Headlines

Britain's economy shrank more than twice as fast as expected in the second quarter of 2009 to register its biggest annual decline on record, dashing hopes of a speedy recovery from the worst recession in nearly 30 years, Reuters reported. GDP fell 0.8 percent in the three months to June and by 5.6 percent lower on the year, the steepest yearly fall since similar records began in 1955, official data showed on Friday as Britain became the first G7 country to report Q2 data.

China's Beijing Auto said intellectual property issues were behind its failure to reach an deal with General Motors over its Opel unit. General Motors' European business said on Thursday it had agreed to continue detailed talks with both Magna and RHJ International on its German unit Opel, but did not mention Beijing Auto, which had also submitted an offer. Beijing Auto did not mention in the statement what are the next possible steps after the end of its Opel bid.

An 85-year-old woman won a damages claim for €102,000 ($145,000) against a German savings bank which bought certificates in her name that became worthless when Lehman Brothers Holdings Inc. went bankrupt, Bloomberg reported. German courts have found in several cases for consumers who claimed their savings banks talked them into buying Lehman certificates without properly explaining to them how derivatives work and that banks may go bankrupt, making such investments worthless. The consumers claimed they asked their bank advisers for a “conservative and safe” investment strategy.

Tiny Iceland was hit uniquely hard by the credit crisis, The Economist reported. Its banks had assets eight times its GDP. When they collapsed it seemed that a life of fishing and harvesting pelts beckoned for the country’s more sophisticated inhabitants. Yet Iceland is special in another way: it did not issue a blanket bail-out to its banks, but rather let bits of them go bust. That could mean the cost to its public is less devastating than once seemed possible. When the government stepped in last October, it only took over the domestic operations of the three big banks.

Two-thirds of Irish people believe the worst of the economic crisis has yet to come with almost a quarter saying they are not confident of having a job in two years’ time. Meanwhile, the latest European Quality of Life Survey shows that Europe’s households are considerably better protected from the ravages of the financial crisis than its banks because only a minority of homeowners have mortgages. Outright home ownership is highest in Eastern Europe and of the 70 per cent who are homeowners, two-thirds have no mortgages.

Nortel Networks Corp's wireless business goes on the auction block on Friday, marking the first of the insolvent company's three key units to be put up for sale. At least three formal bids have been submitted, ranging from $650 million to $730 million. Nortel, which filed for bankruptcy protection on January 14, will later auction its corporate communications equipment unit. Reuters outlines some key facts about the auction. Read more.

Canadian officials have begun researching whether and what kind of foreign purchases of Nortel Networks assets might be subject to government restrictions, Industry Minister Tony Clement said on Thursday. He told Reuters he was not allowed to review purchases under the Investment Canada Act before there is an agreement, but he has directed his officials to examine what could be subject to the act. "I can't review anything until there is an agreement of purchase and sale, so that's not germane right now because there's still an auction going on," he said.

As it prepares to rule on a series of big banking bailouts, the European competition authority warned Thursday that it was ready to force failed government-backed banks to sell off assets or even to close, The New York Times reported.

A unit of mining giant Grupo Mexico SAB is appealing a ruling that it is on the hook for $1.38 billion in cash and a stake in lucrative Peruvian copper operations to Asarco LLC, in a case alleging Grupo fraudulently shifted the shares, tipping Asarco into bankruptcy, Bankruptcy Law360 reported. Asarco first sued Grupo subsidiary Americas Mining Corp. in February 2007, arguing that Grupo Mexico's 2003 transfer of Asarco's 54.2 percent ownership in Southern Copper Corp., formerly Southern Peru Copper Corp., to AMC was fraudulent.

A bankruptcy judge has given creditors of Lyondell Chemical Co. the green light to proceed with a $22 billion damages suit against wealthy financier Leonard Blavatnik, the company's board of directors and a group of banks over the leveraged buyout of the company by Basell AF SCA, Bankruptcy Law360 reported. In an oral order Tuesday, Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York granted a motion by the official committee of unsecured creditors to pursue all of its claims and ordered the parties to expedite the trial.