Europe

The quickening pace of Russia's rouble devaluation is piling pressure on the currencies of its neighbours and putting those without Moscow's sizeable reserves at risk of foreign debt default and further capital flight, Forbes reported. Investors are shying away from currencies such as Ukraine's hryvnia as the world economic slowdown crushes demand for its exports, global risk aversion shines a harsh light on Kiev's turbulent politics and Russia demonstrates its stranglehold on the country's energy supplies.

The Irish economy, pummeled by the most severe housing bust in Europe, has collapsed, The New York Times reported. Everything, it seems, has grown worse here. The recession started earlier and its bite has been deeper. Housing prices have fallen by as much as 50 percent. Bank shares have plummeted by more than 90 percent. Unemployment is approaching 10 percent. Government policy that chopped taxes in half, sharply reduced import duties and embraced foreign investment gave birth to the Celtic Tiger, perhaps the most open and vibrant economy in Europe.

Waterford Wedgwood Plc received protection from creditors after losing money for five years and failing to find a buyer, threatening an Irish crystal-making heritage that dates back to 1759, Bloomberg reported. As many as 1,900 Irish and British jobs may be at risk if no buyer emerges. Deloitte Ireland was appointed as receiver for the company and some local units, Dublin-based Waterford said today in a statement. Its shares were suspended in Dublin.

Corporate earnings will continue to slump into the first half of 2009 amid the first simultaneous recessions in the U.S., Japan and Europe since World War II, Bloomberg reported on analyst estimates. While profits will rise 4.3 percent for the full year in the U.S., earnings in Europe are projected to decline for all of 2009 and analysts predict worsening reports out of Asia because the recession hasn’t fully hit there yet. Earnings at European oil companies may drop 21 percent in 2009, compared with a 4.7 percent gain last year, according to estimates.

Austrian automotive warp and weft knit fabric producer Eybl International AG announced that it was filing for administrative receivership after recent talks about a takeover by the Slovenian Prevent Group failed to lead to a positive conclusion, the trade journal Knitting Industry reported. Eybl International, which specialises in textile production, fabrication and components for automotive interiors, operates eight production sites in Austria, Hungary, Romania, Germany and Slovakia as well as four distribution sites in Germany, France, Spain and Britain.

Two Rubicon property funds have failed to meet debt repayment requirements and say their creditor, Credit Suisse, may declare them in default, the Business Spectator reported. In separate statements on Friday, Rubicon America Trust and Rubicon Europe Trust Group said they fell short US$35.4 million (A$50.34 million) and €16.7 million ($A23.27 million), respectively, on payments due by December 30, 2008. Under its agreement with Credit Suisse, RAT was required to reduce its facility to US$50 million. As at December 30, the balance stood at US$85.4 million, RAT said.

Austrian private bank Bank Medici was placed under state supervision on Friday amid bigger exposure to the Bernard Madoff scandal than previously disclosed. A source close to the matter told Reuters on Friday the bank holds over $3 billion in funds exposed to what could be Wall Street's biggest fraud. It is still not clear how much cash has been lost. Austria appointed a supervisor to the bank, financial regulator FMA said, in the first known case where a government has stepped in to run a bank caught in the alleged $50 billion Madoff fraud.

Factories in China and India joined much of Europe in slashing output and jobs at a record pace in December, another sign the biggest emerging markets were wilting under the recession gripping industrialized nations, Reuters reported. Economists and policymakers had seen China, Russia, India and Brazil, with their vast markets and rising wealth, as the engines of growth that could save the world from recession. Those hopes are fading fast and forecasts are getting gloomier.

LyondellBasell Industries, the world's third-largest independent chemical company, told lenders on Monday it is considering filing for bankruptcy protection amid plunging sales and a cash crunch, people familiar with the matter said. The Wall Street Journal reported that LyondellBasell, which is based in the Netherlands and has large U.S. operations, has hired bankruptcy counsel and told lenders it is trying to line up as much as $2 billion in bankruptcy financing. A Chapter 11 filing may be imminent.

Oilexco Inc., a North Sea producer of oil and gas, lost more than half its market value in London trading today after saying its U.K. subsidiary was likely to file for insolvency administration as early as next week, Bloomberg reported. Calgary-based Oilexco North Sea Ltd. has been informed by Royal Bank of Scotland Group Plc that lenders aren’t prepared to provide further financing, Oilexco said today in a statement. The unit “does not have any other source of funding,” it said, adding that the parent company “remains solvent.” Oilexco hired Morgan Stanley and Merrill Lynch & Co.