Europe

Irish banking stocks fell in Dublin on Tuesday as the Bank of England ordered lenders with businesses in the UK hold additional capital to absorb losses in the event of a sudden downturn, The Irish Times reported. Sentiment towards the sector was further dented as UK prime minister Boris Johnson put the threat of a no-deal Brexit back on the table as he outlined plans to legislate to ensure the transition phase of the European Union withdrawal will not extend beyond the end of 2020.

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Sweden’s Riksbank is expected to raise interest rates to zero per cent on Thursday, ending a five-year experiment with negative interest rates and becoming the first central bank in the world to ditch the controversial policy, the Financial Times reported. But with the Nordic economy slowing, some traders are already betting that Sweden may struggle to leave behind sub-zero rates for long. The bank’s monetary policy committee is scheduled to announce its decision on borrowing costs on Thursday.

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Croatia prepared on Friday to rush through new legislation to protect the economy from big corporate failures, as the country‘s biggest private company Agrokor tried to secure a debt restructuring deal, the Stock Daily Dish reported. Some local media reported on Friday that Agrokor had signed a deal with creditors overnight to restructure its debt, but the company declined comment and there was no confirmation from its creditors.

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Spanish engineering company Isolux said on Friday it had activated the formal process aimed at avoiding insolvency, as it battles to secure enough money to remain in business, the Stock Daily Dish reported. Under Spanish law, companies can enter into debt restructuring proceedings that give them up to four months to reach an agreement with creditors to avoid a full-blown insolvency process and a potential bankruptcy. Isolux has over 2 billion euros ($2.1 billion) in restructured debt, according to an update on its restructuring process published in December.

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Sports Direct, the British sportswear retailer controlled by founder Mike Ashley, reported a 22 per cent rise in first-half core earnings, as it stemmed losses in its premium unit which includes fashion store Flannels and House of Fraser, The Irish Times reported. The group also repeated its belief that it would not be on the hook for any “material liabilities” from a €674 million bill it received from Belgium’s tax authority in July.

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The eurozone's stagnating economy has suffered its worst performance for six years with uncertainty over Brexit partly to blame, economists said today. A survey by global data providers IHS Markit said manufacturing and job creation had slumped with 'gloomy prospects for the year ahead,’ the Daily Mail reported. Chris Williamson, the London firm's chief economist, said Brexit was a factor in the EU's difficulties.

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The Italian government will create a state investment bank for the nation’s underdeveloped south, in a bid to rescue yet another failing lender that’s laid bare the divisions in the ruling coalition, Bloomberg News reported. Prime Minister Giuseppe Conte’s administration late Sunday approved a decree that will inject as much as 900 million euros ($1 billion) into state entity Banca del Mezzogiorno-Mediocredito Centrale, or MCC.
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Hundreds of international and domestic flights in Italy were cancelled Friday as air transport workers held a nationwide strike to protest feared firings and salary cuts at troubled national carrier Alitalia, the Associated Press reported. Attempts to find a buyer for the airline, run by state-appointed administrators since it declared bankruptcy in 2017, fell apart last month. Last week, the Italian government agreed to grant Alitalia a new 400 million euros ($445 million) to keep it afloat until a buyer can be found.
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Nynas AB, owned by Venezuela’s state-run PDVSA and Finland’s Neste Oil, on Friday filed for company reorganization at a Swedish court as the refiner failed to extend loans as it dealt with the fallout of U.S. sanctions, Reuters reported. Swedish Nynas’ business has suffered as the United States in October introduced changes to a license that had allowed it to import Venezuelan oil despite sanctions imposed on its owner PDVSA.
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Boris Johnson’s general election victory, and the likely departure of Britain from the European Union next month, will bring relief to most European governments: Now they can focus on other pressing issues facing the bloc, the Wall Street Journal reported. Yet Brexit was a rare point of unity for the remaining 27 members and life beyond it could expose divisions among them. It isn’t clear, for example, how cohesive those left in the bloc can be as they confront issues after Britain’s departure—including negotiating new trade relations with the U.K.
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