Headlines

A German-backed proposal to expand the size of the euro-zone bailout funds is gaining ground, officials tell us, ahead of a meeting of euro-zone finance ministers on Friday in Copenhagen that is expected to seal a deal, The Wall Street Journal Real Time Brussels reported. Under the favored option, the region’s bailout funds would rise temporarily to roughly €650 billion ($799 billion) by July.

European Central Bank action to shore up the eurozone financial system failed to prevent the region’s banks scaling back lending to the private sector again last month, but it did spur a surge in demand for government bonds, the Financial Times reported. The ECB has provided more than €1tn in three year loans to eurozone banks since Mario Draghi became its president late last year – a move which he argues averted a severe “credit crunch” across the 17-country region.

State-controlled Irish Life and Permanent was ordered by the High Court to sell Irish Life to the State for €1.3 billion, which will be used to complete the recapitalisation of Permanent TSB as directed under the EU-International Monetary Fund programme, the Irish Times reported. The court ordered the sale on an application from the Minister for Finance to finalise the €4 billion recapitalisation of Permanent TSB before the separation of the banking and life businesses.

In assessing Europe's debt problems, bond investors are moving beyond Portuguese debt in their hunt for the next bearish bet. Their search is taking them right next-door, The Wall Street Journal reported. Spain's borrowing costs are rising amid worries Portugal's looming budget deficits will ripple across the Iberian peninsula. Spain's 10-year bonds yield 5.33%, up a quarter-percentage point in the past month.

Singapore's privately held PhillipCapital Group said on Wednesday it has agreed to buy a majority stake in defunct broker MF Global's Indian unit, Reuters reported. PhillipCapital, which runs brokerage and asset management business across 13 countries, said it would plan to rename the business Phillip Securities India. No financial terms of the deal were disclosed and the transaction is still subject to regulatory approval. PhillipCapital said it will buy a majority stake in the joint venture between Sify Technologies and MF Global and has also agreed to buy the rest of the bankrupt U.S.

Loan transfers covering €130 million in property assets of Seán Quinn’s family were backdated in an attempt to put them beyond the reach of the former Anglo Irish Bank, the High Court in Belfast heard yesterday, the Irish Times reported. A judge was told overwhelming and undisputed evidence existed that the assignment over the Kutuzoff Tower in Moscow could not have taken place before July 2011 – by which stage the bankrupt ex- billionaire had lost control of his empire.

The eurozone needs to undertake “ambitious structural reforms” to boost growth and overcome its protracted debt crisis, the OECD said in a report released on Tuesday, the Financial Times reported. The Paris-based policy adviser warned that fiscal consolidation paired with banks’ reluctance to lend could lead to further economic pain in the short term, though it forecast modest 0.2 per cent growth for the 17-country bloc in 2012.

The Irish government Tuesday said a referendum on the European Union's new fiscal treaty will be held on May 31, formally starting a campaign to persuade voters to back the compact or risk exclusion from access to future bailout funds, The Wall Street Journal reported. Ireland is in the second year of an austerity program linked to €67.5 billion ($90.17 billion) of loans from the EU and the International Monetary Fund.

The administrator of insolvent refiner Petroplus has applied to a Swiss court for a six-month extension of a debt moratorium for the Cressier refinery, Reuters reported. Switzerland's 68,000 barrel per day Cressier plant, one of just two refineries in the landlocked country, is up for sale and the deadline for offers was Monday. The court had previously given the plant a two months' grace period of protection from its creditors pending offers for its purchase. The administrator, Wenger-Plattner, said in a statement it had made the application for the extension.

Central Bank governor Patrick Honohan warned today the payments on the Anglo Irish Bank and Irish Nationwide promissory notes have become "a source of risk to financial stability" to Ireland, the Irish Times reported. Mr Honohan told the Oireachtas Joint Committee on Finance, Public Expenditure and Reform a deal on the next €3.06 billion payment on March 31st was likely to be successful. He said the Central Bank has been "working vigorously" with the European Central Bank and other parties to come up with a mechanism to reduce the annual cost of the notes ahead the next payment.