Greece’s debt crisis returned to financial markets with a vengeance as agitated investors demanded the highest premiums to buy its government bonds since the launch of European monetary union over a decade ago. The yield spread between 10-year Greek bonds and benchmark German Bunds widened dramatically on Wednesday, by almost 0.7 percentage points at one point, in what one trader called a “capitulation” to sellers worried about Greece’s ability to refinance its debt.

Allen & Overy (A&O) has taken a lead role as General Motors (GM) and Spyker reached an agreement for the purchase of Saab Automobile yesterday (26 January) after months of discussions, LegalWeek reported. The magic circle firm advised Spyker on the deal, which has been agreed at a cut-price value of $400 million (£247 million), but will see the small Dutch auto maker save the Saab brand from disappearing after GM announced plans to wind down operations late last year.

The president of Iceland, which became one of the biggest victims of the financial crisis when its banking system collapsed, predicted an economic recovery earlier than expected, The Wall Street Journal reported. "In the second half of this year and 2011, the recovery will be gaining strength," Ólafur Ragnar Grímsson said in an interview at the World Economic Forum's annual meeting here. Mr. Grímsson said a decline in the country's currency, the krona, is helping to revive its export industries such as fishing, manufacturing and aluminum.

Greece is wooing China to buy up to €25 billion of government bonds, a move that underlines Beijing’s growing financial power, as Athens struggles to fund soaring public debt, The Irish Times reported. Goldman Sachs, the US investment bank, has been promoting a Greek bond sale to Beijing and the State Administration of Foreign Exchange (Safe), which manages China’s $2,400 billion foreign exchange reserves, said people familiar with the issue.

European companies face increased risk of failure as the economy creeps out of recession, because they will need more working capital, credit insurance specialists and distressed debt investors warn, Reuters reported. Distressed debt investors and advisers predicted a second wave of restructurings throughout Europe in 2010, responding to a survey by Debtwire released on Tuesday. Companies that have limped along by stripping costs to the bone may struggle to build inventories in an economic recovery if they cannot meet their working capital requirements, investors said.

The Swiss government will on Wednesday reveal how it will rescue a decisive deal with Washington about bank secrecy after the country’s highest administrative court derailed the agreement last week, the Financial Times reported. Bern agreed in August that UBS should divulge the names of 4,450 Americans with offshore accounts. Bern had been obliged to intervene after escalating US legal pressure threatened to trigger a crisis of confidence in the bank.

Greece's debt problems have boosted interest in Portugal's 2010 budget plan coming Tuesday, which international investors will study for signs of similar fiscal frailty, The Wall Street Journal reported. Portuguese stocks and bonds have sold off sharply recently because of Portugal's high long-term deficits and low growth prospects.

When it comes to rescuing banks, the Swedes are earning a reputation as trendsetters. First they set a standard for recovering from disaster; now they want to export their idea for how to pay for it, The New York Times reported. The country went through its own crippling banking crisis during the early 1990s, after the bursting of a domestic credit bubble. It rebounded relatively smoothly through an aggressive bailout policy built around nationalization and carving the troubled assets of banks off into a so-called bad bank.

Renewed worries over Greece's fiscal problems weighed on the country's financial markets Thursday even as the government reaffirmed that it isn't seeking outside support to meet its borrowing needs, The Wall Street Journal reported. Analysts said that the government is moving too slowly to address Greece's fiscal problems and that investors are showing their disbelief by selling down Greek stocks and bonds. "We are being penalized for each and every day we don't do anything about our problems," said Nicholas Douzinas, head of foreign markets at Intersec Securities.

Alarmed by the amount of government involvement in Japan Airlines Corp.'s restructuring, the president of rival All Nippon Airways Co. ratcheted up warnings Wednesday that the state-supported overhaul could undermine competition in the airline industry, The Wall Street Journal reported. ANA President and Chief Executive Shinichiro Ito said his greatest concern is that fierce price competition could break out once JAL receives a government-backed lifeline of $10 billion to support its ailing operations. Mr.