Europe

Iceland got a $4.6 billion bailout from the International Monetary Fund and four Nordic countries to help resurrect the island's economy after the failure of its biggest banks and the collapse of its currency, Bloomberg reported today. The Washington-based IMF approved a $2.1 billion loan late yesterday. Finland, Sweden, Norway and Denmark will provide a further $2.5 billion, the Finnish Finance Ministry said in a statement today. Approval of the loan dragged out after Iceland was unable to reach agreement with U.K.
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Pepsi Bottling Group Inc., the world's second-largest soft-drink distributor, lowered its 2008 earnings forecast and said it will eliminate 4.6 percent of its workforce in North America, Europe and Mexico, Bloomberg reported. Pepsi Bottling, which is 33 percent-owned by PepsiCo Inc., will cut 3,150 jobs, mostly in Mexico. Earnings per share will be $2.20 to $2.26 this year, down from the $2.32 to $2.38 Pepsi Bottling forecast in June, the Somers, New York-based company said today in a statement. The shares fell in New York trading.
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Spanish property group Tremon on Monday said it had filed for administration after failing to meet debt payments, hurting shares in banks which have total exposure of around 1 billion euros ($1.27 billion), Reuters reported. Tremon is the second large Spanish property group to seek administration this year following Martinsa Fadesa. Among its biggest creditors are Banco Popular, with around 200 million euros exposure, unlisted savings bank Bancaja with 100 million followed by Banco Pastor with 95 million.
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PIK Group, one of Russia’s largest residential construction companies, plunged as much as 43 percent in London on Monday after JPMorgan Chase & Co. downgraded the developer to "underweight" from "overweight" on concern that it may default on some debt, The Moscow Times reported today. The developer may be unable to repay $700 million of debt due this year as the Moscow city government seeks to overturn housing orders PIK won in October and renegotiate prices, Elena Jouronova, a property analyst at JPMorgan in Moscow, wrote in a note to clients Monday.
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German Chancellor Angela Merkel said Monday after meeting with leaders of Adam Opel GmbH that it was "not yet determined" whether the automaker would be given 1 billion euros ($1.25 billion) in loan guarantees from the government, the Associated Press reported yesterday. Opel, a subsidiary of General Motors Corp., is seeking the guarantees because the company expects difficult credit conditions on the open market due to the world financial crisis. Merkel said that government officials planned further talks on the issue and should come to a decision by Christmas.
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Eighty-five companies worldwide defaulted on their debt in the year through November 11, impacting a total of $284 billion, up sharply from the two previous years, Standard & Poor's said Monday. By comparison, there were only 22 defaults for all of 2007 and 30 in 2006, Reuters reported. Seventy of the 85 companies are based in the United States, five in Europe, four in Asia, three in Canada, two in Mexico and one in Russia, according to Diane Vazza, head of S&P's fixed income group.
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Troubled Italian airline Alitalia's debts have soared to some 2.3 billion euros, the company's special administrator said Sunday as a pilot and air crew strike caused a seventh day of cancelled flights, Agence France-Presse reported today. Augusto Fantozzi told RAI television he had "around two billion in ordinary debt for the supply of goods and services," before taking into account a 300-million-euro government loan. Alitalia's last publicly recorded debts going back to mid-2008 were 1.2 billion euros, although that figure did not include bills from suppliers.
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Japan, the world's second-largest economy, has fallen into recession, the government said Monday. The country's gross domestic product contracted at an annual rate of 0.4 percent from July to September, marking the second consecutive quarter of negative growth, the Washington Post reported today. Japan's economy minister warned that the situation could worsen: Collapsing sales of Japanese goods in the United States and Europe amid the global downturn threaten to make the country's export-dependent economy even weaker in coming months.
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Iceland agreed that European regulations require it to guarantee accounts of hundreds of thousands of Britons and other foreigners who are frozen in the online arm of one of the nation's collapsed banks, the government said Sunday. Recognition of the legal principle, which came in talks with European Union representatives, is a significant step toward freeing up a $2.1 billion bailout package from the International Monetary Fund, the Wall Street Journal reported today.
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