Europe

Differences about bank stress tests and the timing of exit strategies from government measures to deal with the recession overshadowed the start of a G8 finance ministers meeting in southern Italy on Friday night, the Financial Times reported. Germany’s Peer Steinbrück said it would be difficult to find support for a discussion on exit strategies, although Jim Flaherty, Canada’s finance minister, had said the time had come to begin to talk about how to wind down economic stimulus measures. Fragility of the eurozone’s recovery was underlined on Friday.

Arcandor AG's filing for insolvency presents an opportunity to implement restructuring moves for a better future, German Chancellor Angela Merkel said Monday, Dow Jones Newswires reported. The filing for insolvency doesn't mean the end of the troubled retail and tourism company, "but offers the chance for a reasonable restructuring," Merkel said at the Day of Germany's Industry, organized by the BDI Federation of German industries.

The problems of Greece's homes market pale in comparison with those of Spain and Ireland, but the pain is seeping through the economy. About 135,000 properties, mostly residential, remain unsold in Greece, compared with well over one million in Spain and about 70,000 in Ireland. Construction accounts for 11 percent of Greece's GDP -- a significant factor taking the economy into recession after years when Greece grew by about 4 percent annually, well above its euro-zone peers. This recession will be its first since 1993.

German Finance Minister Peer Steinbrueck said Tuesday that the German government foresees major restructuring and a wave of mergers for the country's state-owned banks, the Los Angeles Times reported on an Associated Press story. Germany has eight public sector banks, or Landesbanken, owned by regional governments such as Bavaria and Berlin that play a key role in Europe's largest economy by funding local businesses. But big bets on global financial markets and large investments in securitized debt linked to the U.S.

Italian automaker Fiat SpA is still interested in Germany's Opel despite losing a bid to take over the General Motors Corp unit, Chief Executive Sergio Marchionne said on Friday, Reuters reported. Fiat lost out last week to Canadian car parts maker Magna International Inc in a bid for Opel, but Marchionne's comments suggested Fiat might yet be a factor in the deal. "The deal technically is not closed, we will see," Marchionne said, adding that Fiat had not yet used a €1 billion ($1.42 billion) line of credit from banks.

General Motors Corp. sold more cars in Britain than anywhere else in Europe last year. But it was Germany, and not Britain, that agreed to rescue GM’s European Opel unit with bridge loans last week to ease a sale to Magna International Inc. Prime Minister Gordon Brown hasn’t committed money to a bailout, raising concern U.K. employees will be cut after the deal as more Germans are spared. Opel sold almost 350,000 vehicles in the U.K. last year under the Vauxhall brand, the No. 2 seller in the market behind Ford Motor Co.

Russian President Dmitry Medvedev, opening the St Petersburg International Economic Forum, said on Friday the global economy had avoided the worst but warned participants it was too early to celebrate recovery, Reuters reported. The global financial crisis has hit Russia harder than any other big emerging market but Medvedev said in generally sober remarks that the country had stabilized its financial system and followed appropriate policies.

The Chinese government’s largest investment ever in a Western company, a proposed $19.5 billion stake in the Australian-British mining giant Rio Tinto Group, collapsed early Friday, dealing a blow both to China’s global corporate ambitions and to its efforts to gain clout in the natural resources market, The New York Times reported. The board of Rio Tinto announced the decision after meeting in London on Thursday, saying the company had ended the deal it struck in February to sell the stake to China’s state-owned Aluminum Corporation of China, also known as Chinalco.

India's biggest energy group, Reliance Industries Ltd, said on Wednesday a European textile unit, Trevira, had applied in a German court to start of insolvency proceedings with a restructuring plan, Reuters reported. "The move follows major efforts by the company to overcome the impact of industrial slowdown in Europe particularly of the automotive and textile sectors to whom it is an important supplier," Reliance, India's most valuable listed firm, said in a statement. Trevira makes polyester fibres and filament yarns, and reported turnover of €323 million ($459 million) in 2008.

A failed Latvian government debt auction on Wednesday sent tremors across financial markets as investors feared that emerging nations round the world would struggle to find buyers for a huge wave of sovereign debt issuance, the Financial Times reported. The auction failure revived concerns about the economies of central and eastern Europe and triggered a sell-off in the shares of Swedish banks, which have invested heavily in the Baltic nation. The currencies of several east European countries fell sharply against the dollar.