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In a related story, the Financial Times reported that Spain’s central bank chief has warned its new leftwing government not to scrap a landmark labour reform that economists say is crucial to the country’s recovery. Pablo Hernández de Cos told the Financial Times that Spain’s competitiveness could be hit by moves such as a shift from company-level to sector-wide bargaining over wages and conditions — a priority for the ruling coalition. “The Spanish economy still needs to keep its competitiveness at a high level,” Mr Hernández de Cos said in an interview.

Brussels has admitted that its contentious budget rules for member states need an overhaul, with even EU finance ministries struggling to understand how to comply, the Financial Times reported. The rules are part of a “stability and growth pact” supposed to set limits on eurozone member states’ debt burden and budget deficits. But the European Commission on Wednesday acknowledged that the metrics used in its calculations were hard to quantify and open to dispute.

China’s massive pile of soured debt is set to get even bigger, giving foreign investors more opportunities to try to profit from the cleanup, Bloomberg News reported. Nonperforming loans and stressed assets are likely to keep growing after reaching $1.5 trillion in 2019, according to a new study from PricewaterhouseCoopers. The mountain of soured borrowings is rising as the world’s second-largest economy opens further to foreign capital. As part of a recent trade deal, China is now allowing U.S. firms to apply for licenses to buy non-performing loans directly from banks.

The Bank of Thailand cut its benchmark interest rate to a record low as the coronavirus outbreak, a stalled government budget and bad drought imperil economic growth, Bloomberg News reported. The central bank lowered the policy rate by 25 basis points to 1% on Wednesday in a unanimous decision, the third cut in its last five meetings. Fourteen of 29 analysts in a Bloomberg survey predicted the decision, with the rest expecting no change. “They have come to terms with a continued slowdown this year.

The Finnish government will on Thursday give the green light for Terrafame to start mining and refining uranium at an existing mine in eastern Finland, a government source told Reuters on Wednesday, Reuters reported. The permit will allow Terrafame, which is majority state-owned, to become the first miner to extract uranium on a commercial scale in Finland. Terrafame took over the nickel mine, previously known as Talvivaara, in the Kainuu region back in 2015, after environmental hurdles had led it to file for bankruptcy.

Ghana’s efforts to raise domestic revenue are beginning to bear fruit and will help the country to be less dependent on debt, Finance Minister Ken Ofori-Atta said a day after the nation sold $3 billion in Eurobonds, Bloomberg News reported. West Africa’s second-biggest economy received about $15 billion in offers for the debt issuance that included a tranche of sub-Saharan Africa’s longest-yet Eurobond with an average life of 40 years. The sale would increase Ghana’s debt burden, which the International Monetary Fund estimated was 63% of gross domestic product at the end of 2019.

The IMF is like a hospital emergency room. Countries abhor the fund’s demands to adjust their economic policies in return for loans, so they only walk in when an accident makes them lose access to private capital, the Financial Times reported. The IMF imposes conditionality because its interest rates are fixed and cannot reflect the borrower’s risk — it is lending the taxpayers’ money of member countries. The “injured” country is requested to reduce spending and raise taxes. When fiscal changes cannot re-establish debt sustainability, it is also asked to restructure its debt.

Brazil construction company Odebrecht SA has taken Peru to arbitration over a failed $2 billion investment in a gas pipeline, arguing it needs to recoup the money to pay debtors in order to navigate its own bankruptcy restructuring, Reuters reported. Odebrecht, which announced the move on Wednesday, is in a precarious financial situation due to the revelation of its participation in a complex scheme to exchange bribes for public work contracts throughout Latin America. Peru’s prosecutorial agency did not return a request for comment on Wednesday.

Lebanon’s cash-strapped authorities are struggling to decide what to do about a $1.2 billion Eurobond maturing in March but are leaning towards repayment for foreign holders and a swap for local investors, political and banking sources said on Tuesday, Reuters reported. Lebanon, which has never defaulted on its hefty debt, is in the throes of a financial and economic crisis that has shattered confidence in banks and ignited protests against a political elite blamed for steering the country towards collapse.

Dewan Housing Finance Corp. Ltd (DHFL), India’s first non-bank lender to face bankruptcy proceedings, has a curious mix of operational creditors, Mint reported. On one end of the spectrum, there’s investment bank Rothschild & Co. India Pvt. Ltd. And then, on the other end of the spectrum are neighbourhood tea shops and florists, all claiming that their dues haven’t been cleared by the company, according to documents reviewed by Mint.