Headlines

Italy and the European Commission are in emergency talks over plans to shore up the country’s ailing banks, with the two sides said to remain deeply divided, The Herald Scotland reported. Matteo Renzi, the Italian Prime Minister, wants to pump in billions of taxpayers’ cash to shore up confidence, but Germany, Finland, the Netherlands and other eurozone members have historically opposed state bailouts, unless private creditors also shoulder the losses.

A minority investor in Oi SA, Brazil's largest fixed-line phone carrier, has called for the replacement of most of its board after the company filed for the country's biggest-ever bankruptcy protection, Reuters reported. Nelson Tanure, a Brazilian investor with a contentious track record, and partners have been buying up shares through a fund controlled by Bridge Administradora de Recursos Ltda, according to four sources familiar with the matter.

Credit ratings firm Moody’s Investors Service cut Mozambique’s sovereign debt rating to Caa3, one of the lowest rungs on the junk-debt ratings ladder. The firm said it expects a continuing loan restructuring by state-owned company Mozambique Asset Management, or MAM, will be followed by defaults on other government debt. Investors believed Mozambique was poised to resolve its debt troubles as recently as March when Credit Suisse Group AG and VTB Group convinced holders of an $850 million bond to extend their repayment schedule.

As Irish shares threaten to enter a bear market for the first time since 2011, the outlook may depend on two events: how the UK “bails out” of the EU and whether Italy is forced to “bail in” bondholders in its ailing banks. While the Iseq index rallied almost 3 per cent in the last two days to 5,580 points, it remains 14 per cent below its May highs, driven by a sharp slump following the Brexit referendum.

The slumping oil market is taking a heavy toll on consumers in Canada, new federal statistics suggest, as personal insolvency filings spiked in energy-producing provinces over the past year, CBC.ca reported. Consumer insolvency filings were about five per cent higher in April 2016 than they were during the same month last year, according to a report recently released by the Office of the Superintendent of Bankruptcy. The increase was led by huge spikes in Canada's major oil-producing provinces: Alberta, Saskatchewan and Newfoundland and Labrador.

Even as Europe grapples with repercussions of Britain’s vote to leave the European Union, a dispute over tens of billions of dollars is also threatening to roil the region’s $16 trillion economy, the International New York Times reported. The Italian government, according to some estimates, needs to spend $45 billion to shore up its banks burdened with bad loans.

German industrial output plunged unexpectedly in May, posting its steepest monthly drop since August 2014. The latest data suggests Europe’s largest economy lost steam in the second quarter after its surprisingly strong start to the year. The weak output figures followed data on Wednesday showed that German industrial orders were flat in May, before Britain’s decision to leave the European Union, and were weaker than expected, pointing to an economic slowdown.

Greece’s Prime Minister Alexis Tsipras said the country won't be able to reach its primary surplus budget target after its current bailout program expires in 2018 and called on the creditors to renegotiate for lower goals, The Wall Street Journal reported. “We guarantee that we are going to reach the [3.5% primary] surplus, even if we have to use the fiscal brake, but only once in 2018,” Mr. Tsipras said late Wednesday during a briefing to journalists on the plane while traveling from China to Athens.

South Africa will narrowly avoid slipping into recession this year, the International Monetary Fund said, as lackluster leadership and the global commodity rout drag down a longlisting economy, The Wall Street Journal reported. The IMF said Thursday that Africa’s most developed economy will expand just 0.1% this year, down from its previous forecast for a 0.6% expansion. Growth of just 1.1% in 2017 will do little to make up for the a multiyear slump that pushed unemployment and the current-account deficit to record highs.

Canada’s largest newspaper publisher is proposing a restructuring plan that would wipe out nearly half its debt and slash its annual interest payments, easing immediate financial pressure that threatened to turn the company insolvent, The Globe and Mail reported. Postmedia Network Canada Corp. outlined a planned recapitalization on Thursday that would eliminate more than $268-million (U.S.) in debt. In exchange, those creditors would receive 98 per cent of the company’s equity, all but eliminating the stake owned by existing shareholders.