Germany’s audit watchdog suspects EY partners knew they were issuing a “factually inaccurate” audit for Wirecard in 2017, according to four people familiar with the matter, the Financial Times reported. Apas, the Berlin-based audit oversight body, has reported EY to prosecutors, telling them that the firm may have acted criminally during its work for Wirecard, which collapsed into insolvency earlier this year in one of Europe’s largest fraud scandals.
Resources Per Country
- Czech Republic
- Isle of Man
- San Marino
- United Kingdom
- Vatican City
- Bosnia and Herzegovina
The UK is set to suffer more economic pain from the coronavirus crisis than any other leading economy apart from Argentina, the OECD said on Tuesday, highlighting the spread of the virus and deep downturn across Britain, the Financial Times reported. In its twice-yearly economic outlook, the Paris-based international organisation said that the world economy would on average regain the lost output from the Covid-19 crisis by the end of 2021, but the UK would be far behind the pack.
Italian former prime minister Silvio Berlusconi said on Tuesday his Forza Italia opposition party would not back a reform of the euro zone bailout fund, a move that puts the government in difficulty ahead of a crucial parliamentary vote, Reuters reported. Reform of the fund, known as the European Stability Mechanism (ESM), has lacerated the ruling majority. The 5-Star Movement - the biggest party in parliament - says it would increase the risk of a public debt restructuring.
British department store group Debenhams is set to close all its UK shops after 242 years in business, putting 12,000 jobs at risk in the country’s second major corporate failure in as many days, Reuters reported. The decision to liquidate Debenhams comes after Philip Green’s Arcadia fashion group collapsed into administration on Monday, threatening 13,000 jobs, after the COVID-19 pandemic hit business.
Seadrill Partners LLC said on Tuesday it had filed for Chapter 11 bankruptcy protection as a means to restructure its debt, in another sign of financial difficulties for the wider Seadrill Ltd oil drilling rig group, Reuters reported. “The company intends to use the bankruptcy process to ensure that all customer, vendor and employee obligations are met without interruption and to complete a consensual restructuring of its debt,” Seadrill Partners said.
Up to 18.7% of Spanish companies could be insolvent by the end of the year because of the economic impact from the COVID-19 pandemic, with one in 10 of them unviable “zombies”, according to a worst-case scenario published by the Bank of Spain on Tuesday, Reuters reported. Even in the central bank’s most optimistic scenario, the number of insolvent companies would still rise to 14.5% from 10.5% last year.
The Dutch government expects its debt-to-GDP ratio to have risen to 57.4% by the end of 2020 as a result of heavy spending to support the economy during the coronavirus pandemic, it said on Monday, Reuters reported. Dutch debt to gross domestic product (GDP) stood at 48.7% at the end of 2020, making it one of the few countries to adhere to euro zone rules that allow a maximum of 60%. The budget deficit will be around 6.2% this year, the finance ministry said, high but below a forecast of 7.2% given by Finance Minister Wopke Hoekstra in September.
Borr Drilling, a Norwegian contractor of shallow water drilling rigs, warned on Monday that the company continued to face a “very challenging” financial situation after reporting $61.9 million in net loss for the third quarter, Reuters reported. The company said it continued talks with its creditors to improve its liquidity and it was ready to take part in the industry’s consolidation as a number of its peers filed for bankruptcy protection after the latest oil market crash.
Corporate defaults are a growing risk for next year, although central bank stimulus and a COVID-19 vaccine will provide support, Russell Investments’ CIO for fixed income and EMEA said on Monday, Reuters reported. “You’ve got the vaccine news, you’ve got the stimulus in the background, you’ve got low interest rates,” Gerard Fitzpatrick told the Reuters Global Investment Outlook Summit. “On the flip side, there is definitely a rising risk relating to default risk. We’re not out of the woods relating to COVID.
Euro zone finance ministers agreed on Monday to move ahead with stalled changes to their ESM bailout fund to strengthen the resilience of the common currency area as the COVID-19 pandemic increases risks of future economic trouble, Reuters reported. After almost a year since their agreement “in principle” on widening the responsibilities of the European Stability Mechanism (ESM), ministers from the 19 countries sharing the euro currency gave the deal a final go-ahead for ratification.