Europe

Norway risks sinking into a recession for the first time since the financial crisis of 2008, after a collapse in oil prices added to the fallout of the coronavirus, Bloomberg News reported. The government of western Europe’s biggest petroleum producer, which is also the richest Nordic economy, is preparing emergency stimulus measures to fight the effect of the virus on trade and travel. Prime Minister Erna Solberg said she’s also ready to counter the potentially more damaging fallout of an oil crisis if necessary. “If the economy is lower, there could be room to spend more money.

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In a related story, Bloomberg News reported that Italy is negotiating with banks to provide breaks from debt payments including mortgages as it seeks to soften the impact of a nationwide lockdown to contain the coronavirus. The government is considering unprecedented steps to inject money into companies and ease family debt burdens, Deputy Finance Minister Laura Castelli said in a radio interview. It’s also looking to aid those who experience temporary layoffs, she said, adding that a new decree on economic relief will be announced soon.

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European officials are considering loosening some bank rules as efforts to combat the coronavirus threaten to hurt lenders still weakened by years of negative interest rates, Bloomberg News reported. Germany’s banking watchdogs on Monday discussed easing a planned rule that banks bolster reserves in good times. France is pushing regulators to go easy on lenders whose customers face difficulties repaying loans. The issue may also be on the agenda when supervisors at the European Central Bank meet later this month, according to one official, who spoke on condition of anonymity.

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The Rome government is considering a state guarantee scheme to support banks offering debt moratoriums to firms and households grappling with the economic fallout from Italy’s coronavirus outbreak, one of the world’s worst, Reuters reported. Deputy Economy Minister Antonio Misiani said in an interview with Radio24 on Monday that the government was discussing the measure with Italy’s central bank. Such a move would address requests by Italian banks, which fear a new surge in problem loans just as they are emerging from a long restructuring to tackle the legacy of previous downturns.

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Even as Ashmore Group Plc’s bond funds endured blow after blow in the past year from risky bets that came undone, its stock price soared to a record -- until now. In the past three days, the London-based money manager’s shares plunged 16%, heading for the biggest slide in more than a decade, Bloomberg News reported. The tumble reflects a crash in oil prices that rattled risky assets already on edge over the spreading coronavirus. The $5.3 billion Ashmore Emerging Markets Short Duration Fund offers a study in what went wrong.

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British Steel’s Chinese buyer intends to continue pursuing the company’s French arm after completing the takeover of the rest of the group and saving 3,200 jobs, the Financial Times reported. The rescue deal gives Jingye control of the manufacturer’s British and Dutch sites but not its factory in Hayange, northern France, the sale of which has been delayed by concerns from the government in Paris.

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Oil companies just can’t catch a break. Energy bonds plummeted Monday to record lows, some of them with extraordinary drops of 10, 20 or even 30 cents on the dollar, Bloomberg News reported. The average spread over Treasuries for companies in the Bloomberg Barclays High Yield Energy index has surged above 10% for the first time since 2016, back when hundreds of energy-related companies were going bust or restructuring. That last round of rejiggering was supposed to stabilize the industry’s future by cutting debt and extending maturities for almost a decade.

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A company affiliated to Gruppo San Donato, Italy’s private healthcare group, has withdrawn from bidding for NMC Health, the Middle East-focused healthcare company, the Financial Times reported. The Italian group has been the only bidder for NMC Health after private equity group KKR ruled out its involvement last month. NMC’s shares have been suspended since the end of February, and the UK’s Financial Conduct Authority has launched a formal investigation into its finances.

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Italy's banking lobby is asking European authorities to ease rules on problem loans for at least six months, as a coronavirus outbreak hits the economy and throws the fragile sector's recovery off course, the International New York Times reported on a Reuters story. Europe's worst flare-up of coronavirus is expected to have pushed Italy into a new recession as measures to prevent the spread of the virus cripple economic activity, threatening an increase in the number of bad loans that Italian banks have worked hard to reduce in recent years.

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Deutsche Lufthansa AG is looking into government support amid the “immense” fallout from the coronavirus, which could burden travel demand for months, Bloomberg News reported. To avoid layoffs after slashing capacity by as much as 50%, the airline is examining the implementation of so-called short-time work, the company said in an emailed statement to Bloomberg on Sunday. The program, known as “Kurzarbeit” in German, involves the government offsetting wages lost when companies are forced to temporarily halt work.

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