Headlines

Brussels has written to Italy’s populist government warning of “serious” concerns that the country’s draft budget plan will break eurozone spending rules — a development that is likely to fuel fears of a full-blown showdown between Rome and the EU later this month, the Financial Times reported. In a letter to Giovanni Tria, Italy’s finance minister, the EU’s two commissioners in charge of budgetary rules urged Rome to take heed of rules requiring Italy to shrink its budget deficit next year.

A rebound in German industrial orders has yet to feed through to production, with output from the country’s factory sector once again lagging behind expectations, the Financial Times reported. Industrial production dropped 0.3 per cent in August from the previous month according to statistics agency Destatis, after a 1.3 per cent month-on-month decline in July. Economists polled by Reuters had expected a 0.4 per cent increase for August. July’s production was also worse than previously thought. Data had originally pointed to a decline of 1.1 per cent for the month.

India’s top court has set new norms for the country’s bankruptcy law in an attempt to speed up the resolution of billions of dollars worth of soured loans weighing down banks, Bloomberg News reported. The Supreme Court on Thursday set mandatory timelines for the various stages of the insolvency resolution process, which the law says must be concluded in 270 days, and imposed restrictions on when and why the process can be appealed or stalled.

The jewel gathering dust in India’s bankruptcy court can have a suitor after all. The two top bidders may stay in the race for Essar Steel India Ltd.’s 10 million-tons-a-year plant, the country’s top court ruled on Thursday, provided they first make banks whole, a Bloomberg View reported. There’s the catch. For ArcelorMittal, the payment required is for two unconnected defaults. The world’s biggest steel producer and Lakshmi Mittal, its billionaire controlling shareholder, sold their interest in Uttam Galva Steels Ltd. and KSS Petron Pvt. to become eligible to acquire Essar.

Racing Point, a consortium led by Canadian billionaire Lawrence Stroll, paid 90 million pounds ($117 million) to take over Formula One racing team Force India in August, an administrators report shows. The report also revealed the parlous finances of the Vijay Mallya-owned team at the time they were taken into administration last July, Reuters reported. The Silverstone-based team had only 240,000 pounds in its account on July 27 while outstanding gross wages due to be paid at the end of that month totalled 2.2 million pounds.

Burdened by the highest ratio of bad loans in Europe, Greek banks have no shortage of challenges. And that was before Greece -- the continent’s most indebted state -- decided to end its bailout program in August without requesting a follow-up lifeline backed by European creditors, Bloomberg News reported. If doubts about the state of their balance sheets aren’t addressed, concerns about the fate of Greek banks could spiral out of control.

A trio of funds backed by $3 trillion in global assets reckon the recent sell-off in Italian bonds is overdone. UBS Wealth Management is buying into the weakness in the nation’s debt, along with Allianz Global Investors and Nomura Asset Management, Bloomberg News reported. The surge in Italian bond yields is a reflection of a market in fear, which will be forgotten noise in a few months for Allianz. “The move is completely crazy,” said Kacper Brzezniak, a portfolio manager at Allianz, whose firm overseas 524 billion euros ($605 billion) in assets globally.

India’s benchmark equity index fell the most in eight months as surging oil prices added to the rupee’s weakness, prompting foreign investors to sell a day ahead of an expected increase in interest rates by the central bank, Bloomberg News reported. The S&P BSE Sensex declined 2.2 percent to 35,169.16 in Mumbai, with Reliance Industries Ltd. and HDFC Bank Ltd. the biggest drags. All 19 sector sub-indexes compiled by BSE Ltd. retreated, with a measure of energy companies dropping the most. The benchmark gauge earlier fell as much as 2.7 percent. ICICI Bank Ltd.

The World Bank halved Lebanon’s 2018 growth forecast to 1 percent, predicting its ratio of debt to gross domestic product would remain on an “unsustainable path,” Bloomberg News reported. The international lender cited a central bank decision to abruptly halt subsidized housing loans as a main factor behind the slowdown in economic activity this year. The real estate sector has provided “a rare source of growth impetus since 2012,” while production in most of the country’s other industries has fallen off, the World Bank said in its October report.

A group of creditors to entities set up to finance affiliates of Etihad Airways said in a letter to the airline they were misled on its commitments to support part-owned carriers, two of which are now insolvent, a person familiar with the matter said. The investors say they bought bonds issued by EA Partners between 2015 and 2016 after Etihad implied it would back the affiliates including struggling carriers Alitalia and Air Berlin, according to the person, who asked not to be identified because it’s private, Bloomberg News reported.