Headlines

Greece began talks today on activating a €45 billion ($61 billion) emergency aid package as the International Monetary Fund called the country’s fiscal crisis a “wake-up call” on sovereign-debt risks, BusinessWeek reported on a Bloomberg story. Greek officials joined counterparts from the euro-region, the IMF and the European Central Bank to begin hammering out the deficit-cutting measures Greece will have to accept to be able to tap the funds. The government needs to raise about €10 billion before the end of May, and its soaring financing costs are lending urgency to the talks.

European airlines and travel companies ramped up pressure on national governments and the European Union on Tuesday to help ease the financial burden they are suffering due to the volcanic ash cloud that has grounded 95,000 flights and stranded eight million passengers, The Wall Street Journal reported. Three airline associations called on the European Commission and EU member countries to help the industry.

The global financial system and the world economy are slowly regaining their health, thanks in large part to unprecedented interventions by governments, but the sharp rise in government debt during the economic crisis from already elevated levels has helped create what the IMF says is the newest threat to the world financial system: growing sovereign risk, Finfacts reported. The Fund says that that is not to say that the private financial sector is fully recovered.

Hector Sants, the chief of Britain’s financial regulator, pledged last year to reverse his agency’s reputation as a toothless tiger. He wanted to spread fear across the financial services industry by stepping up the aggressiveness of its inquiries and by pursuing more prominent fraud cases. His opportunity has arrived, and its name is Goldman Sachs, The New York Times reported. The Goldman investigation comes at a pivotal time for the British regulator. The F.S.A.’s reputation, like its American counterpart’s, was damaged badly by the financial crisis.

Japan Airlines Corp is believed to have generated a single-month operating profit in March, following five consecutive quarters of operating loss, according to a report by the turnaround entity overseeing the airline's rehabilitation, the Nikkei business daily reported. The Enterprise Turnaround Initiative Corp (ETIC) of Japan told a Tokyo court in a report dated last Friday that JAL's profitability is recovering, helped by improving earnings from international routes and cost-cutting measures, the Nikkei reported.

Paper and packaging firm Georgia-Pacific LLC said the Canadian government approved its acquisition of certain facilities in Ontario of bankrupt rival Grant Forest Products Inc., Reuters reported. Georgia-Pacific, which received approval from the Minister of Industry late Friday for buying the Englehart and Earlton facilities, said it plans to continue operations at Englehart without any major changes in employment levels.

Authorities last night faced growing pressure to lift airspace restrictions keeping much of Europe a no-fly zone for a fifth day today, after airlines said they had safely carried out test flights, the Financial Times reported. As officials said weather conditions showed no signs of dispersing the cloud of volcano ash drifting across the continent, some carriers warned European Commission officials in Brussels that there could be airline bankruptcies this week.

The level of lending to SMEs fell again between the third and fourth quarters of last year, a new report said today, The Irish Times reported. The latest report by Mazars said total lending to SMEs decreased by 1.2 per cent on a quarter to quarter basis, bringing to €32.3 billion the total credit outstanding to the sector in the fourth quarter of 2009. The report found that one in five SME credit applications are not being approved, although 29,000 applications for credit with a value of some €1.6 billion were approved in the quarter.

The Thai government has scrapped plans to seek parliamentary approval for a special bill allowing it to borrow an additional 400 billion baht to partly finance the 1.4 trillion baht ($43.3 billion) fiscal stimulus program, Finance Minister Korn Chatikavanij said Monday. Improvements in the government's fiscal position and a previously approved decree allowing 400 billion baht of additional borrowing are sufficient to finance the stimulus program, Mr. Korn told Dow Jones Newswires in an interview.

German finance minister Wolfgang Schauble has pleaded with his country's citizens to back a joint EU-IMF bail out for Greece worth up to €45bn (£40bn), warning that failure to act risks a financial meltdown, Telegraph.co.uk reported. "We cannot allow the bankruptcy of a euro member state like Greece to turn into a second Lehman Brothers," he told Der Spiegel. "Greece's debts are all in euros, but it isn't clear who holds how much of those debts. The consequences of a national bankruptcy would be incalculable. Greece is just as systemically important as a major bank," he said.