Europe

Barely three weeks ago, Daimler AG dialed back profit expectations for the year. The move was seen as a housekeeping exercise to allow Chief Executive Officer Ola Kallenius to start with a clean slate. But on Friday, the Mercedes-Benz maker cut its earnings outlook again -- the fourth warning in just over a year -- suggesting an alarming degree of disarray at the world’s biggest producer of luxury cars at a time when slowing sales and huge investments in new technology are testing the industry, Bloomberg News reported.

St Helens College is at “high risk of insolvency” without action to mitigate its financial position following an underfunded merger, according to an FE Commissioner report. The college did not properly predict how much money it would need for a 2017 merger with Knowsley College to form the SK Colleges Group, which was supported by £14.1 million from the ESFA’s restructuring facility, FE Week reported. As a consequence of which, FE Commissioner Richard Atkins wrote in a report published today, the current underlying position of the college is “not sustainable”.

Green shoots are showing in Europe’s manufacturing sector after a torrid year — but it is probably too early to call an end to the slowdown, the Financial Times reported. Industrial production expanded month on month in all five of the eurozone’s largest economies in May, a welcome relief given the gloom that has shrouded the bloc’s manufacturers in the past year. Economists polled by Reuters expect to see a 0.2 per cent month on month expansion of industrial production across the eurozone when May’s figures are published on Friday. That would be the best performance since January.

Job cuts and restructuring announced by Deutsche Bank AG this week risk making it harder for the German lender to claw back market share at its surviving Asian units, Bloomberg News reported. Over the past five years, Deutsche Bank has fallen down the rankings for Asian debt capital markets and wealth management, while it has lost the top spot to rivals in fixed-income, currencies and commodities trading. Despite these slips, the businesses contributed to a record profit for the firm in the first quarter of 2019.

Europe’s financial centre is splitting up, possibly for the better. Dublin has gained a lot of new business from London’s exodus, becoming the top choice of firms seeking higher ground post-Brexit, The Irish Times reported. Now Ireland must decide whether it wants to be a leader or a counterweight in Europe’s financial future. With the departure of the UK as the financial industry’s primary voice, the EU will have a chance to redefine how it approaches its banking and capital markets.

Greece's new prime minister, Kyriakos Mitsotakis, vowed Wednesday to make government more efficient and to legislate for tax cuts later this month despite concerns raised by the country's creditors over economic promises made during the election campaign, the International New York Times reported on an Associated Press story. Although Greece no longer relies on funds from international bailouts, its economy is still under strict supervision and its partners in the 19-country eurozone have made clear that the fiscal goals agreed to by the previous government must be adhered to.

The European Commission cut its euro-area growth and inflation forecast for next year as trade tensions and policy uncertainty weigh on the region, strengthening Mario Draghi’s case for further stimulus measures, Bloomberg News reported. The latest warning comes just two weeks before the European Central Bank’s next policy meeting, where it may lower interest rates or signal that action is imminent. The fallout from slower global demand was already laid bare this week when German chemicals giant BASF SE shocked investors with a huge downgrade to its profit outlook.

Bosnian aluminium smelter Aluminij will file for bankruptcy after closing on Wednesday, putting at risk some 10,000 jobs, including contractors and those at the processing firms it supplies, Reuters reported. The smelter was disconnected from the power grid just after midnight over debts incurred because of high electricity and alumina prices, officials said. The asset is one of Bosnia’s biggest exporters, employing 900 workers in the southern town of Mostar.

The European Commission has warned that the bloc’s economy faces a “host of negative risks” in the second half of the year, even as it kept its growth projections for 2019 unchanged. Pierre Moscovici, the EU’s economy commissioner, said that surprisingly strong euro area growth in the first quarter of 2019 “will be entirely offset by a weakening during the rest of the year”, as a recovery in German auto sales fizzles out and one-off factors cease to apply, the Financial Times reported.

The number of German corporations going insolvent is expected to rise for the first time since the 2009 economic crisis, Bloomberg News reported. In the latest sign that Europe’s biggest economy could be on the verge of recession, German credit rating agency Creditreform says the trend for company closures is hitting a turning point. The rate of corporate insolvencies sank by just 0.4% in the first half of the year -- 9,900 corporations have already become insolvent -- and a total of 20,000 are expected by the end of 2019.