Headlines

European finance officials met late Wednesday in Vienna to prepare a fresh aid package for Greece, people close to the matter said, but the talks must first bridge a crucial gap between Germany and the European Central Bank over whether private investors should share the pain of propping up the indebted nation, The Wall Street Journal reported. Plucked from the brink of default in May 2010 by other euro-zone countries and the International Monetary Fund, Greece is again verging on a critical cash shortage.

Jean-Claude Trichet, the president of the European Central Bank, called on Thursday for the creation of a central finance ministry to oversee spending by countries that use the euro, the International Herald Tribune reported. The creation of such an entity would require a change in the European Union treaty, and there would certainly be a lengthy debate. But Chancellor Angela Merkel of Germany said on Thursday in Singapore that members of the euro area needed to work together more closely, perhaps indicating an openness to the idea.

The Czech Republic's lottery company, Sazka, has been forced into the Czech equivalent of Chapter 11 by its main creditors after shareholders refused to agree to restructuring and a management change, Dow Jones Daily Bankruptcy Review reported. Sazka has been on life support since the beginning of the year when it failed to meet terms on its Eurobonds issue amid accusations that its chairman deliberately acted against the company's interests.

The new board and management at the international property company formerly owned by businessman Seán Quinn will seek to appoint a bankruptcy receiver to the family’s company in Sweden, the Irish Times reported. Mr Quinn and his family won a court ruling in Sweden last month over-ruling the dismissal of Quinn Investments Sweden by the receiver that was appointed by Anglo Irish Bank to its parent Irish company.

The federal government gave almost $300,000 worth of BER funding to private schools that rented their buildings, but went broke and were forced to close, The Australian reported. The Victorian Department of Education is now trying to recover $285,326 of schools building stimulus program money from two private schools that were operated in the state by Independent Colleges Australia. The colleges in Melton and Casey, connected to the bankrupt ABC Learning childcare group, went into voluntary administration last November after it could not pay its landlord.

The results of Europe's latest round of bank "stress tests" will be delayed until July as European regulators worry that banks and their national supervisors submitted overly optimistic data, according to people familiar with the matter, The Wall Street Journal reported. The European Banking Authority previously had planned to publish the test results later this month. That is getting pushed back as the EBA requires banks to resubmit data about how they would fare in an economic downturn, these people said.

China’s plan to rein in property prices with a record homebuilding program may worsen local debt risks even as it proves a boon to companies from domestic cement makers to Chilean copper exporters, Bloomberg reported. Premier Wen Jiabao aims to build 36 million low-cost homes by 2015, an initiative that will see 2 trillion yuan ($307 billion) added to local government borrowing by 2012, bringing it to a total 12 trillion yuan, Standard Chartered Plc estimates. The surge of loans by banks to local authorities may spark a wave of bank failures that hobble economic growth.

The seasonally adjusted Live Register rose by 2,600 in May, bringing the total number of people signing on to more than 443,000, new figures from the Central Statistics Office (CSO)have shown, the Irish Times reported. The increase pushed the standardised unemployment rate slightly higher in May, to 14.8 per cent compared with 14.7 per cent a month earlier. The Live Register also includes casual and part-time workers. The official unemployment rate is measured by the CSO’s Quarterly National Household Survey, which showed the rate was 14.7 per cent in the fourth quarter of last year.

Cash-strapped Belarus has turned to the International Monetary Fund for a new loan, the Belarussian government said on its web site Wednesday, as a much-anticipated bailout from a Russian-led fund will likely be smaller than expected, The Wall Street Journal reported. Prime Minister Mikhail Myasnikovich said Belarus was seeking a loan of between $2.5 billion and $8 billion, the country's state-run news agency reported. Belarus devalued its ruble by 36% in May, after depleting its reserves by a quarter since the beginning of the year, trying to support the currency.

After almost a year of haggling, the Hungarian government struck a deal this week with the country’s banks to, in the words of Prime Minister Viktor Orban, “save the homes” of those who have mortgages in foreign currencies, the Emerging Europe blog reported. Home owners who financed their property with foreign-currency mortgages were hit hard over the past eight years because “nobody warned them,” not even the people whose job it was, about the risks of foreign currency fluctuations, Mr. Orban said referring to the previous Socialist government’s term in power.