The global economy won't suffer if banks are forced to adopt tighter standards on capital and liquidity, the Financial Stability Board and Basel Committee for Banking Supervision said in a joint statement Wednesday, The Wall Street Journal reported. The statement summarizes an interim report on the long-term effects on the economy of forcing banks to hold more capital and more liquid assets, relative to their overall balance sheet. The findings rebut banking sector complaints that such requirements would crimp lending to the real economy.

General Motors Co. agreed to pay employees of its European division up to €1.1 billion, or about $1.4 billion, if it fails to honor commitments to invest billions into new cars and trucks in the region through 2014, according to a regulatory filing Monday, The Wall Street Journal reported. GM said in the filing it expects to have a final deal with European labor unions in place by Sept. 30. The auto maker and unions reached tentative agreements earlier this year.

For years, Denmark was held out as a model to countries with high unemployment. The Danes, despite their lavish social welfare state, managed to keep joblessness remarkably low. But now Denmark, which allows employers to hire and fire at will while relying on an elaborate system of training, subsidies for those between jobs and aggressive measures to press the unemployed into available openings, is facing its own strains. As a result, it is beginning to tighten up, The New York Times reported.

Ireland’s bailout of Anglo Irish Bank, a key factor behind the country’s soaring budget deficit, is “costly but manageable”, the head of th Central Bank said yesterday, The Irish Times reported. Prof Patrick Honohan, who is also part of the European Central Bank’s (ECB) governing council, said the total cost of bailouts of all Ireland’s banks and financial institutions would be around 20 per cent of GDP.

When retail giants Brown Thomas, Clerys and Arnotts flung their doors open on St Stephen's Day last year – traditionally a shop holiday – it was an appropriate end to a terrible year for the retail industry. Sales had hit a 25-year low and an estimated 30,000 jobs were lost. 2010 hasn't been much better for Ireland’s retail sector, InsolvencyJournal.ie reported. Newly constructed shopping centres still stand partially, or even wholly empty, while 'to let' signs litter high streets up and down the country.

The euro has conspicuously failed to rally in light of Germany’s strongest quarterly growth since unification. Why? The punchy German economy makes things worse for the euro, not better, The Source blog at The Wall Street Journal reported. It highlights the yawning gap between the strongest of the single currency’s 16 members, and its weakest links. Remember that earlier this week, Greece’s gross domestic product was shown to have declined by 1.5% in the second quarter — a drop of 3.5% on the year.

Less than a month after stress tests calmed concerns about the health of European banks, new problems in the Irish banking sector are making investors nervous once again, The Wall Street Journal reported. Earlier this week, Ireland received European Commission approval for an additional €10 billion ($13 billion) in capital for state-owned Anglo Irish Bank, on top of the €14.3 billion the government has already injected into the bank. On Wednesday, Bank of Ireland, 36%-owned by the government, reported a pretax first-half loss nearly twice as big as its loss a year earlier.

A rebuilt Prussian palace in Berlin. High-speed rail from Lisbon to Kiev. A new visitor center for Britain's Stonehenge. They're just some of the big-ticket European projects put on hold by the continent's government debt crisis, the Associated Press reported. Deep in debt after decades of borrowing too much and still running big deficits from the recession, European countries are scaling back some of expensive building and high-speed transport projects that over the decades have given life on the continent much of its glitter and convenience.

As Britain continues to haul itself out of recession, the number of companies entering liquidation in the UK dropped by almost 20 per cent in the first half of 2010, InsolvencyJournal.ie reported. Figures released by the UK's Insolvency Service last week revealed that a total of 8,140 companies collapsed in England and Wales between January and June of this year, compared to 10,005 in the same period last year – a drop of 19%. Of these figures, 2,467 were compulsory liquidations while 5,673 were creditors' voluntary liquidations.

Greece's recession deepened in the second quarter, according to official estimates released Thursday, as the country felt the painful consequences of the government's drive to reduce its debt load with aggressive austerity cuts, the Associated Press reported. Gross domestic product declined by 1.5 percent from the previous quarter as the government reduced spending. The unemployment rate, meanwhile, rose to 12 percent in May from 11.9 percent, the statistics agency said.