Brussels has called for the creation of a European Monetary Fund and financial aid for countries hit by economic shocks, as it pushes ahead with ambitious plans to overhaul the institutions and functions of the euro area, the Financial Times reported. The European Commission said its proposals were a natural response to shortcomings of eurozone governance that were brutally revealed by the sovereign debt crisis.

A manager at the center of investigations into an accounting scandal at British Telecom’s Italian business has been awarded almost 1.8 million euros ($2.1 million) in damages for wrongful dismissal, three legal sources said on Wednesday. Gianluca Cimini was fired for disciplinary reasons last year, months before the phone company filed a criminal complaint accusing him of grave violations of corporate governance, Reuters reported. The accusations arose from its investigation of alleged accounting fraud that cost the firm 530 million pounds ($690 million).

The answer to cleaning up bad loans still weighing down Italian banks may lie in a controversial proposal that would allow lenders to sell their debt at deep discounts without being forced to hold more capital, Bloomberg News reported. European Parliament lawmaker Peter Simon, who’s leading the assembly’s work on updating prudential rules for the region’s banks, wants to make it easier to sell debt cheaply without having to adjust a calculation known as loss given default, which typically hurts banks’ capital ratios.

The world economy is enjoying a synchronised recovery. But it will prove unsustainable if investment does not pick up, especially in high-income economies, the Financial Times reported in a commentary. Debt mountains also threaten the recovery’s sustainability, as the OECD, the Paris-based group of mostly rich nations, argues in its latest Economic Outlook. This report is the swansong of Catherine Mann, who was an outstanding OECD chief economist. It suggests that relief is legitimate, but complacency definitely is not.

A complex scheme Italy conceived to help the country's banks offload their bad loans seems ready at last to deliver on its potential, as the lenders fight their way through a mass of practical problems, the International New York Times reported on a Reuters story. The "GACS" state guarantee scheme, aimed at easing a major concern hanging over the Italian economy, has had a long gestation. European authorities approved the plan almost two years ago, and one senior banker has compared the drawn-out task of preparing debt sales under its rules with childbirth.

Ratings agency Standard & Poor’s cut Swissport’s credit rating on Tuesday as a result of its weakening outlook for HNA Group, the Swiss aviation services company’s Chinese owner. S&P cut the company’s rating one notch to B-, deeply in “junk” territory, the Financial Times reported. HNA Group acquired the Swiss airport services group at the start of 2016, and last week the ratings agency lowered its assessment of the group’s creditworthiness due to the “aggressive financial policy” and the risk of “tightening liquidity at China’s most prolific dealmaker.

British wholesaler and convenience retailer Nisa Retail said on Monday it would provide a new short-term contract to its member McColl’s Retail Group to help it ensure continuity of supplies after the collapse of Palmer & Harvey (P&H), Reuters reported. P&H, the UK’s largest tobacco distributor which also delivers food and drink to supermarkets, went into administration last week after running out of cash, raising the possibility of tobacco shortages across the country. Analysts said McColl’s was relatively well-placed to deal with the situation but could face additional costs.

The private equity owner of Four Seasons Health Care has urged the care home operator’s largest creditor to accept a debt restructuring offer it made nearly a month ago as a looming interest payment threatens to push the business into administration, the Financial Times reported. Terra Firma, led by City financier Guy Hands, called on H/2 Capital Partners to accept its offer to hand over to the lender and the other bondholders, the 343 care homes owned by the Four Seasons group “for a nominal sum, with immediate effect”, as it did at the start of November.

Global hedge fund managers have said they are willing to pursue the Spanish government in the courts for a “zillion years” until they get a full payout over a series of bankrupt toll roads, the Financial Times reported. The group, some of whom were involved in the protracted fight over billions of unpaid debt in Argentina, are looking to wring up to €4.5bn from the government — enough to make a dent in Spain’s budget deficit.

The European Commission is on a collision course with Berlin and other major European governments over its plans to increase its oversight of the eurozone’s €500bn sovereign bailout fund, angering member states who fear a power grab, the Financial Times reported. Brussels is expected to propose on Wednesday that the European Stability Mechanism — set up in 2012 at the height of the debt crisis — is converted into a “European Monetary Fund” with broad new powers. The move is part of a wider package of euro area reforms.