Headlines

Eurozone economies will be paid to carry out labour market reforms and finance crisis-era investments from the single currency’s new budget, according to a Franco-German blueprint, the Financial Times reported. A four-page paper from Paris and Berlin’s finance ministries, seen by the Financial Times, lays out possible spending tasks and the legal set up of a “eurozone budgetary instrument”. It is the first attempt from the EU’s two biggest member states to flesh out how the eurozone budget should operate after European leaders agreed to set up the tool last December.

For almost two years, the question has lingered over China’s market-roiling crackdown on financial leverage: How much pain can the country’s policy makers stomach? Evidence is mounting that their limit has been reached, Bloomberg News reported. From bank loans to trust-product issuance to margin-trading accounts at stock brokerages, leverage in China is rising nearly everywhere you look.

Top banks led by HSBC have taken more than half a billion pounds in exceptional charges to cover a rise in defaults after Brexit, but other leading lenders are not as pessimistic on the UK’s economic outlook, creating a growing divide on strategy among Britain’s financial institutions, the Financial Times reported. HSBC, Barclays and Royal Bank of Scotland have all set aside extra cash in the belief that standard economic models would not fully cover the risks of a disorderly Brexit, while rivals such as Lloyds and Santander have dismissed the need for extra provisions.

A Chinese state-backed borrower’s failure to make good on a payment on a dollar bond on Friday threatens to overturn assumptions that officials would step in to avert defaults by companies closely linked to local authorities, Bloomberg News reported. Qinghai Provincial Investment Group Co., an aluminum producer that was seen by some analysts as a bellwether for assessing government support due to its struggles to make payments on offshore debt last year, had failed to wire funds for a coupon payment due Feb. 22 as of late afternoon China time.

India’s property developers are finding it hard to borrow money, raising the prospect of a wave of debt defaults from the sector hitting shadow lenders that are trying to survive a funding crunch of their own, Bloomberg News reported. Developers have to repay about 1.29 trillion rupees a year on outstanding debt but generate less than half the amount in income that can be used for repayments, according to an analysis of about 11,000 companies by research firm Liases Foras.

EOH Holdings Ltd. Chief Executive Officer Stephen Van Coller is in a race against the clock to restructure the sprawling South African IT business before shareholders and lenders run out of patience, Bloomberg News reported. Van Coller, a former executive at Barclays Africa Group Ltd. and MTN Group Ltd., was brought in to turn around the troubled business and improve its corporate reputation after allegations of corruption linked to government contracts.

Greek jewellery maker Folli Follie is in talks with three bondholders hoping to firm up a restructuring plan “within days”, a senior company source told Reuters on Friday. The step is key for the company, which has debt of about 430 million euros due this year and in 2021, to avoid collapse, Reuters reported. Along with its luxury jewellery trademark, Folli distributes international apparel brands in Greece, including Nike and Calvin Klein. It employs 5,000 people in its home market and abroad, including in China and Japan.

Business tycoon Anil Ambani is planning to use a payment from his brother’s company and the sale of real estate assets to pay what he owes to Sweden’s Ericsson following a court ruling this week, a source familiar with the matter said. India’s Supreme Court on Wednesday ordered Ambani’s Reliance Communications Ltd and two of its directors to pay Ericsson 4.5 billion rupees ($63.30 million) within four weeks or face a three-month jail term for contempt of court, Reuters reported.

South African retailer Steinhoff International Holdings N.V. said on Thursday it had received a petition by a group of shareholders looking for an inquiry into the company before a Dutch court, the latest addition to its growing troubles, Reuters reported. The company has been in the middle of a clean-up of its balance sheet after discovering multi-billion euro holes in its balance sheet more than a year ago. One of Steinhoff’s creditors has also challenged the company’s plan to restructure its convertible debt into new secured loans.

The plight of the single currency area’s makers — hit hard by weak global demand and political uncertainty — intensified in February, according to a closely watched poll of purchasing managers, the Financial Times reported. A flash Purchasing Managers’ Index for manufacturers hit its lowest level for almost six years in February and suggested output is now contracting for the first time since 2013. The PMI for manufacturers hit 49.2 in February — below the crucial 50 level that separates an expansion in activity from a contraction and down from 50.5 the previous month.