Headlines

Italian Prime Minister Silvio Berlusconi pledged to step down after Parliament approves austerity measures, as the euro-zone's third-largest economy tried to stave off the nightmare scenario of a bailout that would test the currency union, The Wall Street Journal reported. The promise to resign, which came after Mr.

Olympus Corp's losses on securities investments mounted to more than 100 billion yen ($1.3 billion) at one point, the Nikkei business daily said on Wednesday, citing sources close to the matter, Reuters reported. Olympus, engulfed by a scandal that has brought the 92-year-old company to its knees, admitted the previous day to using M&A transactions to conceal past losses.

An EU Commission proposal for a common European tax on financial transactions ran into fresh trouble as divisions over the plan resurfaced between European finance ministers, the Irish Times reported. At a two-day meeting in Brussels, which was overshadowed by the escalating political crisis in Italy, questions were also raised about the drive to recapitalise the weakened euro zone banks. The greatest divisions were seen when ministers held their first formal discussion on the commission’s plan to tax financial transactions. “There were very diverse views on this.

A strike by Portuguese public transport workers shut down national train services and the Lisbon subway Tuesday in the latest major protest against austerity measures designed to reduce the country's crippling debt burden, the Associated Press reported. Staff at the state-owned rail company Comboios de Portugal and the Lisbon subway walked off the job during the morning rush-hour. Bus and ferry workers were also due to stop work later in the day.

Car maker Saab will still for now enjoy legal protection from creditors, the court-appointed lawyer overseeing a reconstruction process for the company said on Tuesday after General Motors rejected a Chinese bid for the company, Reuters reported. GM had said on Monday it would stop supplying components and technology to Saab if two Chinese companies succeeded with their acquisition bid -- a hardening in its opposition to the proposed sale of Saab which called into question the survival of the niche brand, which has been under court protection from creditors since September.

Greece can get a crucial €8 billion ($11 billion) slice of bailout money this month if the leaders of the two main parties both commit in writing to the terms of the country's two massive bailouts and the austerity measures and economic reforms that they require, eurozone finance chiefs said Monday, the Associated Press reported. That payment, which has been delayed by two months, would head off a potentially disastrous default as early as December.

Prime Minister Silvio Berlusconi defied huge pressure to resign on Monday, desperately playing his last cards to save his crumbling government as fears over Italy's instability hit markets across Europe, Reuters reported. Berlusconi denied reports by journalists close to him that he would resign within hours, immediately reversing a brief recovery in stock and government bond markets battered by political uncertainty in the euro zone's third economy.

European banks are sitting on heaps of exotic mortgage products and other risky assets that predate the financial crisis, adding to pressure on lenders that also are holding large quantities of euro-zone government debt, The Wall Street Journal reported. Four years after instruments like "collateralized debt obligations" and "leveraged loans" became dirty words because of the massive losses they inflicted on holders, European banks still own tens of billions of euros of such assets. They also have sizable portfolios of U.S.

While many businesses in the United States struggle to stay afloat and workers collect unemployment checks, China has the opposite problem: an economy, pumped up by expansive lending by state-controlled banks, which is growing too fast to keep inflation and speculation in check, the International Herald Tribune reported. Beijing’s solution: Create an artificial shortage of credit.

Fortress Energy Inc. said Friday it has won a challenge against a tax reassessment that would have left it on the hook for $24 million, CanadianBusiness.com reported on a Canadian Press story. The Calgary-based energy company filed a notice of objection to the Canada Revenue Agency, which said Fortress owed $18 million in federal taxes and $6.2 million in provincial taxes. On Friday, Fortress said the CRA had decided in its favour at the federal level, and that a similar decision should come soon at the provincial level.