Headlines

Amid new signs that the euro-zone economic recovery is gathering headway, Germany continues to prepare for a possible relapse as other governments plot exit strategies, The Wall Street Journal reported. Chancellor Angela Merkel said Tuesday that government-funded programs to keep people employed by reducing work hours have helped prevent broad layoffs in Germany and will be extended. Ms. Merkel told a business conference in Berlin that the length of the extension for short-hour program was is still being discussed.

General Motors asked European governments to help pay most of the $4.9 billion that it needs to restructure its struggling European operations, The Washington Post reported. At talks in Brussels, E.U. nations where GM has plants vowed to avoid individual negotiations with the company before a Dec. 4 meeting, where they will coordinate their response to GM's restructuring plans, due later this week.

Union representatives hope the future of Opel's 50,000 workers in Europe will become clearer when they meet on Wednesday with General Motors' interim regional chief Nick Reilly to discuss restructuring plans, Reuters reported. "It's of crucial importance to us that there is a complete financing until 2014. We do not want at all to find ourselves in the situation that they cancel once again (investments in) models and new development work," Lothar Sorger, Opel's deputy labor leader at its Kaiserslautern site in Germany, said on Monday.

State-controlled Banco do Brasil played a key role in rescuing Brazilian companies and banks at the height of the turmoil in global financial markets last year, Valor Economico newspaper reported, citing unnamed sources. Banco do Brasil, Latin America's largest bank by assets, freed up 5.8 billion reais ($3.36 billion) in funds to private-sector banks Banco Votorantim, Banco Safra and Banco Alfa that suffered a run on deposits, Valor said on Tuesday.

China's banking regulator issued a stern warning to banks to strictly comply with capital requirements or face sanctions, the clearest sign yet Beijing is worried about possible risks building in the country's financial system after a year of blow-out lending, The Wall Street Journal reported.

Shares of Japan Airlines Corp. slid to a record low on Tuesday on growing investor worries that Asia's largest airline by revenue could face bankruptcy as it struggles to agree pension cuts, Reuters reported. The slide was also fuelled by news that trading house Mitsui & Co sold all its 11.7 million JAL shares, raising speculation other shareholders would follow suit.

In a related story, Japan Airlines said Tuesday it obtained government approval to receive up to $1.1 billion in emergency loans aimed at preventing the money-losing company from grounding flights, The Associated Press reported. JAL signed an agreement with the state-run Development Bank of Japan after receiving government approval, a company official said on condition of anonymity, citing policy. Asia's largest airline has pressed for a government bailout and mulled over massive job cuts and other restructuring steps to avoid collapse.

Japan's Minister of Land, Infrastructure, Transport and Tourism announced Tuesday that ailing Japan Airlines Corp., the nation's top carrier, can turn itself around despite share prices plummeting in recent weeks, Xinhua reported. "I still believe JAL can definitely rebuild itself if it carries out drastic restructuring, reviews its routes, replaces aging aircraft, and resolves the pension issue," Maehara said in a statement to the press on Tuesday.

Lehman Brothers Holdings Inc.'s bankruptcy estate in the U.K. is set to launch Tuesday a proposal to hedge-fund creditors aimed at unfreezing about $11 billion in assets, The Wall Street Journal reported. The "claim resolution agreement" is a bid to return assets tied up in the estate of Lehman Brothers International Europe, the main European arm of the U.S. investment bank that tumbled into bankruptcy last year and helped set off the worst of the credit crisis.

A fund which can make up to €99 billion ($148 billion) available to help Spanish banks merge and restructure is more than enough, the country's economy minister said on Monday, Forbes reported on a Reuters story. Spain's 46 savings banks are undergoing a wide-ranging restructuring process, mainly through mergers, which is expected to cut their numbers by about half by the end of next year.