Headlines

The president of Poland challenged the view that Eastern Europe as a whole is heading into a deep recession that is dragging down Western Europe and posing grave risks to the global economy, warning in an interview against lumping all countries in the region "into one basket," the International Herald Tribune reported. "We were hit as everyone else by the crisis, though we have not suffered to the degree that some other countries have," President Lech Kaczynski said Tuesday.

Personal insolvencies in New Zealand have jumped in the first full year after a simplified alternative to bankruptcy was introduced, but new restrictions may not provide much more of a barrier to people taking up the option, The National Business Review reported. "No asset procedures" or NAPs, provide a one-off chance for people with no assets to wipe off up to $40,000 in debt and emerge a year later with a clean slate to borrow again. Further restrictions on NAPs were proposed this week in a bill introduced to Parliament by Commerce Minister Simon Power.

Stricken German specialist mortgage lender Hypo Real Estate (HRE) could declare bankruptcy on April 24 if it does not get more state aid, a press report said on Wednesday. HRE's supervisory board will sign off on the 2008 accounts that day, the Dueddeutsche Zeitung newspaper said, without identifying its sources. The Munich-based property loan specialist could show a loss of several billion euros (dollars), the newspaper reported, whereas HRE's accounts are supposed to be balanced, failing which it would have to declare bankruptcy.

Liechtenstein's largest bank said it is abandoning its tradition-rich trust business, seeking to distance itself from accusations from officials in Germany and the U.S. that it helped rich foreigners evade taxes, The Wall Street Journal reported. The move by LGT Group, which is owned by the tiny Alpine principality's royal family, marks a move away from a mainstay of Liechtenstein banking: the formation of secretive foundations as tax shelters.

Chinese exports plunged 25.7 percent in February compared with a year ago, much higher than analysts had expected, as the global economic crisis began to take its full toll on the country’s export sector, the Financial Times reported. However, the government also announced a strong increase in fixed asset investment in the first two months of the year, which economists said was a sign that fiscal stimulus measures were starting to have an impact.

Europe's three biggest economies showed signs of steepening economic declines in data released Tuesday, The Wall Street Journal reported. Industrial production in France and the U.K. crumbled during January. At the same time German exports, driver of the region's biggest economy, dropped sharply. The difficulties at big manufacturers and exporters have dashed hopes that Europe's economies hit bottom in the fourth quarter. The services sector is faring no better.

Russia is “not yet on the brink” of a credit-rating downgrade by Moody’s Investors Service as the ruble and foreign reserves stabilize and the government resists taking corporate debt obligations, Bloomberg reported. The ratings firm has no current plans to follow Standard & Poor’s and Fitch Ratings, which both cut their debt ratings for Russia since December, according to Jonathan Schiffer, Moody’s lead analyst on Russian sovereign debt. Moody’s rates Russia at Baa1, three levels above non-investment grade and a step higher than equivalent ratings from S&P and Fitch.

Singapore-based contract electronics manufacturer Flextronics International Ltd. said Tuesday it will eliminate an unspecified amount of jobs and close certain plants in a restructuring effort expected to generate cash savings of $230 million to $260 million a year, the Associated Press reported. Flextronics, which makes consumer products such as cell phones and Microsoft Corp.'s Xbox, said the current global economic crisis and related decline in demand for its customers' products has caused the company's customers to slash manufacturing outsourcing--hurting demand for Flextronics' services.

Canadian gem-miner Tahera Diamond Corp has entered into a confidential letter of intent regarding a potential transaction with an unnamed third party, which has agreed to provide a staged secured loan of an much as $500 000, the firm revealed on Tuesday. In exchange, Tahera will agree to exclusivity while the other party conducts due diligence and until the proposed transaction is completed, Mining Weekly reported. Further, Tahera's biggest secured creditor, Caz Petroleum, has also agreed to provide additional debtor-in-possession financing to the company.

Pacific Holdings, one of Japan’s largest real estate investment fund sponsors, filed for bankruptcy protection on Tuesday with liabilities of Y163.6 billion ($1.6 billion) after failing to receive a capital injection from 10 Chinese investors to help repay part of its debts, the Financial Times reported. The failure of Pacific--which sponsors both Nippon Residential and Nippon Commercial real estate investment trusts--reflects the difficulty many property companies are facing raising funds either in the capital markets or from banks.