News round up: Thomas Cook, Lloyds Banking Group, Marks & Spencer, Angela Merkel, Economic impact, Benefits and Greece.

Thomas Cook Group plc (LON:TCG) has warned investors that any revolt against its planned disposals could result in the company falling into administration. The troubled tour operator issued a circular to shareholders over the weekend, outlining the importance of the sale and leaseback of part of its aircraft fleet and the disposal of five Spanish hotels.

Thomas Cook said its directors were confident that investors would back the deals when they vote on the disposals at a meeting in London on May 29. However, it warned that failure to support the fundraising moves would jeopardise the company's recent £1.4bn deal with lenders – including Royal Bank of Scotland and Barclays – to extend the maturity of its bank loans to 2015.

Thomas Cook was plunged into crisis in November after it went back to its lenders to ask for an additional £100m lifeline, sparking fears of a collapse. The company is now hopeful it has a platform for recovery, with its turnaround plan for the UK business focusing on fewer and better-quality hotels and a drive for more online bookings, writes the Telegraph.

Lloyds Banking Group

Lloyds Banking Group and the Co-operative are thought to have moved a step closer to a deal for the sale of the 632 "Project Verde" branches after putting a hybrid proposal to the City regulator. Under the proposal, which is understood to have received interest from the Financial Services Authority, the mutual would buy the Verde branches through a quasi-reverse takeover process of the Co-op Bank.

The Sunday Telegraph has learnt that Verde's interim management team, led by Paul Pester, would transfer with the business and run the Co-op's enlarged banking business. However, the Verde branches would not be removed from Lloyds' technology platforms, and would instead be reliant on the high street bank for its operational capabilities. The proposal is intended to assuage the FSA's questions over management capabilities and governance at the Co-op, as well as questions about its systems expertise.

Marks & Spencer

Marks & Spencer is expected to admit this week that it is struggling to meet chief executive Marc Bolland’s grand plan to add £3bn to sales over three years. Bolland revealed the plan 18 months ago to increase turnover from £9.7bn in the year to April 2011. In his first presentation on the strategy, he said M&S would reach £11.5bn to £12.5bn in sales by 2014. The plan would have seen £1bn added to each of the international, online and British stores divisions.

But modest gains in the past year have left the strategy looking over-ambitious. M&S is expected to confirm in nine days that sales have risen by only £200m to about £10bn, with little hope of a consumer recovery in sight. That means M&S would need to quadruple its growth rate to 7.5% a year for the next two years to reach even the lowest bar of the plan, according to The Financial Mail on Sunday.

Angela Merkel

German Chancellor Angela Merkel suffered an electoral setback yesterday as opposition to European austerity measures spread across the continent. The German chancellor may be tempted to rethink her approach after her allies in the country's largest state, North Rhine-Westphalia, lost 9 per cent of the vote in their worst showing since the Second World War.

The result left her in a weaker position for her first meeting tomorrow with François Hollande, the socialist president-elect of France, who has demanded that the EU adopt higher-spending policies to battle the recession, The Telegraph reports.

Economic impact

A “massive” economic impact awaits Britain should the Eurozone fail to contain the turmoil sweeping the Continent, Vince Cable warned yesterday. In the bleakest prediction of the UK’s economic vulnerability to date by a senior minister, the Business Secretary said that there was little Britain could do apart from hope the Eurozone’s economic firewalls were strong enough to stop Greece’s problems from spreading.

His intervention came as the fate of the single currency hung in the balance. Greek coalition talks appeared close to collapse last night, more than a week after the country’s inconclusive general election, according to The Telegraph.

Benefits

Half a million people are set to lose disability benefits as the Government pushes ahead with plans to rid the system of abuse and fraud, Iain Duncan Smith says. In an interview with today’s Daily Telegraph, the Work and Pensions Secretary says that he is determined to introduce radical reforms to disability benefits which will see more than two million claimants reassessed in the next four years.

Iain Duncan Smith says that the number of claimants has risen by 30% in recent years “rising well ahead of any other gauge you might make about illness, sickness, disability”. Losing a limb should not automatically entitle people to a pay-out, he suggests.

Greece

Germany has drawn up plans to make Britain pay a share of the multi-billion pound clean-up costs if Greece is ejected from the euro, risking a clash with Downing Street. A finance ministry draft shows that Berlin is preparing a fresh bail-out to stabilise the Greek economy and stem EMU-wide contagion after a return to the drachma, should the country reject EU austerity demands.

The funds would come from Europe's rescue machinery but costs would be shared among all 27 EU members – not just the Eurozone – on the grounds that Greece has a right to Brussels crisis funds, like any other member state with its own currency. The scheme aims to contain fallout from a Greek exit and "limit the losses of the European Central Bank" on the country's bonds, The Telegraph says.