Headlines

Barring a last-minute deal, Argentina will default on billions of dollars of bonds on Wednesday, the International New York Times reported. It would be Argentina’s second default in 13 years. But unlike the last time, when scores of unhappy Argentines took to the street as unemployment rose to 25 percent and inflation soared, this default would look decidedly different. Argentina’s equity, bond and currency markets, which have been volatile in recent days, would certainly feel a jolt.

Germany’s borrowing costs have fallen to their lowest level on record as Europe’s weak economic recovery persuades the region’s central bank to keep interest rates vanishingly low, the Financial Times reported. The yield on Germany’s 10-year Bunds dropped 2.6 basis points to 1.12 per cent on Tuesday morning. Aside from distortions during the years of hyperinflation in the 1920s, this is Germany’s lowest borrowing rate since the early 1800s. Across Europe, low interest rates have pushed government bond yields down to historic levels.

A Luxembourg court on Tuesday accepted requests for creditor protection filed earlier by Espirito Santo Financial Group (EFSG) and Rio Forte Investments, holding companies of Portugal's troubled Espirito Santo family, Reuters reported. The commercial court said in a statement that it had declared the demands of ESFG and Rio Forte admissible. ESFG is Banco Espirito Santo's largest shareholder, with a stake of about 20 percent, and is controlled by the bank's founding family, the Espirito Santos.

Germany’s Zweibrücken Airport has announced insolvency, but will continue operations because agreements have been reached with airlines, clients and suppliers, according to several media reports, Air Transport World reported. Insolvency administrator Jan Markus Plathner has been quoted by several German media outlets as saying the collapse of the airport had been avoided, but the search for a potential investor is urgent. Talks with possible investors have already begun. Earlier this year, Germany’s regional Lübeck Airport filed for insolvency.

Top bankers in Britain will become directly accountable for their actions under proposals unveiled by regulators on Wednesday, with those behaving recklessly facing jail, Telegraph.co.uk reported. The Bank of England’s Prudential Regulation Authority (PRA) will also publish final rules on clawing back bonuses paid to bankers found guilty of misconduct, and consult on closer scrutiny of how awards are made. Bonuses handed to “code staff”, those who take the biggest risks at a bank, will be subject to a clawback lasting seven years from when they were awarded, Sky News reported.

A group of euro-skeptics that has opposed Germany’s participation in the currency said on Monday that it had filed a lawsuit to block a plan at the heart of efforts to prevent banking crises in Europe, the International New York Times reported. But the suit at the country’s Constitutional Court was given even less chance of success than previous attempts, which created a stir last year by challenging policies intended to prevent disintegration of the eurozone.

Ireland could save up to €375 million a year in interest costs on our national debt if it can secure an agreement to refinance €15 billion worth of IMF loans from the Troika bailout programme, the Minister for Finance Michael Noonan said Monday, the Irish Times reported. Speaking at the launch of the National Treasury Management Agency’s annual report, Mr Noonan said about €18 billion of the €22 billion owed by Ireland to the IMF is financed at a cost of just under 5 per cent a year. This compares with a rate of 2.3 per cent currently for Irish 10-year bonds.

An international court ruled that Russia owes shareholders of the now-defunct oil giant Yukos more than $50 billion for what it described as the Kremlin's "devious and calculated expropriation" of assets designed to bankrupt the firm, The Wall Street Journal reported. The compensation award is the largest the Permanent Court of Arbitration in The Hague has ever rendered, lawyers said. But it is only half what shareholders had sought, and any attempts to collect are expected to drag on for years.

The biggest political crisis that President Benigno S. Aquino III of the Philippines has faced in four years in power could damage his image as a crusader against corruption and undermine his ability to deliver on overhauls to sustain strong economic growth, the International New York Times reported. The Supreme Court has declared partly illegal a 145 billion peso, or $3.34 billion, economic stimulus fund that Mr. Aquino created in 2011 from budget savings.

Greece wants the European Central Bank's health checks on its four biggest banks later this year to take account of their new restructuring plans rather than being based on last year's balance sheet data alone, a Greek finance ministry official said on Monday, Euractiv reported. Greek finance minister Gikas Hardouvelis raised the concerns at a 8 July meeting of EU finance ministers, the official told Reuters, as Athens wants to avoid the ECB calling for new capital to be raised following the tests when restructuring plans are already in hand but not yet implemented.