Europe

The economy of the euro zone slipped into recession for the first time during the third quarter, the European Union’s statistics agency confirmed Friday, as the financial crisis continued to depress manufacturing activity and consumer demand, the New York Times reported today. Gross domestic product declined 0.2 percent in the third quarter from the previous three months in both the euro zone, which comprises the 15 countries that use the euro as their currency, and the European Union as a whole, according to an initial estimate published by the agency Eurostat.

Japan will offer up to 10 trillion yen ($105 billion) to the International Monetary Fund to bailout nations reeling from the global financial crisis, The Nikkei newspaper reported Thursday. Japanese officials have repeatedly said Tokyo is ready to provide some of its ample cash for IMF loans if the multilateral group doesn't have enough funds for bailouts. But the ministers have not given an amount. The Nikkei, the nation's top business daily, said the amount is likely to be about 10 percent of Japan's $1 trillion foreign currency reserves.

Russian stocks plunged and Kuwait suspended trading as a slump in oil to below $55 a barrel roiled emerging markets and increased concern that Moscow will be forced to devalue the ruble, Bloomberg reported today. Russia's Micex Index fell as much as 17 percent and was 8.6 percent lower at 1:09 p.m. in Moscow after it reopened following a 30-minute trading suspension. A court in Kuwait ordered a shutdown as traders lobbied for support after a sixth day of declines.

The European Commission on Wednesday gave its green light to a plan by Italian investors to create a new Italian airline using the flight operations of the failed national carrier Alitalia, ANSA reported. Last August the Italian government changed Italy's bankruptcy laws to allow Alitalia's more profitable flight operations to be spun off into a separate company and sold while the carrier's remaining assets, referred to as a 'bad company', would be declared bankrupt and liquidated to pay for the airline's debts of over one billion euros.

Troubled German real-estate financier Hypo Real Estate Holding AG early Wednesday reported a €3.1 billion ($3.9 billion) provisional third-quarter loss and said it had completed negotiations with the German government to receive a €50 billion liquidity facility to shore up its funding needs, the Wall Street Journal Europe reported today. A €50 billion emergency liquidity facility package organized last month for Hypo RE will become available on Nov. 13, the company said.

An international bail-out of crisis-hit Iceland appeared to be unravelling on Tuesday night as the International Monetary Fund withheld official backing for the $6 billion plan, the Financial Times reported yesterday. Iceland has also been left with a $500 million shortfall in the funds for the plan that it had hoped to raise from other international donors.

Mail and logistics company Deutsche Post AG said it will cut 9,500 jobs and close all of its DHL express service centers in the U.S. amid heavy losses in the market there, the Wall Street Journal Europe reported today. In a statement released Monday, the German company said that new round of cuts are on top of 4,500 job cuts it already announced and blamed heavy losses at the unit, which competes with rivals UPS Inc. and FedEx Corp.

NextWave Wireless, Inc. said it initiated bankruptcy liquidation proceedings for three of its network infrastructure units in Israel, Denmark and Canada, and is also looking to sell its IP wireless unit as part of the planned divestiture of its network infrastructure businesses, Reuters reported today. The company, which reported a wider loss for the third quarter ended Sept. 27, said it discontinued the operations of its GO Networks and Cygnus subsidiaries in the quarter as part of the divestiture plans. Read more.

Latvia's government has decided to take over the nation's No. 2 financial institution after the bank ran into a liquidity crisis, the Associated Press reported yesterday. The government decided late Saturday to take a 51 percent stake in Parex Bank, the Baltic state's second largest bank by total assets, based on data that indicated the bank was headed toward insolvency. The government bought the majority stake in Parex for 2 lats ($3.70). Another 34 percent stake in the bank will be held as collateral by the state-owned Hipoteku Bank.

Groups related to collapsed Allco Finance Group warned today the failure of Allco may have triggered defaults on debt facilities, The Australian reported today. Real estate managers Rubicon Japan Trust, Rubicon America Trust and Rubicon Europe Trust Group said they were in talks with various lenders about the implications of Allco Finance's situation. All three entities were suspended from trade. Rubicon America Trust said that defaults on two debt facilities may have been triggered by Allco Finance's collapse, although it was not clear in the documentation for the loans.