Europe

European Central Bank president Jean-Claude Trichet “gulped a bit” when he was told by the former chief executive of the National Treasury Management Agency (NTMA), Dr Michael Somers, that the State might need up to €60 billion to buy toxic loans from the Irish banks, The Irish Times reported. Speaking on RTÉ’s Marian Finucane Show yesterday, Dr Somers said he travelled to meet Mr Trichet because there was nowhere “except the ECB” that funding for the National Asset Management Agency (Nama) could come from. Dr Somers said he did “a lot of hard swallowing” about Nama.
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Sea Launch's plans to emerge from bankruptcy under majority Russian ownership are still subject to court and regulatory approval, but company leaders say they expect to resume commercial missions early next year, Spaceflight Now reported. The besieged launch firm filed a plan of reorganization in a Delaware bankruptcy court this week, kicking off several months of behind-the-scenes negotiations between the Sea Launch's new owners and unsecured creditors.
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Europeans and Americans see a plausible chance of their governments defaulting in the next decade, with the French emerging from among the largest nations as most nervous about their country’s public finances, the Financial Times reported. Some 53 per cent of those polled in France thought it was likely that their government would be unable to meet its financial commitments within 10 years, according to a Financial Times/Harris opinion poll published on Monday. Just 27 per cent said it was unlikely.
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Greek Prime Minister George Papandreou declared he is not ruling out taking legal action against U.S. investment banks for their role in creating the spiraling Greek debt crisis. Both the Greek government and its citizens have blamed international banks for fanning the flames of the debt crisis with comments about Greece's likely default, actions that are causing the country's borrowing costs to soar, The Associated Press reported. "I wouldn't rule out that (legal action) might be a recourse.
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The number of company winding-up petitions and individual bankruptcy petitions presented in courts in England and Wales in the first quarter of 2010 increased on the previous quarter, ministry of justice statistics showed Thursday, Dow Jones reported. In total, 2,777 winding-up petitions to dissolve a company that can't pay its debts were presented in the first quarter, 4% up from the 2,670 presented in the fourth quarter of 2009. This compares with the 3,461 winding-up petitions filed in the first quarter of 2009.
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U.S. navigation device maker Garmin said it would raise its bid for debt-laden Raymarine by more than 16 percent, topping a third-party offer, if the British marine navigation supplier were to enter into administration, Reuters reported. Garmin said it would pay more than 17.5 pence for each share in Raymarine, representing a premium of at least 21 percent to Raymarine's Thursday close. Earlier on Friday, Raymarine said an unnamed third party had walked away from a potential deal but remained willing to reconsider a transaction if Raymarine placed itself with administrators.
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AIB said today the Government's stake in the bank would rise to more than 18 per cent as it increased the holding instead of paying the State a dividend, The Irish Times reported. The National Pension Reserve Fund Commission was due to be paid a dividend today on €3.5 billion preference shares, amounting to €280 million. However, the European Commission had requested the bank would not make discretionary coupon or dividend payments on certain securities, as discussions on a restructuring plan are ongoing.
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Romano Prodi recalls how he persuaded Germany to allow debt-swamped Italy into the euro: support our membership and we’ll buy your milk, he said. When Prodi toured Germany’s agricultural heartland after becoming Italian leader in 1996, he pitched “a big milk pipeline from Bavaria,” pointing to a three-year, 40 percent plunge in the Italian lira that was hurting dairy sales. “To have Italy outside the euro, a huge quantity of exports from Germany would have been endangered,” Prodi, now 70, said.
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Fitch Ratings said today that Greek and Irish banks’ reliance on European Central Bank loans is out of proportion to the size of their assets, Finfacts reported. Greek banks accounted for 6.6% of the €749bn the ECB lent to financial companies by the end of 2009, though only held 1.6% of the Eurozone's banking assets, Fitch analysts wrote in a report. Irish banks took 12% of ECB funding, compared to a 5.24% share of the region’s bank assets.
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