Headlines

CSA Czech Airlines won European Union authorization to receive government restructuring aid after it sold assets, reduced capacity and gave up landing slots at European airports, Bloomberg Businessweek reported. The European Commission said it approved a 2.5 billion- koruna ($130 million) loan to the airline from state-owned company Osinek SA after Czech airlines agreed to a five-year restructuring plan that will also see it sell subsidiaries, aircraft and other assets and secure a private bank loan for an aircraft lease.

An accelerating flight of deposits from banks in four European countries is jeopardizing the renewal of economic growth and undermining a main tenet of the common currency: an integrated financial system, Bloomberg reported. A total of 326 billion euros ($425 billion) was pulled from banks in Spain, Portugal, Ireland and Greece in the 12 months ended July 31, according to data compiled by Bloomberg. The plight of Irish and Greek lenders, which were bleeding cash in 2010, spread to Spain and Portugal last year.

The Spanish government proved it can still finance itself on markets, despite mounting pressure for it to seek an international bailout, The Wall Street Journal reported. The Spanish debt agency Tuesday sold €4.57 billion ($5.99 billion) of short-term debt, slightly more than planned and at a cheaper rate than at previous auctions. The result showed that Spain, one of Europe's largest fiscally frail countries, is benefitting from the European Central Bank's pledge to throw its vast financial firepower behind future European bailouts.

Costs associated with the receivership of the failed finance company Bridgecorp have topped $10 million, Radio New Zealand reported. The finance company collapsed in 2007, owing nearly $490 million to 14, 500 investors. The receivers, PricewaterhouseCoopers, are required to file six-monthly updates on the receivership. The latest report says receivers' fees for the past five years have reached $4.166 million, legal costs are $4.92 million, while other professional services total $1.42 million.

Great Basin Gold Ltd said its South African unit Southgold Exploration filed for creditor protection a week after it suspended operations at its Burnstone mine, Reuters reported. Great Basin suspended production at the mine in the Witwatersrand Goldfields last week due to its inability to continue funding operations at the mine. The mine, which started production in February last year, was producing about 5,000-6,000 tons of ore per day. The company is trying to negotiate a debtor-in-possession working capital loan with certain lenders to pursue an orderly shutdown of the mine.

Allied Irish Bank was duped into lending nearly £800 million to two British alleged fraudsters to buy 16 commercial properties in Britain at the height of the property boom on the back of forged documentation, a London court was told yesterday, the Irish Times. Achilleas Kallakis and his co- defendant Alexander Williams face 23 charges of fraud in the retrial, which began in Southwark Crown Court in London yesterday and could last for several months.

A Polish court on Tuesday delayed until Oct. 2 a ruling on whether to allow an 11.6-billion zloty ($3.7 billion) investment in new power units by Poland's top utility PGE, a decision keenly awaited by troubled local builders, Reuters reported. The utility has said that more delays in starting the project, the largest in the country's power sector, could hurt Polish construction firms, which are in financial difficulties, and deprive the slowing economy of an important cash stimulus.

German Chancellor Angela Merkel reiterated her support for the European Central Bank's bond-buying program as she tried to walk a fine line between endorsing ECB President Mario Draghi without alienating the Bundesbank, Germany's influential central bank, The Wall Street Journal reported. During her traditional wide-ranging summer news conference with the Berlin press corps on Monday, Ms. Merkel backed the ECB's announcement that it could resume purchasing euro-zone government bonds but tried not to isolate Bundesbank President Jens Weidmann, a vehement critic of the bond purchases.

EU Commissioner Michel Barnier has asked experts to examine the possibility of splitting up major European banks to avoid future bailouts at taxpayers' expense, Spiegel Online reported. But even less radical intervention in the banking sector could have drastic consequences for the industry, and its powerful lobby is resisting any such change. In Europe, breaking up the banks was long seen as more of a subject for armchair economists than a real prospect.

France's enduring ability to defy economic gravity - adding new taxes on top of one of the highest fiscal burdens in Europe, preserving short working hours, job protection, early retirement and generous welfare benefits - is about to be tested, Reuters reported in an analysis. President Francois Hollande has promised to bring the deficit down to 3 percent of gross domestic product in next week's 2013 budget from a forecast 4.5 percent this year.