Headlines

With a new sense of urgency, the leaders of the 27 European Union nations grappled directly on Sunday with their thorniest financial and economic problems, and made progress that they promised could yield a complete package of measures within days, the International Herald Tribune reported. The hope is that the seriousness of the leaders’ effort to finally solve the interrelated problems of Greek debt, weakened banks and a bailout fund in need of reinforcement will keep speculators at bay when the financial markets open on Monday morning.

France and Germany are close to a deal to leverage the euro zone bailout fund through first loss insurance for the primary bond market and a special purpose vehicle with an EFSF subordinated loan for the secondary market, euro zone officials said, Reuters reported. There is also wide support for a declaration from euro zone leaders which would welcome continued European Central Bank bond purchases on the secondary bond market, the officials said. The ECB has said it would prefer to take a back seat once the European Financial Stability Facility (EFSF) is fully functional with new powers.

Decisions taken over the coming week will define Europe's destiny for generation, The Wall Street Journal Agenda blog reported. For the past 60 years, the European Union in its various guises has helped to ensure peace and prosperity.

The High Court has appointed a liquidator to the Dublin investment firm Custom House Capital after Central Bank inspectors found “systemic and deliberate misuse” of more than €56 million of client funds, the Irish Times reported. A 198-page report by two inspectors into the company described “a sort of Irish Ponzi scheme”, Mr Justice Gerard Hogan said. The judge directed the report to be referred to the Garda, Minister for Justice, Director of Public Prosecutions, Revenue Commissioners and the Director of Corporate Enforcement.

Vitro S.A.B.'s bondholders are pushing to move forward with a legal battle that could cost $1.35 billion or more, calling the Mexican glassmaker's bid to stop them a meritless "act of pure gamesmanship," Dow Jones Daily Bankruptcy Review reported. An informal group of bondholders and bond trustee Wilmington Trust separately asked the U.S. Bankruptcy Court in Dallas Thursday to deny Vitro's request to enforce the shield of bankruptcy currently protecting the company from litigation, according to court papers.

Retailer Sterling Shoes Inc. is restructuring under court protection from creditors after the economic downturn brought an aggressive expansion plan to its knees, CanadianBusiness.com reported on a Canadian Press story. The company, which operates 158 stores under several banners in addition to the Sterling name, including Shoe Warehouse, Freedman, Joneve and Gia, plans to close stores and reduce its corporate overhead to get back on track.

Europe’s efforts to solve its escalating debt crisis plunged into disarray Thursday, after Germany and France could not bridge their differences in time for a summit Sunday, forcing them to call a second meeting, The Washington Post reported. Sunday’s summit was supposed to deliver a comprehensive plan to finally get a grip on the currency union’s debt troubles by detailing new financing for debt-ridden Greece, a plan to make Europe’s banks fit to sustain worsening market turbulence and a scheme to make the eurozone bailout fund more powerful.

Dexia, the stricken Franco-Belgian lender that has been at the centre of recent market turmoil, loaned €1.5bn of fresh capital to its two largest institutional shareholders which then used the cash to buy Dexia shares before 2008, the Financial Times has learnt. The unorthodox funding move, which raised the Belgian regulators’ concerns at the time, amounted to Dexia borrowing money from itself to finance a capital increase. This is illegal in most jurisdictions and is now banned in the European Union, but did not break Belgium’s existing laws.

Distressed European Union banks that tap national governments or the region’s €440bn rescue fund for capital will be subject to state-aid penalties, involving compulsory restructuring or – in the worst case – orderly wind-downs, the Financial Times reported. The stance – on the agenda at this weekend’s EU summit – has emerged after intense debate between European officials and bankers over whether the plan for forced recapitalisations should be exempt from normal state-aid rules.

High-profile house builder Manor Park Homes is in receivership with debts of €170 million after the company’s directors told its bank that the business could not repay the money, the Irish Times reported. Businessman Joe Moran and his family own Manor Park, which made headlines eight years ago when it bought former taoiseach Charles Haughey’s estate in Kinsealy, Co Dublin, for €45 million.