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South Korea’s current-account surplus widened to a three-month high in October, indicating that exports have so far withstood the won’s appreciation against the dollar.

The surplus was $5.37 billion in October, up from a revised $3.95 billion in September, the Bank of Korea said in a statement in Seoul today. The current account is the broadest measure of international trade, tracking goods, services and investment income.

The nation is one of a number of emerging markets from Asia to Latin America striving to limit currency appreciation this year to support exports. North Korean shelling of a South Korean island three days ago sent the won to a two-month low against after unsettling investors.

“Exports will likely stay firm,” Hwang In Seong, vice president of the Samsung Economic Research Institute in Seoul, said before the release. “The won’s recent weakness due to the risks from North Korea and Europe will help.”

The currency touched 1,172.50 per dollar, the weakest level since Sept. 9, the day after North Korea fired artillery onto South Korean territory for the first time in half a century. The won’s advance in the past 6 months is the biggest climb in Asia, according to data compiled by Bloomberg. The Kospi stock index closed up 0.1 percent yesterday.

President Lee Myung Bak’s government expects limited economic impact from the incident with the North and has pledged to supply ample liquidity to cope with any shocks. The administration last week supported the revival of a tax on foreigners investing in the nation’s bonds to curb fund inflows driving up the won cash advance flexible payments.

Capital Controls

“The government may delay additional steps to control capital flows until international investors feel confident about the security situation,” Hwang said.

Bank of Korea Governor Kim Choong Soo raised borrowing costs by 0.25 percentage point in November, the second increase this year, to 2.5 percent. The current interest rate lags behind inflation, which surged past the monetary authority’s ceiling of 4 percent last month.

Exports account for about half the economy and grew for the 12th straight month in October. Overseas shipments have boosted earnings this year at firms such as Hyundai Motor Co., South Korea’s largest automaker.

Total exports on a customs-cleared basis, which excludes ships, rose 27.6 percent last month from a year earlier, compared with a revised 16.2 percent increase in September. Imports advanced 21.3 percent.

The surplus on traded goods widened to $6.54 billion in October from a revised $5.57 billion in September, today’s report showed. The services deficit, which measures the flow of travel, transport costs and royalties, was $1.69 billion last month, compared with a revised $1.96 billion in September.

The income account had a $756 million surplus, from a revised $509 million surplus in September.

South Korea’s economy is expected to grow 6.2 percent this year and 4.3 percent in 2011, the Organization for Economic Cooperation and Development estimated on Nov. 18.

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A drilling team on Wednesday broke a narrow shaft through to the section of a New Zealand coal mine where 29 workers have been missing for almost six days, and was greeted by a blast of potentially deadly gases from inside.

Officials have become increasingly pessimistic about the chances of pulling the men alive from a network of tunnels some 1 1/2 miles (2 kilometers) deep in the side of a mountain, following a powerful explosion on Friday.

Nothing has been heard from the missing miners since the blast. Toxic and potentially explosive gases have kept rescuers from entering the mine, though an army bomb disposal robot crawled two-thirds of a mile (1 kilometer) into the tunnel on Wednesday and found a miner’s helmet with its fixed light still glowing.

Drillers using a diamond-tipped drill bit to prevent sparks finished boring a 530-ft. (162-meter) hole to the mine’s main tunnel, close to where the missing men are believed to have been at the time of the blast. It was a key step, giving officials their first information from that section of the mine and allowing testing for levels of dangerous gases.

Hot air and gas rushed the hole when the chamber roof was punctured, and Pike River Coal Ltd. chief Peter Whittall said initial tests showed it was “extremely high in carbon monoxide, very high in methane and fairly low in oxygen.” Carbon monoxide _ the polluting gas from car exhausts _ is extremely poisonous, while explosive methane is the gas believed to have ignited in Friday’s blast.

“The environment is still unstable, it is unsafe and it is not appropriate to send rescue teams underground at this time,” said Gary Knowles, the police superintendent in charge of the rescue operation.

Whittall said the helmet that was spotted by the robot belonged to one of two miners who were not as deep inside as the missing workers and who stumbled to the surface with minor injuries shortly after the blast.

He said it offered a small hope that if any of the missing miners had survived, they may not be in complete darkness.

A second robot had been sent into the mine, and a third was being prepared. Only the third robot has the capacity to explore deep enough into the mine to potentially spot the miners, officials said. Rescuers also plan to feed a camera down the bore hole.

Prime Minister John Key has warned the nation to prepare for the worst, as frustration among some relatives of those missing builds.

“We’ve got to know, we’ve got to go and have a look,” Geoff Valli, whose brother Keith, 62, is missing, told National Radio. “Around town a lot of guys are prepared to go in and do it. It’s time for men to do what men have got to do.”

Knowles said he can understand the mounting pain of the families, but safety for rescuers is paramount and the dangers _ including that of another explosion _ were too great.

Security footage of Friday’s blast shows a wall of white dust surging from the mine entrance and small stones rolling past for about 50 seconds as the force of the blast rips out of the mine. The dust was blown across a valley and the blast wave shot up a ventilation shaft, tearing off surface vents hundreds of feet above.

New Zealand’s mines have been safe historically, with 181 deaths in 114 years. The worst disaster was in 1896, when 65 died in a gas explosion. Friday’s explosion occurred in the same coal seam.

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U.S. commercial property prices rose 4.3 percent in September from the previous month, the biggest gain in a decade of records, Moody’s Investors Service said.

The Moody’s/REAL Commercial Property Price Index climbed 0.3 percent from a year earlier as a small number of high-priced deals drove up values, Moody’s said in a statement today. The measure had fallen to an eight-year low in August.

“Each of the summer months this year recorded declines in the 3 percent to 4 percent range, followed by this month’s sizeable uptick,” Nick Levidy, a Moody’s managing director in New York, said in the statement. “The relatively large swings seen in the index recently are due in part to the uncertain macroeconomic environment and the effects of a thin market with low transaction volumes.”

Demand is rising for the best office buildings in major markets such as New York and Washington as investors seek returns higher than fixed income. Interest in well-leased commercial properties in smaller markets may also be starting to increase, according to Robert Bach, chief economist for Grubb & Ellis Co cash until payday loans., a Santa Ana, California-based commercial broker.

“The demand is still focused at the core end of the spectrum,” Bach said before the report. “Investors may be broadening their parameters just a little bit.”

43% Below Peak

The Moody’s/REAL index is still 43 percent below its October 2007 peak. The gauge measures overall commercial property values on a monthly basis and breaks the numbers down by property type once each quarter. The changes are based on repeat sales transactions.

While the number of repeat sales had only a “slight uptick” in September, the dollar volume of those transactions doubled from August to $3.7 billion, according to Moody’s. That was the largest volume since January 2008, the company said.

The biggest single-property sale to close in September was a $208 million deal for Union Bank Plaza, a 627,000 square-foot (58,250 square-meter) office building on South Figueroa Street in Los Angeles, according to Real Capital Analytics Inc., a New York-based firm that tracks commercial real estate sales.

Apartment buildings have led prices higher, rising almost 16 percent in the third quarter from a year earlier, Moody’s reported. An index of retail properties fell about 12 percent in that time, while industrial buildings dropped 1.2 percent. Office property values increased 4.4 percent.

Top 10 Areas

Office prices in the top 10 metropolitan areas jumped 22 percent in the third quarter from a year earlier, the most of any property type in major cities. Prices gained 9.4 percent from the previous three months.

Moody’s defines the top 10 metropolitan areas as the ones with the most transactions by dollar volume. New York, Los Angeles, Washington, San Francisco, Atlanta and Chicago are included in the rankings for all four property types.

Two competing indexes show national commercial property prices rising at a faster rate. Green Street Advisors, a real estate research company in Newport Beach, California, reported Nov payday loans in California. 2 that values are up 24 percent in the 12 months through October. Its property index is 21 percent below its 2007 peak.

CoStar Group Inc., a real estate data service based in Bethesda, Maryland, found that prices for investment-grade properties in the U.S. rose 5.5 percent in September. Values are down 4.9 percent from a year earlier and 29 percent from two years ago, according to the company.

CoStar, unlike Moody’s, tracks transactions below $2.5 million. CoStar also limits its index to Class A and B offices, the highest-quality buildings; retail and industrial properties built since 1990; and multifamily buildings of 30 units or more.

Green Street’s index includes deals that are in negotiation or under contract, while Moody’s tracks only closed sales.

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The Toronto stock market was poised to open relatively flat Monday as investors digested news that Ireland has applied for a massive emergency loan, and commodities remained little changed.

The Canadian dollar gained 17 cents to 98.4 cents U.S. even as the greenback edged higher against European currencies.

U.S. futures markets made early gains following Ireland’s application for financial aid from its European neighbours. However, those gains were soon erased with Dow Jones futures down 29 points to 11,150 and Nasdaq futures down 1.5 points to 2132 and the S&P 500 futures down 3.5 points to 1194.70.

European stocks and the euro currency got early boosts Monday and Asian stock markets closed mostly higher as investors were calmed after Ireland accepted some sort of aid package, expected to be worth no less than 100 billion euros, or US$137 billion.

The Irish government confirmed Sunday it is formally requesting a financial aid package to shore up its debt-laden banking sector. The actual details are expected to be released later in the week following talks between the Irish government and officials from the European Union and the International Monetary Fund.

The country will likely be forced to make further massive spending cuts and raise its very low rate of corporate tax.

However, investor uncertainty still lurks due to questions over whether the Irish austerity program will work and as eyes turn to whether other highly indebted euro countries — particularly Portugal — will be next.

Meanwhile, commodity prices were slightly lower as efforts by China to tighten monetary policy, such as higher bank reserve requirements, weighed the new January crude contract down 10 cents US$81.88 a barrel on the New York Mercantile Exchange.

The December copper contract on the Nymex slipped four cents to US$3.80 while the December gold contract gained 50 cents to US$1352.80.

Developments in Ireland will likely dominate market activity on what could be an otherwise quiet week as the U.S. markets effectively shut down mid week as traders take a Thanksgiving break.

Reports set to be released Tuesday and Wednesday include the Canadian consumer price index for October and retail sales for September. In the U.S. reports this week include October home sales, an update of consumer sentiment, and revisions to earlier estimates of the third-quarter gross domestic product.

In Canada, technology licensing company Wi-LAN Inc. (TSX: WIN) says it has initiated a lawsuit against Comcast Corp., Time Warner Cable Inc., and Charter Communications, claiming that each violates one of its patents in its cable systems and cable modem products.

Spectral Diagnostics Inc. (TSX: SDI) has signed a long-term, exclusive agreement with Toray Industries Inc. to market and sell Toraymyxin, a treatment for sepsis, in Canada. Financial details were not disclosed.

In Europe, the FTSE 100 index of leading British shares was down 0.2 per cent while France’s CAC-40 fell 0.1 per cent. Germany’s DAX remained in positive territory up 0.2 per cent.

Japan’s Nikkei 225 stock average closed 0.9 per cent higher.

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The Air Force mistakenly gave rival companies sensitive information that contained each other’s confidential bids in a long-standing, multibillion dollar competition to build a new refueling tanker.

Chicago-based Boeing Co., and the European Aeronautic Defence and Space Company (EADS), parent of Airbus, are in an intense competition for a $35 billion contract to build 179 new Air Force tankers based either on the Boeing 767 jetliner or the Airbus A330.

Boeing received detailed proprietary information about the EADS bid; corresponding information was given to EADS North America concerning the Boeing bid.

“It was a clerical error and involved a limited amount of source selection information,” Air Force spokesman Col. Les Kodlick said late Friday in a telephone interview with The Associated Press. Kodlick declined to be more specific about what data had been transmitted.

Source selection information is data critical to the Air Force’s making a decision on which bid to select and could include technical data about the competing aircraft as well as financial information. Defense News and The Seattle Times initially reported Friday on the Air Force’s mistake. The Times said the data included crucial pricing information on the competing bids.

Kodlick said the incident “will not delay” the awarding of the contract which had been expected before year’s end, but recently had been postponed until early next year. Kodlick said the postponement was not related to the disclosure of proprietary data.

It was not clear what use _ if any _ the two companies made of the information they received, reportedly on a computer disk.

“As soon as it happened and they received (the information) they recognized the errors and contacted the Air Force contracting officers,” said Kodlick. He said the Air Force has taken steps “to make sure both companies have access to the same information.”

But if the information included price data, it could have an impact on each companies’ final bid proposal. Pricing has been a key issue in the competition. Last summer, Boeing CEO Jim McNerney expressed concern in a meeting with securities analysts that his company might be underbid by its European competitor.

The Air Force is reviewing how the disclosures occurred and was “taking steps that it doesn’t happen again,” said Kodlick.

Sen. Maria Cantwell, D-Wash., who was briefed Friday on the incident, said it was “an inexcusable mishandling by the Air Force of very sensitive, proprietary data.”

Sen. Patty Murray, D-Wash., said in a statement she is “deeply concerned by the Air Force’s mishandling of proprietary information” about the tanker bids.

“This is a critical contract with serious consequences for our military and economy, and this mistake will further delay an award that has already been pushed back to allow an illegally subsidized company to compete,” said Murray.

Boeing did not immediately return AP calls for comment.

The Air Force needs to replace its KC-135 refueling tankers, which date to the 1950s. It has been trying to pick someone to make the new tanker since 2003. While the initial contract award was expected to be $35 billion, replacing the entire fleet of old tankers could be worth up to $100 billion.

The competition had been intense between Boeing, the premier U.S. aircraft manufacturer, and EADS, the heavily subsidized European aircraft consortium.

The Pentagon had hoped to award the contract by last August after having extended the bidding deadline so that EADS could submit its revised bid. The deadline was extended to fall and now is expected early next year.

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China ordered its banks Friday to hold back more money as reserves in a new move to curb lending and rising inflation that communist leaders worry might stir unrest.

It was China’s second reserve increase in two weeks and came as Beijing tries to restore normal financial conditions following its recovery from the global crisis and cool inflation that surged to a 25-month high in October.

Analysts also expect China to announce a second interest rate hike after its surprise Oct. 19 increase but there was no word Friday of any changes in rates.

The state-owned banking industry was ordered to set aside an additional 0.5 percent of deposits as reserves, effective Nov. 29. Reserves vary by institution but could be as high as 19 percent for the biggest commercial lenders.

Economists say money flooding through the economy from China’s stimulus spending and heavy bank lending helped to push inflation to 4.4 percent in October, well above the government’s 3 percent target. Politically sensitive food costs jumped more than 10 percent.

Poor families in China spend up to half their incomes on food and communist leaders see inflation as a possible trigger of unrest.

Regulators worry that excessive lending is fueling overspending on real estate and other assets and might leave banks burdened with unpaid loans if ill-considered projects default.

Friday’s order came after China’s stock markets closed. Stocks fell this week on investor fears the government might respond to October’s inflation by tightening economic controls and further slowing China’s growth faxless payday loans.

China’s post-crisis expansion peaked at 11.9 percent in the first quarter of this year and cooled to 9.6 percent in the three months ending in September. The World Bank says next year’s economic growth should slow to 8.7 percent.

Raising reserve requirements allows Beijing to slow lending growth without increasing costs for borrowers through a rate hike. The government has used such targeted tools to try to restrain housing costs and make other changes while avoiding large rate increases.

A rate hike is politically fraught because it increases costs for state companies and heavily indebted finance agencies set up by local governments to use bank loans to invest in infrastructure and real estate projects.

Analysts say the modest quarter percentage point rate hike on Oct. 19 was meant as a warning to banks to cut back runaway lending.

Chinese leaders also worry that higher interest rates will attract inflows of foreign speculative “hot money” into stocks and real estate. Unauthorized inflows of money meant to profit from China’s rebound and a rise in its currency, the yuan, have surged in recent months despite Beijing’s moves to tighten capital controls.

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Stock futures are sliding after China moved to curb inflation after days of speculation.

The Chinese government told banks Friday they must hold more reserves. The move is aimed at cutting down on lending to avoid speculative bubbles and curb inflation. Inflation in China shot up to a more than two-year high last month.

There is also growing expectation China will raise key interest rates soon to combat inflation worries. Raising bank reserve requirements and hiking interest rates, though, could also slow China’s robust economy.

Dow Jones industrial average futures are down 38, or 0.3 percent, at 11,138. S&P 500 futures are down 4, or 0.4 percent, at 1,193, while Nasdaq 100 index futures are down 6, or 0.3 percent, at 2,128.

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Traders are increasing payments to limit ruble losses faster than any other European emerging- market currency as the Irish debt crisis and China’s vows to cut inflation cause a slump in oil, Russia’s biggest export earner.

Options traders are paying more than double the rate at the end of October for the right to sell the ruble rather than buy it, with the one-week risk-reversal rate against the dollar — the premium of put options over calls — climbing to 1.25 percent yesterday from 0.5 percent on Oct. 29. The increase is the biggest among Europe’s emerging-market currencies and topped the 0.3 percentage point rise in the rate for Brazil’s real and a decline of 0.2 percentage point for China’s yuan.

Russia, which depends on oil and gas for 25 percent of economic output, is losing investor support as fuel prices slump to a four-week low on speculation higher Chinese borrowing costs will erode demand and as Ireland’s fiscal woes drive a selloff in riskier assets. VTB Group, the second-largest Russian bank, cut its economic growth forecast yesterday, citing lower oil prices. The ruble slid to its weakest level in five months against the dollar, the worst performer among the 25 developing- nation currencies tracked by Bloomberg.

“Depreciation pressures on the ruble have intensified,” Alexander Morozov, chief Russia economist at HSBC Holdings Plc, said in a phone interview in Moscow yesterday. “With lower oil prices and higher global volatility, the ruble will naturally weaken.”

Russia’s currency slid as much as 1.2 percent yesterday, its biggest drop in more than a month, and ended the day 0.9 percent lower at 31.37 per dollar, the weakest closing price since June 11. Non-deliverable forwards, or NDFs, which provide a guide to currency movements and allow companies to hedge, yesterday showed the ruble at 31.5963 per dollar, slipping for a fourth trading day to the weakest since June 11.

Dollar Demand

Investors are fleeing to the safety of the dollar as Ireland moves toward a possible European Union bailout that Barclays Capital has estimated may cost about 80 billion euros ($108 billion). The Irish government agreed yesterday to a review of the finances of its debt-laden banks.

The average yield on dollar-denominated Russian corporate bonds jumped 8 basis points yesterday to 5.72 percent, the highest since Sept. 27, as investors shunned emerging market assets.

Market volatility is “characteristic” of the post-credit crisis world, Deputy Finance Minister Dmitry Pankin said in a phone interview in Moscow yesterday.

Fleeing Risk

“There are periods when it seems there is a mass of money that’s just looking for a home and then a moment comes, whether it’s Portugal, Dubai, now Ireland, that spurs outbursts and nervousness on the market,” Pankin said. “Positions are being closed, investors are fleeing to risk-free assets and are no longer able to soberly measure the risk level of any given country.”

Crude lost as much as 2.4 percent in New York trading yesterday after Chinese Premier Wen Jiabao said the government of the world’s fastest growing economy is drafting measures to counter inflation, which at 4.4 percent last month is the fastest in two years. Energy accounts for about 75 percent of Russian exports to the Baltics and countries outside the former Soviet Union, government data show. Urals crude, Russia’s chief export blend, declined 0.2 percent to $84.73 a barrel.

The ruble would have weakened further had the central bank not intervened in the market to stem the drop, HSBC’s Morozov said. Bank Rossii, which has managed the ruble against a basket of dollars and euros since February 2005, is selling about $300 million of foreign currency a day to limit the ruble’s decline, Morozov said. The Moscow-based regulator doesn’t comment on its day-to-day actions in the currency markets.

Currency Basket

Russia’s currency fell for a fourth day against the basket, sliding 0.4 percent to 36.2998 by the close of trading at 5 p.m. in Moscow yesterday. The basket is made up of about 55 percent dollars and 45 percent euros and is used to limit swings in the currency that disadvantage Russian exporters. The ruble was little changed against the euro at 42.3250 yesterday, after hitting its weakest intraday level in a week.

Russia’s federal ruble bonds, or OFZs, have declined, with the yield on notes due 2016 jumping 20 basis points in November to 7.37 percent yesterday. Government dollar bonds due 2020 have also dropped this month, sending the yield 16 basis points higher to 4.67 percent since Oct. 29.

The cost of protecting Russian debt against non-payment for five years using credit-default swaps rose 1 basis point to 145 yesterday, down 72 from this year’s peak of 217, according to data provider CMA. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a debtor fail to adhere to its agreements.

Depreciation Pressure

Credit-default swaps for Russia, rated Baa1 by Moody’s Investors Service, its third-lowest investment grade, cost 13 basis points more than contracts for Turkey, which is ranked four levels lower at Ba2. Russia swaps cost as much as 40 basis points less on April 20. Brazil stood at 109 yesterday and China at 62.

The extra yield investors demand to hold Russian debt rather than U.S. Treasuries fell 3 basis points to 212 points, according to JPMorgan’s EMBI+ indexes. The difference compares with 146 for debt of similarly rated Mexico and 175 for Brazil, which is rated two steps lower at Baa3 by Moody’s.

Concern Russia’s economic recovery after the global financial crisis may falter is spurring foreign investors and local companies to switch from rubles and invest their money outside the country, stoking depreciation pressures, said Aurelija Augulyte, a Russia economist at Nordea Bank AB, the Nordic region’s biggest lender.

OAO Sberbank, Russia’s largest bank, said Nov. 16 it will seek a $2 billion loan to help meet client demand for U.S. currency.

Slowing Growth

Russia’s economy expanded at its slowest pace this year in the third quarter at 2.7 percent as the worst drought in 50 years cut agricultural output and reduced consumer demand, according to government data published Nov. 12. China grew three times faster at 9.6 percent in the three months to Sept. 30.

Russia, the world’s largest energy exporter, is also being outpaced by the other so-called BRIC economies, with Brazilian and Indian GDP growing 8.8 percent in the second quarter, compared with 5.2 percent for Russia.

“Russia’s clearly not the strongest link in the emerging- market basket right now,” Nordea’s Augulyte said by phone from Copenhagen yesterday. “The overall picture of Russia in investors’ eyes is just not that attractive.”

Capital Outflows

Net capital outflows from Russia will reach $22 billion this year, the central bank said in monetary policy guidelines published Nov. 16, more than doubling its previous forecast of $8.7 billion. Russian bond funds took in $166 million so far this month, half the $326 million invested in Brazilian debt funds, according to Cameron Brandt, an analyst at EPFR Global, a Boston-based research firm.

Russian companies and the government have a total $17.1 million of foreign-currency denominated debt coming due in December, the most since at least July, according to central bank data. Repayments and the resulting demand for dollars will further depress the ruble until the end of the year, said HSBC’s Morozov, who forecasts the currency will weaken 6 percent to 33.40 per dollar by the end of 2011.

VTB Capital, the investment banking arm of VTB Group, cut its forecast for economic growth to 4 percent from an earlier estimate of 4.3 percent, according to its note e-mailed yesterday. It also lowered its ruble forecast to around 30 per dollar by year-end from a previous estimate of 29.30 per dollar, as oil trades at an average $85 a barrel, from previous forecasts of $92, the note said.

“All this noise about the euro area debt crisis and risk coming off is not going to just die away,” Ivan Tchakarov, chief economist for Russia and the former Soviet Union at BofA Merrill Lynch Global Research in Moscow said by phone from London yesterday. “December is going to be a challenging month for the ruble.”

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A top Federal Reserve official defended the Fed’s controversial bond-buying program on Tuesday, saying it could be years before pulling back easy money policies is warranted.

“This exit could be years away,” New York Federal Reserve President William Dudley said an interview on CNBC. A transcript of the interview was made public.

Dudley cautioned that it will take months of adding 200,000 to 300,000 jobs to foster a meaningful recovery, and said the Fed’s program to buy $600 billion in longer-term Treasuries is unlikely to generate a spurt of growth.

“Modest effect. It’s not a fantasy. It’s not a magic wand,” he said.

“It’s going to make the economy grow a little bit faster. It’s going to generate a little bit more employment growth. But you know, we have a long bumpy road to travel,” Dudley said.

Criticism has rained down on the Fed internationally and domestically since it announced it the program. Among those taking issue are international trading partners of the United States who have said that the weaker dollar hurts growth elsewhere by weakening their exports.

Dudley, a permanent voter on the Fed’s policy setting panel, said the U.S. central bank’s sole aim is to stimulate growth in the United States, not to devalue the currency at the expense of other economies around the world.

“What we’re doing is actually in their long-term interests,” he said. The sooner the United States recovers fully, the more quickly monetary policy authorities can pull back from extraordinary policies, he added.

“The goal of our policy is a very simple one, to ease financial conditions,” Dudley said. “We’re not trying to push the dollar to any particular level.”

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Greeks voted Sunday in runoffs for local elections as the crisis-hit nation faced renewed pressure to reduce overspending.

The vote follows a first round Nov. 7 that gave Prime Minister George Papandreou’s Socialists a slim lead over conservatives who campaigned against the terms of a euro110 billion ($140 billion) bailout loan agreement with the IMF and European Union.

The EU on Monday is expected to announce an upward revision of Greek budget deficit figures, including for the year 2009, while officials from the EU and IMF are due in Athens for another inspection of cost-cutting efforts.

In a weekend newspaper interview, Papandreou said Greece could seek an extension for repaying the rescue loan, and conceded the deficit revision would add pressure on his government to cut costs.

“It’s like running a marathon, and finding out during the race that they have added more kilometers to the course,” he told the Proto Thema newspaper.

Papandreou had billed the local government poll as a key test of popular support for his government’s austerity program, which has included pay cuts for pensioners and civil servants. But last Sunday, he dropped a threat to call an early general election after the Socialists took the lead in the local polls to elect mayors and 13 new regional governors.

The Socialists won two governors’ races outright last week, and led in greater Athens and four other regions no fax cash advance.

The conservatives are ahead in six regions, as well as in high-profile mayoral races in Athens and the country’s second-largest city, Thessaloniki. About 9.8 million people are eligible to vote.

Papandreou made no mention of austerity Sunday after voting near his north Athens home.

“Today we are called to elect capable mayors and regional governors … who will help us emerge from the crisis on our own steam,” he said.

But conservative leader Antonis Samaras _ wooing first-round voters who backed left-wing parties _ described Sunday’s vote as a one-time chance for Greeks to express their discontent.

“No one tomorrow will be able to pretend that they didn’t hear or didn’t understand the resounding message from the Greek people calling for a change in course,” Samaras said after voting.

The November elections are the first following far-reaching changes in Greek local government that reduced the number of municipalities from 1,014 to 325, provided for elected regional governors and regional councils and will extend the terms of mayors and governors from four to five years.

(This version CORRECTS umber of races already won outright by Socialists to two.)

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