Harvard University Professor Martin Feldstein said Greece will eventually default on its bonds and other euro-area nations may follow, most probably Portugal. “Greece is going to default despite all the talk, despite the liquidity package,” Feldstein, who warned almost two decades ago that the euro would prove an “economic liability,” said in an interview with Tom Keene on Bloomberg Radio yesterday.

Greece has agreed the outline of a €24 billion austerity package, including a three-year wage freeze for public sector workers, in return for a multibillion-euro loan from the eurozone and the International Monetary Fund, according to people familiar with the talks, the Financial Times reported. Final details of the measures, which were intended to slash the budget deficit by 10-11 percentage points of gross domestic product over the next three years, were still being worked out, a senior government official said.

Lehman Brothers Holdings Inc. pressed its case Thursday that former executives of the firm were conflicted as they worked on closing a deal to sell its assets to Barclays Plc in 2008, Dow Jones Daily Bankruptcy Review reported. Lehman, which is fighting to recover billions of dollars from Barclays, has claimed top executives working on the sale had conflicted loyalties because they were negotiating new employment contracts with Barclays when they were supposed to be acting on Lehman's behalf.

Ukraine's state railway said on Thursday it planned to sign an agreement by May 20 to restructure $440 million remaining from a syndicated loan of $550 million, Reuters reported. The loan was organised by Barclays in July 2007 and matured in 2009, according to Thomson Reuters Loan Pricing Corp data. Its total size is now $440 million after the company made an initial August 2009 payment of $110 million. "We have been holding talks for the past three months and I hope a new credit agreement will be signed by May 20," railway director Mykhailo Kostyuk was quoted as saying.

Anglo Irish Bank may have to be wound up in the long term, but an immediate liquidation would not benefit taxpayers, according to the Minister for Finance, Brian Lenihan, The Irish Times reported. The final cost of bailing out the bank, the biggest casualty of the property bubble’s collapse, could run to €22 billion, but the Government has insisted that it will be kept as a going concern since the State took over the institution in January 2009. Speaking to the Dáil yesterday Mr Lenihan said he accepted that a longer-term wind down of the bank is an option that must be examined.

Fears that Greek debt crisis will spread to other eurozone nations intensified on Wednesday when Spain suffered a debt downgrade from Standard & Poor’s, sending the euro to fresh lows against the dollar, the Financial Times reported. The downgrade, by one notch from AA plus to AA, dealt a blow to Spain’s frantic efforts to avoid contagion from Greece and followed S&P downgrades this week of Greece and Portugal.

Dubai International Capital Wednesday sent a letter to senior lenders of German aluminum company Almatis, urging them to vote against a restructuring plan from distressed-debt investor Oaktree Capital, Dow Jones Daily Bankruptcy Review reported. The letter comes on the eve of Almatis' management filing to place the company in U.S. Chapter 11 bankruptcy proceedings as part of Oaktree's restructuring plan to more than halve Almatis' $1 billion debt to around $422 million.

Lehman Brothers Holdings Inc. continued its court battle Monday to claw back billions of dollars in assets from Barclays Plc, as two witnesses testified that the British bank wasn't supposed to see an immediate gain when it bought Lehman's core U.S. operation in 2008, Dow Jones Daily Bankruptcy Review reported. A member of Lehman's board of directors and its former president testified that the deal hammered out following Lehman's historic bankruptcy filing called for Barclays to acquire a pool of assets and an equivalent amount of liabilities when it bought Lehman's broker-dealer unit.

Europe's hopes of containing Greece's credit crisis dimmed as the country's debt woes spread to Portugal, sparking a selloff in markets across the globe and testing the European Union's ability to protect its common currency, The Wall Street Journal reported. The euro tumbled to its lowest point in a year against the dollar after Standard & Poor's Ratings Services cut Portugal's credit rating two notches and downgraded Greece's debt to "junk" territory, a first for a euro-zone member. The move is bound to worsen Greece's already dire fiscal situation and hamper a recovery.

A Greek official said the International Monetary Fund is considering increasing its promised €15 billion ($19.76 billion) loans to Greece by between €5 billion and €10 billion, but expressed doubts about whether the boost will happen, The Wall Street Journal reported. “Everything is still very fluid. If our partners and creditors feel that more money is needed to finally calm the markets and stop hurting the euro, more money could be approved. It is being discussed among all parties involved," the official added, without elaborating. The IMF wasn't immediately available for comment.