Headlines

Portugal has passed the latest test of its compliance with the terms of its bailout and qualified for around 5.5 billion euros ($7.5 billion) in further funding from creditors, officials said Thursday, the Associated Press reported. However, the creditors who lent Portugal 78 billion euros in 2011 refused the government's request to ease next year's deficit target to 4.5 percent of gross domestic product, Deputy Prime Minister Paulo Portas said. The goal remains 4 percent.

New trends present Europe's car makers with a hard prospect: Whenever the Continent crawls back from its debt-crisis ravages, its auto market likely won't, The Wall Street Journal reported. Europe's largely unprofitable auto sector already is among the biggest industrial casualties of the crisis. New-car registrations in Europe have fallen to nearly a two-decade low. Most mass-market car makers are losing money on the Continent. Moody's Investors Service Inc. estimates that PSA Peugeot Citroën, General Motors Co.'s GM Opel, Fiat SpA and Ford Motor Co.

Franco Bernabè resigned as chief executive of Telecom Italia on Thursday after he clashed with some of the European telecommunications company’s major investors, the International Herald Tribune reported. Mr. Bernabè, 65, had led the struggling Italian telecommunications firm since 2007, but his tenure had been clouded by the European financial crisis that severely hit the company’s domestic market.

Europe's newest cathedral isn't made of stone: It's the elaborate system for coordinating economic policy created by its leaders to prevent another sovereign-debt crisis, The Wall Street Journal Brussels Beat blog reported. But a debate is already brewing about whether the system is so baroque it's incapable of delivering results. Finance ministries are groaning under the burden of the system's complicated procedures. Many of the recommendations to national authorities that the structure has generated aren't being followed.

Bankrupt developer Seán Dunne has suffered a setback in the US courts after being ordered by a judge to attend court, answer questions and provide all information requested by the trustee managing his case in Connecticut, the Irish Times reported. In an order issued yesterday, bankruptcy judge Alan Shiff said Mr Dunne must “completely answer all questions posted by the trustee and turn over all documents requested by the trustee without limitation or qualification”.

The chief executive of Air France-KLM, the largest foreign shareholder in Alitalia, said on Wednesday that he had not ruled out the possibility of participating in a fresh bailout of the struggling Italian flagship carrier as it scrambles to produce a plan to shore up its dwindling cash reserves, the International Herald Tribune reported. But given the weak financial position of the French-Dutch group, which owns 25 percent of Alitalia, any assistance would be subject to strict conditions, he said.

The European Union on Wednesday proposed a scorecard to help national authorities remedy emerging social problems and a lack of jobs—part of a push led by Germany to dispel accusations the bloc has done little to defuse the region's festering unemployment crisis, The Wall Street Journal reported. The proposal, however, already appears to face long odds.

The Central Bank of Ireland has urged the Government to push ahead with €3.1 billion of cuts and tax hikes in this month’s budget, warning any scaling back of the planned fiscal adjustment “runs the risk of starting to unwind the positive effects” of the considerable consolidation effort to date, the Irish Times reported. In its latest quarterly bulletin, the Central Bank said there was no point in putting at risk the hard-won gains of the past several years for the sake of “a relatively small short-term fiscal easing”.

The European Central Bank is watching moves in market interest rates closely and is ready to use any policy option to temper them if needed, its president said on Wednesday, Reuters reported. The central bank was "particularly attentive" to any moves in market rates which could threaten economic recovery or push inflation too low, Mario Draghi told a news conference after the ECB left official euro zone rates at a record low 0.5 percent. But he stopped short of any immediate action. The ECB has grown concerned about market rates, which moved higher over the summer at the prospect of the U.S.

Pawnbroker Albemarle & Bond (A&B) is in rescue talks with its banks after an attempted rights issue failed on Wednesday, The Guardian reported. Britain's second-biggest pawnbroker admitted that after four months of talks it had been unable to persuade its biggest shareholder, US pawnbroker EZ CORP, to underwrite the proposed £35m cash call. The company is now close to breaching its banking covenants and is "focusing its efforts on constructive discussions with the banks".