Headlines

Polish construction company Polimex is in talks with creditors to extend debt deadlines and, possibly, issue bonds, Reuters reported. Polimex said on Thursday it wanted a four-month delay in repaying some liabilities and would use the time to improve the conditions and terms of its financing. Like many constructions firms, Polimex is facing financial troubles after a bidding war for contracts to build roads ahead of the Euro 2012 soccer championship that Poland co-hosted with Ukraine.

Once again, a summit of European leaders raised hopes that the euro zone's debt and banking crisis could be about to turn the corner. And once again, those hopes were soon dashed, The Wall Street Journal reported. The leaders' late-June summit followed the usual template. Since the start of the crisis in early 2010, summits have been greeted by bond-market rallies lasting anywhere from a few hours to a few days—followed by abrupt reversals. Political fixes are proving unconvincing to financial markets, says Paul De Grauwe, an economics professor at the London School of Economics.

Royal Bank of Scotland Group Plc, Commerzbank AG and Standard Bank Group Ltd may be betting Dubai will improve terms on a $10 billion debt restructuring to protect its reputation after a near default in 2009, Bloomberg Businessweek reported. The banks walked away from talks with government-owned Dubai Group after 18 months without an accord, two people familiar with the situation said July 9. The banks disagreed with demands for loan maturities of 12 years, one of the people said, asking not to be identified because the negotiations aren’t public.

Shares in Centrotherm plunged on Wednesday after the German solar equipment maker became the latest victim of the industry's ongoing shakeout by filing for protection from creditors, Reuters reported. The industry's crisis, triggered by overcapacity amid falling government subsidies, has hit peers Q-Cells, Solar Millennium, Solarhybrid and Solon, which have all filed for outright insolvency in recent months. "With the help of these proceedings, the company aims to consistently pursue the reorganization path that it has already adopted," Centrotherm said.

Spanish Prime Minister Mariano Rajoy announced new austerity measures Wednesday that should help Madrid cut its budget deficit by €65 billion ($80 billion) through to 2015, and warned the euro-zone's fourth-largest economy may not grow at all next year, The Wall Street Journal reported. In an impassioned address to parliament, Mr.

Alarm bells are sounding over the collapse in consumption, according to official figures that show high-income earners tightening their purse strings, The Korea Times reported. Sales at discount chains like E-Mart, Lotte Mart and Home plus plunged 7.4 percent year-on-year in June, the sharpest drop in 16 months, after being hit with a double-whammy of less spending and business-hour restrictions imposed by the government. It was the third consecutive month of revenue decline for the retailers, following a 5.7 percent drop in May and a 2.4 percent fall in April.

The private sector will be involved in bearing the cost of restructuring Spain's banks, but senior bank bondholders and depositors will not be affected by such burden-sharing, a spokesman for the European Commission said on Wednesday, Reuters reported. "Once we have a clear sense of the costs of restructuring ... we will work on the principle that private sector participation in the distribution of losses is necessary in order to ensure that taxpayers do not have to shoulder an unfair burden," Simon O'Connor, a spokesman for the European Commission, told a regular news briefing.

Europe's plans to launch a permanent bailout fund and cement a European fiscal pact faced another roadblock Tuesday, as Germany's top court resisted calls to speed its decision on whether the euro-zone's main crisis-fighting tools are compatible with the country's constitution, The Wall Street Journal reported. The Federal Constitutional Court heard testimony on several petitions that seek to keep the €500 billion ($615 billion) European Stability Mechanism from beginning its work until the court has time to rule on the legal issues in the case.

Spain will be forced to give up most of the control over its banks to European institutions—and will be required to impose losses on local investors—in return for a bailout of as much as €100 billion ($123 billion), according to the draft agreement accompanying the rescue, The Wall Street Journal reported. The requirements, some of which could prove to be explosive politically, suggest that holders of junior bonds and preferred shares issued by bailed-out banks will incur losses.

Italy said on Tuesday it may want to tap euro zone aid to ease its borrowing costs as finance ministers struggled to convince markets they are getting a grip on the bloc's debt crisis, which a top European Central Banker said could escalate, Reuters reported. Prime Minister Mario Monti, who is under intense market pressure to shape up his economy and avoid being drawn into the centre of the debt crisis, said Italy could be interested in tapping the euro zone's rescue fund for bond support.