axel Weber, who is also a European Central Bank Governing Council member, said the rescue fund the EU has enough money to calm the markets and there is no alternative to European monetary union .

"I think we can rule out" the pessimistic scenario that the fund could be exhausted, Weber said in a panel discussion on Thursday in Berlin. "We will do everything possible to safeguard the existence of the euro," he said.

Bank of Ireland lost 45 percent amid concerns that the government will force a portion of the cost of rescuing banks in the country of the senior bondholders. The bank has 5.4 billion euros (7.2 billion) senior unsecured debt and a € 5,900,000,000 bonds guaranteed by the government.
Two people familiar with the situation said the lender may result in majority control of the state that the government inject more capital into the bank.

Santander, Mediobanca

Banco Santander, Spain's largest bank, shed 12 percent after calling on the European Commission to reject plans for global regulators require lenders to accumulate more capital in boom times. The bank urged the commission to take a different approach than that proposed by the Committee on Banking Supervision, or scrap the idea altogether.

Mediobanca SpA of Italy withdrew 9.9 percent, while France's BNP Paribas fell 8.5 percent.

De La Rue Plc fell 13 per cent of the company said it still "remains uncertainty" on issues of work being produced. De La Rue reported a 17 percent drop in first half revenue and removed from the Stoxx Europe 600 index.

Porsche Automobil Holding SE rose 15 percent after the automaker's profit from operations increased more than sevenfold in the first quarter.

Provident Financial Plc, the UK's largest lender high risk, rallied 12 percent after announcing spending cuts that the government will have a "modest" about their customers.

Shopping Capital Group Plc, the largest owner of shopping centers in Britain, rose 9.7 percent last week after saying Simon Property Group Inc. can provide more than 2.3 million pounds (3.6 billion ) in cash for the company.
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