Headlines

Mike Ashley’s bid to rescue JJB Sports stores from closure is in jeopardy after an 11th-hour spat with Adidas, one of the sports retailer’s biggest suppliers, the Financial Times reported. Sports Direct, controlled by Mr Ashley, and Adidas are at loggerheads over the price at which it would take JJB’s Adidas stock under an administration, according to people familiar with the situation. A deal is thought to have been struck between Mr Ashley, the owner of Newcastle United football club, and KPMG, which is trying to find a buyer for JJB’s assets.

The pressures facing the government of Prime Minister Mariano Rajoy mounted on several fronts on Tuesday, as thousands of demonstrators besieged Parliament and Spain’s two largest regions took steps that underscored their deepening economic troubles and displeasure with his austerity plans, the International Herald Tribune reported. Presenting the biggest domestic political challenge, the leader of Catalonia, Spain’s most powerful economic region, called an early election for Nov. 25 that could turn into an unofficial referendum on whether to split from the rest of the country.

Euro-zone governments have begun discussions about creating a central budget for the currency union aimed at smoothing over some of the region's economic divergences, after Germany indicated support for the idea, European officials say, The Wall Street Journal reported. The discussions are part of a push toward a limited "fiscal union," after the economic crisis revealed fatal flaws in the setup of the common currency.

European Central Bank President Mario Draghi offered a vigorous defence of the bank's bond-buying plans to a sceptical German audience on Tuesday and said it was now up to governments to follow with decisive policy steps of their own, Reuters reported. Speaking at a conference of the Federation of German Industries (BDI) in Berlin, Draghi described the ECB's plan, unveiled earlier this month, to buy the sovereign bonds of stricken euro members as a "bridge" rather than a solution to the three-year-old crisis haunting the currency bloc.

Ecuador’s inability to borrow in international markets after its 2008 default is drawing the nation closer to China as the world’s largest commodities consumer grants loans in exchange for access to oil and metals, Bloomberg reported. Home to untapped copper reserves similar to those of Chile and Peru, the world’s top producers, Ecuador has signed loans for $7.3 billion from China since 2009, or about one-third of the Andean country’s annual budget, according to data compiled by Bloomberg based on government announcements.

U.K. banks cut their lending to businesses and households in August, underlining the challenge facing policy makers as they struggle to boost the supply of credit and revive a stagnant economy, The Wall Street Journal reported. Figures released by the British Bankers' Association showed lending to nonfinancial firms fell by £1.5 billion ($2.43 billion) compared with July, a larger fall than the £500 million drop recorded in that month.

Gunns' lurch into administration, and probable receivership, means the company will never get to build its proposed $2.3 billion pulp mill in Bell Bay, Tasmania, but it does not necessarily mean the end of the project, The Australian reported. The project, which was announced in December 2004, has been controversial from the outset, attracting fierce opposition from the Greens, environmentalists and community groups. Gunns had struggled since the global financial crisis to secure financing and find a 50 per cent partner. Management upheavals and a blowout in gearing didn't help.

Progress on two of the euro zone's most pressing concerns—containing the crises in Greece and Spain—faces holdups up in Germany, where Chancellor Angela Merkel is reluctant to ask parliament to vote on measures that are likely to raise fierce opposition from within her own coalition, The Wall Street Journal reported. Greece faces a funding shortfall that is likely to require more-generous financing from Germany and other euro-zone governments. But Ms. Merkel's aides are searching for a way to close the shortfall without asking German lawmakers for more money.

The government said on Monday it would allocate 1 billion pounds towards a new state-backed business bank designed to expand lending to smaller firms currently starved of loans from Britain's main lenders, Reuters reported. The government hopes its backing will be matched by a similar amount from private capital and could support up to 10 billion pounds of new and additional lending, Business Secretary Vince Cable said.

As banks in Europe and America scrabble to meet stricter capital requirements, made necessary by the failures of their own exotic lending practices, Mexico is offering some a lifeline, The Economist reported. On September 26th Santander, a Spanish bank, plans to list a quarter of its Mexican subsidiary on stock exchanges in Mexico City and New York. It has already listed subsidiaries in Brazil, Chile and Peru, as well as selling its Colombian unit.