Europe

The gloom hanging over the German economy has deepened after a closely watched survey of the country’s business leaders this month found that sentiment had sunk to its lowest level in seven years, the Financial Times reported. An intensifying trade war between the US and China is weighing particularly heavily on Germany’s export-focused economy, prompting calls for the government in Berlin to ditch its commitment to running a budget surplus to provide a fiscal stimulus.

Brussels is planning to simplify the eurozone’s complex budgetary rules to provide governments with softer debt reduction targets that do not push struggling economies into trouble during downturns, the Financial Times reported. In what is set to be one of the most politically sensitive debates for the next European Commission, officials are considering ways to rewrite the bloc’s Stability and Growth Pact, which has come under fire for being impossible to enforce and overly flexible for governments that are in breach of the rules.

German banks grappling with the burden of negative interest rates are fighting back against a proposal to ban them from passing on the costs to their retail depositors, the Financial Times reported. They warn that such a move could unleash “dangerous instability” on financial markets. Markus Söder, the minister-president of Bavaria, proposed the ban last week in response to fears that banks could start charging their depositors if, as expected, the European Central Bank cuts interest rates further into negative territory next month. The idea is gaining political traction in Berlin.

Investors just delivered a body blow to a company that was once Scandinavia’s biggest conglomerate, Bloomberg News reported. On Monday, the last remnant of the East Asiatic Company of Denmark lost more than 40% of its market value after a key creditor said it breached debt covenants. The development represents an existential threat to EAC, now called Santa Fe Group A/S, and has left in tatters what was once an icon of corporate Denmark. Gabriella Sahlman, an investment director at Proventus Capital Partners, told Bloomberg that the creditor thinks “there is a breach of covenants.

A number of “non-binding” offers are on the table for Harland and Wolff which, if successful, could ensure a new future for the historic east Belfast shipyard which is in the hands of administrators, The Irish Times reported. According to Michael Jennings and Brian Murphy of BDO NI, who were appointed as joint administrators of the yard at the beginning of this month, there has been a “healthy level of interest” from potential buyers.

The head of Germany’s central bank has announced his opposition to launching a major monetary or fiscal policy stimulus package in response to the recent slowdown in Europe’s biggest economy, the Financial Times reported. Jens Weidmann said it was not time to “panic” even though the German economy was heading for its first recession in six years after shrinking slightly in the second quarter, hit by US-China trade tensions, weak global growth and fears of a chaotic UK exit from the EU.

Insolvency isn’t always avoidable but the chances of doing so are always improved if action is taken early and rapidly to give the company the greatest opportunity of trading its way out of difficulty. The warning signs can be singular but usually accumulate in a financially poisonous cocktail and it is important that directors and company accountants are prepared to recognise them, Accountancy Age reported.

The National Company Law Appellate Tribunal (NCLAT) on Friday ordered liquidation of debt-ridden Amtek Auto as it declined lenders' request for extension of the insolvency resolution process deadline, Business Today reported. Amtek Auto was among the first list of the 12 companies that were referred by the Reserve Bank of India (RBI) in 2017 to respective banks for the initiation of insolvency process for defaults. UK-based Liberty House was selected as the highest bidder by the committee of creditors (CoC) of Amtek Auto.

Essex and London Properties was wound up by the courts in September 2018 on public interest grounds. The Official Receiver was appointed liquidator of the company and has been made aware of several schemes targeting the company’s investors, GOV.UK reported. The ‘recovery schemes’ falsely claim they can retrieve invested capital from the liquidation process, pretend to be acting in co-operation with the Official Receiver and some even claim to be the Insolvency Service itself.

Bank of England Gov. Mark Carney said global growth prospects are flagging due to a trade war pursued by Washington, creating new challenges for economic policy makers, The Wall Street Journal reported. “The pickup that we’ve been expecting in global growth has not transpired,” Mr. Carney said in an interview Friday on the sidelines of the Federal Reserve Bank of Kansas City’s annual symposium in the Grand Teton National Park. “When we trace it, it’s not because of Fed policy. It’s not because of global financial conditions.