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Mario Draghi, the former head of the European Central Bank, became a hero to financial markets and the European Union after he defused the continent’s debt crisis by promising to do “whatever it takes” to save the euro, the Wall Street Journal reported. That could turn out to be the easy part. Mr. Draghi must now show he has what it takes to become Italy’s next prime minister, convince the country’s fractious parties to back him, and reverse a long economic decline in the depths of the worst pandemic in a century. The euro’s future could once again hinge on how Mr. Draghi fares.
Spain’s government is considering debt relief for companies as extended pandemic restrictions and a slow European vaccine rollout tip the economy into another downturn, according to officials, Bloomberg News reported. One proposal would excuse a portion of the debt borrowed through Spain’s state-backed loan guarantee program for companies that stand a good chance of surviving after the pandemic, the officials said. They asked not to be identified because the talks are confidential and no decision has been reached.
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China will improve policies to help medium-to small and micro companies deal with bankruptcy more smoothly, state broadcaster reported on Wednesday, citing the state council meeting, Reuters reported. China will also crack down on such firms dodging repayment obligations for defaulted bonds in order to protect the interests of workers, creditors and investors, the cabinet said.
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Ant Group Co. has agreed a restructuring plan with Chinese regulators under which the fintech giant will become a financial holding company, potentially easing founder Jack Ma’s regulatory woes, Reuters reported. The plan calls for putting all of Ant’s businesses into the holding company, including its payment processing and technology offerings in areas like blockchain and food delivery, the person said, declining to be named due to confidentiality constraints.
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A Brazilian appeals court on Wednesday could clear up a legal hurdle delaying Bunge’s plans to take over two soy processing plants following a deal in May with crusher Imcopa, Reuters reported. Wednesday’s hearing will focus on two Panama-registered firms that claim, as indirect creditors of Imcopa, which is in bankruptcy protection, to have rights to some of the proceeds from the sale, according to court filings seen by Reuters. The three-judge panel is expected to rule on whether the Panamanian firms Minefer Development SA and Triana Business SA are legitimate participants in the process.
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A 200 billion rand ($13 billion) loan program, one of the linchpins of President Cyril Ramaphosa’s plans to shore up a South African economy devastated by the coronavirus pandemic, may not even reach 10% of its target, Bloomberg News reported. Banks have distributed 17.8 billion rand since the initiative started in May through to Jan. 16, the Banking Association of South Africa said in a statement on Wednesday. At the current rate, only 18.9 billion rand will be allocated under the plan, it said.
France and the Netherlands appear to be readying for a clash with the European Commission over a fresh aid package to debt-laden carrier Air France-KLM, Bloomberg News reported. Dutch Finance Minister Wopke Hoekstra warned lawmakers on Wednesday he couldn’t rule out the possibility that the airline will be asked by European regulators to give up airport slots in exchange for approval for more state aid.
New passenger car registrations in Germany fell more than 30% in January to around 170,000 vehicles, an industry source told Reuters on Wednesday. Car dealerships have been hit by a second lockdown amid the coronavirus pandemic in Germany, with non-essential stores closed since mid-December, and by tax breaks for consumers running out at the end of 2020. New car registrations in December had been up by almost 10%.
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Australia’s central bank will extend its quantitative easing program by a further A$100 billion ($76.2 billion) and doesn’t expect to increase interest rates until 2024, following in the footsteps of global peers in moving to stamp out premature tapering speculation, Bloomberg News reported. Governor Philip Lowe left the key rate and three-year yield target at 0.10%, the Reserve Bank said in a statement Tuesday. In addition to the QE program now extended beyond mid-April, the RBA also operates a bank lending facility.
Indian Prime Minister Narendra Modi’s government on Monday proposed a nearly half-a-trillion-dollar budget for the 12 months beginning on April 1 that shows New Delhi is taking a largely conservative tack, the New York Times reported. Infrastructure and health care spending are set to rise significantly, but Mr. Modi’s budget also calls for reducing debt. Over all, spending would rise less than 1 percent at a time when India is suffering from its worst recession in years while battling the coronavirus.
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