Headlines

Are EU policy makers willing to let Greece suffer a little? The Source asked. Absolutely. Greece is paying about 3.5 percentage points over benchmark rates in order to borrow, which is a hefty tax on the country’s already strained public finances. But EU officials in Brussels note that a bailout might encourage “moral hazard,” allowing yet another Greek government to skirt much-needed reforms. The bloc’s finance ministers and bureaucrats justifiably feel duped.

Not so long ago, financiers ruled the roost at the glitzy annual gathering of the global economic elite here in the Swiss Alps. At this year's gathering of the World Economic Forum, the unofficial theme seemed to be, "First, kill all the bankers." The scorn poured on the industry at this year's get-together in the Swiss ski resort is a sign of a mounting international backlash against the financial sector, The Wall Street Journal reported.

Davos 2010 wrapped up yesterday after five days of yet more soul-searching on how to regulate banking and stop the global financial world creating another crisis, The Irish Times reported. The economic summit concluded with much the same message as last year – governments need to co-operate. What’s different this year is that Davos, with all its aspirations for global agreement, was faced with governments wanting to go it alone. The contentious issue is US president Barack Obama’s planned banking reforms, unveiled just six days before Davos.

The eurozone is likely to be significantly worse affected than the US economy by the drying-up of bank lending, according to research published by the European Central Bank just days before its next interest-setting meeting, the Financial Times reported. The results of a study into the links between bank lending and eurozone growth could strengthen the hands of those on the ECB’s 22-strong governing council urging caution as it unwinds emergency measures taken to shore up the financial system.

European leaders are quietly considering whether to come to the aid of their troubled neighbor Greece amid fears that the nation might default on its debts and unleash another round of financial crisis, The New York Times reported. Only a month after Dubai was rescued by its neighboring emirate Abu Dhabi, Germany, France and other European powers are discussing whether Greece might need a bailout too. After a decade of debt-fueled profligacy, Greece is confronting what amounts to a run on the bank.

As speculative pressure intensified against Greece in European financial markets on Thursday, senior figures in the Greek government sought to bolster confidence that it will repay its debts on time, The Wall Street Journal reported. The message: Their government, which took office in October, has embarked on an austerity plan that will rebuild the country's shattered credibility and start bringing its debt burden down by 2012.

The Icelandic government said top officials from Iceland, Britain and the Netherlands would be joined by Icelandic opposition leaders at talks later on Friday on the so-called Icesave issue, Reuters reported. An Icelandic government official said Icelandic Finance Minister Steingrimur Sigfusson, Dutch Finance Minister Wouter Bos and British Financial Services Minister Paul Myners would attend the talks, along with the leaders of Iceland's main opposition parties. "The purpose of the meeting is to exchange information and discuss the situation," the Icelandic official said by telephone.

An American-based multinational company interested in buying Grant Forest Products promises to keep the oriented strand board manufacturer operating, Northern News reported. Georgia-Pacific, owned by Koch Industries, signed an agreement to buy Grant Forest Product operations in Englehart, Earlton and South Carolina earlier this month. Grant Forest Products sought protection to restructure under the Companies' Creditors' Arrangement Act in June 2009.

The journey to resumption of trading in Uchumi Supermarkets’ shares on the Nairobi Stock Exchange will start today after its bankers agreed to renegotiate terms of its loans and lift the retail chain from receivership, BusinessDaily Africa reported. The company’s shares were suspended from trading on the bourse after it closed its stores in mid-2006 following a botched expansion plan which led to a Sh1.2 billion loss in 2005 and left the firm indebted to the tune of Sh2 billion which it owed to suppliers and KCB and PTA bank.

Eight English language schools operated in Australia by the GEOS group have gone into voluntary administration, leaving about 2300 foreign students unsure of their future, The Sydney Morning Herald reported on an Australian Associated Press story. Justin Walsh and Adam Nikitins of Ernst & Young have been appointed administrators to nine companies operating the schools in Melbourne, Sydney, Adelaide, Perth, Brisbane, Gold Coast and Cairns. They have about 390 employees and international students from a number of different countries.