Headlines

Portugal's unemployment rate jumped to 14% in the final three months of last year, surprising economists and suggesting that austerity measures being implemented under the country's international bailout are creating a bigger-than-expected dent in the economy, The Wall Street Journal reported. A total of 771,000 people were without jobs in the fourth quarter, up from the previous quarter when the jobless rate stood at 12.4%, the country's national statistics bureau said Thursday.

Australia’s Prime Minister Julia Gillard may be forced to follow U.S. Federal Reserve Chairman Ben S. Bernanke by increasing mortgage purchases as house prices slump and the nation’s biggest banks extend their grip on the home-loan market, Bloomberg reported. Non-bank lenders including Greater Building Society and CUA say more government purchases of residential mortgage-backed securities will be needed as Europe’s debt crisis saps investors’ appetite for risky assets.

Thousands of travelers were stranded Friday after budget airline Air Australia went into voluntary administration, immediately grounding its entire fleet, The Washington Post reported. The Brisbane-based international and domestic airline, formerly known as Strategic Airlines, said all flights had been canceled and the airline would not be accepting new bookings because it could no longer pay its bills. Voluntary administration in Australia is similar to bankruptcy protection in the U.S., and can buy a company time to trade out of its financial problems.

Hellas Telecommunications Luxembourg II SCA filed for Chapter 15 bankruptcy to put on hold certain lawsuits pending against the company in New York State Supreme Court, Bloomberg Businessweek reported. The company, based in London, listed both debt and assets of more than $100 million in documents filed today in U.S. Bankruptcy Court in Manhattan. Chapter 15 protects foreign companies from U.S. lawsuits and creditor claims while a company reorganizes abroad. Hellas Telecommunications Luxembourg is asking the U.S.

Europe’s creditor countries struggled to bridge divisions over aid for debt-plagued Greece, while welcoming commitments from Athens for budget cuts as the clock ticked toward a possible default next month, Bloomberg reported. In a replay of the brinkmanship that marked the early stages of the Greek crisis two years ago, finance ministers extracted concessions from Greece intended to pave the way for the endorsement of a 130 billion-euro ($171 billion) aid package next week.

The European Central Bank is preparing to pass profits on its Greek bond holdings to eurozone governments for use in funding Greece’s second bail-out, senior policymakers have indicated. Comments by ECB’s governing council members suggest a deal is possible, which could help reduce Greece’s public debt mountain – although possibly only over a period of years, the Financial Times reported.

Fledgling carrier Air Australia yesterday hit out at rumours that ANZ Bank is considering winding up the company amid worries from some creditors about outstanding payments. A spokeswoman rejected suggestions parent company Strategic Group was being put into receivership or administration. She did not respond to suggestions the company was as much as $30 million in debt or that several creditors were chasing payments.

Japan Airlines Co. outlined a five-year plan that includes spending $6 billion on new aircraft as the carrier emerges from two years of bankruptcy protection, The Wall Street Journal reported. JAL has been turning its business around more quickly than expected by withdrawing from unprofitable routes, modernizing its fleet and cutting operating expenses. The airline has reduced its work force by a third. The strategy shows how the airline is embarking on an offensive to increase profit and growth amid intensifying competition.

Pininfarina, which in tough markets has downsized from a coachwork maker for high-end sports cars to focus on its automotive design business, said it had reached a debt restructuring deal with banks after long-running talks, Reuters reported. The Italian company, famous for designs including the Ferrari FF and Maserati Gran Turismo, will complete a 182.6 million-euro ($239.8 million) debt restructuring deal with 13 creditor banks by the end of March, Chief Executive Silvio Pietro Angori told shareholders on Wednesday.

British refinery Coryton will continue to operate for at least three more months after Marcel Van Poecke, a co-founder of insolvent owner Petroplus, teamed up with Morgan Stanley and investor KKR to provide fresh crude supplies, Reuters reported. Coryton is the most coveted asset of the five refineries owned by Petroplus around Europe, traders and analysts say. It has been running at half capacity since banks stopped financing Petroplus in late December.