Headlines

The magnitude of Greece’s fiscal challenge was painted in sharp relief on Wednesday as Athens unveiled new budget projections exceeding the worst-case scenarios envisioned by international lenders when they agreed a €174bn rescue eight months ago, the Financial Times reported. Instead of Greece’s debt peaking at 167 per cent of economic output next year, as predicted in the March bailout agreement, it will hit 189 per cent and climb to 192 per cent in 2014, according to projections presented to the Greek parliament.

The number of people out of work in the euro zone climbed to another record high in September, the latest evidence of the damage the region's long-running fiscal crisis is doing to the real economy as governments cut spending to try to control their debts, The Wall Street Journal reported. Eurostat, the European Union's official statistics agency, said Wednesday that 18.49 million people were unemployed in the euro zone in September, after 146,000 more people lost their jobs during the month.

Micron Technology's plan to acquire Japanese memory chipmaker Elpida took a big step toward completion after a Tokyo court approved the agreement and dismissed a rival plan promoted by a group of bondholders, Reuters reported. A district court in Tokyo said on Wednesday it was referring bankrupt Elpida's plan to be bought by U.S. chipmaker Micron to creditors for approval, according to a news release on Elpida's website.

Portugal's government won parliamentary approval Wednesday for an unpopular package of tax increases and spending cuts, keeping its international bailout program on track and avoiding the kind of political crisis that has accompanied Greece's rescue effort, The Wall Street Journal reported. In a further sign of strength for Western Europe's poorest economy, one of its banks managed for the first time in two years to raise cash on the international bond market without government guarantee and without submitting to a direct claim on its assets.

Kingfisher Airlines Ltd., controlled by liquor tycoon Vijay Mallya, is struggling to resume services after five straight years of losses and mounting debt forced it to ground planes. India’s bankruptcy laws aren’t helping, Bloomberg Businessweek reported. The carrier can’t emulate U.S. airlines that have gone through court-led Chapter 11 restructuring, as India doesn’t have any similar procedures for service providers. Under the existing law, a government body only oversees rehabilitation of companies with licenses to run factories.

The travel plans of thousands of Australians this summer are up in the air after Classic International Cruises was placed into voluntary administration today, The Australian reported. Lawler Partners was this morning appointed voluntary administrators and customers with cruises booked on the MV Athena cruise ship are being urged to contact them to make a claim. The company had been in talks to replace the Athena with a German ship after it was impounded in France over debts, but talks in Europe broke down.

Battle lines hardened over the EU’s next long-term budget as a plan to cut more than €50bn of proposed spending was deemed too meek by the UK and its allies – and rejected as too harsh by the European Commission, the Financial Times reported. The divergent reactions reveal sharp divisions over the budget – to cover roughly €1,000bn in spending from 2014-2020 – that have been exacerbated by a prolonged economic slump. They also hinted at the difficulty of forging a compromise among the 27-member bloc at a two-day summit of EU leaders that begins on November 22 in Brussels.

Greece's coalition government will delay a vote on major new austerity measures by another week, warning Tuesday there would be financial chaos if a deal is not reached, the Associated Press reported. Finance Minister Yannis Stournaras told reporters the austerity measures, worth (EURO)13.5 billion ($17.4 billion), would be submitted to parliament next week, as the three parties in government continue to disagree over new savings demanded by international bailout lenders.

Portugal's parliament is expected to approve the biggest tax hikes in its modern democratic history on Wednesday, paving the way for a court fight over a budget the government says it urgently needs to keep a 78-billion euro bailout afloat, Reuters reported. Political tension has been increasing and anti-austerity demonstrations have become more common in recent weeks in Portugal, which despite being one of the countries worst hit by the euro zone crisis had so far escaped unrest seen elsewhere.

An unexpected New York court decision has raised the spectre of an Argentine government default, causing a rise in the cost of insuring against a payment failure and rattling the country’s bond market, the Financial Times reported. The 2nd US Circuit Court of Appeals in New York late last week ruled that Argentina was legally barred from prioritising payments to bondholders that participated in debt exchanges in 2005 and 2010.