Europe

Struggling U.S. carmaker General Motors denied a weekend newspaper report its German unit Opel was preparing for insolvency. "This scenario is currently not on the agenda," a GM Europe spokesman told Reuters on Sunday. German newspaper Die Welt had reported on Saturday, citing no sources, that GM and Opel seemed to be preparing for an insolvency at Opel, having hired three law firms with renowned insolvency experts.

Latvia faces bankruptcy in three months if it fails to deliver budget cuts required by the International Monetary Fund and the next installment of its bailout is delayed, Premier-designate Valdis Dombrovskis said. Latvia, in the grip of the severest crisis since independence in 1991, was granted a €7.5 billion ($9.5 billion) bailout last quarter after the economy shrank 10.5 percent and the state seized its second biggest bank. The government fell on Feb. 20 after agreeing to budget cuts needed to keep the deficit below 5 percent of gross domestic product.

The forint hit a new low against the euro Friday, continuing a slide spurred Thursday by a Hungarian Banking Association letter instructing its members to fend off rumors of an impending freeze on customers' deposits, The Wall Street Journal reported. The country's central bank quickly sought to assure depositors their money was safe to avoid a run on the banks, but the effort failed to stabilize the currency. On Friday, the forint fell .95% against the euro. The currency has lost more than 20% against the euro since the start of the year.

The crisis at General Motors threatens to drag down Opel, a storied German brand that GM bought 80 years ago on the eve of the Great Depression, the International Herald Tribune reported. Many in the industry believe Opel has a future only if it can get a temporary helping hand from the German government.

German carmaker Opel should consider entering insolvency, the country's interior minister has said. Modern insolvency law was "not set up for the destruction but for the preservation of economic assets", said Wolfgang Schaeuble. The comments came as executives from Opel and its parent General Motors (GM) met government officials and promised more details on a restructuring plan, the BBC reported.

Swedish auto parts maker Plastal Holding AB, which employs 6,000 people in Europe and is 90 percent owned by investment fund Nordic Capital, said yesterday it had filed for bankruptcy, the Globe and Mail reported. "Efforts to avoid insolvency have failed," Plastal said in a joint statement with Nordic Capital. Plastal counts Ford, Volvo, Daimler, Audi, Volkswagen and BMW among its clients. "The auto sector is in free fall at the moment. Bankruptcy is the last resort," Nordic Capital said.

Just off Kiev's busy Khreshchatyk thoroughfare, armed and masked security officers barged into the offices of state-owned energy giant Naftogaz, placing the Ukrainian company once again at the center of government infighting and corruption allegations, Forbes reported on an Associated Press story. The raid Wednesday underscores the Naftogaz problem at the heart of the country's crucial energy sector, and the threat its sprawling, inefficient and impoverished condition poses to European energy security. Ultimately, Naftogaz is Europe's problem.

Housing markets across Europe suffered steep declines in both prices and activity during 2008 and the situation isn't likely to improve much in 2009, according to an annual report published Thursday by the U.K.-based Royal Institution of Chartered Surveyors. A continued lack of mortgage-credit availability will keep European housing markets in the doldrums, the survey said. The report shows that while U.K.

Businessman Urmas Sõõrumaa and his partner Gunnar Kool’s plan to establish one of the leading luxury clothing and accessories chains in Eastern Europe has failed. Last week the court started bankruptcy proceedings for Versus Invest, Eesti Ekspress reported. Franchiser Versus Invest operated ten stores that sold clothing and accessories by Hugo Boss, Joop, Calvin Klein and Zegna. Six of them were in Estonia, one in Latvia and three in Belorussia. According to the plan, Versus Invest was supposed to open ten new stores during 2009.

Companies struggling with tight credit conditions can now apply for liquidity guarantees and loans from the German government's €100 billion ($126 billion) fund, a spokesman for the Economy Ministry said Wednesday. The fund will offer €75 billion in liquidity guarantees and €25 billion in direct loans, The Wall Street Journal reported. General Motors Corp.'s German unit Opel could be one of the first companies to tap the fund, after GM Europe warned it needs €3.3 billion in aid.