TOP EUROPEAN STORIES at 1215 GMT
BRUSSELS — European Union leaders closed in on a deal that would cut the bloc's budget for the first time in history and deliver a strong message that years of expanding EU powers were on the wane. If a deal emerges Friday, the budget would still need to be ratified by the European Parliament, and early signs suggest that may prove problematic. By Sarah Dilorenzo and Raf Casert.
TUNIS, Tunisia — Tens of thousands of Tunisians chanting anti-government slogans converged on a cemetery for the funeral of an assassinated leftist opposition politician as military helicopters hovered overhead amid fears that tensions could boil over into further violence. Mourners came from all over the country to mark the passing of 48-year-old lawyer Chokri Belaid, who was gunned down in front of his house Wednesday, sparking off days of anti-government rioting. By Bouazza Ben Bouazza.
AP Photos REB105-0208131158, REB103-0208131149, REB102-0208131142, REB101-0208131102, REB104-0208131153, REB107-0208131208, REB106-0208131204.
WARSAW, Poland — The before and after photos of Anna Grodzka show how much she — and her country — have transformed. As a man, she once wore a thick beard. Now, Poland's first transsexual lawmaker favors big dangly earrings, her hair in a bob. By Vanessa Gera.
LONDON — Lawyers for Sarah Ferguson, the former wife of Prince Andrew, say that Rupert Murdoch's News Corp. has agreed to pay her for repeatedly intercepting her voicemail messages. The Duchess of York was one of a slew of phone hacking victims who settled on Friday with News Corp. over its campaign of illegal espionage by its British newspapers.
BRATISLAVA, Slovakia — A Slovak national arrested in Iran and accused of spying for the United States has been released and returned home. Iranian authorities claimed in January that 26-year-old Matej Valuch was involved in Central Intelligence Agency activities in Iran.
DUSHANBE, Tajikistan — Authorities in Tajikistan say border guards have shot dead two drug-smugglers from neighboring Afghanistan trying to cross with a consignment of illegal narcotics. The State Security Services said Friday another two were wounded and fled, while a fifth was captured. It did not say why the guards opened fire.
BAKU, Azerbaijan — A 75-year old Azerbaijani author who wrote a novel about the Nagorno-Karabakh conflict that describes mob violence against Armenians has been stripped of his honorary title and pension by the leader of the oil-rich Caspian Sea nation. President Ilham Aliyev announced the decision late Thursday, accusing Akram Aylisli of "insulting the dignity" of more than a million Azerbaijani refugees. Aylisli's "Stone Dreams" offers a wrenching description of attacks on Armenians in the Azerbaijani capital amid the conflict that erupted in 1988.
PARIS — A visitor to the Louvre's newest extension, in northern France, has been detained after scrawling an inscription in marker on the famed canvas of Eugene Delacroix "Liberty Leading the People." The 28-year-old woman was immediately seized by a guard and another visitor, then handed over to police, according to a statement from the Louvre-Lens on Friday. It said the painting should be easily cleaned.
PARIS — The former American ambassador to Mali says France paid $17 million in ransoms to free French hostages and that the money ended up in the hands of the same al-Qaida militants the country is fighting now. In an interview that aired Friday on iTele, Vicki Huddleston said the money allowed al-Qaida's North Africa branch to flourish in Mali.
AP Photos XJD105-0207130514.
BUSINESS and FINANCE
LONDON — Markets were ending the week solidly after better-than-expected trade figures from China provided new evidence of an upswing in the world's second-largest economy. Japanese shares tanked, though, as the yen rallied on reports that the country's finance minister thinks the recent fall in the currency may have been too fast. By Pan Pylas.
BERLIN — Exports from Germany, Europe's biggest economy, hit a record high of nearly €1.1 trillion ($1.5 trillion) last year thanks to strong demand from outside Europe. The Federal Statistical Office said Friday that exports grew 3.4 percent, driven by an 8.8 percent increase in sales of goods and services to countries outside the European Union. Exports to other countries in the 17-country eurozone, where several countries are in recession, were down 2.1 percent.
BERLIN — German steelmaker ThyssenKrupp says it will slash at least 2,000 jobs by 2015 as part of a cost-saving drive as the company copes with high commodity costs and the struggling European economy. Essen-based ThyssenKrupp Steel Europe says a further 1,800 jocbs may be lost as it sells parts of the company.
MADRID — Las Vegas Sands casinos and Madrid officials have chosen the town of Alcorcon on the outskirts of the Spanish capital as the site for the multibillion-dollar "EuroVegas" casino project, which authorities hope will bring much-needed jobs and investment to the recession-wracked country. Madrid regional government president Ignacio Gonzalez said Friday that work on the first of three phases would begin at the end of 2013 and would be completed by 2017.
ATHENS, Greece — Greece has slashed its deficit targets for the next four years following its latest international debt relief deal. A revised mid-term strategy paper submitted to Parliament foresees the budget deficit shrinking to €7.9 billion ($10.7 billion), or 4.3 percent of the country's annual gross domestic product this year.
STOCKHOLM — Frozen-food company Findus is recalling beef lasagna meals in Sweden after tests confirmed the products contained horsemeat. The move follows a similar recall earlier this week in Britain amid a widening scandal surrounding the use of horsemeat and the mislabeling of meat products in Europe.
OSLO, Norway — Norwegian Air Shuttle says Boeing has warned it of possible delays in the deliveries of its first 787 Dreamliner aircraft scheduled for April and June. The Oslo-based budget airline's spokesman, Lasse Sandaker-Nielsen, said Thursday that delivery of the planes, scheduled to be operational in May and June, might not be possible. He gave no reason for the delays.
HELSINKI — Higher revenues and lower operational costs have helped Finnair PLC return to profit in the last three months of 2012. The Finnish airline says Friday its net profit of €1.2 million ($1.6 million) came on the back of a 6 percent rise in revenue to €613 million compared to a year earlier, because of increased passenger traffic in Europe and Asia.