Europe

The EU’s path to recovery from the economic effects of Covid-19 has been set back by the pandemic’s second wave and it will take at least two years for the bloc’s economy to return to pre-pandemic levels, Brussels has warned, the Financial Times reported. The recovery from the EU’s deepest downturn in history will be slower than previously expected, according to new forecasts published by the European Commission on Thursday, as the resurgence in the virus has forced most member states to impose fresh restrictions on activity in recent weeks.

Germany's Commerzbank swung to a third-quarter loss, it said on Thursday, as it dealt with fallout from the coronavirus crisis and continued a restructuring programme, Reuters reported. Germany’s No. 2 bank, which is waiting for new chief executive Manfred Knof to take the helm in January before deciding on a new strategy, confirmed earlier warnings that it was on course for a full-year loss. Its shares had tumbled around 6% by midmorning in Frankfurt after a slightly bigger than expected third-quarter loss. The shares are down around 27% this year.

Czech lender Komercni Banka reported a larger-than-expected 57% drop in third-quarter net profit on Thursday as bad loan provisions grew amid the coronavirus pandemic, Reuters reported. The Czech Republic, like other European nations, is facing a strong second wave of coronavirus infections, forcing the government to shut many retail shops, services and public venues. Banks face the prospect of rising loan defaults as repayment moratoriums expire and the economy struggles to recover.

The euro zone’s economic recovery stalled last month as a second wave of coronavirus cases and restrictions imposed to try and contain it whacked activity in the bloc’s dominant service industry, pointing to a double-dip recession, a survey showed, The Irish Times reported. Alongside their peers, Germany and France -- the 19-country bloc’s two biggest economies -- have reimposed tough lockdown measures, likely dealing a heavy blow this month as restaurants, gyms and shops remain closed and citizens stay at home.

Markets face some disruption in January if Britain and the European Union fail to agree on continued two-way cross-border access, top British regulators said on Wednesday, Reuters reported. Britain has left the EU and continued full access to the bloc under a transition arrangement expires on Dec. 31, with the City of London facing patchy access to the bloc in future. The EU is still deciding on how much direct financial market access it can give Britain under a system whereby Brussels deems British rules to be “equivalent” to its own.

The Covid-19 pandemic has put small businesses under considerable financial strain relative to larger companies, with the shock to their turnover creating significant cash-flow challenges in some sectors, Central Bank deputy governor Ed Sibley said at a Small Firms Association webinar on Wednesday, The Irish Times reported. Small and medium-sized enterprises (SMEs) are operating in a very difficult and uncertain environment, despite interventions to cushion the effects of the crisis, Mr Sibley said.

Services companies in Italy and Spain suffered a fresh fall in activity last month as restrictions to contain the second wave of the coronavirus pandemic hit businesses, according to a widely watched business survey, the Financial Times reported. The IHS Markit flash services purchasing managers’ index dropped in both countries, with companies reporting sharp declines in demand and activity as a result of the pandemic, data released on Wednesday showed. The Spanish index was slightly better than most economists expected but still fell 1 point to a five-month low of 41.4 in October.

A resurgence of the pandemic is threatening to tip the eurozone into a double-dip recession, cutting short the recovery that took shape from the middle of this year, the Financial Times reported. Few if any economists expect a slump as severe as the 11.8 per cent quarter-on-quarter contraction recorded between April and June. But services, which account for about three-quarters of economic activity in the 19-nation eurozone, are bearing the brunt of the tight restrictions on people’s movement that governments are reimposing in an effort to control Covid-19.

The European Securities and Markets Authority has criticised Germany’s financial regulator BaFin and the country’s accounting watchdog FREP for their “deficient” handling of the Wirecard accounting scandal. In a report published on Tuesday, in which the regulator detailed the result of its investigation into the Wirecard accounting fraud, Esma wrote that BaFin and FREP ignored red flags over Wirecard’s financial reporting for years, the Financial Times reported.

A sufficient number of creditors of indebted Premier Oil have approved a proposed merger with private equity backed Chrysaor to create the British North Sea's biggest oil and gas producer, Premier said on Tuesday, Reuters reported. The reverse takeover, which will see Premier’s creditors paid $1.23 billion (947.9 million pounds) in cash, will fold one of the world’s oldest independent producers into a private equity-backed group in which Premier shareholders will receive an expected 5.45% stake. Premier had $1.9 billion in net debt.