Europe

Spain's government approved a long-awaited €9 billion ($12.66 billion) bailout fund to shore up banks weakened by a deep economic recession and get them lending again, The Wall Street Journal reported. Spanish Finance Minister Elena Salgado said the country's systemically important institutions are healthy, but some smaller banks could have "problems" as the downturn deepens.

The federal bankruptcy court filing earlier this week by Sea Launch Co., the last remaining U.S.-based commercial satellite launch provider, could hand its European and Russian rivals new opportunities to gain control over the industry, The Wall Street Journal reported. The filing underscores the financial weakness of the commercial satellite launch business in the U.S. The partnership's woes are in stark contrast to the expanding, government-supported launch operations aggressively marketed by Russia and the European launch consortium Arianespace.

The Swiss National Bank is attempting to put a “line in the sand” with its first intervention in the foreign-exchange market in more than a decade after previous attempts to weaken the franc failed, Bloomberg reported. Currency traders said the Zurich-based central bank intervened twice yesterday, driving the franc down against more than 150 currencies tracked by Bloomberg. It fell the most in three months versus the dollar and euro. The franc extended declines today.

Beijing Automotive Industry Holding Co. held discussions this week with General Motors Corp. about the possibility of buying Adam Opel GmbH if an existing bid for the European unit of GM falls through, a person familiar with the situation said, The Wall Street Journal reported. GM executives in Europe met with representatives of Beijing Auto after the Chinese government-owned company expressed interest in Opel for a second time, the person said.

Prices are falling faster in Ireland than anywhere else in the developed world. Now, beleaguered retailers face an even bigger strain as more shoppers head north, out of the country, for bargains. For years, shoppers have hopped the border between the Irish Republic and Northern Ireland. But recently, a deepening recession, complaints about a "rip-off republic," a weaker British pound and a wide gap in tax rates have dramatically increased the appeal of stores in Northern Ireland. To try to keep people like Ms.

Strains in pensions systems, in both private and public provision, threaten to turn the financial crisis of the past two years into a social crisis lasting for decades, the Organisation for Economic Co-operation and Development warned on Tuesday. In its annual analysis of the health of pensions systems globally, the Paris-based organisation found private pension plans lost 23 per cent of their value last year, while higher unemployment “leaves little room for more generous public pensions”, the Financial Times reported.

PSA Peugeot Citroen, Europe’s second-largest carmaker, said it may have an operating loss of as much as €2 billion ($2.8 billion) this year as sales decline and people buy smaller, less costly autos, Bloomberg reported. Peugeot rose as much as 3.5 percent in Paris trading after the company said European unit sales may fall 12 percent this year, better than a 20 percent drop forecast April 22, as governments pay people to scrap old cars and buy new ones. The loss will be €1 billion to €2 billion, it said.

Western consumers are buying fewer luxury goods, and demand for cashmere has plunged, The New York Times reported. The painful effects of this are being felt all the way to these nearly empty plateaus of Inner Mongolia, by goatherds and factory workers and owners — showing how ripples from markets in the United States, Europe and Japan can reverberate to some of the most remote corners of the world. The problem is not just the collapse of the cashmere market, but also a government ban on Kashmir goats across much of Inner Mongolia for environmental reasons.

Ireland’s Minister for Finance, Brian Lenihan TD, today announced the Government’s agreement to the establishment of a single fully integrated regulatory institution, the Central Bank of Ireland Commission, Finfacts reported. This new structure will replace the current board structure of the Central Bank and the Financial Services Regulatory Authority to achieve the highest performance standards for the new organisation. Substantial additional staff has been promised.

A plan to tighten financial-market regulation is pitting the U.K., home of Europe's financial center, against other members of the bloc, The Wall Street Journal reported. At a European Union summit starting Thursday, a key issue will be how much power should be handed to regulatory bodies that the EU's executive arm, the European Commission, wants to establish, and who will head them. The U.K.'s resistance to the EU plan comes amid tensions among British officials over financial regulation. In a speech Wednesday, Mervyn King, the head of the Bank of England, warned that the U.K.