Headlines

George Osborne said on Tuesday he would not be able to dilute his austerity programme even though the public finances were doing better than expected, the Financial Times reported. Speaking in London after the official figures were published, the chancellor made a point of saying that lower headline levels of borrowing did not necessarily improve the underlying picture.

The new insolvency code, in Romania, due to come into force on October 25 puts in place fresh provisions reducing a company’s chances of exiting insolvency, claimed experts during the first Legal Updates event organized by Business Review last week, Balkans.com reported. Special provisions regarding M&A deals and public procurement were discussed during a series of specialized workshops, chaired by expert speakers. The new code, which was passed through government emergency ordinance no.

France's Hediard chain of luxury food stores has filed for bankruptcy, a source close to the case told AFP on Monday, France 24 reported. Hediard, which has shops in 30 countries from Madagascar to Vietnam, declared itself insolvent at a commercial court in Paris, said the source. A hearing is due to take place on Thursday to determine whether an administrator should be appointed. The fine foods and confectionery stores opened in 1854 in Paris as a small shop specialising in exotic foods and soon began expanding.

European Central Bank President Mario Draghi challenged rules that would bar banks from accessing public aid unless they forced losses on junior bondholders, a central building block of European Union protocols for handling struggling banks, Bloomberg reported. In a letter to EU Competition Commissioner Joaquin Almunia, Draghi said EU rules need to be clarified so regulators can order technically solvent banks to strengthen their balance sheets without scaring off investors.

Germany’s central bank, the Deutsche Bundesbank, sounded an alarm Monday, warning that urban real estate in the country could in some cases be significantly overvalued, against a backdrop of low interest rates, The Wall Street Journal Real Time Economics blog reported. In a report issued Monday, the Bundesbank said that prices in urban housing markets could be as much as 10% higher than the level suggested by fundamentals, such as demographic and economic factors.

Despite previous calls by France’s Socialist government to rein in financial markets, the government’s firm stand against a proposal to tax intraday trading is yet another sign of its waning political will to curb speculative trading, and force the financial sector to significantly contribute to public finances, The Wall Street Journal Money Beat blog reported.

Siac Construction, one of Ireland’s largest construction groups, is expected to seek the protection of the courts this week, possibly as early as today, as losses in Poland threaten the 100-year-old business, the IrishTimes reported. It is expected the application to the courts will be supported by the group’s main lenders, Bank of Ireland, KBC and Bank of Scotland Ireland. The Siac group has operations in Ireland, Britain, Belgium, Canada and Poland and has approximately 560 employees. Efforts to get a comment from the group last night were unsuccessful.

Tachikawa Forest Products (NZ), the owner of the Rotorua sawmill tipped into receivership last week, was in breach of its banking covenants for the past two years, and had its 2012 accounts tagged by auditors over a working capital deficit, Scoop.co.nz reported. KordaMentha’s Grant Graham and Brendon Gibson were appointed receivers on Friday, ending the Japanese-owned wood processor’s attempts to regain profitability after successive years of losses that had accumulated to $12.5 million as at Dec. 31.

Hungarian operator Magyar Telekom announced plans to apply to the High Court of Justice in England and Wales for a court hearing to be held no earlier than 28 October for approval of its earlier announced debt-equity swap, Telecompaper reported. This should include permission to convene a meeting of creditors for approving the scheme. Based on the preliminary agreement reached in July, holders of more than 70 percent of the operator's senior secured notes due 2016 have agreed to support the restructuring.

The governor of Cyprus’s central bank has come out fighting in his escalating battle with the country’s president over the alleged mismanagement of the Cypriot banking crisis and bailout. Panicos Demetriades, who heads the Central Bank of Cyprus, told the Financial Times that his dysfunctional relationship with president Nicos Anastasiades was “not a sustainable state of affairs”, but insisted he would not resign. “I don’t think that would be the right thing to do,” he said.