Italy is close to clinching a deal with European Union competition authorities to reintroduce a scheme under which the state provides guarantees to help banks offload bad loans, Reuters reported. Rome has been working to renew the "GACS" scheme, which expired in June, while also tightening the terms under which the state provides guarantees to investors who buy bad bank loans repackaged as securities. Discussions with Brussels are at a very advanced stage and the terms have been for the most part agreed, the four sources briefed on the matter told Reuters.

Ukraine's central bank said on Thursday it would keep its main interest rate unchanged at 25% as inflation pressure remained high due to continued Russian missile strikes on critical energy infrastructure, Reuters reported. The central bank said it expected very sluggish economic growth and a bigger trade deficit this year as the economy adapts to a war-time reality of regular power outages and disrupted supply chains and logistics, Reuters reported.

The European Union is floating a plan to cap the price of Russian diesel at $100 a barrel — a level that might help to stave off the very worst effects of a fuel-imports ban that the bloc will impose on Moscow in just 10 days’ time, Bloomberg News reported. The EU’s executive arm is considering cap levels after the Group of Seven nations offered a price range based in part on the existing cap on Russian crude oil. The thresholds are expected to apply from Feb. 5, the same date as the EU will ban almost all imports of refined Russian products as punishment for the nation’s invasion of Ukraine.

The German government on Wednesday said it expects to eke out economic growth this year instead of a decline as Europe’s largest economy manages its energy divorce from Russia and shells out support for consumers and businesses hit by higher energy costs, the Associated Press reported. The 2023 outlook improved to an 0.2% expansion from a 0.4% contraction that was expected in October, when Germany feared it would run out of natural gas used to power factories, generate electricity and heat homes this winter.

The UK faces a wave of companies going bust as insolvency experts warn that the number of firms in “critical financial distress” has jumped by more than a third, MSN.com reported. A “red flag alert” by insolvency firm Begbies Traynor said tax authorities are chasing debts over Covid support which will send many smaller businesses over the edge into administration. It also highlighted the “intense strain an increasing number of companies are under as they are hit by rising labour and materials costs, higher energy bills and an economy likely heading into recession”.

Ireland's central bank governor urged lawmakers on Wednesday to ban the advertising of crypto assets targetted at young adults, likening crypto not linked to any underlying assets to a Ponzi scheme, Reuters reported. A long-time critic of crypto assets, Gabriel Makhlouf said that while they presented minimal financial stability risk for now, the Irish regulator was very concerned about the impact on retail customers. "There's a reasonable number of young adults who have put their money into crypto and there is an uncomfortable level of advertising that is targeted at that cohort.

Polish rate-setter Ludwik Kotecki said on Wednesday that he sees scope for some small interest rates hikes this year but doesn't believe the Monetary Policy Council will decide to raise them, Reuters reported. "I would still see room for small interest rate hikes this year (...) but it probably won't happen. I just hope no one comes up with the idea of ​​lowering interest rates," Kotecki told website gazeta.pl.

British private-sector economic activity fell at its fastest rate in two years in January, a survey showed on Tuesday, as businesses blamed higher Bank of England interest rates, strikes and weak consumer demand for the slowdown, Reuters reported. The S&P Global/CIPS flash composite Purchasing Managers' Index (PMI) dropped to 47.8 from 49.0 in December, at the bottom end of economists' forecasts in a Reuters poll and the lowest since January 2021. Readings below 50 indicate falling output. The fall contrasted with a slight rise in business activity in the euro zone.

Up to 100 Irish businesses are tipped for a new insolvency regime this year, according to Baker Tilly, the Independent reported. Demand for the Small Company Administrative Rescue Process (SCARP) has accelerated so far this year, with six companies exiting the process in the past week alone. The process was introduced in December 2021 and provides a simplified restructuring mechanism for small companies facing financial distress. There are 23 now commenced,” Baker Tilly corporate restructuring director Dessie Morrow told the Irish Independent.

European Central Bank Governing Council member Peter Kazimir joined a chorus of fellow hawks in rejecting suggestions that moderating inflation will soon warrant smaller interest-rate increases, Bloomberg News reported. “We need to deliver two more 50 basis-point moves,” said Kazimir, who also heads Slovakia’s central bank and favors the monetary-tightening cycle being completed by the summer. “The fall in inflation for two months in a row is positive news.