Headlines

Germany may be willing to move sooner than expected to accept shared liability of euro-zone debt and would support short-term measures to deal with the acute financing problems facing some of the region's governments, German Finance Minister Wolfgang Schäuble said in an interview with The Wall Street Journal ahead of Thursday's European summit. Mr. Schäuble said Germany could agree to some form of debt mutualization as soon as Berlin is satisfied that the path toward establishing centralized European controls is irreversible.

Euro zone experts discussed a Finnish proposal for Spain and Italy to issue covered bonds to make their debt more attractive and to allow the euro zone's permanent bailout fund to bid at primary auctions of the two countries, officials said on Thursday, Reuters reported. The aim of the Eurogroup Working Group of deputy finance ministers and treasury officials is to find a way to lower financing costs for the two sovereigns that European Union leaders meeting in Brussels could discuss later.

Many Chinese exporters are starting to hoard the dollars they earn, betting that the yuan is unlikely to appreciate much more, a shift in strategy that is having a ripple effect throughout the country's financial system, The Wall Street Journal reported. Until recently, Chinese exporters like state-owned Huihong International Group and privately held Saijia Co. had rushed to sell their dollar earnings to banks as soon as they got paid, in exchange for the appreciating yuan.

Russia's arbitration court ruled on Thursday that state-owned crude oil producer Rosneft was not obliged to repay almost $340 million of loans taken by a unit of Yukos which it acquired after Yukos was forced into bankruptcy by authorities. Once Russia's top crude producer, Yukos declared bankruptcy in 2006 after a multi-billion-dollar back-tax claim from the state. Former Yukos owner and chief executive officer Mikhail Khodorkovsky is serving a prison sentence on fraud and tax evasion convictions. He is due to be released in 2016.

A new scheme that will turn holders of hopelessly distressed mortgages into renters has been unveiled by Minister of State for Housing Jan O'Sullivan, the Irish Times reported. The Mortgage to Rent scheme will allow families remain in their home, but they will have to relinquish ownership of the property. The ownership of the house will be transferred to a housing agency financed by a 70 per cent loan from the original mortgage lender with the remainder coming from the State, which will take a 30 per cent equity stake in the house.

A High Court judge has further continued orders restraining the children of bankrupt businessman Seán Quinn, a nephew, two sons in law and a number of international companies dealing with assets owned or controlled by them worldwide below €50 million each, the Irish Times reported. The Quinn defendants will be allowed up to €8,000 for ordinary living expenses each, subject to approval by solicitors for the former Anglo Irish Bank and receipts being provided by them, until the injunction orders return to court on July 24th, Mr Justice Peter Kelly directed.

The eurozone group of nations insisted Wednesday that the rescue loans for Spain’s troubled banks would be channeled through the national government, adding to its sovereign debt. Madrid had petitioned to have it paid directly to the banks to not raise concerns over its public debt, The Washington Post reported on an Associated Press story. A Eurogroup statement said the aid would be given to Spain’s bank restructuring fund, or FROB, and that the Spanish government would “remain fully liable” for it.

When Petroplus went bankrupt early this year, many in the industry thought that at least the Coryton oil refinery in England, the most modern and efficient of its five plants in western Europe, would survive. So far it is the only one to have closed, doomed by the priorities of UK bankruptcy law, the British government's laissez faire approach and strategic calculations by trading houses who saw more opportunities from other refinery assets, Reuters reported.

Banca Monte dei Paschi di Siena SpA, the world’s oldest bank, will seek 3.4 billion euros ($4.3 billion) of government money to plug a capital gap uncovered by European regulators, Bloomberg Businessweek reported. “There were no alternatives,” Chief Executive Office Fabrizio Viola said Wednesday at a presentation in Siena. The bank expects to pay a higher interest rate on these securities than the 8.5 percent annual coupon for 2009 aid, Viola said. The government hasn’t set the bond’s terms yet.

Dubai's shipyard operator Drydocks World signed a deal Wednesday to form a joint venture for its Asian operations with Singapore's Kuok Group as it tries to close a $2.2 billion debt restructuring, The Seattle Times reported on an Associated Press story. The debt-laden shipbuilder has been working on the deal since at least December, when chairman Khamis Juma Buamim first discussed the possibility of sharing control of its Asian businesses. Its parent company, Dubai World, sent markets reeling in 2009 when it acknowledged it couldn't pay back billions it owed.