Headlines

Hungary’s capital Budapest adopted a “survival package” of cuts to avoid bankruptcy as the opposition-led city’s mayor blamed Prime Minister Viktor Orban’s government for squeezing revenue for political gain, Bloomberg News reported. In the latest clash between Orban’s nationalist government and cities led by Hungary’s fractured opposition, Budapest Mayor Gergely Karacsony said his office would stop paying taxes to the country’s Finance Ministry in an effort to keep providing services including public transport and paychecks for the city’s 27,000 employees.

The European Union on Tuesday proposed making it harder for states to pour billions of euros of aid into an ailing bank, as Italy did with Monte dei Paschi di Siena six years ago, Reuters reported. Proposals from the EU's executive seek to ensure that banks hold enough resources, in particular debt that can be written down to release cash in a crisis, to avoid taxpayer handouts. The recent collapses in the United States of Silicon Valley Bank and Signature Bank and the forced takeover of Credit Suisse by UBS last month were a reminder that failures still occur.

A $1.2 trillion liquidity crunch looms for Europe’s lenders, testing their ability to stand on their own after more than a decade of easy money from the European Central Bank, the Wall Street Journal reported. The biggest hurdle will come in late June, when banks will have to pay back about 478 billion euros, equivalent to some $525 billion, of ultracheap loans to the central bank. Those loans were handed out at the height of the pandemic to ensure banks kept lending as lockdowns brought business to a halt.

Britain’s inflation rate slowed last month, but is likely to bring only limited relief to households as it stubbornly held in the double digits because of rapidly rising food prices, the New York Times reported. Consumer prices rose 10.1 percent in March from a year earlier, the Office for National Statistics said on Wednesday, a slightly slower pace than the 10.4 percent in February. But economists had expected the country’s inflation rate to drop below 10 percent for the first time since the summer.

Inflation drifted lower to the slowest pace in nearly two years, a reprieve for the Bank of Canada amid a jobs market and economy that continue to defy expectations for a stall, Bloomberg News reported. The consumer price index rose 4.3% in March from a year ago, the lowest headline number since August 2021, Statistics Canada reported Tuesday in Ottawa. That matched expectations in a Bloomberg survey of economists and was down from 5.2% in February. On a monthly basis, the index rose 0.5% in March, also matching economist forecasts.

The holding company for Avianca Group International Ltd., a Colombian airline that filed for bankruptcy during the pandemic, is planning an initial public offering as revenue roars back, Bloomberg News reported. “Without a doubt the IPO makes sense to support the group’s growth,” Avianca’s head of investor relations Maria Cristina Ricardo said in an interview. The plan is for Abra Group Ltd. to sell shares in New York or London in the next 12 to 18 months, she added. Air travel in Latin America has rebounded to pre-pandemic levels, according to data from OAG Aviation.

The riskiest type of bank bonds appear to be back on the menu for investors, after a Japanese megabank reopened a segment of the bond market that was called into question following UBS Group AG’s emergency takeover of Credit Suisse Group AG, the Wall Street Journal reported. Sumitomo Mitsui Financial Group Inc. raised 140 billion yen, equivalent to $1 billion, from the sale of Additional Tier 1 bonds on Wednesday.

Brazil's government reversed a decision to end tax exemption on foreign shipments targeting Asian e-commerce giants, a measure aimed at improving public finances that faced backlash from lower-income Brazilians, a crucial part of the new government's electorate, Reuters reported. Speaking to reporters on Tuesday, Finance Minister Fernando Haddad said that President Luiz Inacio Lula da Silva had asked him not to proceed with ending the tax exemption for international orders from individuals.

Spain’s leftist coalition government on Tuesday approved a plan to make available around 50,000 houses for rent at affordable prices as part of measures aimed at curbing soaring rents and house prices, the Associated Press. The apartments will come from the state-controlled SAREB “bad bank” that was set up in 2012 to manage and sell off troubled banks most toxic assets during the international financial crisis. The SAREB plan follows a much-hailed agreement last week between the coalition parties and their parliamentary supporters for what would be democratic Spain’s first-ever housing law.

Ireland's budget surplus is forecast to more than double to 6.3% of gross national income by 2026, the finance ministry forecast on Tuesday, handing the government significant resources to set up a planned new pension fund, Reuters reported. The finance ministry also expects inflation to slow to 4.9% this year and again to 2.5% next year, while the economy will grow by a faster-than-expected 2.1% in 2023 and 2.5% in 2024 after remaining "remarkably resilient" in recent months, it added.