Europe

Northern Rock Plc shareholders lost a court bid seeking compensation from the British government for stock they claim was rendered worthless when the U.K. bank was nationalized last year, Bloomberg reported. A three-judge panel at the Court of Appeal in London today threw out a lawsuit filed by hedge funds SRM Global, RAB Capital Plc and a group of private investors. They had sought a judicial review of the way the shares will be valued by the government. Northern Rock shares peaked at 1,251 pence in February 2007, and closed at 90 pence on Feb. 15, 2008, when they were suspended.

Lithuania’s economy plunged a preliminary 22.4 percent in the second quarter, the worst recession since 1990 independence, as output crashed and retail sales slumped, Bloomberg reported. The decline, the deepest in the European Union, compares with a revised 13.3 percent contraction in the first quarter, the Vilnius-based statistics office said in an e-mailed statement today. The economy grew 5.2 percent in the same period last year.

Nortel Networks, the bankrupt Canadian maker of telecommunications equipment, said over the weekend that Ericsson of Sweden had won an auction of its wireless technologies unit with an offer of $1.13 billion, thwarting a bid by a rival, Nokia Siemens Networks, The New York Times reported. Last month, Nortel signed a deal to sell the division, which is profitable, to Nokia Siemens for $650 million. A bank owned by the Canadian government also agreed to provide $300 million in financing for the deal.

Tiny Iceland was hit uniquely hard by the credit crisis, The Economist reported. Its banks had assets eight times its GDP. When they collapsed it seemed that a life of fishing and harvesting pelts beckoned for the country’s more sophisticated inhabitants. Yet Iceland is special in another way: it did not issue a blanket bail-out to its banks, but rather let bits of them go bust. That could mean the cost to its public is less devastating than once seemed possible. When the government stepped in last October, it only took over the domestic operations of the three big banks.

Two-thirds of Irish people believe the worst of the economic crisis has yet to come with almost a quarter saying they are not confident of having a job in two years’ time. Meanwhile, the latest European Quality of Life Survey shows that Europe’s households are considerably better protected from the ravages of the financial crisis than its banks because only a minority of homeowners have mortgages. Outright home ownership is highest in Eastern Europe and of the 70 per cent who are homeowners, two-thirds have no mortgages.

ING Groep NV is seeking buyers for its private-banking business in Europe and Asia, according to people familiar with the situation, in the latest step by the financial-services firm to slim down after it turned to the Dutch government for aid last year, The Wall Street Journal reported. The sale process is at an early stage and any deal is likely several months away, the people said.

Poland chose potential bidders for Warsaw Stock Exchange SA and announced plans to privatize strategic energy and mining companies in an effort to plug a gaping budget deficit, The Wall Street Journal reported. The move to sell government stakes in copper miner KGHM Polska Miedz SA and oil refinery Grupa Lotos SA took markets by surprise. Many analysts had been skeptical the government would carry through with such politically sensitive sales amid a recession.

The European Commission on Wednesday cleared the Polish government's state aid of €251 million ($356.4 million) to the Gdansk Shipyard, ending a long-running legal battle, The Wall Street Journal reported. The commission, the European Union's executive arm, has been investigating state subsidies for the historic shipyard, where the Solidarity trade-union movement was born, since 2004. Much of the state aid cleared by the commission has already been paid to the shipyard. The commission said in its ruling that the state subsidies gave the shipyard an unfair advantage over rivals.

General Motors Corp. on Monday said it received final offers for its Opel and Vauxhall operations in Europe from three bidders, without naming them, The Wall Street Journal reported. A person familiar with matter said Beijing Automotive Industry Holding Co., owned by the Chinese government, has submitted a final bid. Another person close to the discussions on Friday said Canadian auto-parts supplier Magna International Inc. and Belgian investment group RHJ International SA are the front-runners to clinch the deal.

A consortium of bidders for Opel led by Magna International will make a new offer for the German carmaker on Monday which includes a demand for rights to Opel’s intellectual property, a Russian newspaper reported. Citing a single source, the Russian daily Kommersant said the consortium, which includes Russian state bank Sberbank, would make the new offer “in the form of an ultimatum” and leave the talks if it was not accepted, The New York Times DealBook blog reported.