The Netherlands has recently found itself in the unusual position of being a deficit scoldee rather than deficit scolder: The government’s forecasting agency said that worse-than-expected growth boosted the deficit last year and will do so this year and next without more cuts. The ensuing austerity talks prompted the collapse of the Dutch government, but the caretaker government managed to secure a deal on a package of spending cuts and tax hikes that will bring the deficit under 3% of gross domestic product next year, as required by EU rules. So, good news, right? Actually, no.

France, Belgium and Luxembourg, which own Dexia, the lender that is being broken up, have agreed to boost state guarantees to the ailing bank by €10bn to €55bn, it was disclosed on Wednesday, the Financial Times reported. The decision followed Monday’s meeting between Pierre Moscovici, France’s new finance minister, and his Belgian counterpart, Steven Vanackere, in Brussels. The European commission “temporarily approved” the €10bn increase in guarantees “in order to preserve financial stability”.

The European Commission will propose far-reaching powers for regulators to deal with failing banks today, a step towards the banking union the European Central Bank has demanded to secure the euro's future, the Irish Times reported. The proposal will suggest closer coordination between countries and powers to force losses on the bondholders of failing banks to prevent a repeat of the chaos following the 2008 collapse of US investment bank Lehman Brothers.

As Europe careens deeper into political and economic crisis, the immediate survival of the euro turns more than ever on a single question: Will Germany act? The Wall Street Journal reported. For nearly three years, Chancellor Angela Merkel has resisted pressure from European neighbors to provide a stronger financial backstop for the euro zone. Germany, the only euro-zone nation with the economic heft to do so, has done the minimum necessary to keep vulnerable countries afloat—and demanded crushing public-spending cuts in return.

French President Francois Hollande's plan to lower the minimum retirement age to 60 from 62 is fully financed through higher payroll charges, the government said. The cost in the first full year is €1.1 billion, peaking at €3 billion in 2017, the government's spokeswoman, Najat Vallaud-Belkacem, said after the weekly Cabinet meeting, the Irish Times reported. The change, which takes effect on November 1st and involves those who started work as teenagers, will add no more than 110,000 people a year to the retirement rolls, the government said in a statement.

Spain has made its most explicit call to date for European institutions to recapitalise the country’s banks amid concerns about its own ability to raise the billions of euros needed on sovereign bond markets, the Financial Times reported. Cristóbal Montoro, budget minister in the centre-right government, sent jitters through financial markets on Tuesday when he admitted that the high perceived risk of Spanish sovereign debt meant Spain “does not have the door to the markets open”.

The country’s two main banks, Bank of Ireland and AIB, may struggle to meet the target of sanctioning €3.5 billion in new loans to small and medium-sized enterprises (SMEs) set for each lender, according to the head of the Credit Review Office John Trethowan, the Irish Times reported.

The Portuguese government will inject €6.6bn into three of the country’s largest banks, becoming the latest eurozone country to tap international bailout funding for an undercapitalised financial sector, the Financial Times reported. Vítor Gaspar, Portuguese finance minister, said the funds would ensure that Banco Commercial Portugues, Banco BPI and state-owned Caixa Geral de Depósitos met tough new capital requirements set by the European Banking Authority.

European Union and French officials squared off against Germany on Monday over how best to help Spain’s ailing banks, drawing lines in the debate over the latest challenge to the euro zone, the International Herald Tribune reported. Olli Rehn, the European commissioner for economic and monetary affairs, and Pierre Moscovici, the French finance minister, offered cautious endorsement at a news conference in Brussels for the idea of letting Europe’s bailout funds inject money directly into troubled banks.

PBG SA (PBG), Poland’s third-largest builder, decided to file for bankruptcy to help reach an agreement with creditors to cut debt by as much as 31 percent, Bloomberg Businessweek reported. PBG, which helped build three out of four stadiums for European soccer championship that kick off in Poland and Ukraine this week, is proposing to honor 69 percent of its debt to creditors owed more than 1 million zloty ($282,700), 80 percent to those owned from 100,000 zloty to 1 million zloty and 100 percent for those owned lesser sums, the company said in a regulatory filing today.