Headlines

This week, the Government went to its bankers and asked to borrow a record $1 billion in one week—effectively re-mortgaging an already indebted house just as its retirement costs are about to surge and the ability of its taxpayers to support that cost is about to sag, The New Zealand Herald reported in an analysis. How will we repay that debt in 2019? By then many of the baby boomers making the decisions to borrow now and pay later will be retiring, asking for their "free" national superannuation and "free" health care.

It’s an anniversary few are celebrating. A year ago Saturday, with its faltering economy days away from bankruptcy, Greece ended months of speculation and requested bailout loans, The Washington Post reported.

French President Nicolas Sarkozy is planning to force companies to give staff a bonus when they raise dividends, but both businesses and unions slammed the proposal, The Wall Street Journal reported. Mr. Sarkozy said late Wednesday that he was in favor of a such a rule; it would apply only to companies with more than 50 employees.

In the general election last weekend, the nationalist and populist True Finn Party emerged from political obscurity after largely campaigning on the evils of the European Union and its bailouts of Greece and Ireland. It claimed 39 seats in Finland’s Parliament — almost eight times the number it won in the 2007 election — and it is likely to become a partner in any coalition government, the International Herald Tribune reported. The elections drove the governing Center Party from power and left this small and prosperous country reeling.

Vitro SAB’s massive bankruptcy case, which spans two countries and has played out in at least six courts, has one simple purpose, say the company’s bondholders: keep Mexico’s Sada family at the helm of the glass maker, the Bankruptcy Beat blog reported. The reorganization plan that Vitro is pursuing in Mexico would force bondholders to accept a $650 million loss on their investment while leaving the company’s stockholders, including the Sadas, virtually untouched, said John Cunningham, an attorney for the bondholders, at a hearing held Wednesday in the U.S.

Saab Automobile Thursday moved a step closer to resolving the short-term financing problems that have brought production to a halt after the Swedish National Debt Office said the car maker's funding plan meets the terms outlined by the Swedish government and the Debt Office, Dow Jones Daily Bankruptcy Review reported. Saab, owned by Dutch car maker Spyker Cars NV, urgently needs fresh funds to pay its suppliers and resume production. Production came to a halt in recent weeks because of parts shortages after some suppliers stopped deliveries.

China could continue to invest some of its enormous reserves in European government debt, its ambassador to the European Union said Thursday, The Wall Street Journal reported. China has recently bought chunks of Spanish and Greek debt, and its companies are investing across broad sectors of the European economy, including in ports, chemical firms and car makers. Two weeks ago, when Spanish Prime Minister José Luis Rodríguez Zapatero traveled to China, Premier Wen Jiabao pledged his support for Spanish public finances and its banking sector.

Seán Quinn and his family will no longer have a role in the management or ownership of the Quinn Group after Anglo Irish Bank appointed a share receiver to take control of the family’s stake in the business, InsolvencyJournal.ie reported. Anglo Irish Bank is owed €2.8 billion by Seán Quinn and his family, while other lenders to the Quinn Group are owed almost €1.3 billion. Anglo Irish Bank chief executive Mike Aynsley said that the bank was owed an enormous amount of money by the Quinn family, of which there was little prospect of recovery.

Arafura Pearls Holdings has been placed into voluntary administration by its directors with more than $40 million owed to creditors, NT News reported. The Perth-based company is a ASX-listed pearl farming and managed investments company. KordaMentha partners Stephen Duncan and Chris Powell have ben appointed joint administrators. Mr Duncan said the company's pearl farming business had creditors owed around $6 million while investments in the various managed investment schemes totalled around $35 million, with some 600 members.

Afghan officials plan to sell part of troubled Kabul Bank, the country's biggest financial institution, in hope of clearing the way to resume international aid temporarily suspended last year after the bank's loan scandal, The Los Angeles Times reported. The head of the country's central bank announced Wednesday that his institution had placed Kabul Bank in receivership and plans to have a government commission collect on its problem loans, then privatize what's left of the bank within three months.