Headlines

European Central Bank President Mario Draghi Wednesday warned that "downside risks" to growth remained and any discussion of how and when the ECB will unwind its unconventional measures to fight the crisis was premature, Dow Jones reported. Striking a cautious balance between taming stubbornly high inflation amid rising commodity prices and supporting the still-weak euro-zone economy, the ECB left its main interest rate unchanged at a 1% record low for the fourth straight month earlier Wednesday.

Spanish borrowing costs jumped at bond auctions on Wednesday, spreading fear in European markets of a return of the euro zone debt crisis and overshadowing a successful step back into debt markets by neighbouring Portugal. Spain sold 2.6 billion euros of debt, at the low end of its target range, with a bond maturing in 2020 yielding an average 5.338 percent, higher than a forecast 5.2 percent and up from 5.156 percent when it was last sold in September.

France has enviable economic strengths: an educated and productive workforce, more big firms in the global Fortune 500 than any other European country, and strength in services and high-end manufacturing, The Economist reported. However, the fundamentals are much grimmer. France has not balanced its books since 1974. Public debt stands at 90% of GDP and rising. Public spending, at 56% of GDP, gobbles up a bigger chunk of output than in any other euro-zone country—more even than in Sweden. The banks are undercapitalised.

It wasn't so long ago that people viewed Q-Cells as an energy company of the future. At one point, it was the world's largest manufacturer of solar cells and quarter after quarter, it topped analysts' expectations. The company proved to be a money-making machine even during the financial crisis, with some believing it might one day grow to become part of Germany's DAX index of benchmark companies on the stock exchange. But Q-Cells' insolvency comes as a great shock to the Germany's solar industry, Spiegel Online reported.

A 77-year-old Greek man took his life in Athens's central Syntagma Square early Wednesday, police said, in what appeared to be a protest against a deepening economic crisis that has coincided with a rising national suicide rate, The Wall Street Journal reported.

European rules on state aid have jeopardised small UK companies’ access to venture capital funding worth hundreds of millions of pounds each year, placing further strain on a sector already starved of credit, the Financial Times reported. Under a measure included in the Finance Bill, venture capital trusts that invest in small growth companies could lose generous tax benefits as a result of a new cap on state-backed investment sources. At present, VCTs offer 30 per cent upfront tax relief on investments of up to £200,000 a year, as well as tax-free dividends and capital gains.

Europe is pressing ahead with fiscal belt-tightening amid mounting criticism from economists and political leaders that the strategy is hurting the region's fragile economy, The Wall Street Journal reported. The argument is entering a decisive phase as Europe teeters on the brink of a new recession. Manufacturing contractions in March extended from the Mediterranean periphery to powerhouses including Germany and the Netherlands, according to business surveys. Euro-zone unemployment climbed to 10.8% in February, the European Union's statistics agency said this week, a euro-era high.

Spain’s government, grappling with €57bn in combined annual costs for debt servicing and jobless benefits, will tolerate “no excuses or pretexts” from wayward autonomous regions in its drive to cut the public deficit, according to the budget minister, the Financial Times reported. Cristóbal Montoro described the situation as “extreme, at the limit and exceptional” as he presented parliament on Tuesday with the harshest budget since the death of dictator General Francisco Franco, comprising central government spending cuts and tax rises worth €27.3bn.

The banking industry has urged the Government to limit the mortgage debt eligible to be written off in out-of-court debt settlements at €1 million, fearing that the proposed €3 million limit would include too much property investment debt, the Irish Times reported. The group representing mortgage lenders has lobbied Governments officials to reduce the debt cap to €1 million for individuals applying for personal insolvency arrangements to prevent too many buy-to-let mortgages and property investors being included.

The Quebec government is threatening legal action against Air Canada over its alleged failure to comply with a federal law that requires the continued operation of maintenance services in Montreal, CanadianBusiness.com reported on a Canadian Press story. Justice Minister Jean-Marc Fournier told a news conference in Quebec City that the carrier had previously given assurances that its heavy maintenance operations would be continue to be performed in Montreal — effectively by Aveos Fleet Performance, the sucessor to a former subsidiary sold off by the airline.