Headlines

The euro-zone countries Wednesday signed off on Greece's second bailout program, ending a protracted and dramatic negotiating process that started last July. Their hope is that the €130 billion (roughly $169 billion) package—funded mostly by euro-zone countries and the International Monetary Fund—will be enough to keep Greece funded until 2014-15. But talk of a third Greek bailout has already begun, even as the ink is still drying on the second package.

A group of officials and bankers who helped prevent Eastern Europe from being thrown into the financial crisis in 2009 has reconvened, seeking to avoid a credit squeeze and economic downturn caused by problems at parent banks in Western Europe, the International Herald Tribune reported. The International Monetary Fund, European Commission, World Bank and other institutions this week formally revived an effort known as the Vienna Initiative, which three years ago succeeded in preventing panicked West European banks from draining capital from their subsidiaries in Eastern Europe.

Britain's unemployment rate held at a 16-year high in the three months to January and the youth unemployment rate rose to a record high, piling pressure on the government to introduce policies to boost growth and jobs in next week's budget, Reuters reported. Unemployment on the broader ILO measure inched down to 2.666 million for the November-January period from 2.671 million in the three months to December, but the overall rate held at 8.4 percent, a rate that prior to recent months was last equalled in the three months to January 1996.

More Asian governments are pressing businesses to hike wages as a way to prevent outbreaks of labor unrest, raising the specter of higher manufacturing costs for global companies—and the products they sell world-wide, The Wall Street Journal reported. In the latest move, Malaysia's cabinet has approved the country's first-ever minimum wage to be imposed soon, according to people familiar with the matter.

Italy's successful government bond sale Wednesday added new evidence that investors have begun to give Italy better chances of avoiding a fiscal crisis than Spain, another big euro-zone economy that has been seen at risk of needing a Greek-style bailout, The Wall Street Journal reported. Italy comfortably sold the maximum targeted €6 billion ($7.8 billion) in government bonds with maturities of three and seven years. It also did so at lower cost, with the yields on both bonds falling significantly from previous auctions of similar maturities.

Units of Berlian Laju Tanker, Indonesia’s largest oil and gas shipping group, filed for Chapter 15 creditor protection in a US bankruptcy court early Wednesday morning, The Jakarta Globe reported on a Reuters story. The company’s units have listed assets and liabilities in the $50 million to $100 million range, according to a filing with the US bankruptcy court in the Southern District of New York. Under US bankruptcy laws, Chapter 15 grants a foreign company protection from creditors looking to seize its assets in the country.

With no room to spend its way back to growth in next week's budget, Britain's government is straining to find creative ways to boost the economy and betting on new schemes aimed at helping the private sector spark recovery, Reuters reported. But chancellor George Osborne's much-vaunted plans to boost bank lending to small businesses and encourage pension funds to invest in Britain's creaking infrastructure look set to be tarred with disappointment before they are even launched.

European finance ministers agreed to suspend European Union funds destined for Hungary because of its failure to hit budget targets while, under pressure from other euro-zone governments, Spain agreed to deeper budget cuts than it had planned for this year, The Wall Street Journal reported. The two developments on Tuesday are signs of how the tougher policing of government budgets introduced since the onset of the sovereign-debt crisis is likely to generate tensions within the EU.

Greece will have to slash a further 5.5 percent of GDP in government spending in 2013 and 2014 to meet agreed fiscal targets underpinning the second international bailout for Athens, a European Commission report said. The Compliance Report by the European Union's executive describes the progress of Greek reforms necessary for the release of new euro zone money to Athens and recommends the first disbursement be made as soon as possible.

Property prices have fallen by 68 per cent since their peak, significantly more than official figures suggest, a new report said today, the Irish Times reported. Tough credit conditions, an oversupply of housing and weak domestic demand have weighed on the residential property market in recent months, while a lack of transparency has helped draw out the property crash. The report from Goodbody Stockbrokers shows property has fallen by 68 per cent from peak asking prices, based on property prices recently achieved at Allsop Space auctions.