Burberry Group PLC issued a surprise profit warning on Tuesday and reported its worst same-store sales figures since the financial crisis, raising concerns about a slowdown in the luxury sector, where companies are feeling the pangs of a decelerating China and macroeconomic uncertainty world-wide, The Wall Street Journal reported. The British fashion house, known for its classic trench coats and Haymarket check, is scheduled to report full quarterly sales figures in October.

Spanish Prime Minister Mariano Rajoy said Monday that a new backstop from the European Central Bank has helped to shore up confidence in the euro zone and made it less urgent for his country to seek a new bailout, The Wall Street Journal reported. "[The ECB] has sent a message that the euro is here to stay and that no country will be allowed to fall," Mr. Rajoy said in a televised interview with state-owned broadcaster TVE. "This message alone has sent borrowing costs for many European Union countries, including ours, much lower," he said.

Greece's prime minister started a new round of negotiations Monday with representatives of the country's bailout creditors, who are demanding a fresh set of controversial austerity cuts to release the next batch of rescue loans the country desperately needs to stay afloat, the Associated Press reported. Antonis Samaras' meeting with officials from the so-called troika of the European Union, International Monetary Fund and European Central Bank comes a day ahead of his talks in Frankfurt with ECB president Mario Draghi.

The temporary transfer of ownership of Ireland’s banks to the European Stability Mechanism could reduce funding costs, boost profitability and support economic recovery, the IMF said Monday, the Irish Times reported. In a staff report on Ireland, it called on Europe to help the State to lower the cost of rescuing the banking system, which has to date cost some €64 billion, by making good on a June 29th commitment by euro area leaders to break the link between sovereign and banking debt.

Safeguards proposed by Brussels to stop a newly beefed-up European Central Bank from calling the shots on banks beyond the euro zone are unlikely to satisfy Britain and other EU countries that do not use the common currency, Reuters reported. The EU faces weeks of hard bargaining before a banking union puts the banks of the 17 countries that use the euro under the authority of the ECB next year, giving the Frankfurt-based ECB unprecedented new powers.

The euro zone enters a dangerous week, strewn with potential landmines, in a somewhat more optimistic mood after investors welcomed a European Central Bank plan to prevent a breakup of the single currency. German judges, Dutch voters, IMF inspectors and Brussels regulators could all spring surprises that make it harder to resolve a sovereign debt crisis which is almost three years old and weighing on the world economy. Wednesday is the main day to watch.

State-controlled Royal Bank of Scotland said on Monday it would use the government's new flagship lending scheme to offer cheap funds to manufacturing companies, in a first move to put the scheme into action, Reuters reported. Britain launched its 'funding for lending' (FLS) plan in June as part of efforts to lift the economy out of recession, making 80 billion pounds of cheap loans available to banks provided they go to households and businesses.

The Finnish parliament would find it all but impossible to approve any changes to the latest Greek bailout, according to senior politicians in Helsinki, the Financial Times reported. Leading figures in the two main parties in the six-party coalition government said that if Greece was given more time to cut its deficit it would impose additional costs on Finland, making parliamentary approval “very difficult”.

French President François Hollande on Sunday sought to brace the nation for its toughest budgetary effort of the past six decades, as he outlined a raft of austerity measures—including a controversial tax on the rich—to shore up public finances. In a television interview, Mr. Hollande said he has given himself two years to turn around France's economy and acknowledged the gravity of that task. He said the country's growth prospects have clearly deteriorated and significantly downgraded the growth forecasts to "barely above zero" for this year and "about 0.8%" for 2013.

The Government will this week face calls to alter incoming personal insolvency legislation so the €3 million upper limit of debt is reduced and debtors will not have to sell engagement rings, the Irish Times reported. The European Commission has warned that the debt threshold is too high for a scheme aimed at struggling homeowners. Minister for Justice Alan Shatter has said expensive jewellery could not be exempt from debt relief mechanisms.