Headlines

Poland's LOT airline said Friday it will present a plan to stave off bankruptcy next month after the government indicated that there will be no more money for the lossmaking state-owned company, the Associated Press reported. Poland's main link to the western world under communism until 1989, LOT has largely struggled since. LOT spokesman Marek Klucinski said the rescue plan will be presented March 20 and will include layoffs among some 2,000 employees and a deep restructuring of the company and its routes. LOT's most profitable routes are to Chicago and New York.

Lithuania's Siauliu Bankas has agreed to acquire the assets and liabilities of Ukio Bankas, which was placed in administration last week, Reuters reported. The country's central bank restricted operations at Ukio and appointed an administrator after Lithuania's No.4 bank ran into financial trouble. Ukio's main shareholder - with a 65 percent stake - is Vladimir Romanov, owner of cash-strapped Scottish soccer club Hearts. "The most important task now is to resume the provision of services to the former customers of Ukio Bankas," Audrius Ziugzda, CEO of Siauliu Bankas, said in a statement.

Iceland's biggest mortgage bank said the government would bail out the lender before it’s unable to honor its debts, Bloomberg reported. “There’s no risk of a default,” Sigurdur Jon Bjornsson, chief financial officer of the Reykjavik-based Housing Financing Fund, said in an interview late yesterday. “The Treasury, if it needed to, would bail out the fund.” His comments were echoed by Finance Minister Katrin Juliusdottir today, who said the government is prepared to cover the struggling fund, which yesterday was downgraded by Moody’s Investors Service to junk.

At the Netherlands’ highest civil court, lawyers clamoured to block the government’s move to wipe out stakes of shareholders and bondholders when it nationalised lender SNS Reaal earlier this month, the Financial Times reported. Investors at the hearing denounced Jeroen Dijsselbloem, finance minister, for exceeding his authority; one went so far as to accuse him of fraud.

Big European banks are boosting a key gauge of their financial health through largely cosmetic maneuvering, even as regulators in some countries try to crack down on the practice, The Wall Street Journal reported. Banks are recalculating the risks in their loan portfolios and trading books in flattering ways, a move that has the effect of raising their ratio of capital to "risk-weighted" assets—a metric that investors and regulators use to assess banks' abilities to absorb unexpected losses.

Elisa Dalbosco says she lost her job when it came time for her former employer, a refugee shelter in northern Italy, to either hire her with a permanent contract or let her go. “I have a college degree and it would have cost too much,” said Dalbosco, who at 26 is now unemployed and poised to vote for self-described populist Beppe Grillo in elections on Feb. 24 and Feb. 25. Dalbasco’s disappointment shows why Italy is braced for its biggest political upheaval since 1994.

The violent protests that forced Bulgaria's cabinet from power this week underscore the lose-lose situation facing the European Union's newest members as they struggle to stop economic downturn and stem growing public anger, Reuters reported. Ruling parties which stick with strict austerity programmes to win investor trust risk being bounced from power by voters fed up with cost cutting and tax hikes. Governments which loosen the fiscal screws or try unconventional ways to rebuild support before elections may alienate investors and invite more pain down the road.

Debtholders of Australian and New Zealand print and logistics provider Geon Group — KKR & Co. and Australia’s Allegro Funds — have placed the company into administration and subsequently made an offer to buy the business out of receivership, according to an internal memorandum seen by Deal Journal Australia. In a note to all Geon staff, Chief Executive Graham Morgan said offers for the business will be taken by receiver McGrathNicol. “I have been advised that KKR and Allegro, collectively known as KKRM, have already submitted an offer for the business,” Mr. Morgan said in the memo.

Portuguese Finance Minister Vitor Gaspar painted a worse-than-expected picture of the country's economy this year, forecasting a 2% contraction and saying the government may need more time to meet the budget-deficit target of its €78 billion ($104 billion) international bailout agreement, The Wall Street Journal reported. Mr.

Prime Minister Boiko Borisov of Bulgaria submitted his government’s resignation on Wednesday after a tumultuous week of public anger over rising electricity prices, corruption and worsening living standards that ignited mass protests nationwide and led to bloody clashes with the police on Tuesday night, the International Herald Tribune reported. “The people gave us power, and today we are returning it,” Mr. Borisov said on Wednesday morning in Parliament, according to local news reports.