Headlines

The Irish economy is in bad shape, but the decline has been slowing in recent months. The real issue is what to do now, The Wall Street Journal reported. Ireland has models galore. It could follow Greece, whose Prime Minister George Papandreou stunned observers by responding to the downgrading of his nation's sovereign debt with a plan to increase public-sector pay.

It was a year of massive stimulus packages, rising unemployment and the bankruptcy of General Motors and other big names; but 2009 ended with America’s big banks beginning to repay their huge bail-outs and China leading an incipient world recovery. Read The Economist’s review of The world this year. Read more.

Gala Coral’s board has given its backing to a plan from its mezzanine creditors to restructure its £2.5 billion of debts. It sees other third party proposals as unlikely to be able to be implemented, according to people close to the situation, the Financial Times reported. A majority of the gambling group’s shareholders and more than 75 per cent of its mezzanine creditors have already agreed to back the plan.

Trade union Unite, which represents the majority of British Airways PLC's 13,500 cabin crew, said Friday it will likely hold a new ballot for industrial action soon after a court blocked its plan for a massive strike during the Christmas holidays, Dow Jones reported. BA said Friday that it hasn't received any formal notification to re-ballot from the union and that it remains "available for talks at any time." The comments from both sides come a day after British Airways' management secured an injunction at the U.K.

Opel labour leader Klaus Franz said talks with management over an upcoming plan from General Motors for the future of its European unit Opel should be finished by mid-February, Reuters reported. Asked if a management plan to halve Opel's expected 2009 loss to just €1 billion ($1.4 billion) next year was realistic, Franz said: "Those are not my numbers but (I assume) they must exclude special effects", referring to charges related to 8,300 planned job cuts in Europe.

Dubai’s ruler sought to boost his oversight of the emirate’s finances on Thursday when a new law increased control over the budgets of government departments, the Financial Times reported. Law Number 35 of 2009, covering the management of public funds, introduces procedures designed to control spending, said an official statement. The law, replacing one passed in 2006, requires departments to transfer any excess revenues to the public purse.

Bankers expect Dubai World to make a formal request for a standstill on its $26 billion debt at Monday's creditor meeting, but it could be more than a month before banks agree, bankers said on Friday. Banks are expected to support Dubai World's request, but what happens next will depend on the information they receive about the health of its finances, as the scale and complexity of the restructuring and its political overtones put creditors in uncharted territory.

Chinese lenders are using a little-understood financial transaction to move loans off their balance sheets, a trend that raises questions about transparency in one of the world's biggest banking industries, according to analysts in China who have studied the deals, The Wall Street Journal reported. The transactions, which increased sharply last month, involve banks temporarily selling loans to Chinese trust companies, promising to repurchase the loans any time between a few weeks and a few years later. The trusts repackage the loans into financial instruments for clients.

Unable to find a buyer for Saab after a year-long search, General Motors said Friday that it would begin shutting down operations at the Swedish carmaker, The New York Times reported. G.M. had been in final sales negotiations with a Dutch maker of high-end sports cars, Spyker Cars, but issues arose during the due diligence process that made the sale impossible before G.M.’s Jan. 1 deadline, the company said in a statement. “We regret that we were not able to complete this transaction with Spyker Cars,” the president of G.M. Europe, Nick Reilly, said.

The heat has been turned up on Capital+Merchant managing director Owen Tallentire and his colleagues, with the Official Assignee being appointed as liquidator of the company described by the Companies Office as the worst finance company they've seen, The New Zealand Herald reported.