Headlines

The brief afterglow from Greece's vote Sunday to try to remain in the euro was quickly extinguished by a cascade of bad news out of Spain that again rattled faith in the currency bloc's ability to support its most troubled members, The Wall Street Journal reported. Fresh data from Spain's central bank showed the country's lenders were sitting on the highest level of bad loans in 18 years and that their deposits continued to leak away.

Russia is setting aside up to $40bn for this year and next to shore up the economy in case the crisis in the eurozone escalates and spreads, and is dusting off a plan that would allow the government to recapitalise the country’s banking system, the Financial Times reported. In his first interview with a foreign newspaper since his appointment as finance minister last year, Anton Siluanov said the government had agreed to create a reserve mechanism worth Rbs500bn ($15.4bn) for next year “for the direct financing of anti-crisis measures”.

Creditors of Ssangyong Engineering & Construction (E&C) have decided to relinquish a controlling stake in the company by means of a private contract after open bids failed to achieve this end, The Korea Times reported. A German engineering firm, which took part in three previous bids, has emerged as the most likely to acquire one of Korea’s largest builders, according to industry officials Monday.

Romanian state-owned power producer Hidroelectrica has filed for insolvency after a drought cut its sales and led to losses, but it will respect all contracts, the company said on Monday, Reuters reported. A drought in late 2011 has continued into this year and reduced its sales by 10 percent, the company said. After losses of 121 million lei ($34.1 million) in 2011 and 112 million lei in the first five months of 2012, its board decided to file for insolvency. Hidroelectrica, with installed capacity of 6,400 megawatts, is Romania's cheapest power producer.

The results of the Greek elections are in: New Democracy, the conservative “pro-bailout” party, has come in first and appears to have enough support to form a new government, The Washington Post Wonkblog reported. So what does this mean? In the very short term, it likely means Greece won’t be leaving the euro zone. New Democracy’s leader, Antonis Samaras, basically wants to abide by the terms of the country’s bailout agreement with the rest of Europe. Greece will continue to stick with its austerity program — spending cuts, tax hikes, paring back public-sector jobs.

Woori Finance Holdings Co. and Hana Financial Group Inc. are among the bidders that have submitted initial offers to buy the troubled savings banks put up for sale by the government, people familiar with the matter said Friday, The Wall Street Journal reported. South Korea's laws stipulate that the government can intervene in a faltering financial firm, and the country's financial regulator put the four second-tier financial firms up for sale when it suspended their operations last month for six months due to their weak financial standing.

Kazakhstan's third-largest bank by assets, BTA Bank JSC, said Friday it has begun formal discussions with the steering committee of its creditors on the proposed restructuring of $4.98 billion of its debt, Dow Jones reported. The bank's advisers presented a draft of its preliminary restructuring proposal to the steering committee during meetings held June 12 and 13 in London. The bank and the steering committee will also hold due diligence meetings in Almaty next week and discuss an agreed term sheet over the following two weeks.

Swiss steel and coal trader Carbofer General Trading (CGT) was declared bankrupt last month, officials in its home town Lugano said on Friday, shortly after its shipping branch Carbofer Maritime, Reuters reported. CGT, once a large player in the spot coal and steel trade, was declared bankrupt on May 16, the bankruptcy office of Lugano told Reuters, as market conditions worsened and financing froze up. Its Copenhagen-based shipping branch Carbofer Maritime Trading (CMT) was declared bankrupt about a month earlier, the Danish Sea and Maritime court said.

“It’s done!” one eager Irish official shouted. “The baby is born.” The “baby” was an agreement that had eluded European leaders for years and held up their grand plan for a common currency. That deal, reached after months of bitter acrimony, would pave the way for the euro’s launch in 1999. But its flaws would help spark the financial crisis that is now sweeping the continent. The problem at the time was simple. How could euro zone countries ensure that their currency would not be undermined by one or two members who overspent and ran large budget deficits?

The administrator of insolvent German chipmaker Qimonda has almost doubled his demands for payment from former parent company Infineon Technologies to 3.35 billion euros ($4.22 billion), Reuters reported. "The insolvency administrator continues to base a substantial part of his alleged payment claims on so-called liability for impairment of capital," Infineon said in a statement on Friday. Infineon had said in February the administrator was demanding 1.7 billion euros, claiming Qimonda paid Infineon for a business in 2006 that was negative in value.