Europe

The ESRI (Economic and Social Research Institute) says today that the Irish Economy will shrink 9.2 per cent in 2009, which will be the sharpest fall in economic growth experienced by an industrialised country since the Great Depression, Finfacts Ireland reported. The ESRI says employment in 2009 will be 187,300 lower than in 2008, on an annual average basis. The ESRI says the implications of the downturn for employment are highly negative. It expects employment in 2009 to be 187,300 lower than in 2008, on an annual average basis.

In Spain, when the previous finance minister said there was no room for tax cuts or spending to buoy the economy, he was sacked by the prime minister. "There is room--there can't not be," new finance minister Elena Salgado said last week, in the face of a Europe-high 17% unemployment rate. But in the U.K., France and Italy, gaping budget deficits have largely ended the chance of major new tax cuts or spending . Germany says that despite expecting a 6% dive in its economy this year, it is more worried about stoking inflation in 2010.

One of Australia's most extraordinary business stories of the past few decades is the spectacular rise and equally spectacular fall of the ABC Learning Group, analysis by The New Zealand Herald found. ABC began with one centre in Brisbane in 1988. By 2007 it had used hundreds of millions of dollars from taxpayers, shareholders and banks to grow into the world's second-biggest childcare operator with more than 2300 centres in Australia, the United States, Britain, and New Zealand. In 2007, it reported profits of more than $150 million.

Italian car maker Fiat SpA is in talks to buy a stake in General Motors Corp.'s German-based unit Adam Opel GmbH as part of a wide-ranging strategy to become one of the world's largest auto makers, according to people familiar with the matter. Fiat Chief Executive Sergio Marchionne held talks in Berlin last week with German Economy Minister Karl-Theodor zu Guttenberg, who is leading the German government's search for a new investor in Opel, one person said.

Faced with plunging orders, merchants across recession-wracked Spain are starting to do something that many of them have never done: cut retail prices. Prices dipped everywhere, from restaurants and fashion retailers to pharmacies and supermarkets in March, The New York Times reported. The nation’s jobless rate, already a painful 15.5 percent, could soon reach 20 percent, a troubling number for a major industrialized country.

Fiat's chief executive has returned to the United States for talks as pressure builds to seal a partnership deal with Chrysler before the end of the month, sources at the Italian car maker said on Monday. Chief Executive Sergio Marchionne is going to Detroit and Washington, where the government has given Fiat and Chrysler an April 30 deadline to get the U.S. car maker's unions and bondholders to agree the deal, the sources told Reuters on condition of anonymity.

The bank has installed a receiver over Thedforde Trading in an effort to secure about €20 million it lent to the firm, The Sunday Business Post reported. Thedforde Trading is controlled by Simon Kelly, the son of Dublin property developer Paddy Kelly. Thedforde Trading has been trying to redevelop the premises into shops and a hotel, and had lodged a number of planning applications. It recently received planning permission for a part of the proposed development. Thedforde is the latest in a series of companies controlled by the Kelly family to be seized by banks.

Russian billionaire Alexander Lebedev said his Blue Wings AG airline in Germany is planning to file for bankruptcy after the discount carrier’s flight license was revoked, Bloomberg reported. “I will probably file for bankruptcy and will try to make a point that it is the German government’s fault,” Lebedev said today in an interview with Bloomberg Television.

Austria is not on the brink of default and can cope with any risks caused by the exposure of domestic banks to emerging Europe, Austrian officials said. Austrian banks are among the biggest lenders to formerly Communist areas of central and eastern Europe and have lent the equivalent of 75 percent of its gross domestic product to clients in the region, Forbes reported. 'The creditworthiness of the state of Austria and of the Austrian banking sector is beyond any doubt,' Austrian National Bank Governor Ewald Nowotny said in a statement late on Tuesday.

German department store chain DWW Woolworth GmbH Co, owned by British investor Argyll Partners, has filed for insolvency, a court said on Tuesday. Slowing sales, increased competition, and insufficient liquidity are believed to have contributed to the company's collapse, Sky News reported. Business at its roughly German and Austrian stores would continue as usual, with the Austrian and logistics operations not believed to affected by the filing. Woolworth employs about 9,000 staff in Germany and generated about €900 million ($1.2 billion) in sales in its fiscal year to end-October 2008.