Europe’s top court ruled on Wednesday that the European Union could withhold money for member countries that have curtailed the independence of their democratic institutions, marking a potentially costly defeat for Hungary and Poland, the Wall Street Journal reported. The ruling, by the EU’s European Court of Justice, gives the bloc more power to clamp down on governments accused of purging their judiciary or weakening anti-corruption watchdog agencies.

Germany is set to ease COVID-19 restrictions as a wave of infections from the Omicron coronavirus variant seems to have passed its peak in most federal states, a draft plan seen by Reuters showed on Wednesday. In the three stage plan, restrictions on private indoor meetings will be dropped for those vaccinated or recovered from the virus, according to the draft, prepared for a meeting between Chancellor Olaf Scholz and the heads of the federal states on Wednesday.

Spain suffered the euro zone’s worst slump after the Covid-19 pandemic erupted -- but it would have been much worse without speedy action from the European Central Bank, according to a new study, Bloomberg News reported. The ECB’s bond-buying and liquidity lines kept credit flowing, sovereign-debt costs steady and permitted extra public spending, BBVA Research economists Sonsoles Castillo, Rafael Domenech and Miguel Jimenez said in the paper, published Tuesday.

A possible Russian invasion of Ukraine is threatening to deepen a continuing economic crisis in nearby Turkey, which faces the prospect of soaring energy prices and disrupted trade with its two Black Sea neighbors in the event of war, the Wall Street Journal reported. Turkey’s economy has already been shaken by inflation that is among the highest in the world, after a series of unorthodox economic steps and a collapse of the currency’s value over the past year. Turkey is dependent on imported Russian oil and natural gas, as well as tourists from both countries.

The Dutch government announced Tuesday that it will scrap virtually all its remaining coronavirus restrictions by the end of the month as infection rates begin to decline and pressure on health care services eases, the Associated Press reported. “The country is opening up again,” Health Minister Ernst Kuipers said. The Dutch are following neighboring Belgium and other European nations in easing restrictions as the continent increasingly looks for ways of co-existing with the virus without the economic and social damage wreaked by lockdown measures.

Britain's financial watchdog said on Monday it had told four 'buy now pay later' firms (BNPL) to change their contracts after identifying "potential harms" to consumers, Reuters reported. BNPL firms, which are unregulated, typically offer on-the-spot interest-free short-term loans that spread payments for retail goods like clothing. The market more than trebled in size during 2020 to 2.7 billion pounds ($3.65 billion), when COVID-19 lockdowns saw more people struggling to make ends meet. "The four firms involved, Clearpay, Klarna, Laybuy and Openpay, have fully cooperated with our work.

The sudden emergence of the fast-spreading Omicron variant of the coronavirus in Britain late last year stalled the country’s economic recovery, data confirmed on Friday, though the impact was milder than expected, the New York Times reported. Britain’s gross domestic product fell 0.2 percent in December from the previous month, the Office for National Statistics said, as the government told people to work from home where possible. High case numbers and voluntary social distancing led to a wave of cancellations for restaurants, bars, theaters and other social activities.

The U.S. is considering offering Ukraine up to $1 billion in sovereign loan guarantees to help Ukraine’s economy amid pressures from the Russian military build-up, a senior Biden administration official said on Monday, Reuters reported. The White House official was confirming what a source familiar with the matter had earlier recounted to Reuters about a conversation by national security adviser Jake Sullivan with congressional leaders.

Collateralized loan obligation managers in Europe are preparing for the post-pandemic world of rising credit risk by adding more flexibility to their traditionally strict structures, Bloomberg News reported. CLOs -- which package speculative debt into bonds -- have been including options to participate in restructurings and remain involved in financings even if they go south. And while managers don’t expect a sudden deterioration of junk-rated loans and bonds anytime soon, with defaults in Europe still historically low, they want to be prepared in case things sour.

The Bank of England has begun talks with the U.K. Debt Management Office and the Treasury over how to handle active sales of bonds held in its quantitative easing portfolio, Bloomberg News reported. The discussions come as the central bank last week said it would begin running down its 875 billion pounds ($1.2 trillion) of government bond holdings for the first time by letting expired gilts fall off its balance sheet, and reiterated it would consider active sales once interest rates hit 1%.