Spain’s government and its banks are discussing a new scheme to segregate problematic property loans into one or more asset management companies to relieve the burden on struggling lenders, according to officials and bankers, the Financial Times reported. The “bad bank” scheme is the latest attempt by the centre-right government of Mariano Rajoy, prime minister, to avoid an international rescue programme of the sort required by Greece, Ireland and Portugal.

Spanish officials moved to shore up confidence in the ailing local economy after new data showed unemployment at an 18-year high, after credit-ratings firm Standard & Poor's slapped Spanish government debt with a two-notch downgrade, The Wall Street Journal reported. Spain's statistics bureau Friday said the country's jobless rate rose to 24.4% in the first quarter, from 22.9% in the fourth quarter of last year, inching toward its highest level on record. More than half of workers under 25 years old were without jobs.

Another vital sign for the euro-zone economy took a sudden turn for the worse this month as an economic confidence indicator fell, raising the risk of a prolonged contraction even as government leaders begin poring over formulas for promoting growth, The Wall Street Journal reported. The European Commission, the European Union's executive arm, said in its latest sentiment survey that the overall index of economic confidence for April dropped to a reading of 92.8, its lowest level since the end of 2009 from a reading of 94.5 the previous month.

The Dutch caretaker government secured a parliamentary majority for its austerity package Thursday evening, after clinching the support of a fifth political party, The Wall Street Journal reported. Dutch Finance Minister Jan Kees de Jager had been engaged in talks with three left-leaning opposition parties in an effort to reach agreement on the 2013 budget ahead of a key debate in Parliament later in the day and a European Commission deadline next week.

When the euro backstop fund was first created, it was considered a taboo to use the money to directly bail out banks. Now, though, it appears a number of euro-zone countries as well as the European Central Bank are seeking to ease the rules in order to prevent a banking crisis in Spain from forcing the country to request aid from the common currency rescue fund, Spiegel Online reported.

A major piece of legislation aimed at tackling the State’s personal debt crisis is facing delays of at least two months, the Irish Times has learned. A draft version of the proposed personal insolvency legislation was published in January, with the Minister for Justice Alan Shatter describing it as the “most radical reform of insolvency law since the foundation of the State”. He said the Bill would be finalised and ready by the end of April and he expressed the hope it would become law in the autumn.

A chorus of European leaders on Wednesday called for strategies to bolster the region's faltering growth, in comments reflecting the growing unease about the austerity medicine being applied to heal the region's economic woes—but their similar rhetoric hid widely divergent policy prescriptions, The Wall Street Journal reported.

Britain slipped back into recession at the start of this year, with economists concluding that even the most generous interpretation of official data released on Wednesday suggested the economy had flatlined for over a year, the Financial Times reported. The Office for National Statistics said that output for the first three months of the year contracted by 0.2 per cent, following a 0.3 per cent decline at the end of 2011. “A second consecutive drop in GDP in the first quarter leaves the UK meeting the technical definition of recession,” said Allan Monks, economist at JPMorgan.

When Maclaren USA entered bankruptcy in December, its Chapter 7 filing made for a lot more questions about what the company was doing in bankruptcy than it provided answers—questions that have remained largely unanswered since, The Wall Street Journal Bankruptcy Beat blog reported. Why did sales drop so drastically in 2011, to $34,251 from over $20 million in 2010? Does Maclaren, the U.K.-based company that manufactures the strollers and other products, plan to continue selling in the U.S.?

A YPF bond due in July next year is likely to default, and while Repsol YPF SA should escape a similar fate, this prospect could be yet another headache for the Spanish company after YPF's operations were seized by Argentina's government last week. Analysts expect that YPF's nationalization will almost certainly lead to a default on its bonds. Argentina's proposal to take over 51% of YPF would cut Repsol' stake to just 6% from 57% currently. Repsol, which denounced the takeover, has vowed to take the dispute to court.