LONDON | Fri Feb 8, 2013 9:14am EST

LONDON (Reuters) - They may have had accolades and a knighthood in common, but veteran British thespian Alec Guinness found his fellow actor and former mentor Laurence Olivier tiresome and vindictive, newly released extracts from his diary show.

Writing just a day after Olivier's death, Guinness praised his contemporary as a "giant" of the theatre, but said he was unmoved by Olivier's performance in "Oedipus Rex".

"His 'I defy you, stars' in Romeo was memorable. And so was his Poor naked wretches etc in Lear. But his famous howl in Oedipus I thought just tiresome," Guinness wrote in a diary entry dated July 12, 1989.

"Like so many people whose ambition drive them to great eminence, he had a cruel and destructive streak. Side by side with his generosity, he could be unpleasant, possibly even vindictive," he wrote.

Born seven years apart, Guinness and Olivier first met on stage in 1935 in a performance of "Romeo and Juliet".

Guinness went on to win an Oscar for his performance in "The Bridge on the River Kwai" in 1957 and star as Obi-Wan Kenobi in George Lucas's "Star Wars" franchise.

Guinness wrote that Olivier "knew every trick of the trade", including brightening and dimming lighting when he entered and exited the stage.

"He was always very conscious of the audience - and his own powers over them. I'm not sure he was an artist but he was total actor - a giant among actors," Guinness wrote.

The entries are part of a collection of 100 diary volumes and 900 letters which will be available for research at London's British Library next year and chronicle Guinness's career from the late 1930s until his death in 2000.

The library purchased the documents for 320,000 pounds ($502,500) from the Alec Guinness Estate, which still holds the copyright.

($1 = 0.6368 British pounds)

(Reporting by Alice Baghdjian, editing by Paul Casciato)

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n">(Reuters) - California Energy Commission staff on Friday said BrightSource Energy's proposed 500-megawatt Hidden Hills solar thermal power project would have "significant" impact on the environment.

In a statement on the final staff assessment, the state's primary energy planning and policy agency cited impacts on "biological resources, cultural resources, land use, and visual resources" even if recommended mitigation measures are implemented.

BrightSource said the company is looking forward to the formal evidentiary hearings upon which the Commission will base its final decision.

"Unmitigated environmental impacts and non-compliance with applicable laws and regulations would require the Commission to adopt override findings if the project is approved," the CEC said in a statement.

The proposed project would consist of two 250-MW solar plants, each having about 85,000 heliostats - elevated mirrors used to focus the sun's rays on a solar receiver. It would be located on 3,277 acres of private land leased in Inyo County next to the Nevada border.

The construction of the $2.2 billion project, if approved, would take about 29 months with work scheduled to start in the second quarter of 2013 and end in the fourth quarter of 2015.

BrightSource's first major project, the $2.2 billion Ivanpah plant in California, is nearly complete. The 377-megawatt plant is backed by a $1.6 billion government loan guarantee and is expected to enter service in 2013.

California has a goal to produce 33 percent of its power from renewable sources by 2020.

(Reporting by Nichola Groom in Los Angeles and Koustav Samanta in Bangalore; editing by Jim Marshall)

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WASHINGTON | Thu Dec 20, 2012 7:41am EST

WASHINGTON (Reuters) - Western states that rely on receipts from coal sales to help fund their governments are concerned the mining industry is dodging royalty payments on lucrative U.S. exports to Asia.

By valuing coal at low domestic prices rather than the much higher price fetched overseas, coal producers can skip a large royalty payout when mining federal land.

The practice could add up to hundreds of millions of dollars in forgone royalties if exports to Asia surge in coming years as the industry hopes, Reuters found.

Wyoming warned federal officials about flaws in the royalty system a year and a half ago. Last week Montana Governor Brian Schweitzer said he will not tolerate the coal industry skirting royalties: "If there's phony baloney going on, we have to get to the bottom of it."

Montana and Wyoming get half of federal royalties on coal from their states.

Asian energy demands mean several million tons of the black rock typically move from the Powder River Basin in eastern Wyoming and Montana across the Pacific each year. Taxpayers have a stake in those sales since the region is mostly on public land.

Powder River Basin sales are uncommonly profitable for miners like Arch Coal, Peabody Energy Corp. and Cloud Peak Energy since coal worth about $13 a ton last year domestically could have fetched roughly 10 times that in China.

Last year less than 5 percent of Cloud Peak coal was shipped to Asia but that accounted for nearly 19 percent of revenue, or about $290 million.

Federal and state officials have said that the mining industry is two steps ahead of regulation as it moves into Asian markets and that the current rules that value coal are open to abuse.

Questions about royalties and taxpayer interests could flavor a dispute about whether coal export terminals should be built in the Pacific Northwest.

Activists in Oregon and Washington have vowed to block coal trains that the mining industry hopes will link the Powder River Basin and Asian markets. Coal export foes say local communities will be harmed by mile-long coal train traffic, and scientists warn that coal power is worsening the impacts of climate change.

VAGARIES OF ROYALTIES

Officials expect coal royalties to be paid on the highest value for the fuel, which is typically the price utilities are willing to pay.

But regulators fret that miners are selling to sister companies at low domestic prices and then pocketing gains when that coal eventually reaches Asian power plants, thus circumventing the higher royalty.

Arch Coal, Cloud Peak and Peabody Energy declined to comment on how they book Asian sales, but they boast to investors about their profitable trade and brokering business.

That business is booming.

About 54 percent of coal export sales from the Powder River Basin was handled by brokers last year while only about 16 percent of such sales east of the Mississippi River was handled that way, according to the Energy Information Administration.

The Office of Natural Resources Revenue, an agency of the Interior Department, has struggled to find the true value of coal when brokered deals and direct-to-utility sales produce different prices for the fuel.

The agency's benchmarks for finding the true value of coal "have proven difficult to use in practice," the agency wrote in May 2011 as it mulled royalty rules that it said were open to abuse.

In a letter supporting tougher rules, the Wyoming Department of Audit beseeched ONRR to "not allow coal producers to create affiliates to reduce the royalties paid."

The mining industry, though, defended the status quo in several letters to regulators.

An ONRR spokesman said officials were committed to collecting every dollar due taxpayers, but he could not comment on when final royalty valuation rules might be proposed.

Autumn Hanna with nonpartisan Taxpayers for Common Sense said the government must quickly put rules in place to protect the public interest on coal sales.

"Taxpayers stand to lose day by day with the existing rules," she said. "The new rules are needed now."

FUTURE EXPORTS

The coal trade has become a controversial issue in the Pacific Northwest where miners want new terminals to allow about 150 million tons of coal a year to be exported from the Powder River Basin.

While politicians spar over whether those ports should be built, there is less friction about what taxpayers are due.

"The Department of the Interior should ensure these companies pay royalties on the full value," said Oregon Senator Ron Wyden, whose staff has met with federal officials in recent weeks to discuss the issues raised by Reuters reporting.

Wyden, a Democrat, will chair the Energy and Natural Resources Committee in the next Congress.

Alaska Senator Lisa Murkowski, the ranking Republican on that committee, believes the government should allow coal exports but officials must protect taxpayers' stake in such sales.

"We know Interior is looking at this and we wait to hear what they find," said a Murkowski spokesman, who noted the senator believes Congress should be setting rules on royalty payments.

Montana Governor Schweitzer, who leaves office next month, has roundly supported the coal terminal expansion, but the straight-talking rancher and miner said taxpayers must get a fair cut on those Asian sales.

"We need to collect on the actual value," Schweitzer told Reuters in an interview.

(Reporting by Patrick Rucker; editing by Prudence Crowther)

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Employees make circuit boards at an electronic component factory in Hefei, Anhui province May 2, 2012.

BEIJING | Sat Sep 29, 2012 12:34am EDT

BEIJING (Reuters) - China's economy has almost certainly suffered a seventh straight quarter of slowing growth, with a new private sector survey of factory managers revealing a near year-long decline in business activity and a fresh fall in export orders in September.

The HSBC China Manufacturing purchasing managers index (PMI) showed overall factory activity shrank for an 11th consecutive month in September, despite the 47.9 final index level being slightly ahead of a preliminary, or flash, estimate of 47.8 and the August reading of 47.6.

It extends the longest run of readings below 50 - which separates expansion from contraction - in the survey's 8-year history, with the need for more pro-growth government policies signaled by a fall in the output sub-index to its lowest since March and a slide in export orders to a 42-month trough.

"The sharper contraction of new export orders and the lingering pressures on job markets mean that Beijing should step up easing to support growth and employment," Qu Hongbin, chief China economist for survey sponsor HSBC, said in a statement.

Two cuts to interest rates, the easing of bank reserve requirements that freed about 1.2 trillion yuan ($190 billion) for lending and the approval of infrastructure projects worth more than $150 billion have so far failed to arrest the decline in China's overall economic growth.

"Fiscal measures should play a more important role in the coming months," Qu said.

Analysts expect 2012 to be China's weakest full year of growth since 1999 at just 7.7 percent, according a Reuters poll which forecasts annual growth of 7.4 percent in Q3, down from Q2's 7.6 percent.

The slide in the PMI's export orders sub-index to a three-and-a-half-year low of 44.9 is a crucial gauge for the accuracy of that call.

EXPORT SLIDE

Exports generated 31 percent of gross domestic product in 2011, according to World Bank data, and support an estimated 200 million jobs - around a quarter of the country's workforce.

Export growth this year is averaging around 7.8 percent versus 2011. August's growth slumped to 2.7 percent compared with a year ago and the Commerce Ministry sees a risk that things get worse in the months ahead - jeopardizing the official 10 percent target for expanding trade this year.

An adviser to China's central bank conceded on Thursday that Beijing policymakers had underestimated the severity of this year's global economic slowdown and said that further cuts to interest rates or reserve requirements would hinge on any new deterioration in the external environment.

China's exports have been hit hard by the festering sovereign debt crisis in the European Union, where a slide back towards recession has sapped demand in the single biggest foreign market for Chinese factory goods.

Analysts say the destocking it has triggered has dragged down industrial production growth and will ultimately show up when Q3 economic data is published in mid-October.

"We expect the data to show that demand remained weak, destocking continued and the recovery has yet to happen," said Tao Wang, China economist at UBS in Hong Kong.

"We forecast that industrial production growth slowed to about 8.6 percent year-on-year in September, while Q3 GDP growth slowed to 7.3 percent year-on-year," she wrote in a client note.

Tao believes the deterioration is so entrenched that GDP growth will slow to an annual rate of 7.0 percent in Q4 before rebounding through the course of 2013.

The consensus view is that Q3 is the nadir of this cycle and the HSBC PMI offers some sign that this may be the case, despite the index having consistently pointed to a more bearish economic backdrop this year than China's official PMI.

The official PMI is set to be released by the National Bureau of Statistics (NBS) on October 1 and analysts polled by Reuters expect it to have rebounded to 49.8 from August's 49.2.

A difference in samples and survey methodology largely explain the discrepancy. The NBS captures data from China's biggest firms - the dominant state-owned enterprises - while Markit, the UK-based data provider that compiles the survey sponsored by HSBC, tracks mainly smaller private sector firms.

SOME SIGNS OF STABILISATION

Markit said its survey detected some signs of stabilization in manufacturing activity in September as the rate of deterioration in the sector eased.

Backlogs of work remained steady for 77 percent of respondents, while only 13 percent reported a decrease.

And it said the rate of job cuts reported was relatively modest, with nearly 85 percent of survey respondents indicating no change in employment levels on the previous month.

Unemployment is a vital indicator for China's ruling Communist Party, which is acutely sensitive to anything that could trigger discontent in the run-up to its party congress - expected later this autumn - when a new generation of leaders will be named ahead of a once-a-decade handover of power.

The loss of millions of Chinese factory jobs in a matter of months in late 2008 as world trade ground to a halt during the depths of the global financial crisis triggered a massive 4 trillion yuan ($635 billion) stimulus package from Beijing.

The lack of job cuts so far and persistent signs of tightness in the labor market are cited by analysts as one reason for the government's reluctance to open the stimulus taps this time around, along with attendant inflationary and speculative risks that it could unleash.

Credit ratings agency Fitch said on Friday it had downgraded its 2012 growth forecast for China to 7.8 percent, from 8 percent previously, on a combination of slowing exports and efforts to squeeze speculative risks from the economy.

But it said it did not expect Beijing to deploy any more than marginal monetary and fiscal tools to boost growth, unless there was a sudden deterioration in the labor market.

"The resilience of the labor market seen in current data suggests growth of 7.5-8.0 percent may be in line with the economy's potential rate," Fitch said.

(Editing by Alex Richardson)

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1 of 4. Men chat as they drink beer at a sheeben (bar) in Soweto, southwest of Johannesburg August 8, 2012.

WORCESTER, South Africa | Wed Aug 8, 2012 10:08am EDT

WORCESTER, South Africa (Reuters) - On a bitterly cold Saturday afternoon in Worcester, a forlorn rural community near South Africa's southern tip, the queue at the liquor store is the longest in town.

It's a scene constantly repeated across South Africa and a number of other nations on the continent: the prelude to a weekend of binge drinking.

After years of turning a blind eye to alcohol abuse, politicians from South Africa to Kenya and Zambia are under pressure to tackle a problem that is adding to Africa's burden of HIV, birth defects, road accidents and violent crime.

Africa has the world's highest proportion of binge drinkers, even though its large populations of Muslims and evangelical Christians generally abstain from alcohol. As incomes rise, it has become a boom market for international brewers and distillers whose sales are often flagging in the wealthy world.

"It's true that most people in Africa don't drink for cultural, religious and economic reasons but those who drink, drink a lot," said Dr Vladimir Poznyak of the World Health Organisation (WHO) in Geneva.

If governments finally crack down effectively, companies such as SABMiller, Diageo Plc and Heineken NV may find Africa no longer allows the spectacular sales growth they have achieved there in recent years.

The drinks firms say Africans are better off consuming their products than popular but sometimes lethal home concoctions.

However, the effects in Worcester of drinkers rapidly consuming dangerous - sometimes even fatal - quantities of alcohol are obvious. The liquor store queue snakes past a drunken man crumpled on the ground in a pool of vomit and in the evening drinkers cram into Worcester's numerous run-down bars.

"They drink and drink and drink. They don't stop when it is necessary to stop drinking liquor," said Berita Jones, a police captain in the town of about 130,000.

"Worcester's crime is almost entirely alcohol-related," said Jones, whose time is spent checking that its 166 licensed bars outlets comply with the law, and making regular raids of its more than 300 shebeens, or informal taverns.

UNQUENCHABLE THIRST

Home to some of the world's fastest growing economies, Africa's thirst for beer and spirits is almost unquenchable: analysts estimate beer volumes rose around 7 percent last year. Excluding the mature South African market, growth reached more than 10 percent.

Drinks companies want to keep up the momentum. SABMiller is investing up to $2.5 billion over the next five years to build and renovate breweries on the continent. Rival Diageo's African sales have risen by an average 15 percent in each of the last five years, and now account for 14 percent of the group's total.

But some public health officials say regulation of alcohol consumption and education about its abuse have failed to keep pace. "In parallel to this increase in commercial alcohol availability, the infrastructure and regulation for effective alcohol control have no strong tradition in many African countries," said Poznyak.

NEW LAWS

On average an African drinks about 6.15 liters of pure alcohol each year, about half of what a European consumes. However, more than 25 percent of Africans are binge drinkers, the highest proportion in the world, according to a WHO report.

Most African countries already have laws that prohibit underage drinking and drink driving, but critics say these are poorly enforced and often completely ignored.

South Africa is crafting a new law to restrict alcohol advertising, raise the minimum drinking age to 21 from 18 and get tougher on drink driving, Minister of Social Development Bathabile Dlamini has said.

The bill would also propose warning labels on alcohol containers, raising taxes and stricter licensing laws for alcohol outlets, said a government official who declined to be identified because the bill has not yet been made public.

The bill will be discussed in South Africa's cabinet in the next few weeks before its release for public comment, the official said.

In Kenya authorities are also looking to raise the legal drinking age to 21 from 18, following on from a 2010 law that banned alcohol sales in grocery stores and in bars before 5 p.m.

The Mututho law, named after the legislator who crafted it, John Mututho, is credited for a 90 percent drop in alcohol-related deaths in Kenya.

"Even when we say we have succeeded up to that level, we are also saying we have failed 10 percent, so the age of drinking will be 21. We are amending the law," Mututho said.

Earlier this year, Zambia banned the manufacture and sale of spirits in relatively cheap small plastic sachets, which it blamed for increasing alcohol abuse by young people. Zambia's health department secretary told Reuters that alcohol-related road accidents and health problems are increasingly a concern.

In Nigeria, Africa's most populous nation and a huge beer market, alcohol regulation does exist but critics say it is loosely enforced.

Adeline Osakwe, deputy director at the Nigeria Food and Drug Administration, said the country ensures consumers are aware of alcohol content through product labeling. It also regulates alcohol advertising.

"For TV commercials, as long as it will not lead people to abuse alcohol, we give approvals," Osakwe said.

HOME-BREW TO HEINEKEN

For years poor Africans were limited to home-brew sorghum or maize beer, sometimes made with dangerous ingredients such as battery acid to increase the potency.

Commercial alcohol is now widely available in most African states and premium brands such as Johnny Walker whisky or Heineken beer are increasingly in reach of the average drinker.

Rising incomes have also encouraged conspicuous consumption of premium brands. Even in Worcester's gritty nightclubs, some tables are weighed down by bottles of pricey spirits such Scotch whiskies Chivas Regal and Glenfiddich.

Drinks companies say commercially produced alcohol is safer than home-brews. "The alternative is that lower income people who wish to consume liquor will buy illicit and potentially dangerous alcohol," said Vincent Maphai, executive director of Corporate Affairs at SABMiller's South African unit.

SABMiller is already offering lower priced beer in order to win over drinkers from the home-brew market, which it says is about four times the $11 billion commercial market.

Higher alcohol taxes, which the South African bill is likely to impose, risk of pushing the poor back to potentially lethal home-brews. Nevertheless, public health officials say governments need to do more to warn about the dangers of alcohol abuse.

BIRTH DEFECTS

Even several months into pregnancy, Johannesburg resident Martha regularly drank until she passed out. She never worried about the effect until her son was born with a hole in his heart. "I would have stopped if I knew that it would harm my baby like this," said Martha, who declined to give her family name.

Her son, now 12 years old, was diagnosed with fetal alcohol syndrome, an incurable birth defect that has left him with the brain and body of a four-year old.

South Africa has the highest reported number of children with such birth defects: about 122 out of every 1,000 are born with the syndrome, compared with about 8 per 1,000 in the United States, according to South Africa's Foundation for Alcohol Related Research.

But experts say many Africans, like Martha, don't get proper education about the dangers of alcohol, especially in rural areas where access to hospitals and clinics is limited.

Alcohol also heightens the danger on a continent where driving is already perilous. Kenya's Kenyatta National Hospital treats up to 40 victims of road accidents, mostly caused by drunk drivers and pedestrians, on some Saturday nights.

But with little to do beyond drinking for entertainment in many parts of rural Africa, health officials face a tough battle.

"In spite of all economic benefits that increased investments in alcohol production and sales can bring, the health of the population should be properly protected and this should be a priority," the WHO's Poznyak said. "Health is the best investment, also from an economic point of view, in any society." ($1 = 0.6401 British pounds)

(Additional reporting by Duncan Miriri in Nairobi, Chris Mfula in Lusaka, Chijioke Ohuocha in Lagos; editing by David Dolan and David Stamp)

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n">Aug 1 (Reuters) - Insurer Cigna Corp reported a better-than-expected profit, as its takeover of Medicare specialist HealthSpring helped boost premiums and fees, and the company raised its 2012 earnings forecast.

Cigna on Thursday reported second-quarter net income of $380 million, or $1.31 per share, compared with $391 million, or $1.43 per share, in the year-earlier period.

Excluding special items, Cigna earned $1.52 per share. Analysts, on average expected $1.42 per share, according to Thomson Reuters I/B/E/S.

The company bought HealthSpring for $3.8 billion earlier this year.

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A woman in a wheelchair passes the shop window of a clothing store in Pontevedra, northern Spain, June 29, 2012.

FRANKFURT/BERLIN | Thu Aug 2, 2012 6:18am EDT

FRANKFURT/BERLIN (Reuters) - The United States raised the pressure on euro zone leaders to take decisive action on solving the region's debt crisis, notably by lowering troubled members' borrowing costs, on the eve of a crucial European Central Bank meeting.

President Barack Obama said he welcomed recent declarations by European leaders and the ECB on the need to do whatever is necessary to preserve the euro.

U.S. Treasury Secretary Timothy Geithner had a blunter message for the euro zone, saying it must take steps including "bringing down interest rates in the countries that are reforming and making sure those banking systems can provide the credit those economies need".

Obama, in a telephone call with French President Francois Hollande on Wednesday, "encouraged their efforts to take decisive action", the White House said.

Hollande reassured Obama that European Union member states aimed to enact soon the decisions taken at a summit in late June, according to the French leader's office.

Germany, whose voters are deeply hostile to funding bailouts of the euro zone's weakest members, agreed in principle at the summit that the bloc's rescue funds could buy bonds of countries that are struggling to borrow on international markets.

Geither made his more forthright comments in an interview with Bloomberg Television recorded on Tuesday, a day after he flew to Germany to meet Finance Minister Wolfgang Schaeuble and ECB President Mario Draghi.

Italy and Spain, the euro zone's third and fourth largest economies, are struggling to fund their budget deficits and debt obligations at affordable levels as bond market investors take fright.

Draghi's promise last week to do whatever it takes to preserve the euro, within the ECB's mandate, stirred speculation that its Governing Council might take more radical steps at a monthly policy meeting on Thursday.

"BOLD AND APPROPRIATE"

Italian Prime Minister Mario Monti said Draghi's promise was "bold and appropriate", and said European leaders were weighing joint intervention by the ECB and the euro zone's rescue funds.

He predicted that the future permanent rescue fund, the European Stability Mechanism (ESM), would "in due course" be granted a banking licence so it could tap ECB funds to buy almost unlimited amounts of bonds despite German opposition.

Market expectations of a major ECB move this week have faded somewhat. Those traders and investors who expect action on Thursday would sell the euro and European shares, and drive up Spanish and Italian bond yields if the ECB sits on its hands.

Geithner said Schaeuble and Draghi had told him of plans they were making on tackling the crisis, but he cautioned against expecting immediate action.

Past crises showed that the longer it took to address the issues, the more they cost. "I believe they understand that. That's why they've signalled they are prepared to move further. Now again, this is going to take time," Geithner added.

German Vice-Chancellor Philipp Roesler rejected pressure for the ECB to step in and cap the borrowing costs of countries in trouble, saying the central bank should stick to fighting inflation and not ease market incentives for reform.

"If you take away the interest rate pressure on individual states, you also take away the pressure on them to reform," Roesler, economy minister and leader of the Free Democrats, junior partners in Chancellor Angela Merkel's centre-right coalition, told reporters in Berlin.

He also reasserted Germany's firm opposition to letting the ESM borrow from the central bank, calling this "the road to an inflation union".

Nick Parsons, head of markets strategy at nabCapital in London, said the euro could fall a couple of U.S. cents from current levels, while bond market analysts expect Spanish yields to reach new euro-era highs if the ECB does not act.

At the heart of the crisis, Greek political leaders said on Wednesday they had reached agreement on 11.5 billion euros of austerity cuts demanded by the country's lenders. Failure to agree the cuts threatened a sequence of events that could have led to Greece's exit from the single currency.

The head of one of its lenders, Christine Lagarde at the International Monetary Fund, promised to stand by the country and "never leave the negotiating table", while calling on its leaders to do more with structural reforms and by improving tax collection.

She also warned that uncertainty over the future of the euro zone was clouding the horizon for the Spanish economy.

MONTI ON TOUR

Monti, who is touring Europe to press for action to bring down Rome's borrowing costs, made his pitch to euro zone hardliner Finland on Wednesday, saying Italy did not need an assistance programme but might in future need "a breathing break" from high interest rates.

"We have in mind a possible intervention through EFSF, ESM and the ECB," Monti was quoted as saying by Finnish daily Helsingin Sanomat before he met Prime Minister Jyrki Katainen.

Central bank sources have told Reuters that intervention could be at least five weeks away because Draghi's comments had not been agreed in advance with the Governing Council, and other elements must first fall into place.

The sources said the ECB could revive its mothballed programme of buying the bonds of troubled governments along with the rescue funds, but Spain would first have to request assistance, which it has resisted so far.

Credit ratings agency Standard & Poor's affirmed Spain's sovereign BBB+/A-2 rating on Wednesday, citing its commitment to economic and fiscal adjustments, but warned it risks losing investment grade if euro zone support fails to boost confidence.

Euro zone leaders would have to agree to the rescue funds buying up government bonds, and the German Constitutional Court would have to uphold the legality of the bloc's permanent rescue fund in a ruling due on September 12.

The leaders have spent the past week issuing statements promising to take whatever steps are necessary to rescue the currency, but none has raised expectations as high as Draghi, who heads the only federal European institution able to act swiftly and decisively.

However, the ECB is divided, with Germany's Bundesbank opposed to reviving government bonds or giving the euro zone rescue fund a banking licence.

Draghi met Bundesbank chief Jens Weidmann privately earlier on Monday to try to reconcile differences on what action the bank might take. Neither bank would comment on the meeting.

The Bundesbank released on Wednesday a June 29 interview for an in-house publication in which Weidmann said governments expected too much from the central bank, and what they wanted did not always make economic sense.

"Politicians overestimate the central bank's capacity and place too many demands of it," he said. "Whether it's about interest rates or any sort of special measures, in the end it always comes down to the same thing: trying to rope the central bank into meeting fiscal policy objectives.

Weidmann said the Bundesbank would continue to defend its positions firmly "so that the (European) monetary union remains a stability union".

With the economy slowing and inflation under control, other options on the ECB's radar screen include a possible further cut in interest rates and a further loosening of rules on the collateral it will accept to lend funds to banks.

(Additional reporting by Terhi Kinnunen in Helsinki, Swaha Pattanaik and Richard Hubbard in London, Eva Kuehnen in Frankfurt and Margaret Chadbourn in Washington; Writing by Paul Taylor; editing by Will Waterman and David Stamp)

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