Greece will have to cope with an even deeper recession than expected in 2012, according to the country’s central bank. In a revision to its previous estimate a month ago, it suggests Athens will find it even harder to meet its fiscal targets, meaning yet more pain for the population, the Financial Times reported. The Bank of Greece forecast the economy will shrink by about 5 per cent this year – the fifth consecutive year of contraction – compared with its previous estimate of 4.5 per cent just a few weeks ago.

Germany's central-bank chief rejected calls for the European Central Bank to back off from its push for fiscal austerity, batting down mounting concern that the strategy is causing deep economic pain and escalating political upheaval across Europe. In an interview with The Wall Street Journal, Bundesbank President Jens Weidmann also made no apologies for his repeated warnings that some ECB anticrisis policies, including government-bond buying and looser collateral rules, threaten financial stability and may generate inflation.

The European Commission is to consider Wednesday whether to start formal talks with Hungary on a precautionary loan package, after delaying negotiations for months amid disagreements about the independence of the country's central bank and other contentious issues, The Wall Street Journal reported. After a meeting in Brussels on Tuesday with Hungarian Prime Minister Viktor Orban, the commission's president, José Manuel Barroso, said he welcomed Mr. Orban's promises of "prompt and full implementation" of changes to Hungary's new central-bank legislation.

International Monetary Fund staff said Tuesday governments should consider mandatory debt restructuring for systemically important banks as part of a policy tool set to prevent new financial crises, Dow Jones reported. By instituting a so-called bail-in rule, governments could prevent the type of excessive risk-taking and market disruptions that fueled the 2008-2009 global financial meltdown, senior IMF economists said in a new discussion paper.

The Dutch prime minister, Mark Rutte, announced the resignation of his coalition government on Monday after its partners failed to agree on austerity measures, leaving the Netherlands with a messy leadership vacuum at a time of anxiety about the euro, the International Herald Tribune reported. Mr. Rutte has been an ally to Chancellor Angela Merkel of Germany on fiscal matters and a strong voice in favor of austerity for other European countries.

Several parties have shown interest in German solar company Q-Cells since it filed for insolvency earlier this month, including domestic and foreign investors, an administrator said on Monday, Reuters reported. "Our goal is to save most of the company and as many jobs as possible," preliminary insolvency administrator Henning Schorisch said in a statement, noting financial and strategic investors were among the parties but not giving further details. "The coming weeks will now show how big interest is," he said.

Spain in recent days has taken center stage in the euro crisis, Spiegel Online reported. The country's banks are threatened with collapse and the government in Madrid has not been successful in efforts to get the national budget under control. Will the country be forced to request aid from the euro bailout fund? Spain's banks are widely regarded as time bombs, with portfolios of volatile loans on their balance sheets that could explode at any time. The country is sliding deeper into recession and international financial investors are slowly but surely withdrawing.

Collapsed budget talks in the Netherlands heralded months of political uncertainty ahead of early elections that now appear inevitable, shedding doubt on austerity programs and raising the prospect of a downgrade of the euro-zone country's top sovereign credit rating, Dow Jones reported.

Canada will pledge funds to the International Monetary Fund in the event countries outside the euro zone require a bailout, but it is of the view Europe has adequate resources to deal with its debt crisis, Finance Minister Jim Flaherty said Friday, Dow Jones reported. He said Europe should "step up to the plate" and "overwhelm" the issue with its own resources. Canada and the U.S. have declined to commit resources to the IMF "at this time," as the Fund has adequate resources to deal with any imminent requirements.

Treasury Minister Danny Alexander will set out new rules on Monday to push ministries to tighten their grip on spending at a time of deep public cuts aimed at wiping out the country's huge budget deficit within five years, Reuters reported. Under the new rules, government departments will be asked to identify 5 percent of their annual budget to cover unexpected costs - in a bid to discourage them from asking for more money from central government when emergencies arise.