Headlines

The German government is urging “compulsory” hiring of outside experts to help collect taxes, fight corruption and privatise government assets in Greece in return for agreeing an overhauled bailout that would include two more years of EU aid for Athens, the Financial Times reported. The measures would go further than ever before in asserting international control over Greek budgetary decision-making.

German Finance Minister Wolfgang Schaeuble suggested on Wednesday that his country may be prepared to show flexibility on Greece's fulfilment of its bailout terms if there are obstacles that are beyond Greece's control, Reuters reported. Greek Finance Minister Yannis Stournaras said earlier on Wednesday that Athens had been given additional time by the European Union and the International Monetary Fund to implement new austerity measures.

A U.S. judge told Japanese chipmaker Elpida Memory Inc he was "troubled" by the firm's inadequate efforts to keep creditors informed about its bankruptcy process, and warned he may upend its proposed sale to U.S. rival Micron Technology Inc. Elpida's main bankruptcy proceeding is being handled by a district court in Tokyo, but Christopher Sontchi, the Delaware Bankruptcy Court judge overseeing Elpida's parallel U.S. case, said the company was taking a risk by not keeping creditors better informed.

Four out of five Supreme Court judges have found the High Court was entitled to jail Seán Quinn jnr for three months over “outrageous” contempt of court orders restraining the stripping of assets from the Quinn’s international property group, the Irish Times reported.

In spite of years of harsh spending cuts and tax increases, Europe’s debt problems are getting worse, The Washington Post reported. Figures from the EU’s statistics office Wednesday showed that, at the end of the second quarter, the total government debt of the 17 countries that use the single currency was worth 90 percent of the group’s total economic output for the year — the highest level since the euro was launched in 1999.

European authorities are pushing Bankia group to impose losses on junior debtholders as part of Spain’s bank bailout by swapping their securities for stock in the nationalized lender, two people with knowledge of the matter said, Reuters reported. The European Central Bank and European Commission want investors including preference shareholders to accept newly issued shares in exchange for their existing securities to help reduce the cost to the taxpayer of Spain’s 100 billion-euro ($130 billion) bank rescue, said the people, who declined to be named because the matter isn’t public.

A concession from Greece's lenders on Tuesday failed to win over two junior parties in the ruling coalition who blocked agreement on a vital austerity package because they oppose labour reforms. Hopes that a final deal on the austerity cuts was near had grown after inspectors from the lenders left Athens last week saying the two sides had agreed on most reforms and austerity cuts needed to unlock the country's next tranche of aid.

The Madrid region has been pushed further towards requesting a bailout from Spain’s regional government rescue fund after it pulled a planned debt sale amid limp investor demand, the Financial Times reported. The failure to sell bonds by the Community of Madrid, which has the second-highest credit rating of Spain’s 17 regional governments, came after Moody’s downgraded the debt of five other Spanish regions, including the economic powerhouse of Catalonia.

One of the biggest puzzles facing the Bank of England is why British labor productivity has been so poor since the financial crisis, The Wall Street Journal The Source blog reported. This matters, because it suggests the economy has little capacity to grow before inflation becomes a concern. So far, the BOE has largely shrugged off the productivity puzzle as an anomaly. It could be that productivity growth has only apparently been poor because GDP growth has been under-reported. That’s because of accounting identities: the U.K.

Investors in two European property funds at the failed investment firm Custom House Capital have been told that winding up the company behind the funds is the cheapest way to recover more than a third of their money on one fund and a fifth on the other.Accountants appointed to manage the properties by the Central Bank last year have recommended investors vote to wind up Custom House Capital Investment Property Funds plc in a ballot by a deadline of November 9th.