Headlines

Ireland was given a “back-door bailout” worth around £10 billion (€11.5 billion) by Britain in “an arrangement that was never explicitly approved by parliament”, according to a report today, the Irish Times reported. The London Times claims Ulster Bank has accounted for about a quarter of losses since 2008 at the state-owned Royal Bank of Scotland, which is 81 per cent owned by British taxpayers after a £45 billion state bailout five years ago.

Slower Chinese inflation in May, combined with below-expectation bank lending, added to a downbeat picture of the world’s second-biggest economy in the current quarter, following the release of new data Sunday, the Irish Times reported. China’s economy grew at its slowest pace for 13 years last year, and so far this year it has failed to register a significant upturn, prompting downgrades from some economists who fear the country would even fall short of its annual growth target of 7.5 per cent.

Two Thai business tycoons, one a politically connected Chinese speaker, the other the son of a street vendor, have spent $27 billion on acquisitions in the past year, mainly abroad - more than all Thai firms spent overseas in the previous three years. The billionaires - 74-year-old Dhanin Chearavanont and Charoen Sirivadhanabhakdi, five years his junior - personify Thailand's bull market and Asia's frothy credit, feeding on fast, cheap loans bolstered by a surging local currency.

Ireland, Greece and Portugal are labouring under debt-to-income ratios of more than 300%, according to figures that expose the indebtedness of eurozone governments in relation to their government revenues, The Guardian reported. The measure, intended to show governments' abilities to pay debts, shows Ireland's total debt in 2012 was €192bn (£163.1bn), or 340% of the government's income. Ireland came a narrow second in the table to fellow bail-out recipient Greece, which has amassed an even worse debt-to-revenue total of 351%.

French state holding company FSI said it was confident of a positive outcome to debt restructuring talks at Saur, the water and waste treatment company in which it is the leading shareholder. Saur, burdened by 1.8 billion euros ($2.3 billion) of debt, is trying to negotiate a restructuring with its lenders and shareholders before June 30, after which the firm risks being put under a court-sanctioned reorganisation scheme. "Important progress has been made in the past few days. We expect a positive outcome for these talks," FSI Chief Executive Jean-Yves Gilet told Reuters.

Tensions are likely to rise between Labour and the Finance Minister Michael Noonan over his refusal to consider ending VAT of 23 per cent on those who use the Government's new insolvency service, Independent.ie reported. In particular, a concern is growing within Labour over the double standards being applied to the collection of VAT in Irish and UK personal insolvency plans. Under Alan Shatter's current legislation those availing of the embattled minister's insolvency regime will have to pay 23 per cent VAT on top of fees charged by the Personal Insolvency Practitioner.

A Tel Aviv court set a late August deadline on Sunday for indebted Israeli conglomerate IDB Holding to sell its stake in an insurance firm, giving its chairman some breathing space in a bitter ownership battle, Reuters reported. Many of the companies IDB owns have been hit by slowing economic growth and increased competition. IDB Holding owes bondholders 2 billion shekels ($550 million) and its unit IDB Development owes a further 5.8 billion shekels. Both sets of bondholders - mainly institutional investors led by U.S.

The European Commission on Thursday rejected the International Monetary Fund’s view that lenders mishandled the first Greek bailout in 2010 by allowing Athens to delay a debt restructuring to 2012, The Globe and Mail reported. The Commission – which together with the IMF and the European Central Bank forms the troika that prepared the bailouts of Greece, Ireland, Portugal, Spain and Cyprus – said tackling a restructuring in 2010 would have been wrong. “The (IMF) report argues that an upfront debt restructuring in 2010 would have been desirable.

Arguments continue in Europe over whether governments should relax budgets to encourage growth. But some analysts argue this debate is drawing attention from something more important that is generating serious headwinds for the region's economies: Europe's broken financial sector, The Wall Street Journal Brussels Beat blog reported. António Borges, a former European director of the International Monetary Fund who is now at the Católica Lisbon School of Business and Economics, says arguing about austerity misses the point.

After five years battling its most severe downturn since the Spanish civil war, Uralita felt that it was running out of options, the Financial Times reported in an analysis. The building materials supplier faced debt repayments this year and next. And with no recovery in sight, Uralita’s banks were not in a lending mood. In 2007, the family-owned company boasted healthy profits and more than €1bn in sales. But it lost money in 2012, with revenues down 40 per cent, due to the collapse in the Spanish construction market.