Headlines

Divisions deepened among European leaders on how to deal with the euro debt crisis yesterday as turmoil in financial markets continued and fears grew about the banking sector, the Irish Times reported. The Belgian finance minister Didier Reynders added his voice to calls for common eurobonds. Mr Reynders said the euro zone had to prove it had “deep pockets” to reassure investors that euro zone banks were safe.

The Swedish debt agency said Friday that it has found 5.1 million Swedish kronor ($796,291) so far in its probe of assets belonging to the troubled Swedish car maker Saab Automobile AB, Dow Jones Daily Bankruptcy Review reported. The firm, owned by Netherlands-listed Swedish Automobile NV, has struggled with its finances for months and failure to pay suppliers has left it without the components it needs to produce its cars.

Further clarity emerged this week as to what regulators will require from banks to make bank capital instruments compliant under Basel 3 when Canada released its rules on non-viability contingent capital, Reuters reported. However, while the release provided clues on how regulators will define non-viability, the implications for Europe are not obvious while current market conditions would make any issuance extremely difficult, if not impossible.

For the second time in as many weeks, President Nicolas Sarkozy flew to Paris for the day from his holiday spot on France’s Mediterranean coast to try to calm the markets, The Economist reported. His meeting with the German chancellor, Angela Merkel, at the Elysée Palace on August 16th took place as the panic of recent weeks had given way to mere gloom about the stagnating euro-zone economy.

Confusion reigns around the administration of a landmark Auckland wedding venue and restaurant, with the owner puzzled over what has happened to his business of 28 years, Stuff.co.nz reported. The case is one of nearly 100 voluntary administrations agreed since insolvency laws were changed to allow the new procedure four years ago. And the results so far have been mixed, with most companies which opt for voluntary administration eventually failing.

A dramatic sell-off in European financial markets on Thursday renewed fears that Europe's banks are too weak to withstand the Continent's debt crisis, increasing the chances that the region's leaders will be forced to pursue radical steps toward fiscal union in order to preserve their single currency, The Wall Street Journal reported. For more than a year and a half, the euro zone's strategy has been to buy time for its weak nations to regain the confidence of financial markets, while taking tentative steps toward closer cooperation on the bloated budgets that got them in trouble.

Spain will announce further austerity measures Friday aimed at fending off debt market attacks while avoiding drastic cuts which may damage the ruling Socialists' chances in November's general election, Reuters reported. The government aims to save around 5 billion euros (4.3 billion pounds) with measures that include front-loading tax payments from large businesses and cutting drug costs for regional governments with a new bill on generic medicines.

Silvio Berlusconi’s ability to pass a €45.5bn austerity decree swiftly through parliament, as demanded by the European Union, is being jeopardised by a slew of amendments proposed by his own coalition and opposition parties, the Financial Times reported. Although the centre-right government was able to speedily approve the fiscal adjustment package, it appears that the parliamentary procedure, due to start next week in Senate commissions, will turn into a time-consuming battle of strength for Mr Berlusconi and will challenge the credibility of his parliamentary majority.

Australian Prime Minister Julia Gillard expressed concern Thursday about the outlook for global growth, warning that Europe's sovereign-debt crisis is far from being resolved and the U.S. is only beginning to deal with its fiscal problems, The Wall Street Journal reported. In a wide-ranging interview Thursday, Ms. Gillard said the inability of Europe's leaders up to now to calm markets worried over the economic health of the euro zone was the world economy's biggest challenge. Confidence has also been dented by a "spectacular" political deadlock in the U.S.

South Canterbury Finance's receivers have taken over the case to bankrupt Phoenix soccer team owner and Wellington property developer Terry Serepisos, chasing a debt of about $18 million, The New Zealand Herald reported. In the High Court at Wellington today FM Custodians withdrew its application to bankrupt Mr Serepisos, saying they had settled their debts. Mr Serepisos had owed FM Custodians about $5m. The lawyer for South Canterbury Finance's receivers, Joshua Cameron, applied to replace FM Custodians as the judgement creditor, saying his client was owed "roughly $18m".