Headlines

Kenyans who were attracted to bank loans by last year’s low interest rates are headed for tough times as the lenders raise the cost of money to protect their margins against inflation and exchange rate turbulence, Business Daily Africa reported. The reality of the high cost of debt has been emerging in the past couple of weeks in which successive lenders have raised interest rates citing increased costs of funds from depositors. The rise in interest rates started last week when I&M Bank increased its base lending rate by 2.25 percentage points to 15.75 per cent.

An offer from Contor Industries GmbH to buy Austria's troubled A-TEC Industries appears to have fallen through because of a legal dispute, the Austria Press Agency reported on Wednesday. A-TEC accepted the offer from Contor this month, saying it fulfilled terms agreed with its creditors, but has been forced to back away for now, APA reported A-TEC's chief executive as telling an extraordinary shareholder meeting. CEO Mirko Kovats said this was because a suit filed by Czech investment group Penta Investments had spooked an investor that Contor had lined up for one of the assets, APA reported.

Germany will be subsidising its weaker eurozone partners for a lifetime and Greece, Italy and Portugal face big changes if the European currency is to survive, Foreign Secretary William Hague said in an interview published on Wednesday, Reuters reported. Britain had been vindicated for its decision not to join the 17-nation currency club but was very concerned about the euro breaking up, Hague told the weekly Spectator magazine.

French President Nicolas Sarkozy will have to walk a fine line on Wednesday, when his government presents its 2012 budget amid faltering growth and a deepening debt crisis in the euro zone, The Wall Street Journal reported. Mr. Sarkozy's room to appeal to French voters ahead of next year's presidential elections is constrained by his commitment to rein in France's deficit—the highest among triple-A-rated euro-zone countries—and retain its prized credit rating. "In France, the problem of deficit reduction is a credibility problem," said ING economist Julien Manceaux.

Greek lawmakers approved a controversial new property tax Tuesday that aims to boost revenue as the country struggles to obtain a critical installment of international bailout loans that will prevent it from default, The Associated Press reported. The new tax passed 154 votes to 143 against in the 300-member parliament. It was announced earlier this month after international debt inspectors suspended their review of Greek reforms amid talk of missed revenue targets and delayed implementation of austerity measures. The inspectors are expected to return to Athens this week.

Workers at an oil refinery owned by LyondellBasell Industries NV in southern France voted Tuesday to strike to protest against the closure of the plant announced by the company earlier in the day. "They voted around noon and the strike started immediately," Charles Foulard, a leader of the CGT Union for the petrochemical industry, told Dow Jones Newswires in a telephone interview.

Industrial & Commercial Bank of China Ltd. said it could raise up to $11 billion from debt markets over the next nine months, in the latest effort by a major Chinese bank to replenish capital amid widening concerns about potential bad loans, The Wall Street Journal reported. The bank, one of the world's largest by assets, has already raised 170 billion yuan ($20 billion) from the capital markets over the past two years. During that period, China's major banks raised more than $100 billion from equity and debt markets both locally and in Hong Kong.

German Chancellor Angela Merkel may fall short of a majority in her own coalition for a crucial reform of the euro zone rescue fund meant to stop a sovereign debt crisis spreading, in what would be a severe blow to her authority, a test vote showed, Reuters reported. Talk of proposals to leverage up the 440 billion euro bailout fund to multiply Europe's financial firepower lifted global stocks on Tuesday but made it harder for Merkel to unite her fractious centre-right coalition.

A $100 million resort complex in Queensland owned by developer and marina group Meridien has been placed into voluntary administration, SmartCompany.com.au reported. The 124-unit One Bright Point project, of which 114 apartments have been sold, is now being looked after by BRI Ferrier, which will look to sell the remaining apartments. It’s understood the project was hit by the weakened property market, troubles in the tourism industry, the Queensland natural disaster and the strong Australian dollar.

Wedged between impatient financial markets and restive voters, European political leaders struggled on Monday to formulate a bolder response to the sovereign debt crisis, including possibly expanding the firepower of the euro zone’s bailout fund, the International Herald Tribune reported. European officials said a plan was in the works that would enlarge the bailout fund’s borrowing power but not the amount that countries were contributing.