Headlines

German Finance Minister Wolfgang Schaeuble warned on Tuesday that failure to win the battle against youth unemployment could tear Europe apart, and dropping the continent's welfare model in favor of tougher U.S. standards would spark a revolution, Reuters reported. Germany, along with France, Spain and Italy, backed urgent action to rescue a generation of young Europeans who fear they will not find jobs, with youth unemployment in the EU standing at nearly one in four, more than twice the adult rate.

Slovenia needs at least €900m ($1.15bn) by July to refloat one of its struggling banks. This is a large sum of money for a country with a GDP of only €35bn. The question is where to find the funds, The Guardian reported. The public deficit is deepening and investors are beginning to question the country's solvency, to such an extent that it can no longer borrow on the money markets. On 30 April Moody's, the credit-rating agency, downgraded Slovenian bonds to junk status. Both Brussels and the OECD are urging the government to take action. But why is there such a hurry?

Goldman Sachs Group Inc., which is already providing Arcapita Bank $350 million in bankruptcy exit financing, is now seeking to give the Bahrain investment firm a $175 million bankruptcy loan that would pay off existing lender Fortress Investment Group LLC, Nasdaq.com reported on a Dow Jones Business News story. In a Monday filing with U.S. Bankruptcy Court in Manhattan, Arcapita said the Goldman loan would pay off the $105 million still owed to Fortress and later convert into the $350 million exit loan that Goldman is already providing.

Three bond restructurings totaling about $9.7 billion in the Caribbean this year are failing to ignite economic growth and may not help the region avoid more defaults, according to Moody’s Investors Service, Bloomberg reported. The bond swaps this year didn’t go far enough to fixing the Caribbean’s “unsustainable” mix of debt and deficits, Warren Smith, the president of the Caribbean Development Bank, said May 22.

Accountants still fail to question banks properly over how they make provisions for poorly performing loans on their books, auditing policeman Financial Reporting Council (FRC) said on Wednesday, Reuters reported. The criticism goes to the heart of regulatory efforts since the 2007-09 financial crisis to restore investor confidence in the figures lenders publish about their health. The FRC said in its annual report it was concerned and disappointed there had been no significant improvement in auditing loan-loss provisions at banks and building societies in Britain.

The European Central Bank has offered to help the EU redesign its financial transactions tax to avoid any ‘negative impact’ on market stability, highlighting official fears about the implementation of the levy. Proposals by 11 eurozone countries for a “Robin Hood tax” on trading in bonds, shares and derivatives have run into strong opposition from the financial industry, which has warned they could dry up markets, increase costs substantially for investors and erode bank profits. Publicly, the ECB has refused to take sides, pointing out it has no mandate in the field.

Following last week's brief jump in Japanese government bond yields that helped precipitate a sudden slide in Tokyo stocks, an advisory panel to Japan's finance minister published a report Monday urging the government to undertake serious fiscal reform to avoid further rises in yields, The Wall Street Journal reported.

The European Commission will further shift the EU's policy focus from austerity to structural reforms to revive growth when it presents economic recommendations for each member state on Wednesday, officials said., Reuters reported. In its annual assessment as guardian of the EU's budget rules, the Commission will say that while fiscal consolidation should continue, its pace can be slower now that a degree of investor confidence in the euro has been restored.

The number of people with Irish addresses applying for bankruptcy in either England or Wales has risen significantly, according to figures from Britain’s Insolvency Service, the Irish Times reported. Last year, there were 75 bankruptcy cases involving debtors who gave an address in the Republic, compared with 28 in 2011 and just 15 in 2010. The figures from the Insolvency Service, however, do not necessarily indicate the number of debtors who have relocated from Ireland to the UK specifically to obtain a bankruptcy order.

Renault SA, France’s second-biggest carmaker, is ending a five-year partnership with Better Place LLC after the operator of electric-vehicle charging stations announced plans to shut down, Bloomberg reported. Better Place filed a motion for liquidation with an Israeli court yesterday after failing to attract new investments, according to a company statement. Renault and Better Place began working together in 2008 and said a year later that they aimed to sell 100,000 of the Fluence ZE, the French carmaker’s first electric vehicle, in Israel and Denmark by 2016.