Headlines

The 17 countries that use the euro have agreed on all key elements of a new pact designed to inject more discipline into their currency zone — except for measures that would bring Europe’s corporate tax systems closer together, the International Herald Tribune reported. A meeting of officials from the euro-zone countries Tuesday gave broad agreement to a new text of the so-called pact for competitiveness, according to diplomats speaking on condition of anonymity due to the sensitivity of the discussions.

Grounded airline Mexicana de Aviacion, whose emergence from bankruptcy protection was dealt a setback last week, says it's in talks with potential new investors and hopes to return to the skies by the Easter holiday week, Dow Jones Daily Bankruptcy Review reported. But fuel prices, which have risen sharply as political tensions in the Middle East and North Africa threaten oil production, add to the uncertainty surrounding the airline's chances at making a comeback.

New Chinese government figures show its national debt load remains low compared with other major economies. But including the debts of local governments and many parts of the state-owned banking sector, as many economists say is proper, shows the constraints facing Beijing in the fight against inflation, its top economic priority, The Wall Street Journal reported. In a report issued during the annual session of the National People's Congress, China's legislature, the Ministry of Finance said central government debt at the end of 2010 was $1.03 trillion.

European Union lawmakers Monday night backed tough new rules on short selling, including a near-ban on so-called naked short selling of credit default swaps linked to sovereign debt, Dow Jones reported. The new legislation is aimed at limiting speculative trading that EU politicians have blamed for exacerbating the debt crisis that has roiled the currency bloc over the past year-and-a-half.

Bond sales by companies outside the financial industry are so scarce in Australia that the nation’s largest retailer, Woolworths Ltd., is paying less to borrow than banks and General Electric Co., Bloomberg reported. Relative yields on Australian company bonds are the lowest in three years, reflecting the paucity of non-financial corporate debt in the nation’s credit market, at less than three percent of the A$32 billion of notes sold in 2011, Bloomberg data and Bank of America Merrill Lynch’s Australian Industrial Index show.

German train drivers voted on Monday to go out on strike, a move which could bring the country's rail network to a standstill. Several other unions are likewise demanding higher wages this year -- a trend experts say is very worrisome given the delicate economic recovery, Spiegel Online reported. Economists in Germany are concerned that the rail strikes could merely be the tip of the labor conflict iceberg this year. After years of stagnating wages, the result of labor market reform followed by economic recession, workers in the country appear to be losing their patience.

Malaysian conglomerate The Lion Group has blamed problems at Vietnam's scandal-hit shipbuilder Vinashin for the failure of a multi-billion-dollar joint venture, Dow Jones Daily Bankruptcy Review reported on an Agence France-Presse story. The $9.8 billion project by state-owned Vietnam Shipbuilding Industry Group, or Vinashin, and Lion would have included a steel mill, power plants and a sea port in the southern Vietnamese province of Ninh Thuan. Vietnamese officials said last month that the project's investment license had been revoked because investors didn't fulfill their commitments.

Greece launched a tirade against U.S. credit ratings agencies Monday after Moody's downgraded its debt grade further below junk status, warning the bailed-out euro country might have to default on its massive borrowings, the Associated Press reported. The agency slashed its rating by three notches to B1 from Ba1 and warned it may cut again if the government's commitment to austerity wanes or international creditors become less willing to support it - Greece was saved from bankruptcy last May after accepting a €110 billion ($154 billion) bailout from the EU and the International Monetary Fund.

A court has rejected a “mechanical” definition of balance sheet insolvency in a ruling that could deter creditors from using this route to push struggling companies into collapse, lawyers have claimed, the Financial Times reported. On Monday the Court of Appeal upheld a lower-court ruling against bondholders in a Lehman Brothers mortgage-backed securitisation deal known as Eurosail-UK 2007-3BL.

A major creditor filed an insolvency claim against the dominant Czech lottery firm Sazka, the second such move against the indebted company over the past two months, a spokesman said on Friday, Reuters reported. Privately-held KKCG Structured Finance, which holds debt past maturity worth 410 million crowns ($23.59 million) and some of the company's bonds, filed the claim with Prague City Court on Friday, KKCG spokesman Daniel Plovajko said.