Poland's LOT airline said Friday it will present a plan to stave off bankruptcy next month after the government indicated that there will be no more money for the lossmaking state-owned company, the Associated Press reported. Poland's main link to the western world under communism until 1989, LOT has largely struggled since. LOT spokesman Marek Klucinski said the rescue plan will be presented March 20 and will include layoffs among some 2,000 employees and a deep restructuring of the company and its routes. LOT's most profitable routes are to Chicago and New York.

Iceland's biggest mortgage bank said the government would bail out the lender before it’s unable to honor its debts, Bloomberg reported. “There’s no risk of a default,” Sigurdur Jon Bjornsson, chief financial officer of the Reykjavik-based Housing Financing Fund, said in an interview late yesterday. “The Treasury, if it needed to, would bail out the fund.” His comments were echoed by Finance Minister Katrin Juliusdottir today, who said the government is prepared to cover the struggling fund, which yesterday was downgraded by Moody’s Investors Service to junk.

At the Netherlands’ highest civil court, lawyers clamoured to block the government’s move to wipe out stakes of shareholders and bondholders when it nationalised lender SNS Reaal earlier this month, the Financial Times reported. Investors at the hearing denounced Jeroen Dijsselbloem, finance minister, for exceeding his authority; one went so far as to accuse him of fraud.

Big European banks are boosting a key gauge of their financial health through largely cosmetic maneuvering, even as regulators in some countries try to crack down on the practice, The Wall Street Journal reported. Banks are recalculating the risks in their loan portfolios and trading books in flattering ways, a move that has the effect of raising their ratio of capital to "risk-weighted" assets—a metric that investors and regulators use to assess banks' abilities to absorb unexpected losses.

Elisa Dalbosco says she lost her job when it came time for her former employer, a refugee shelter in northern Italy, to either hire her with a permanent contract or let her go. “I have a college degree and it would have cost too much,” said Dalbosco, who at 26 is now unemployed and poised to vote for self-described populist Beppe Grillo in elections on Feb. 24 and Feb. 25. Dalbasco’s disappointment shows why Italy is braced for its biggest political upheaval since 1994.

The violent protests that forced Bulgaria's cabinet from power this week underscore the lose-lose situation facing the European Union's newest members as they struggle to stop economic downturn and stem growing public anger, Reuters reported. Ruling parties which stick with strict austerity programmes to win investor trust risk being bounced from power by voters fed up with cost cutting and tax hikes. Governments which loosen the fiscal screws or try unconventional ways to rebuild support before elections may alienate investors and invite more pain down the road.

Portuguese Finance Minister Vitor Gaspar painted a worse-than-expected picture of the country's economy this year, forecasting a 2% contraction and saying the government may need more time to meet the budget-deficit target of its €78 billion ($104 billion) international bailout agreement, The Wall Street Journal reported. Mr.

Prime Minister Boiko Borisov of Bulgaria submitted his government’s resignation on Wednesday after a tumultuous week of public anger over rising electricity prices, corruption and worsening living standards that ignited mass protests nationwide and led to bloody clashes with the police on Tuesday night, the International Herald Tribune reported. “The people gave us power, and today we are returning it,” Mr. Borisov said on Wednesday morning in Parliament, according to local news reports.

The Bundesbank has reported that the effects of the 2008 Lehman Brothers collapse will be minimal for central banks in the eurozone. Patience in unloading legacy assets has paid off, the institution announced, Deutsche Welle reported. On Wednesday, Germany's Bundesbank announced that eurozone central banks stood a good chance of getting off lightly after the spectacular 2008 Lehman Brothers collapse, which plunged global financial markets into a deep crisis.

Axminster Carpets, the manufacturer whose luxury carpets have graced Britain's stately homes and palaces since the eighteenth century, is calling in the administrators, joining a growing list of businesses seeking rescue to avoid collapse, Reuters reported. The 250-year old company, which employs around 400 people, said on Wednesday it would continue to trade while it explores all potential restructuring operations. Axminster was named after the hometown of its founder Thomas Whitty, who started making carpets in 1755.