Headlines

Executives at Italy's Banco Popolare SC were hoping this week to highlight their strength, as well as the resilience of the European banking system, by selling a batch of so-called senior unsecured bonds for the first time in 18 months, The Wall Street Journal reported. Instead, Popolare, Italy's fifth-largest commercial bank by market value, got a reminder of how fragile the Continent's financial system remains, even after the European Central Bank's extraordinary series of rescue efforts.

Family members of bankrupt businessman Seán Quinn’s family have claimed a receiver appointed over their personal assets by the former Anglo Irish Bank is not independent but biased towards the bank on grounds including that several of his staff worked at a senior level for the bank before and since its nationalisation, the Irish Timesreported.

Polish builder Polimex is likely to return to profit next year as it targets asset spin-offs and a new deal with creditors as ways to save the troubled company, its chief executive Robert Oppenheim was quoted as saying on Tuesday, Reuters reported. "Income from disinvestment and a share issue will ensure business resources, which together with operational restructuring will make Polimex a company again booking positive results and operating cash flows starting from 2013," the CEO told daily Parkiet in an interview.

Eurozone finance ministers formally inaugurated a permanent €500bn rescue fund on Monday, but left unresolved whether it would be used to shoulder existing bad debts of Irish and Spanish banks, the Financial Times reported. Klaus Regling, managing director of the new fund, the European Stability Mechanism, said the issue of “legacy assets” – bank liabilities currently being wound down by the Irish and Spanish governments – had not been discussed in “any European body” and signalled the issue may not be resolved for months.

The global economy risks skidding toward recession just three years after pulling out of the previous one, the International Monetary Fund warned, adding that fighting a renewed world-wide downturn will be much more complex than it was in 2009, The Wall Street Journal reported. "Risks for a serious global slowdown are alarmingly high," said the IMF's World Economic Outlook report, which was released here Tuesday ahead of the fund's annual fall meeting. It was its bleakest assessment of global growth prospects since the 2009 recession.

European finance ministers hailed Greece’s determination to cut the budget and reshape its recession-wracked economy, raising the chances that aid will keep flowing to stop the country from careening out of the euro, Bloomberg reported. European officials paired the encouragement with a demand that Greece commit to a list of 89 policy steps before an Oct. 18-19 leaders’ summit, and left open whether the next 31 billion-euro ($40 billion) loan installment would be paid out in one go or dribbled out in smaller pieces.

The U.K.'s leading supermarkets, in the midst of a double-dip recession and sluggish growth, are desperately searching for a way forward, The Wall Street Journal reported. Many of these companies have built their brands on the backs of the country's middle-classes. But this swathe of society, caught between recession-proof top earners and low-income households, has come to be described as the "squeezed middle" in modern-day, austerity Britain.

Aer Lingus is seeking pay restraint for a four-year period from staff in return for providing a once-off financial contribution to help address the substantial deficit that exists in a pension scheme for its general workers, the Irish Times reported. It also warned that current workers and deferred members of the scheme, which it operates jointly with the Dublin Airport Authority, would have received just 4 per cent of their entitlement had it been wound up on the basis of the €748 million deficit in the scheme that existed on May 31st.

Poland's state road operator has been hit with a 1.2 billion zloty ($385 million) compensation claim by Irish builder SRB Civil Engineering, the latest fallout from a troubled construction spree ahead of the Euro 2012 soccer tournament, Reuters reported. SRB said it was forced to walk away from a contract to build stretches of a key Polish highway because of failures by roads operator GDDKiA and wants to be compensated for losses it said it incurred. But GDDKiA said it was the contractor who was at fault and that it had to withdraw from the contract, not the other way round.

The euro zone is considering aiding Spain by providing insurance for investors who buy government bonds in a move designed to maintain Spanish access to capital markets and minimize the cost to European taxpayers, European sources said. One senior European source said the plan could cost about 50 billion euros (39.8 billion pounds) for a year. It would enable Spain to cover its full funding needs and trigger European Central bank buying of Spanish bonds in the secondary market. If the gamble succeeds, it would achieve two important aims.