The European Central Bank is turning into a European “bad bank” by loading up on bundled-up loans, and its record-low interest rates will not do anything to promote lending in the euro zone, former ECB chief economist Juergen Stark said, the Irish Times reported. Stark, a former ECB executive board member and an arch-hawk, quit the bank in 2011 to protest its policies. Now he says the September rates cut would be “ridiculous, if the matter was not so serious”.

Ukraine's KVV Group has offered to buy Latvia's insolvent steelmaker Liepajas Metalurgs for 107 million euros ($138 million), the insolvency administrator said on Tuesday, Reuters reported. Liepajas Metalurgs, the only producer of rolled steel in the Baltic countries, filed for bankruptcy last year, blaming weak demand in Europe. The KVV Group has provided a clear plan for re-launching the plant's operations, the insolvency administrator Haralds Velmers said in a statement. KVV Group is going to pay the sum over 10 years.

Tehnologica Radion, one of the largest local construction companies in Romania, filed for insolvency on September 4, according to data from the Bucharest Court. The court will rule on the company’s request on September 15, Romania-Insider.com reported. The request came a few weeks after Theodor Berna, the company’s administrator and one of its main shareholders, was arrested in a tax evasion and money laundering case. The damages in this case are estimated at some EUR 100 million.

Parliament here began debating Germany's first balanced federal budget since 1969 on Tuesday, seven years after the collapse of Lehman Brothers sent Europe's largest economy into a tailspin, dashing the government's previous attempt at balancing its books, The Wall Street Journal reported. Yet concern is rising in Berlin that a budget partly meant as an example for more profligate members of the euro-zone could, once more, face last-minute derailment amid mounting geopolitical risks and mixed economic signals in Europe's powerhouse.

If investors felt the first flutters of nerves last week over Scotland’s independence referendum, they are now on high alert, the Financial Times reported. The publication of the first poll to put the pro-independence campaign in the lead prompted a sharp fall in the pound on Monday and a sell-off in the shares of companies with Scottish exposure. It also led to a marked shift in investors’ expectations for the timing of the first rise in UK interest rates.

A mortgage expert has said the Insolvency Service of Ireland has "failed" and called for an overhaul of how insolvency is managed, the Irish Examiner reported. ISI was set up in March 2013 under the Personal Insolvency Act to provide debt relief mechanisms to those facing insolvency, or the inability to service their existing debts. One of the key debt relief mechanisms was personal insolvency arrangements, as they dealt with secured debt such as mortgages.

The Irish government has begun an intensive diplomatic push to persuade the European Commission and the European Central Bank to allow it to make an early repayment of a portion of its €67bn bailout debt to the International Monetary Fund, the Financial Times reported. Dublin believes that it could save at least €375m a year in interest payments on €22bn of IMF debt by refinancing three quarters of the amount in the capital markets to take advantage of ultra-low eurozone interest rates.

On Tuesday September 9 the United Nations General Assembly will meet to debate a new legal framework to serve as a guide for nations restructuring their debt, as is the current case with Argentina, teleSur reported. More than 130 developing countries have unanimously submitted a proposal to the United Nations calling for new legal rules to stop predatory financial speculators like vulture funds from undermining debt restructurings. If the motion is successful it could provide more efficient ways of dealing with government debt crisis.

Hungary’s central bank is ready to use part of the country’s foreign-currency reserves to help the government rid households of their costly foreign-currency mortgages, a top central bank official said over the weekend, The Wall Street Journal Emerging Europe Real Time blog reported. While ensuring that the reduction in the country’s foreign-currency reserves were gradual, the central bank would provide the foreign currency to retail banks so they could convert foreign-currency mortgages into the local currency, said Adam Balog, a deputy governor at the National Bank of Hungary.

Prime Minister Antonis Samaras announced tax reductions on Saturday in a bid to appeal to Greeks weary of four years of austerity that have cut living standards and to gain political capital as the opposition pushes for early general elections, the International New York Times reported. Speaking in the northern port of Thessaloniki at an annual trade fair where Greek prime ministers traditionally set out their economic policy for the coming year, Mr. Samaras announced a 30 percent cut to a tax on heating oil.