Headlines

Germany is growing wary of saddling bank-account holders with losses as part of a rescue for Cyprus and no longer insists on a financial contribution from the International Monetary Fund, a close ally of Chancellor Angela Merkel said, Bloomberg reported. Michael Meister, deputy parliamentary floor leader of Merkel’s Christian Democratic Union party, floated concessions that would hasten the wrap-up of nine months of aid talks and lessen the risk that a financial accident in Cyprus, which makes up barely 0.2 percent of the euro-zone economy, could revive European market turbulence.

French President François Hollande said Tuesday the country's budget deficit will be well above what he pledged when he came to power 10 months ago, and Europe needs to change its dose of austerity to fuel an economic recovery, The Wall Street Journal reported. The 58-year-old socialist president came to power in May last year saying he would steer France on a path to growth while also bringing the budget deficit down to 3% of annual output in 2013 from 5.2% in 2011, as the previous government had promised to investors and European peers.

Insolvent German street light maker Hess is holding talks with potential investors with a view to finding a buyer for the scandal-hit company soon, Reuters reported. Hess said on Tuesday it had received expressions of interest from several strategic and financial investors, whom it did not name, and that it had held talks with several of them. The firm, whose search for a buyer is being led by consultancy Ebner Stolz, said it aimed to be sold as a whole if possible. Hess's insolvency filing in February came just months after its stock market debut.

Minister for Finance Michael Noonan has directed Bank of Ireland, AIB and Permanent TSB to reduce their staff remuneration costs by 6 to 8 per cent to aid their return to profitability, the Irish Times reported. The reductions are to be introduced by cuts in payroll and pension benefits, and new working arrangements and structures to deliver efficiency gains. The banks will be expected to begin delivering the cost reductions in 2014. This direction comes on foot of a report on bankers pay for the Government by consultants Mercer.

Spanish fishing company Pescanova said on Tuesday it had found discrepancies between its accounts and its bank debt, Reuters reported. Pescanova's statement comes a day after the stock market regulator opened an investigation into the company for possible market abuse. Galicia-based Pescanova, which catches, processes and packages fish on factory ships, said in a statement to the stock exchange that its auditor, BDO Auditores, was looking into the issue.

An increase in Cyprus's corporate tax rate is under consideration as part of negotiations over a proposed official bailout for the island, according to three people with knowledge of the talks, The Wall Street Journal reported. Cyprus's troika of would-be official creditors—the European Central Bank, European Commission and International Monetary Fund—is pressing Nicosia to raise its corporate tax by up to three percentage points from 10% now, the officials said.

British banks have been suffering amid dismal earnings, scandals and regulatory investigations, but three of the country’s largest financial firms handed out seven-figure pay packages to hundreds of employees last year, The New York Times DealBook blog reported. The disclosures this week add to the growing debate over compensation, as regulators look to rein in bankers’ pay.

More Dutch companies declared bankruptcy in February than at any time since records began in 1981, the Associated Press reported. The country's Central Bureau for Statistics also says Monday that on a three-month average, bankruptcies are at their highest level on record: around 680 per month, not counting one-person businesses. The Dutch economy is struggling as the government cuts spending and increases taxes to meet European budget rules that require countries to get their budget deficits down to 3 percent of their annual gross domestic product.

Greater social justice, higher taxes for the wealthy, and a statutory minimum wage will be at the heart of a left-leaning election campaign by Germany’s Social Democrats bidding to unseat Angela Merkel, the German chancellor, in September’s general election, the Financial Times reported. The programme, including stricter regulation of banks and other financial institutions, and statutory quotas for the appointment of women as company directors, was unanimously approved by the Social Democratic party executive meeting in Berlin on Monday.

Egypt may qualify for an International Monetary Fund bridge loan of more than $700 million a year that could help Cairo stave off collapse of its crisis-stricken economy, an IMF official said on Monday, The Wall Street Journal reported. "Egypt needs bold and ambitious policy actions to address its economic and financial challenges without further delay," IMF spokeswoman Wafa Amr said.