Headlines

The president of Iceland has urged Gordon Brown, UK prime minister, to take personal responsibility for settling the dispute over €3.9bn lost by British and Dutch savers in the Icesave bank after Icelandic voters overwhelmingly rejected a deal to repay the money. Olafur Ragnar Grimsson, whose decision to block the repayment plan triggered Saturday's referendum, told the Financial Times it was "high time" for Mr Brown to "take the matter into his own hands" after more than a year of wrangling.

Signs mounted Monday of Chinese authorities' concern about the risk from debt incurred by local governments in projects to help China's economy recover—an issue that is a hot topic at the National People's Congress, now meeting in Beijing, The Wall Street Journal reported. China's leaders have increased scrutiny of this debt over the past months, fearing that local governments won't be able to pay back all their loans. The issue was also highlighted in the Ministry of Finance's budget report released at the start of the annual legislative session on Friday.

A day before he meets with President Obama, Greek Prime Minister George Papandreou on Monday called for "decisive and collective action" between Europe and the United States to curb the financial speculation believed by many to have exacerbated the debt crisis now hitting Greece and other financially troubled nations in Europe, The Washington Post reported. "Together with my European partners, we have taken a common initiative to strengthen financial regulation, particularly vis-a-vis speculation," Papandreou said, according to a copy of his speech.

German Chancellor Angela Merkel welcomed a proposal to set up a European lender of last resort, saying that the European Union’s ability to act as a bloc is on the line over the Greek financial crisis, Bloomberg reported. “Our instruments are not sufficient,” Merkel told members of the foreign press association in Berlin today. “The European Union must be able to respond to the challenges of the moment.” Merkel was speaking after officials in Berlin and Brussels said European leaders are in talks to establish what may become the European Monetary Fund and limits on credit-default swaps.

The window has reopened for Canberra to acquire the water rights to the nation's biggest irrigator, southwest Queensland's Cubbie cotton station, if voluntary administrators fail to sell the struggling operation. As floodwaters poured into massive dams that can hold enough water to fill Sydney Harbour, promising two full crops of cotton worth up to $280 million, sources told The Australian the administrators were negotiating with the federal government.

Alternative Hotel Group, owner of Cameron House on the shores of Loch Lomond, has agreed one of the largest debt-for-equity swaps in British corporate history with Lloyds Banking Group, The Scotsman reported. AHG, which owns the De Vere Hotels business, swapped about £650 million of its £1.7 billion debt pile in exchange for preference shares in a restructuring of a troubled loan which Lloyds inherited from HBOS. The preference share swap is unusual in that it does not dilute the existing owners' shareholding.

Under pressure to shore up its public finances, Portugal's government Monday announced new budget cuts, including a ramped-up privatization plan, caps on public-sector wages and tax increases on high incomes, The Wall Street Journal reported. The government's new set of cuts comes less than a week after similar steps taken by Greece, whose own debt crisis was seen jeopardizing the 16-country euro-zone credit markets, and even the currency itself. Financial markets recently have viewed Portugal's deep budget deficits as potentially posing the region's next sovereign-debt liability.

Aer Lingus has convened an emergency board meeting for tomorrow to discuss the company’s future after cabin crew last week voted to reject the airline’s €97 million restructuring plan, The Irish Times reported. The airline said tomorrow's publication of its full-year financial results for 2009 would now be deferred because of the uncertainty surrounding the future of the restructuring deal. Aer Lingus is seeking to save €97 million across the various sectors in the airline under the plan which involved about 600 redundancies and 10 per cent pay cuts.

Cing, developer of well-known video game titles including Little King’s Story, Another Code (Trace Memory), Monster Rancher, and Hotel Dusk, has filed for bankruptcy due to mounting debts it could not pay, Geek.com reported. The small Japanese developer only had around 30 staff, but managed to produce a number of memorable games on Nintendo’s platforms. Its debts were relatively small, standing at just $2.9 million, but clearly that was too much for such a small company to handle, and now it looks as though it will be forced to close.

Icelanders Saturday roundly rejected a deal to repay the U.K. and the Netherlands €3.9 billion ($5.3 billion) lost in the collapse of an Icelandic Internet bank, complicating the island's bid to access badly needed international-aid funding and render normal its relations with the rest of the world, The Wall Street Journal reported. More than 93% of Icelanders voted no in a national referendum, according to preliminary figures published Sunday morning by state broadcaster RUV. It was Iceland's first plebiscite since the island's independence from Denmark in 1944.