LONDON (Reuters) – Recent European history teems with examples of durable coalition governments that tackled crises head on, giving Britain’s new Conservative Prime Minister David Cameron reason to hope he can prove skeptics wrong.

Italy, with a track record for short-lived administrations, is often held up as an example of the instability that can accompany coalitions bridging political divides but Finland, Germany, Ireland and the Netherlands all show it can be done.

Gordon Brown resigned as prime minister on Tuesday, leaving Cameron, who won most seats in a parliamentary election last week but fell short of a majority, to cement a coalition with the third-placed Liberal Democrats.

The prospect of a coalition has unsettled markets in a country accustomed to one-party rule and emerging from its worst recession since World War Two, but analysts say such governments have successfully tackled economic crises elsewhere in Europe.

“Italy’s a special case,” said Eoin O’Malley, politics lecturer at Dublin City University (DCU). “Italy is very much a southern European country and I think Britain is more likely to behave like a northern European country and make it work.”

The current Irish government — unpopular at home but often cited abroad as an example of how governments can act decisively to tackle debt problems — was formed as a coalition between Prime Minister Brian Cowen’s centrist Fianna Fail, Greens, the now defunct pro-business Progressive Democrats and Independents.

O’Malley also pointed to the Irish government formed in 1994 by John Bruton as an example of a functional coalition that was more complicated than anything proposed in Britain, including as it did politicians from three parties that spanned both the left and the right of the political spectrum.

BRUSSELS/ATHENS (Reuters) – Greece raised the stakes on Thursday in its quest for EU help to tackle its debt crisis, warning it cannot achieve promised deficit cuts if its borrowing costs remain high and might have to call in the IMF.

Market concerns it may prove impossible to construct a euro zone financial safety net for the currency area’s most heavily indebted member due to German reluctance sent the euro lower, hit Greek bank shares and raised the risk premium on Greek bonds.

Prime Minister George Papandreou told the European Parliament that draconian austerity measures announced by his socialist government showed it was committed to the stability of the euro and would carry out necessary structural reforms.

“But if we keep borrowing at very high rates, and this is the challenge we have, we cannot sustain the deficit reduction that these hard measures aim to achieve,” he told a committee of the EU legislature.

“We should be able to borrow at rates that are normal.”

The premium investors charge for holding Greek debt rather than benchmark German bonds rose to about 310 basis points, meaning Athens would have to pay well over 6 percent to borrow on capital markets, by far the highest yield in the euro zone.

Economists say such rates are unsustainable in a ye ar when Greece needs to borrow some 53 billion euros ($72.4 billion), 20 billion of it in refinancing between April 20 and end May.

LONDON, Feb 18 (Reuters) – VT Group <VTG.L> snubbed suitor Babcock International <BAB.L> for the second time in a week on Thursday, setting its sights on a 800 pence a share offer valuing the defence support firm at 1.44 billion pounds ($2.25 billion).

Shareholders and analysts said a 750 pence a share approach would probably be enough to at least get the two companies talking and rejected VT’s argument that the proposed tie-up would not make strategic sense.

“There’s certainly a consensus that says Babcock can go up to 750 pence without diluting their own earnings so that would seem to be the absolute bottom of an acceptable price,” said Angela Lascelles, joint managing director at OLIM Ltd, citing broker figures. OLIM holds 1.49 percent of VT shares.

Babcock on Thursday increased its proposed bid to as much as 715 pence per VT share, paying with 0.701 new Babcock shares plus cash in an offer valuing VT at up to 1.29 billion pounds.

VT responded by saying Babcock continued to significantly undervalue its business.

“Shareholders will take around 800 pence a share before they tell VT to talk,” a source familiar with VT’s thinking told Reuters.

Shares in VT Group, once a naval shipbuilder but now a support services company which provides flight training for Britain’s Royal Air Force and supplies cranes and bulldozers to the army’s Royal Engineers, closed up 6.2 percent at 660 pence, having earlier hit a new 20-month high of 665 pence. Shares in Babcock ended 2.3 percent down at 553 pence.

LONDON (Reuters) – VT Group has set its sights on an offer of 800 pence a share from suitor Babcock International but analysts believe the group’s improved offer, which is worth up to 715 pence, could be sufficient to tempt VT shareholders into push for talks.

“Shareholders will take around 800 pence a share before they tell VT to talk,” a source familiar with VT’s thinking told Reuters Thursday.

Babcock Thursday increased its proposed offer to buy the defense and public services firm to as much as 1.29 billion pounds ($2 billion) with a proposal to pay 0.701 new Babcock shares plus an unspecified sum of cash.

Shares in VT Group were up 4.2 percent at 647.5 pence by 5:47 a.m. ET, having earlier hit a new 20-month high of 665 pence and extended their gains so far this week to 30 percent.

Shares in Babcock were 2.7 percent down at 551 pence.

VT said in a statement in response that the latest cash and shares proposal, worth between 680 and 715 pence a share, was only a “small improvement” on the 633.9 pence previously offered and “continued to significantly undervalue VT and its prospects.”

The new offer values VT at between 1.22 billion and 1.29 billion pounds ($1.9 billion to $2 billion) and represents an increase of between 7.3 and 12.8 percent.

LONDON (Reuters) – Babcock International <BAB.L> has made a 1.14 billion pound ($1.79 billion) approach to buy defense services firm VT Group <VTG.L>, potentially scuppering VT’s own bid for infrastructure services firm Mouchel <MCHL.L>.

Babcock, which operates ship-building and nuclear power programs, said on Monday that VT had rejected an initial cash and share approach worth 633.9 pence per VT share, representing a premium of 24.8 percent to its current share price.

“There seems to be a more compelling logic to a combination of Babcock and VT than for VT and Mouchel,” said Arbuthnot analyst David Brockton.

“Babcock’s approach could seriously hinder VT’s move for Mouchel. It will have to defend the Babcock bid and may well have to walk away from Mouchel now.”

The offer from Babcock, which wants to combine with VT to create a defense-focused support services company, was comprised of 245.5 pence in cash and 0.701 Babcock shares, although part of the cash element comes from VT’s own resources.

Earlier on Monday VT raised its own bid for Mouchel, boosting hopes it would clinch a 330 million pound deal for the infrastructure support services group as part of moves to diversify beyond the defense industry.

Shares in Mouchel, which had risen as much as 14 percent following VT’s improved offer, quickly shed those gains to close down 12 percent at 221 pence.

LONDON (Reuters) – British waste management firm Shanks Group Plc revealed a 536 million pound ($889 million) buyout approach, sending its shares soaring, but said its board and key shareholders were looking for at least 10 percent more.

Shanks <SKS.L did not name the company behind the approach but a person familiar with the matter said it was the Carlyle Group, the well-connected U.S. investor that is one of the world’s biggest private equity firms.

Nick Spoliar, an analyst at Altium Securities, said the approach could prompt counter-bids from other waste companies and private equity firms, attracted by the steady returns from a business that often works with 25-year contracts.

“Businesses such as this … have long-term characteristics which are very attractive in terms of generating predictable returns over decades,” he told Reuters.

Sector rivals include France’s Suez Environnement, while big-name private equity players such as Guy Hands of Terra Firma

have bought waste and water companies.

Shanks said the “highly preliminary and unsolicited” approach valued it at 135 pence per share.

LONDON, Dec 3 (Reuters) – British Prime Minister Gordon Brown moved to allay fears of a mass walk out by the board of Royal Bank of Scotland <RBS.L>, saying it would not be singled out for unduly harsh treatment over bonuses.

In a rare move by politicians to calm the global backlash against big payouts to bankers, Brown said nobody was being “discriminated against” while his business secretary Peter Mandelson said he understood the concerns of RBS directors. Their comments followed a Wall Street Journal report that Goldman Sachs <GS.N> is meeting investors in an effort to head off anger over planned bonuses that will put employees on track to earn an average of $700,000 each this year. [ID:nN0258740]

UK rival Barclays <BARC.L>, meanwhile, is to bump up the fixed salaries of staff in its Barclays Capital investment bank, an industry source said. The bank will also backdate some of the pay rise.

Other banks have increased basic salaries as pressure builds on them to limit their annual bonus awards — an unintended consequence of guilelines set by G20 countries, and likely to add to the debate about fat payouts to bankers after the crisis.

RBS, set to become 84 percent state-owned after its latest government bailout, warned on Wednesday it could struggle to hire or retain key staff after the government took control of bonuses in return for insuring its bad debts. [ID:nGEE5B114J]

Industry sources, who say the bank’s board could resign en masse were the government to veto bonuses, point out directors have a fiduciary duty to act in the best interests of the whole company and therefore all its shareholders, big or small.

“People like Standard Life and the Prudential and Fidelity, I think now need to stand up and speak publicly about their position on large bonuses and large payments,” British Treasury Minister Paul Myners told Sky television.

LONDON, Nov 18 (Reuters) – ITV Plc <ITV.L>, Britain’s biggest free-to-air commercial broadcaster, has turned to Archie Norman, a turnaround specialist and former Conservative politician, to end its error-strewn seven-month hunt for leadership.

Norman, known for turning around supermarket chain Asda and telecoms business Energis before selling both, but who has little or no direct experience of the TV industry, will take up the position of non-executive chairman in January. [ID:nLI97485]

His early tasks will include the selection of a chief executive, after a protracted saga which culminated earlier this year in the failure to secure the services of favoured candidates Tony Ball, ex head of BSkyB <BSY.L>, and Simon Fox, CEO of music retailer HMV <HMV.L>. [ID:nLP493693]

Shares in ITV, home to talent show X-Factor and soap opera Coronation Street, were up 5.9 percent at 55 pence by 1450 GMT, outperforming the flat DJ Stoxx European Media Index. The stock has bounced from a multi-year low of 16-1/2p set in March.

Norman, who replaces industry veteran Michael Grade, will also be responsible for lobbying politicians and regulators at a time when the Conservative party is well ahead in the opinion polls as a general election approaches. Norman is a former chief executive of the party.

“We see the appointment of a heavyweight chairman with an established track record as a positive move,” UBS analysts said. “Amid a backdrop of improving ad momentum and a strong viewing share performance, there may be a possibility that Norman may make limited changes to the current executive line-up rather than look externally.”

However interim CEO John Cresswell repeated his stance that he will leave once a replacement has been found, rejecting speculation he could be persuaded to stay. “I stand by the statement I made,” Cresswell said at an investor conference in Barcelona.