Europe

Iceland was warned on Tuesday that it risked international isolation after the country’s president blocked a deal to repay Britain and the Netherlands almost €4 billion ($5.7 billion, £3.6 billion) lost in a failed Icelandic bank, the Financial Times reported. The British and Dutch governments condemned the decision by president Ólafur Ragnar Grímsson and hinted at repercussions for Iceland’s bid to join the European Union and for its $10 billion international economic rescue programme.
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There will be no bail-out of Greece by other European Union countries, a top European Central Bank official has said, according to the Financial Times Money Supply blog. “The markets are deluding themselves when they think at a certain point the other member states will put their hands on their wallets to save Greece,” Jürgen Stark, an executive board member, told Italian newspaper Il Sole 24 Ore.
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Greece rejected speculation that it will need a bailout to tackle the European Union’s biggest budget deficit as officials fly in from Brussels to scrutinize tax and spending plans. “We don’t expect to be bailed out by anybody as, I think, is perfectly clear we’re doing what needs to be done to bring the deficit down and control the public debt,” Finance Minister George Papaconstantinou said in an interview with Bloomberg Television today.
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Van der Moolen Holding NV, the 117- year-old bankrupt Dutch stockbroker, will sell cars, champagne buckets and bronze statuettes of Mercury, the Roman god of trade, in an online auction to repay debt, BusinessWeek reported on a Bloomberg story. Receivers, appointed by an Amsterdam court to settle about €28.3 million ($40.8 million) of debt, have hired a company to sell items including office furniture, flat-panel televisions and dish washers, according to the auctioneer’s Web site.
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President of Iceland Ólafur Ragnar Grímsson is still contemplating whether to veto the Icesave legislation, which the Icelandic parliament passed on December 31, Iceland Review reported. The number of signatures on the petition urging the president to veto the legislation so that it will be up for a national referendum is still growing. Last night it had reached 62,000 signatures, which represents a quarter of Icelandic voters.
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Britain is in danger of succumbing to a budgetary crisis this year, with the economy likely to stay in the doldrums until at least the end of 2010, a Financial Times survey of economists warns. Asked to name the three biggest risks to the economy, 37 of the 79 economists polled said the UK was threatened by a fiscal crisis that could derail any revival. The economists said the government must make its plans to improve the public finances more transparent and credible if Britain was to avoid the fiscal crises that have engulfed Greece and Ireland.
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Iceland’s parliament approved an amended bill on Wednesday to repay more than $5 billion lost by savers in Britain and the Netherlands when the island’s banks collapsed during the financial crisis, the Financial Times reported. The passage of the legislation, backed by a 33-30 margin by members of parliament, boosts Iceland’s hopes of swift entry to the European Union and of getting its shattered economy back on track.
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Some hedge funds are starting to wager on painful times ahead for Japan, the world's second-largest economy, The Wall Street Journal reported. These investors, including some who made successful bets against risky mortgages and financial companies in recent years, anticipate trouble for Japan's financial system. Their concern: Government borrowing continues to climb while demand for the nation's debt could taper off.
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Never before has Europe’s monetary union seemed so fragile, The New York Times reported in an analysis. Day by day, fears are growing that Greece or another weak country may default on its sovereign debt obligations, forcing the richer countries in Europe to ride to the rescue or risk having one or more of its most vulnerable members leave the 16-nation euro zone. Many European economists discount such a fracture as a remote possibility. But that doesn’t mean Europe has safely emerged from crisis.
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Youth fashion chain D2 has become the first post-Christmas casualty, collapsing into administration and putting more than 1,000 jobs at risk, the Guardian reported. The retailer, which specialised in brands such as Wrangler, Levis and Kickers, is based in Scotland and had 79 shops, including three in Dublin. Insolvency specialists James Stephen and Dermot Power from BDO Stoy Hayward have been appointed to take control of the business. The D2 website has been taken offline and two Irish stores have closed.
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