Poland’s financial regulator will ease conditions for consumer and mortgage lending in order to stimulate borrowing amid an economic slowdown and to combat growth in the shadow banking sector, its head said Monday, the Real Time Emerging Europe blog reported. With the European Union’s largest emerging economy cooling rapidly this year, Warsaw has stepped up actions aimed at supporting growth and propping up sagging consumer demand.

Lisbon has unveiled an uncompromisingly tough budget for 2013 involving the biggest direct tax increases in living memory as the government struggles to keep Portugal’s €78 billion bailout programme on track, the Irish Times reported. Finance minister Vítor Gaspar said yesterday that income tax increases would include a special 4 per cent levy on earnings. The average tax rate would increase from 9.8 per cent of earnings to 13.2 per cent.

German ship owners have called for a state bailout as the sector continues to struggle with overcapacity, rising fuel costs and hard-pressed banks pulling back from lending to the industry, Reuters reported. The global shipping crisis has hit Germany particularly hard because the euro zone's biggest economy is also home to the biggest fleet of container ships, accounting for 1,800 of the 5,000 vessels worldwide. Between 500 and 700 German-owned vessels are facing liquidity problems, an industry source said, and about 100 have already gone bust.

A weekend gathering of the world's top finance officials deepened conflicts among some of the largest economies, raising fresh doubts about their ability to find big steps quickly to boost the flagging global recovery, The Wall Street Journal reported. At the annual meetings in Tokyo of the International Monetary Fund and World Bank, European officials bickered about the damage caused by austerity; this week they head into a major euro-zone summit with no clear rescue plan for Greece.

Portugal's center-right government presents its 2013 budget on Monday, which will outline the harshest measures yet under Lisbon's 78-billion-euro bailout and is likely to mark the end of the country's so far reluctant acceptance of austerity, Reuters reported.The budget will face immediate opposition from angry Portuguese, who plan to march on parliament to demand the resignation of the government and an end to austerity, which has sent Portugal into its worst recession since the 1970s.

Mario Draghi, president of the European Central Bank, has crafted what he calls a “fully effective backstop” against the disintegration of the eurozone. The question now is whether Europe’s leaders will use it to push for a resolution to the region’s crisis or whether, zombie-like, the bloc stumbles through a lost decade, the Financial Times reported. The 17-nation region contracted in the second quarter and, in spite of the ECB’s actions to slash its main interest rate to a historically low 0.75 per cent, it is proving hard to reignite growth.

Greece's jobless rate topped 25 percent and its biggest company said it would quit the country on Thursday in a fresh blow to an economy that German experts warned cannot be "saved" without writing off more debt, Reuters reported. The announcement by drinks bottler Coca Cola Hellenic that it was switching its primary listing from Athens to London, and moving its corporate base to stable, low-tax Switzerland, is a bitter blow to the debt-crippled nation.

Spain's Prime Minister Mariano Rajoy Thursday came under increased pressure to ask for a European Union bailout after Standard & Poor's Ratings Services slashed the country's credit rating to leave it teetering just above speculative-grade, or "junk" status, The Wall Street Journal reported.

High-level splits over the handling of the eurozone crisis burst into the open on Thursday when Germany’s finance minister rebuked the head of the International Monetary Fund after she warned that EU leaders should ease demands for tighter austerity in peripheral economies, the Financial Times reported. Wolfgang Schäuble said Christine Lagarde had appeared to contradict the IMF’s own stance in advocating an easing of austerity, noting that the fund had “time and again” warned that high debt levels threatened economic growth.

Prime Minister Mario Monti announced a tax cut for low-income earners, a surprise move to reward Italians after months of austerity measures that have damped recovery prospects in the euro-zone's third-largest economy, The Wall Street Journal reported. Though the measures also include a billions of euros of cuts in public spending, Italy's technocratic government billed the income-tax reduction as proof that a year of sacrifices aimed at staving off the prospect of default for the country's indebted state is paying off.