Headlines

A debt restructuring plan for troubled national carrier Air India has been rejected by the airline's lenders, the Business Standard newspaper reported on Wednesday, as bankers refused to take a stake in the loss-making airline. A consortium of banks with exposure to state-owned Air India, rejected a proposal to convert 60 percent of the carrier's $4 billion debt into long-term loans and accept the balance in equity, the report said citing unnamed sources.

Do not expect Mario Draghi, European Central Bank president, to say so after Thursday’s interest-rate setting meeting but the eurozone is being helped significantly by the currency’s weakness, the Financial Times reported. More falls would be welcomed by businesses across the 17-country region. Exchange rates are important gauges of trust in economic systems, governments, politicians – and central bankers.

German Chancellor Angela Merkel's party will push for a financial transaction tax in Europe even though opponents of the levy include her junior coalition partners, a senior lawmaker from her Christian Democrats (CDU) said on Tuesday, Reuters reported. "It will happen," Michael Meister, the conservatives' deputy leader in parliament, said a day after Merkel acknowledged resistance in her coalition to the "Tobin tax" plan being pushed aggressively by French President Nicolas Sarkozy. Merkel favours such a tax with or without support from all 27 members of the EU.

The number of failed companies is expected to rise by 3 percent globally this year, led by Europe, under the weight of an economic slowdown and tighter monetary and budgetary policy, credit insurance company Euler Hermes said in a report, Reuters reported. Failures will likely increase by 12 percent in the euro zone, including a 19 percent rise among Mediterranean countries that have been "very weakened by the crisis", Euler Hermes Chief Economist Ludovic Subran said. Euler Hermes economists expect global gross domestic product growth to slow to 2.7 percent this year from 3 percent in 2011.

Former tycoon Sean Quinn could be effectively barred from relaunching his business career after a Belfast court ruled that his bankruptcy should be dealt with in Dublin, The Press Association reported. The 65-year-old sought bankruptcy in Northern Ireland, where he could have started a fresh career after 12 months, but now faces a wait of up to 12 years in the Irish Republic. The businessman's multibillion-euro empire collapsed over the last two years on the back of massive stock market gambles on the share price of the former Anglo Irish Bank.

Portugal's central bank Tuesday sharply lowered its economic outlook for 2012, citing a worse-than-expected drop in internal demand, and warned that instability in the euro zone and the global economy could hurt exports, The Wall Street Journal reported. In its winter report, the Bank of Portugal said it now expects the economy to contract 3.1% this year. Its fall forecast called for a 2.2% contraction. The government has put the number at 3%. Portugal's woes underscore the challenge many euro-zone countries face currently.

Lenders, led by State Bank of India, have decided to seek a review of the debt restructuring plan for National Aviation Company of India (Nacil) that was pushed by the government citing their inability to take a large haircut, The Times of India reported. The move, which comes six weeks after banks agreed to a restructuring of nearly Rs 21,000 crore of Nacil debt, will come as a blow to the government's efforts to get the beleaguered national carrier back on track.

Negotiations on a new European treaty to reinforce budget discipline in the eurozone are making rapid progress and there is “a good chance” of reaching agreement by the end of January, according to Angela Merkel, Germany’s chancellor, the Financial Times reported. Her confidence was mirrored by Nicolas Sarkozy, French president, speaking after a bilateral Franco-German summit in Berlin on Monday. He said the new treaty, including a requirement for all 17 eurozone members to agree constitutional amendments to balance their budgets, should be signed by March 1.

Germany and France on Monday pressed Greece and its bondholders to agree on a reduction of Athens's debt burden, warning that Greece's bailout loans from the euro zone and the International Monetary Fund are on hold until a deal is reached with private investors, The Wall Street Journal reported.

Britain's economy is at risk of contracting in the first half of this year after stagnating in the final quarter of 2011 due to the euro zone debt crisis, a survey from the British Chambers of Commerce showed on Tuesday, Reuters reported. The BCC - which polled nearly 8,000 members - stopped short of forecasting an outright recession, saying only that one quarter of negative growth was likely over the next six months, but warned this hinged on government action to help business. "A new recession is not a foregone conclusion.