Headlines

The Netherlands will take negotiations with Iceland over a bank debt dispute into account when considering Iceland's hopes to join the European Union, Foreign Minister Maxime Verhagen said on Saturday. Like all EU nations, the Netherlands can block Iceland's bid to join the group, which the island nation launched in the wake of the collapse of its financial system in 2008. The Netherlands and Great Britain want Iceland to repay more than $5 billion in compensation the two EU countries paid out to local savers in Icelandic online banks after the collapse.

AbitibiBowater Inc. has struck a new deal with its main union that a labour leader says will help it stave off collapse as it prepares to file a plan by the end of the month to vault out of bankruptcy protection, The Vancouver Sun reported. The insolvent paper giant, which has been under creditor protection since last April, agreed to a tentative work agreement covering 8,000 workers with the Communications, Energy and Paperworkers Union of Canada following arduous negotiations, the union said Sunday.

Dubai World is expected to approach lenders for the first time this week with a suggested proposal for restructuring $22 billion of its debts, according to people close to the situation, the Financial Times reported. The troubled conglomerate has called leading creditors to London for meetings starting as early as Monday. Bankers expect the one-on-one meetings to reveal the first details of a formal proposal, which the government has said should be finalised this month.

General Motors of Canada Ltd. should match its parent company and reinstate some of the 240 dealerships that were terminated last year when the auto maker was struggling to stay out of bankruptcy protection in Canada, the Canadian Automobile Dealers Association (CADA) says, the Globe and Mail reported. General Motors Co. offered Friday to permit as many as 660 of the 2,000 U.S. dealers it terminated last year to set up shop again and its Canadian unit should follow suit, says CADA, which represents a total of about 3,000 new vehicle dealers in Canada.

Kuwait's Investment Dar, which owns half of British luxury carmaker Aston Martin, said on Sunday that it was considering along with creditors' to use a $5.2 billion state rescue facility, Reuters reported. The Islamic investment firm said in a statement that the government's aid package would set the legal framework for its restructuring process, amid the dissent of some creditors and investors that have opposed its restructuring plan.

Kenya Commercial Bank Ltd. and PTA Bank Ltd. have ended the receivership of Uchumi Supermarket Ltd., the retail chain said on its Web site yesterday, BusinessWeek reported on a Bloomberg story. Specialized Receiver Manager, Jonathan Ciano, has been appointed as Chief Executive Officer, Uchumi said. Uchumi went into receivership in June 2006 with debts of 2.2 billion shillings ($29 million), of which 957 million shillings was owed to Kenya Commercial and PTA. The retailer’s shareholders voted to end the receivership on Jan.

French President Nicolas Sarkozy said the euro region is ready to rescue Greece should the government struggle to fund its budget deficit, arguing that the country is “under attack” from so-called speculators, Bloomberg reported. “I want to be very clear: if it were necessary, the states of the euro zone would fulfill their commitments,” he said in Paris yesterday after a meeting with Greek Prime Minister George Papandreou. “There can be no doubt in this regard.” While Greece doesn’t need assistance right now, “we have measures, we are ready, we are determined,” he said.

France has proven surprisingly stable in the European economic storm. As Greece struggles to avoid default or bailout, Spain and Portugal watch anxiously, Sweden falls back into recession, Germany argues about historically high budget deficits and Britain grapples with deficits and debt of Hellenic proportions, France looks solid and even wise to many, The New York Times reported.

A court ruled Thursday that investors who lost money in Bernard Madoff's Ponzi scheme through funds set up by UBS AG can't sue the Swiss bank and its adviser Ernst & Young for the losses they incurred, The Wall Street Journal reported. In a test case before a chamber of judges specialized in hearing commercial cases, the Luxembourg court found the investors had no grounds for individual claims against the bank. Instead, they must rely on the fund liquidator to obtain compensation for them from UBS.

Everyone agrees China is in the middle of a spectacular real estate boom. The question is whether it is in the middle of a rapidly growing real estate bubble, The New York Times reported. When other recent booms collapsed — in the United States, for instance — they depressed entire economies. In China’s case, a bursting bubble could affect much of the world. China is the fastest-growing large economy and, so far, a main engine pulling the world out of recession. Beijing is clearly concerned.