Headlines

Spain’s cuts to renewable energy subsidies will leave many project developers facing bankruptcy, four industry lobby groups said, Bloomberg News reported. Spanish Industry Minister Jose Manuel Soria’s decision to curtail profits for power generators by 2.7 billion euros ($4.1 billion) this year “will lead many installations to bankruptcy because they won’t be able to repay the credit that financed them,” the Spanish Photovoltaic Union (UNEF) said yesterday.

One of Europe's top regulators has some good news for the hedge fund industry; pay curbs are not on the agenda, Reuters reported yesterday. While they will avoid the caps on bonuses facing bankers, Europe's hedge fund managers can still expect restrictions on the manner and timing of their pay under new regulations coming into force on Monday. The Alternative Investment Fund Managers Directive (AIFMD) is the European Union's attempt to help protect investors and Gareth Murphy, a former hedge fund manager and equity derivatives trader with JP Morgan, is one of the key figures behind it.

The head of the Irish insolvency service has said people applying for bankruptcy under the new insolvency provisions will not need to hire a solicitor or barrister to go to court, the Irish Examiner reported yesterday. Lorcan O'Connor expects the service to be up-and-running by next month - with the first debt-relief notice applying from September. O'Connor said that filing for bankruptcy in Irish will cost less than €750.

The International Monetary Fund is preparing to back Argentina in a long-running legal battle with hedge funds that has broad repercussions for how governments around the world deal with their creditors, the Wall Street Journal reported today. IMF Managing Director Christine Lagarde plans to recommend to the fund's executive board next week that the IMF file a brief with the U.S. Supreme Court asking it to take the case for review and overturn a lower court's ruling.

Greek Prime Minister Antonis Samaras faces the first test of his revamped coalition yesterday as he seeks parliamentary approval of austerity measures to unlock bailout funds, Bloomberg News reported yesterday. Greek unions, which held the third general strike of the year yesterday, demonstrated again today in central Athens and will rally outside the parliament building this evening as a two-day debate on the bill approaches its climax. A roll-call vote will come around midnight, hours before the scheduled visit of German Finance Minister Wolfgang Schaeuble.

Japan's remarkable economic rebound is likely to give Prime Minister Shinzo Abe a landslide victory in Sunday's elections, but that growth is expected to fizzle within a year or two, unless Abe uses his momentum from that win to accelerate policy changes, the Wall Street Journal reported today. Economists are already projecting a big drop in growth as early as next year, citing everything from Japan's stubbornly depressed wages and slow business investment to a plunge in the amount of government spending that is expected to flow through the economy.

Credit default swaps are about to undergo their biggest shake-up in more than a decade, but compromises over the implementation of the new legal framework for trading have raised fears of a two-tier market that could stifle liquidity in an already shrinking market, Reuters reported yesterday. New credit definitions, released on Monday by the International Swaps and Derivatives Association (ISDA), kick in on March 20 next year, and seek to address flaws in the contract exposed by the financial crisis and a wave of new regulation.

German high-end television maker Loewe AG's chief executive said that the move to file for protection from creditors' demands will speed up its search for an investor, Reuters reported yesterday. "Now we have three months' time to finish restructuring and make enough progress on the matter of finding an investor that the court and creditors agree to a plan," Matthias Harsch said.

Banks in the United Arab Emirates are seeking five years to comply with a central bank regulation to limit their exposure to government entities in the second-biggest Arab economy, Bloomberg News reported yesterday. The banks are also seeking to exclude marketable bonds and sukuks from the proposal, according to the U.A.E. Banks Federation. The central bank said in April 2012 that banks must not lend more than 100 percent of their capital to local governments and the same amount to government-related entities to help reduce risk, and must comply with the new regulations by Sept. 30, 2012.

Exports from the 17 countries that share the euro slumped in May, as did imports, an indication that the currency area's longest postwar contraction may have continued into a seventh straight quarter, the Wall Street Journal reported today. The European Union's statistics agency Eurostat said yesterday that adjusted for seasonal factors, exports from the euro zone to the rest of the world fell 2.3 percent from April, while imports were down 2.2 percent. It was the second straight month in which exports fell sharply, and the largest month-to-month fall since June 2011.