Headlines

Four companies each day went out of business in January, new data showed today, the Irish Times reported. The report from InsolvencyJournal.ie showed a total of 135 companies went bust last month, a rise of 39 per cent compared with 2011. The majority of the failed companies were in the services sector, accounting for 32 per cent of the overall total, while the construction industry accounted for 26 per cent. The retail industry, hit by falling consumer demand amid the current economic fragility, saw the number of insolvencies rise by 66 per cent in the month.

Credit card and other unsecured lending to British consumers posted its sharpest drop in nearly two decades in December, supporting expectations that the Bank of England will soon inject more cash into the economy to prevent a deep recession, Reuters reported. A steep decline in money supply also added to views that 75 billion pounds in quantitative easing, or asset purchasing, launched in October are not enough to boost the economy, which may have already entered a mild recession at the end of last year.

Unemployment figures have highlighted the widening gap between Germany and many fellow eurozone members, a day after Angela Merkel secured a new treaty enshrining Berlin’s vision for tough fiscal discipline, the Financial Times reported. Unemployment in the 17 euro countries climbed to 10.4 per cent in December, with the November rate revised upwards to the same rate, setting a fresh record since the introduction of the single currency in 1999. So-called “peripheral” members such as Spain and Greece recorded the highest rates, of 22.9 per cent and 19.2 per cent respectively.

Greece must make "difficult" decisions in the coming days to clinch a debt swap agreement and a 130 billion euro ($170 billion) bailout package needed to avoid an unruly default, the government said on Tuesday, Reuters reported. Near-bankrupt Greece is struggling to convince skeptical lenders it can ram through spending cuts and labor reform to help bridge a funding shortfall driven by a worsening economic climate and its previous reform plan having veered off track. With a long-awaited debt swap deal largely almost secured, Athens' focus is now squarely on the reform front.

Banco Santander of Spain announced on Tuesday that its net profit fell nearly 98 percent, to 47 million euros, during the final three months of last year, as the bank dealt with the downturn in the Spanish real estate market and the European debt crisis, The New York Times DealBook blog reported. The drop in quarterly profit weighed on the bank’s annual earnings, which fell 35 percent, to 5.35 billion euros ($7 billion), in 2011.

Doubling Japan’s sales tax by 2015 won’t be enough to contain the nation’s growing debt load and the government needs to outline how it will pay for swelling social-welfare expenses, a Standard & Poor’s analyst said, Bloomberg reported. “There’s no way that would be enough,” Takahira Ogawa, director of sovereign ratings at S&P in Singapore, said in a phone interview, referring to the plan to raise the levy by 5 percentage points.

Canadian foamer Domfoam International Inc. has filed for bankruptcy protection in the US after flagging sales and a million-dollar fine over price-fixing led the company into insolvency, PlasticsNews.com reported. Domfoam filed for Chapter 15 protection in the U.S. Bankruptcy Court in Toledo, where it faced more than a dozen lawsuits over the inflated prices it charged for its foam that goes into carpet underlay, furniture and bedding, according to a report from Dow Jones.

Investors participating in a deal to slash Greece's massive debt would face an overall loss on their bond holdings of more than 70 percent, a person involved in with the negotiations said early Tuesday, the Associated Press reported. European leaders at a summit in Brussels said a final debt deal could be signed off in the coming days, together with a second multibillion-euro bailout packaged designed to save the country from a potentially disastrous bankruptcy.

Hong Kong is bracing for more finance-sector job cuts as Western banks, many of which base their regional operations in this business hub, scale back their Asian expansion amid the fallout from Europe's debt crisis and a generally weaker global economy, The Wall Street Journal reported.

The U.K. government's proposed reforms to public sector pensions are unlikely to save any money over the long-term, a report from an influential think tank said Tuesday, casting doubt on the government's claim that the changes will save "tens of billions of pounds" over the next few decades, The Wall Street Journal reported. The government and unions have been locked in protracted negotiations for more than a year over the plans to make public sector workers retire later and contribute more towards their pensions.