Headlines

The euro zone is at a cross-roads and must tackle its crisis or face potential break-up, U.K. Prime Minister David Cameron is due to say Thursday in a stark warning of the crisis in its key trading partner, Dow Jones reported. "Either Europe has a committed, stable, successful euro zone with an effective firewall, well capitalised and regulated banks, a system of fiscal burden sharing, and supportive monetary policy across the euro zone. Or we are in unchartered territory which carries huge risks for everybody," he will say according to extracts of a speech he is due to deliver later.

The European Central Bank has reacted to uncertainty over Greece’s future in the euro zone by excluding four of the country’s banks from its regular liquidity-providing operations, The Globe and Mail reported. The move raises the pressure on Greece to stick to its international bailout by highlighting the risk that euro zone central bankers could pull the plug on its financial system. It reflected ECB fears that a planned recapitalization of Greece’s banks could be delayed.

Private equity investor Cerberus has agreed to acquire roughly 22,000 German flats from insolvent Speymill Deutsche Immobilien (SDIC), Reuters reported. As part of the deal, Cerberus is restructuring 985 million euros ($1.25 billion) in SDIC's debt and will inject an undisclosed sum of fresh capital, the administrator and the private equity investor said in a joint statement on Wednesday.

The Minister for Finance has linked a deal on Ireland’s bank debt and the State’s emergence from the bailout programme, the Irish Times reported. Michael Noonan said the International Monetary Fund would have to assess the sustainability of Ireland’s fiscal position when it is emerging from the bailout programme. The IMF conducts ongoing debt-sustainability analyses for countries in its programmes. By the end of this year, it will begin to examine Ireland’s ability to emerge from its funding programme at the end of 2013, as envisaged.

Russia's top central banker warned on Wednesday that capital flight is a "serious problem," as newly released figures showed $42 billion has left the country in the first four months of the year, The Wall Street Journal reported. Meanwhile, the stock market and the ruble have slipped to their lowest levels in more than a year, dashing hopes for a rally following Vladimir Putin's re-election as president in March.

Solicitor Noel Smyth’s Alburn Real Estate UK is to be put into receivership by Rothschild, ending his efforts to regain command of the heavily indebted property portfolio which has breached a number of its borrowing covenants, the Irish Times reported. The move by Rothschild follows the failure on Tuesday of Alburn, which owns 47 offices, warehouses and other properties, to meet a demand from the bank for accelerated repayment of approximately £200 million (€250 million), including interest.

Greece's future in Europe's common currency was in doubt after a last-ditch effort to form a new government failed and the country's political turmoil sparked a dramatic increase in bank withdrawals, The Wall Street Journal reported. After a week of fruitless negotiations, Greece's political parties couldn't agree on a governing coalition, leaving the country in political limbo until new elections next month. The delay could deprive Athens of badly needed international aid and deepen Greece's economic depression.

French President Francois Hollande and German Chancellor Angela Merkel stressed their desire to keep the eurozone together on Tuesday in key talks just hours after France's new leader was inaugurated, Agence France-Presse reported. With all eyes on their first-ever talks, the two leaders also vowed that the two European powerhouses were aware of their responsibilities and ready to help find solutions to the eurozone crisis.

Greece's government said Tuesday that it would honor in full a maturing, foreign-law bond that was not included in the country's recent debt restructuring but said the payment would not necessarily set a precedent, Dow Jones reported. "The Hellenic Republic today announced that it would make timely payment of the principal as well as the interest due on approximately EUR435 million of bonds maturing on May 15," the finance ministry said in a statement. "The decision weighed carefully all relevant factors and implications as well as the current conjuncture," it added.

Kuwait's Global Investment House said on Tuesday that it would ask creditors to further extend a deadline for repaying debt to November from June as part of a restructuring proposal it plans to submit soon, Reuters reported. The company, which is undergoing its second debt restructuring in three years, did not specify an amount. "The main point is that Global is progressing in its negotiations with lenders," a statement filed on the Dubai bourse said. It has asked for the repayment deadline to be pushed to Nov. 10 instead of June 10, it said.