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European Shares to Open Higher, Hopes Fade for EU Summit

European shares were called to open slightly higher on Wednesday after closing flat in the previous session as investors waited on the sidelines ahead of a summit of European leaders on Thursday.

Francois Hollande, France's president, gestures as he speaks with Angela Merkel, Germany's chancellor, during a news conference at Villa Madama in Rome, Italy.
Alessia Pierdomenico | Bloomberg | Getty Images
Francois Hollande, France's president, gestures as he speaks with Angela Merkel, Germany's chancellor, during a news conference at Villa Madama in Rome, Italy.

Hopes for decisive action and a consensus on how to tackle the euro zone debt crisis at the summit have already faded.

German chancellor Angela Merkelappeared to kill off the prospect of Europe wide bonds at birth in comments made on Tuesday, saying Europe would not share total debt liability "as long as I live".

Her comments came as European Council president Herman Van Rompuy released a seven-page report on closer fiscal and banking union, outlining plans for a euro zone treasury that would issue common debt in the medium term.

The FTSE was expected to open 24 points higher at 5470, the DAX was seen opening higher by 36 points at 6172 and the CAC 40 was called to open higher by 12 points at 3024.

Credit ratings agency Egan-Jones cut Germany's rating to A-plus with a negative outlook from AA-minus, noting that the fallout from a Greek exit from the euro zone was still a concern.

On Wednesday, euro zone finance ministers will hold a teleconference to discuss a request for emergency lending from Cyprus and the details of a similar request from Spain, euro zone officials told Reuters.

In company news, Qatar, Xstrata's second largest shareholder, made a surprise demand for a 16 percent increase in the merger ratio on Glencore's $30 billion takeover of the miner on Tuesday.

Glencore only has until Thursdayto sweeten the deal or be forced to delay shareholder meetings scheduled for mid-July and will not be able to push the deal through on current terms, sources told Reuters.

One of the major issues has been what shareholders see as extremely generous benefit packages for senior executives including Xstrata chief executive Mick Davis.

Rupert Murdoch's News Corp confirmedreports in Tuesday’s Wall Street Journal, which the media mogul owns, that it was considering splitting its publishing and entertainment operations in two.

But an uncertain management structure for the two proposed companies raised new questions about a succession plan at the family-controlled media empire.

No final decision has been made yet but one could be announced as early as Thursday sources told CNBC.

Google is expected this week to show off a tablet running its newest mobile software and a service for companies to rent computer servers to store data, according to media reports.

The unveiling of various new devices and Web services is part of Google's annual software-developers conference, where the company hopes to win over mobile-app creators and device owners in a continuing battle with Apple.

Contact Europe: Economy

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