Headlines

Germany and France have tapped a prominent economist from each country for policy advice to counter “the risk of a lost decade in Europe” in an attempt to bridge the growing divide between the two countries over how to revive flagging economic growth in Europe. German Economics Minister Sigmar Gabriel and French Economy and Industry Minister Emmanuel Macron recently solicited help from French economist Jean Pisani-Ferry and Henrik Enderlein, lecturers at the Berlin-based Hertie School of Governance, in separate letters seen by The Wall Street Journal.

The Chinese developer Agile Property Holdings, battling an industry slowdown and speculation about ties to China’s former security chief, said that it was in talks with banks about extending a bridge loan and that the founder’s family would commit to lending $200 million, the International New York Times reported on a Reuters story. Shares in the company, valued at around $2.1 billion, slumped by as much as 31 percent on Monday to five-year lows as they resumed trading after a week’s halt.

Ever since the French government unveiled its 2015 budget two weeks ago, fiscal enforcers in Brussels have attempted to convince Paris it must do more – making additional spending cuts and implementing more reforms – for them to accept the plan, the Financial Times reported. In recent days, as the prospect of an EU rejection became imminent, the discussions moved beyond the normal economic channels, pulling in members of the still-to-be-approved European Commission, including Jean-Claude Juncker, its incoming president, and Frenchman Pierre Moscovici, his economic nominee.

A liquidator has alleged members of a family perpetrated a fraud against their own development firm before it went bust by transferring a €4 million company property to themselves for no charge. A tax bill of €4.4 million remains unpaid, the liquidator said, the Irish Times reported.

Revelations related to how 82 executives and board members of a Spanish bank were given credit cards to spend freely on personal items and without apparent controls have dealt a blow to efforts to restore the image of the country’ financial sector, the Irish Times reported. The high court is investigating the credit cards, which were given out by Caja Madrid savings bank and Bankia, the lender that absorbed it in 2010, and they were not registered in official accounts.

Ukraine will need additional bailout financing from outside the International Monetary Fund to keep the war-torn economy afloat, the head of the IMF said Thursday. The cost of the conflict with Russia-backed separatists has changed the country’s cash needs since the IMF originally designed a $30 billion international bailout program in April, of which the fund pledged to cover $17 billion.

The Espírito Santo Financial Group, which at one point held about 25 percent of the bailed-out Portuguese lender Banco Espírito Santo, said on Thursday that it would file for bankruptcy after it was denied creditor protection by a Luxembourg court last week, the International New York Times DealBook blog reported. Espírito Santo Financial is part of a complex web of companies controlled by the Espírito Santo family.

China has taken a big step towards the resolution of its mounting local government debt burden with the introduction of a legal framework allowing cities and provinces to issue debt directly, Reuters reported. Last week's regulations make it clear that the central government will not bail out local obligations, a key step in creating a municipal bond market that analysts expect will reach Rmb1trn (US$164bn) of new issues in 2015.

“We will not kick you when you are down, at least not for a couple of days”: that is the gist of a putative deal struck by 18 global banks this week, which agreed not to pull abruptly out of contracts with each other if one of them hits the buffers. As modest as that may sound, regulators see it as the foundation of a firewall to halt the spread of future financial crises, The Economist reported. The agreement concerns derivatives, contracts whose value “derives” from the performance of an underlying asset such as a share, currency or bond.

A drop in German exports added to a string of ugly data for Europe’s biggest economy, suggesting Germany’s growth has faltered and the country might even be in a shallow recession, The Wall Street Journal reported. German exports in August fell 5.8% from the previous month, data released on Thursday showed, the biggest monthly decline since the 2009 recession. The slide in exports came after poor readings for German manufacturing orders and factory output, and added to the gloom surrounding Europe’s economic outlook.