Headlines

Ireland’s bailout of Anglo Irish Bank, a key factor behind the country’s soaring budget deficit, is “costly but manageable”, the head of th Central Bank said yesterday, The Irish Times reported. Prof Patrick Honohan, who is also part of the European Central Bank’s (ECB) governing council, said the total cost of bailouts of all Ireland’s banks and financial institutions would be around 20 per cent of GDP.

Melbourne DFO is under threat with a crippling $500 million debt that could see ACCC chief Graeme Samuel lose his $50m personal fortune, news.com.au reported on a story from The Australian. The DFO is expected to be placed in receivership as early as today in a move that would put the future of Austexx, the group behind the Direct Factory Outlets chain, in doubt. The collapse could see Graeme Samuel, who said he only became aware of the seriousness of the problem in recent weeks, face a $50 million-plus wipeout of most of his personal fortune.

Telecom equipment maker Nortel Networks Corp., which is in the midst of selling off divisions as it works through Canadian bankruptcy, said its loss expanded in the second quarter as revenue fell 86 percent, Bloomberg Businessweek reported. The net loss in the three months to June 30 came to $1.5 billion, or $3.02 per share, compared with a loss of $274 million, or 55 cents per share, a year ago. The loss included reorganization costs of $1.4 billion. Revenue came in at $145 million, compared to $1.01 billion a year ago.

When retail giants Brown Thomas, Clerys and Arnotts flung their doors open on St Stephen's Day last year – traditionally a shop holiday – it was an appropriate end to a terrible year for the retail industry. Sales had hit a 25-year low and an estimated 30,000 jobs were lost. 2010 hasn't been much better for Ireland’s retail sector, InsolvencyJournal.ie reported. Newly constructed shopping centres still stand partially, or even wholly empty, while 'to let' signs litter high streets up and down the country.

The euro has conspicuously failed to rally in light of Germany’s strongest quarterly growth since unification. Why? The punchy German economy makes things worse for the euro, not better, The Source blog at The Wall Street Journal reported. It highlights the yawning gap between the strongest of the single currency’s 16 members, and its weakest links. Remember that earlier this week, Greece’s gross domestic product was shown to have declined by 1.5% in the second quarter — a drop of 3.5% on the year.

About three in 10 households suffered from a deficit in the second quarter, the worst figure in six years, and further confirmation that the ongoing recovery has not yet benefited the household economy, The Korea Times reported. According to Statistics Korea, 28.1 percent of households sustained a deficit from April to June, up 0.3 percentage points compared to the same period in the previous year. It is the worst ratio in the comparison of the same quarter since 2004, when 28.2 percent surveyed said that their expenditure surpassed their “disposable” income.

Less than a month after stress tests calmed concerns about the health of European banks, new problems in the Irish banking sector are making investors nervous once again, The Wall Street Journal reported. Earlier this week, Ireland received European Commission approval for an additional €10 billion ($13 billion) in capital for state-owned Anglo Irish Bank, on top of the €14.3 billion the government has already injected into the bank. On Wednesday, Bank of Ireland, 36%-owned by the government, reported a pretax first-half loss nearly twice as big as its loss a year earlier.

Cash-strapped South Korean car maker Ssangyong Motor Co., still under bankruptcy protection, Friday said improved sales helped narrow net losses in the second quarter, with an expanded product lineup in the second half to further boost earnings in the second half, Dow Jones Daily Bankruptcy Review reported. The net loss narrowed to KRW21.54 billion ($18 million) in the three months ended June 30 from KRW177.17 billion a year earlier, the result of higher sales and debt-rescheduling associated with its court-ordered bankruptcy protection, Ssangyong said in a statement.

Chameleon Mining NL says it expects its receivership, brought about by its litigation funder, will be lifted next week in a Supreme Court decision, The Sydney Morning Herald reported. The Singapore-based International Litigation Partners (ILP) on Wednesday moved to appoint an insolvency firm as external receiver to Chameleon.

A rebuilt Prussian palace in Berlin. High-speed rail from Lisbon to Kiev. A new visitor center for Britain's Stonehenge. They're just some of the big-ticket European projects put on hold by the continent's government debt crisis, the Associated Press reported. Deep in debt after decades of borrowing too much and still running big deficits from the recession, European countries are scaling back some of expensive building and high-speed transport projects that over the decades have given life on the continent much of its glitter and convenience.