Fourth California city to file for bankruptcy this year

Atwater, a city of roughly 28,000 in California's Central Valley, may declare a fiscal emergency as soon as next week, but it is trying to avoid becoming the fourth California city to file for municipal bankruptcy this year, its mayor said.

Under California law, a local government must either declare a "fiscal emergency" or go through a 60-to-90 day confidential negotiation process with its creditors before it files for municipal bankruptcy. Since late June, three Golden State cities-Stockton, San Bernardino and Mammoth Lakes-have filed for bankruptcy protection.

"We are planning to stay current on our ... bonds," said Mayor Carol Joan Faul in a telephone interview with Dow Jones Newswires. "We are hoping to avoid" bankruptcy, she said, "but as far as I'm concerned, we may have to declare a fiscal emergency" on Oct. 3. Read more >>

ECB, Commission Working On Greek Exit Plans

The European Commission and the European Central Bank are drawing up plans should Greece abandon the euro, Trade Commissioner Karel De Gucht said in an interview published Friday, the first time a senior official in the European Union executive has acknowledged such preparations.

The ECB and the commission are "working on emergency scenarios in case Greece does not make it," De Gucht said in an interview with the Flemish newspaper De Standaard. Phone calls to and messages left from Dow Jones Newswires to De Gucht's office were not returned.

A commission spokeswoman denied that contingency plans for a Greek exit were under way. An ECB spokesman said in an e-mail the bank doesn't "engage in any speculations about any emergency plans or possible scenarios and therefore do not comment Commissioner De Gucht's statement." The "immutable preference" is for Greece to stay in the currency bloc, he said, echoing comments Wednesday from ECB President Mario Draghi. More...