Tag Archive | Economic crisis

Dubai World to receive government aid

The government of Dubai announced that it intends to provide $9.5 billion to Dubai World to allow the government-owned investment company to restructure its debt.

The announcement comes as part of Dubai World’s plan to restructure more than $23 billion of debt, including converting nearly $9 billion of debt into equity, after its collapse last fall.

The package includes $8 billion of funding to Nakheel, Dubai World’s real estate subsidiary, as well as $1.5 billion to Dubai World as a whole. The restructuring plan also seeks to, within eight years, repay all of Dubai World’s creditors. Read More…

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Aer Lingus to cut more staff

Aer Lingus, an Irish airline, has announced that it will cut about 230 staff in the near future in compulsory job losses, bringing the total number of layoffs from the airline to 670. 440 other workers will face voluntary job losses.

The company believes the job reductions will save it 97 million euros. Chief Executive Officer Christoph Mueller said the move would start “within days” and the airline would return to profitability “relatively soon.” Read More…

Icelanders reject compensation for the collapse of Icesave bank

Icelanders reject a plan to pay €3.8 billion to the United Kingdom and the Netherlands as compensation for the collapse of Icesave bank. The referendum failed to pass, with 93% voting against.

The referendum was held to approve the terms of a state guarantee on the debts of the Depositors’ and Investors’ Guarantee Fund (Tryggingarsjóður innstæðueigenda og fjárfesta), in particular a €3.8 billion loan from the governments of the United Kingdom and the Netherlands to cover deposit insurance obligations in those countries.

The referendum was held under article 26 of the Icelandic Constitution after President Ólafur Ragnar Grímsson refused to counter-sign the corresponding Act of Parliament (known as the second Icesave bill) into law on 5 January 2010. Read More…

UPS to cut 1,800 jobs

United Parcel Service (UPS), the world’s larges package delivery service, has announced that it will cut 1,800 administrative and managerial jobs.

The firm, based in Atlanta, Georgia, is to reorganise its five regions into three, and slash the number of districts to twenty from 46, in addition to the job cuts. The company currently has 340,000 people in its employ.

Economic analysts are paying considerable attention to the financial status of UPS, as many see a large connection between the overalls state of the US economy and the amount of parcels shipped. Read More…

Bank of England holds interest rates at record low

The Bank of England has held UK interest rates at 0.5% for another month. The rate is the lowest ever, and has remained in place since March last year as part of the central bank’s response to the global financial crisis. Most analysts had predicted the rate to go unchanged.

Bank of England in London

Quantitative easing, also begun in March 2009, will continue in January. This involves the Bank purchasing a total of £200 billion in assets.

In a brief statement released today, the Bank’s Monetary Policy Committee said it expected the programme to take another month to complete.

The decision will be revisited in February, when more official economic data and forecasts are available.

The Monetary Policy Committee of the Bank has been responsible for setting the UK’s official interest rate each month since 1997. Prior to this the base rate was controlled by the Treasury and the Chancellor of the Exchequer.

Iceland President refused to pay US$5 billion bill

Ólafur Ragnar Grímsson, President of Iceland, refused to sign a bill to pay US$5 billion (£3.1 billion) to Holland and the UK.

Ólafur Ragnar Grímsson

Savers in those countries lost out when Icesave’s parent bank Landsbanki collapsed and was nationalised alongside Glitnir and Kaupthing.

The governments of those nations paid out the money individuals had lost and the bill is designed to compensate them.

However, the bill is unpopular with the public as 70% of them are said to oppose the measure, which critics have claimed will slow recovery for the Icelandic economy.

A petition was given to the President demanding he refuse to sign the bill. Read More…

US jobless claims fall to 17-month low

The number of newly-laid off US residents has fallen to the lowest level in a year and a half. The Labor Department reports new unemployment claims totaled 432,000 last week, down 22,000 from the previous week.

That is the lowest figure since July, 2008, and a significant reduction from the nearly 700,000 jobs that were being lost each week during the worst stretch of the economic recession in early 2009. Read More…