Headlines

Prime Minister Mario Monti may have saved Italy from ruinous default but the growth potential of Europe's most sluggish economy is as weak as ever, and that means prospects for lasting debt reduction remain fragile, Reuters reported in an analysis. Thanks to his decisive austerity measures and personal credibility, the economist and former European commissioner has put Italy back at the centre of European decision making and helped to lower its borrowing costs.

The Irish economy was stagnant in the second quarter of the year, as consumers continued to cut back on spending and capital investment slumped, the Irish Times reported. The figures were a further blow to hopes for economic growth, coming a day after it was revealed the unemployment rate has risen to 14.8 per cent. The Central Statistic Office said preliminary estimates for the three-month period showed gross domestic product was €39.7 billion, unchanged from the previous quarter.

A court ruling that Indonesia's biggest mobile phone operator is bankrupt, after not paying a disputed debt of just half a million dollars, has revived concerns over flawed laws that invite abuse and can trip up even highly profitable companies in Southeast Asia's largest economy, CNBC reported on a Reuters story. Analysts and shareholders have brushed the decision aside as one of the quirks of the country's legal system, saying it is almost inevitable that it will be overturned when Telkomsel appeals to the country's supreme court.

Indebted miner Great Basin Gold on Thursday said it was to acquire a $35-million loan by order of the British Columbia Supreme Court, following its Companies Creditors Arrangement Act (CCAA) filing made on Wednesday, MiningWeekly.com reported.

Indian opposition parties and shopkeepers staged demonstrations and strikes across India on Thursday to protest against a burst of unexpectedly bold economic reforms unveiled by the Congress-led coalition government, the Financial Times reported. Demonstrators focused their anger on a cut in the subsidy for diesel fuel, which pushed up the price by about 14 per cent on Friday, and on a decision to allow foreign investors to own majority stakes in supermarkets and department stores.

The European Central Bank has urged the Irish government to narrow the category of debtors who will be eligible for its new insolvency regime, warning that current proposals could impact on the capital adequacy of the country's lenders, Reuters reported. In response to growing arrears among homeowners and outdated bankruptcy laws, Ireland has proposed new non-judicial routes for struggling mortgage holders to settle both unsecured and secured debts of up to 3 million euros ($3.9 million). The new laws are currently in the draft stage.

Belize is poised to default on its only bond, as the country's negotiations with creditors continue, The Wall Street Journal reported. In August, the Central American nation failed to make a $23.1 million interest payment, initiating a 30-day window during which it must pay or become the first country since Greece to default on its sovereign debt. The grace period was scheduled to end at 5 p.m. EDT Wednesday. Belize and its bondholders are negotiating to restructure the country's debt.

Japan's central bank has ramped up its efforts to spur economic growth, following similar steps by central bankers in the United States and Europe, The New Zealand Herald reported. The Bank of Japan announced it would boost the size and duration of a government bond-buying program that's intended to encourage borrowing and spending and make Japan's exports more competitive. Purchases of government bonds keep downward pressure on interest rates and the yen, whose rise has made Japanese products more expensive relative to other countries' exports.

New figures show no slowdown in job losses. The number of people at work in the April-June period fell by nearly 14,000, the biggest three-month fall in a year, according to the Central Statistics Office, the Irish Times reported. The figures appear to dash hopes that employment growth is at hand. They show there were 1,783,400 people employed on a seasonally adjusted basis in the second quarter, meaning there are 357,000 fewer people at work since employment peaked in 2007.

BTA Bank, the Kazakh lender seeking to overhaul its debt for a second time, said a Ukrainian court recognized the restructuring proceedings and extended protection over its assets, Bloomberg reported. “This recognition is a part of the bank’s current restructuring process and the order follows successful applications for recognition made by the BTA in the U.K. and U.S., which were obtained on July 11 and Aug. 16, respectively,” the Almaty-based lender said in a statement e- mailed today.