Headlines

It is too soon for financial risk to be shared more broadly across the euro zone, Germany's European Central Bank representative said on Thursday, a day after its head made the case for a deeper union. Germany has long resisted calls for more risk-sharing, and Jens Weidmann said high government debt and piles of soured bank credit were created under national responsibility so should not be pushed onto a community which had had no chance to mitigate them, the International New York Times reported on a Reuters story.

Streets littered with potholes and garbage. Alcohol and drug treatment centers shut down. Vulnerable adults and children left without care. That is the grim picture of Britain’s future painted by the County Councils Network, which warned on Thursday that local councils will be forced to slash more than $1 billion from their budgets next year in cuts that will very likely result in services being whittled to the bone.

Malaysia’s state palm oil plantation agency said on Thursday it will sell assets, including property in London, restructure some loans and try to boost cashflow in a bid to trim debts of nearly $2 billion, Reuters reported. Megat Zaharuddin Megat Mohd Nor, who took over as chairman of the Federal Land Development Authority (Felda) in July, said he aimed to reduce debt by nearly 20 percent from 8.03 billion ringgit ($1.94 billion) at mid-2018 to 6.5 billion ringgit by year end.

A Rio de Janeiro appeals court has determined that billions of dollars in fines owed to regulators by Brazil’s Oi SA will be included in the company’s bankruptcy recovery package, a ruling showed on Wednesday. Oi, Brazil’s largest fixed line telecom company, entered bankruptcy in 2016, and in late 2017 creditors approved a plan to convert billions of dollars of debt into fresh equity, Reuters reported.

Insolvent German charter carrier Small Planet Airlines hopes to attract a buyer following a debt restructuring, its administrator told Reuters on Wednesday, saying he saw good a chance of a deal, Reuters reported. Small Planet, which employs 400 staff and has nine aircraft, mainly flies tourists to Mediterranean destinations. The company filed for insolvency this week in a bid to stay in the air while a buyer is found. “Talks are going on with investors, and they are now being intensified under new conditions,” court-appointed administrator Joachim Voigt-Salus told Reuters.

One of India’s key shadow banks is in trouble. IL&FS Group, a vast conglomerate that funds infrastructure projects across the world’s fastest-growing major economy, sent shock waves through credit markets when it missed several debt repayments, Bloomberg News reported. That’s causing concern among the myriad investors, including private individuals, who had regarded the group’s debt as rock-solid.

Lenders to India’s power industry are scheduled to meet Thursday to discuss ways to resolve 1.4 trillion rupees ($19.2 billion) of stressed assets that’s hobbling the sector, people with knowledge of the matter said. The meeting will be hosted in New Delhi by Power Finance Corp., a state-owned firm that lends to the country’s electricity generators, according to the people, who asked not to be identified because the details aren’t public, Bloomberg News reported. Representatives from the finance and power ministries, and Rural Electrification Corp.

Turkey’s banks agreed on Wednesday to help companies struggling with debt as the country’s finance minister prepared to set out a plan seen as critical to limiting the fallout from a currency crisis, the Financial Times reported. The Banks Association of Turkey said the nation’s lenders would strive to accommodate companies that needed a temporary reprieve on loan repayments because of “a temporary disruption of the balance between income and expenditure”.

Italy wants the public debt of all euro zone states to be brought below 60 percent of gross domestic product, via a long-term restructuring underwritten by the European Central Bank, its European Affairs Minister wrote. The proposal was made in a paper posted on the website of Paolo Savona's ministry and sent to the European Commission, the International New York Times reported on a Reuters story.

Italy’s new populist government is facing a difficult decision: How to reconcile its expensive election promises with the reality of the country’s fragile finances. It is a test of whether Europe’s rising antiestablishment parties can bring change to countries still bearing the scars of the Continent’s long economic downturn—or whether the constraints of life in the eurozone will force them to follow policies they long denounced, The Wall Street Journal reported.