Headlines

The German government plans to curtail credit rating agencies with new legislation that imposes stricter supervision and introduces an array of fines for infringements, according to a draft of the law obtained by Reuters, Spiegel Online reported. Economic analysts say the rating agencies are partly to blame for the global financial crisis. Now the German government is taking action to curb the discredited financial services firms.

Venezuela's economy will likely stay in the doldrums this year even after a devaluation that was aimed at kick-starting the private sector and raising government spending and also triggered a frenzy of shopping, Reuters reported. On Friday, President Hugo Chavez created a dual exchange rate that sharply devalued the bolivar currency to 2.6 and 4.3 against the dollar, markedly helping the oil exporter's fiscal situation and making Venezuelan businesses more competitive. Markets responded favorably to the move, with the price of OPEC nation Venezuela's bonds soaring on Monday.

MMFX Steel, a Canadian company that was to have provided a second life to the Atlas Specialty Steels melt shop, has filed for bankruptcy protection in the U.S. and approached Canadian courts for CCAA protection, The Tribune reported. "We are very disappointed in the turn of events," Canadian Auto Workers Local 523 president Rick Alakas said Tuesday. Alakas said MMFX idled its Welland operation last June. At its peak, the mill employed 34 CAW members "with plans to grow the operation." Nelson Ellsworth, CAW plant chair at MMFX, said there are now 16 people working on site.

Swiss drug industry supplier Lonza Group said on Tuesday it was closing three chemical sites to cut costs as it grapples with a challenging economic environment, Reuters reported. Lonza will close its sites at Riverside in the United States, Shawinigan in Canada and Wokingham in Britain and will cut 175 employees, aiming to cut fixed costs by between 60 million Swiss francs ($59.1 million) and 80 million in the next 18 to 24 months, it said in a statement. The group will face total restructuring cost of approximately 140 million francs, booked into 2009.

Even in an era of bad banking deals, the case of Bayerische Landesbank, a bank based in Munich, stands out, The New York Times reported. Its ill-fated attempt to expand in Eastern Europe has cost Bavarian taxpayers €3.7 billion ($5.4 billion). It has also led to a criminal investigation of the bank’s former chief executive.

Bulgaria, the newest and poorest member of the European Union, is emerging as a fiscal model for a number of EU countries struggling to fend off debt crises, The Wall Street Journal reported. Despite Bulgaria's budgetary rigor, other EU members' swelling debt burdens may end up foiling Sofia's aspirations to join the euro in three years. Bulgaria joined the EU in 2007 and posted the smallest budget deficit among the 27 member states last year, according to the finance ministry. It is expected to be the only EU nation to balance its budget in 2010.

Japan Airlines Corp., Asia’s biggest carrier, plunged 45 percent, the trading limit, on speculation it will file for the country’s sixth-biggest bankruptcy, Bloomberg reported. The carrier changed hands at 37 yen at 11:07 a.m. in Tokyo, after the close of the regular morning session. The airline, founded in 1951, last closed at 67 yen on Jan. 8. All Nippon Airways Co., Japan’s second-biggest carrier, rose as much as 7.4 percent, the most since July.

The incoming EU economic and monetary affairs commissioner Olli Rehn has dismissed suggestions that Greece could be thrown out of the euro zone if Athens fails to correct the crisis in its public finances, The Irish Times reported. Mr Rehn was speaking in a confirmation hearing at the European Parliament. Greek finance minister George Papaconstantinou has said that a new plan to cut the budget deficit will be submitted to the European Commission early next week and should sail through without problems.

Russian aluminum giant UC Rusal is "very comfortable" with its debt levels and confident about meeting its debt-restructuring obligations, the company's deputy chief executive said. The executive, Artem Volynets, also said the company has no intention to sell off its 25% stake in OAO Norilsk Nickel, the world's largest nickel company by production, The Wall Street Journal reported. Rusal, run by the oligarch Oleg Deripaska, is raising as much as US$2.59 billion through a share sale in Hong Kong marketed to professional and other select investors.

Dubai World is expected to soon make a formal standstill request to creditors for $22 billion in debt while it devises a restructuring plan. Dubai sent shockwaves through global markets on Nov. 25 when it said it would request a standstill on billions of dollars in debt linked to Dubai World and its property units Limitless World and Nakheel, developer of palm-shaped islands. In a Q+A, Reuters provided some answers to frequently asked questions about the upcoming standstill agreement. Read more.