Headlines

Plans by the Government to set up a contributory pension scheme for civil servants has stalled, leaving the retirement benefits time bomb that forced the government to push the retirement age to 60 years nearing explosion, Business Daily Africa reported. Treasury officials said the scheme, which was to come into force on Thursday next week, could not take off for lack of an appropriate law to support it. It will now await the outcome of the vote on the Draft Constitution, according to Anne Mugo, the Director of Pensions.

Chancellor Angela Merkel roundly rebuffed U.S. President Barack Obama's call for Germans to aid the global recovery by spending more and relying less on exports, even as she warned that Europe's own financial crisis is far from over. In an interview with The Wall Street Journal in her Berlin chancellery, an unapologetic Ms. Merkel said the nations that share the beleaguered euro have merely bought some time to fix the flaws in their monetary union.

A mass strike against the French government's plan to raise the retirement age disrupted transport and shut down schools on Thursday, with unions hoping to get millions of protestors into the streets, Agence France-Presse reported. The government last week unveiled proposals to raise the retirement age from 60 to 62 by 2018, increasing the number of working years required for a state pension, as part of efforts to cut France's big budget deficit. Unions say the move puts an unfair burden of reform on workers.

Icelandic banks may face a second crisis as a court ruling banning some foreign currency loans saddles lenders, mostly owned by international creditors, with losses on $28 billion of debt, Bloomberg reported. The Supreme Court ruled June 16 that loans indexed to foreign-currency rates were illegal in three cases involving private car loans and a corporate property loan.

Banks in Greece, Portugal, Ireland and Spain account for more than two-thirds of the increase in lending to eurozone financial institutions by the European Central Bank since the summer of 2008 as many struggle to access financial markets, the Financial Times reported. The heavy reliance of these banks on the ECB for funding is a sign of the growing stresses in the eurozone as investors and other banks refuse to lend to them because of fears that the debt crisis in the 16-nation bloc will deepen.

Queensland sorghum growers have expressed relief at news the Dalby Bio-refinery will continue to operate, despite it being placed into the control of receivers last Friday. The Bio-refinery, Australia's first grains to ethanol refinery, was placed into voluntary administration last Friday with debts of $80 million, Queensland Country Life reported. Receiver managers Ernst and Young have indicated the plant will continue to trade as normal as assessments are made about the viability of the existing business and whether it will be prepared for sale.

A legal dispute over Shaw Communications Inc's takeover of Canwest Global Communications' broadcast assets that shareholders say leaves them empty-handed continued into the evening on Tuesday, Reuters reported. The two sides hope to hammer out a deal that can be finalized in a hearing on Wednesday, David Byers, a lawyer for the court-appointed monitor for the CanWest bankruptcy and sale, told Toronto Superior Court on Tuesday. Shaw was in court to get approval for its purchase of Canwest's bankrupt TV assets.

The chief executive of General Motors Co.'s Adam Opel GmbH division, Nick Reilly, said he wants to complete almost all of the planned restructuring measures by the end of this year in a bid to turn around the business as soon as possible, Dow Jones reported. Thanks to the revamped Meriva and Astra models, Opel's market share in the second half of the year is expected to rise to slightly more than 9% from currently just under 9%, Reilly said.

Argentine highway operator Autopistas del Sol SA, or Ausol, has again extended the closing date for a restructuring offer as many creditors continue to turn up their noses at the deal, Dow Jones reported. The restructuring offer was set to end on June 17, but has been extended again until July 16, Ausol said in an exchange filing. The offer was first made in January, and has been extended several times. So far, only 42% of the company's bondholders, representing almost $130 million, have accepted the proposal, virtually unchanged from the acceptance rate seen last month.

Banks in the UK will be forced to pay more than £2bn in a new annual levy, George Osborne, the chancellor, announced on Tuesday, in what was expected to be the first of a series of taxes on large financial institutions in several developed economies, the Financial Times reported. The tax, to be paid from January, will be imposed on UK banks and building societies as well as the UK operations of foreign banks. Mr Osborne stressed that France and Germany had also pledged to introduce a similar bank levy, although full details have not yet been provided.