Headlines

Poland will increase its budget gap for this year by nearly half, the government said yesterday, acknowledging the severity of the current slowdown in the economy so far among the most resilient to Europe's financial crisis, the Wall Street Journal reported yesterday. Finance Minister Jacek Rostowski said that the government would increase its budget deficit by some 1 percent of gross domestic product, an equivalent of some $15.6 billion. The increase will be a strongly stimulating impulse "that will help the economy get back on track in coming years," Rostowski said.

Terry J. Farr, a former broker who was charged on Monday as part of an investigation into manipulation of global benchmark interest rates, was “a minnow in a very large pond,” his lawyer said yesterday, the New York Times DealBook blog reported yesterday. Katie Wheatley, a partner at the law firm Bindmans, which represents Farr, said that it was “regrettable” that the Serious Fraud Office had decided to charge Farr in the continuing investigation into the rigging of the London interbank offered rate (Libor).

Portugal’s ruling coalition and main opposition party will attempt this week to hammer out a “national salvation” pact aimed at overcoming a political crisis that could bring down the government and derail the country’s €78bn bailout programme, the Financial Times reported. In response to a call from President Aníbal Cavaco Silva, the three parties have set themselves a deadline of July 21 for reaching an agreement that will commit future governments to the tough fiscal discipline required to keep the programme on track.

China's push to get consumers to open their wallets more and refocus the economy on domestic consumption is stalling, contributing to lower growth in the second quarter and forecasts of even slower momentum ahead, The Wall Street Journal reported. A slew of data released on Monday showed that disposable income growth for urban households slowed to 6.5% in the first half compared with a year ago, down from 9.7% growth in the first half of 2012 and below the growth rate of the economy as a whole.

The financial crisis was brutal on Europe, but its bankers didn't do too badly, The Wall Street Journal reported. The European Banking Authority published data Monday showing that 3,175 European finance-sector workers each earned at least €1 million ($1.3 million) in 2011, the vast majority of them based in the U.K. Although the total amount paid out was lower than in 2010 and doesn't reach the levels seen in the U.S, the report shows how European banks kept handing out generous paychecks even as the euro-zone crisis flared up and the EU introduced more stringent rules on pay.

Some local lenders to Mexican homebuilder Geo voted against signing an agreement the company recently reached with its major bank lenders to restructure its debt, according to a statement on Monday with Mexico's stock exchange, Reuters reported. The lenders hold local debt certificates that are backed by Geo assets. Geo, which is struggling with a heavy debt load and slowing home sales, said in June its main bank creditors had also agreed not to bring any new legal proceedings against the company and to suspend existing lawsuits.

A company said to have “crucial” documents relating to contract for difference positions built up by businessman Seán Quinn in Anglo Irish Bank is to provide those documents to Irish Bank Resolution Corporation, the Irish Times reported. The special liquidators of IBRC had sought the documents from Gortmullan Holdings for its defence of the Commercial Court action brought by Patricia Quinn and her five children, alleging they are not liable for some €2.34 billion loans made by Anglo after September 2007 to various Quinn companies.

China’s credit crunch in June spurred hundreds of millions of households and companies to divert a record share of their savings into wealth-management products, known as WMPs. The amount of such investments surged eightfold from 2009 to 8.2 trillion yuan as of the end of March, according to government data. That’s almost the size of the Australian economy. Fitch Ratings put the amount even higher in May, at 13 trillion yuan, Bloomberg reported.

Finance ministers from the Group of 20 leading nations plan to launch a new phase of the international crackdown on corporate tax avoidance this week even as UK business leaders are warning their government to resist “radical new solutions” to profit shifting by multinationals, the Financial Times reported. Britain has taken a lead in pressing for reform of the international tax rules after a wave of public anger over the low tax bills paid by some large multinationals.

China's reform-minded leaders are more willing than ever to raise the pain threshold for the economy to push through long-term reforms, despite a protracted slowdown that has sparked calls for looser monetary policy, Reuters reported in an analysis. Grim trade data for June last week fanned market talk of fresh steps to support an economy heading for its weakest growth this year in more than two decades.