European Central Bank President Mario Draghi Wednesday warned that "downside risks" to growth remained and any discussion of how and when the ECB will unwind its unconventional measures to fight the crisis was premature, Dow Jones reported. Striking a cautious balance between taming stubbornly high inflation amid rising commodity prices and supporting the still-weak euro-zone economy, the ECB left its main interest rate unchanged at a 1% record low for the fourth straight month earlier Wednesday.

Spanish borrowing costs jumped at bond auctions on Wednesday, spreading fear in European markets of a return of the euro zone debt crisis and overshadowing a successful step back into debt markets by neighbouring Portugal. Spain sold 2.6 billion euros of debt, at the low end of its target range, with a bond maturing in 2020 yielding an average 5.338 percent, higher than a forecast 5.2 percent and up from 5.156 percent when it was last sold in September.

France has enviable economic strengths: an educated and productive workforce, more big firms in the global Fortune 500 than any other European country, and strength in services and high-end manufacturing, The Economist reported. However, the fundamentals are much grimmer. France has not balanced its books since 1974. Public debt stands at 90% of GDP and rising. Public spending, at 56% of GDP, gobbles up a bigger chunk of output than in any other euro-zone country—more even than in Sweden. The banks are undercapitalised.

Europe is pressing ahead with fiscal belt-tightening amid mounting criticism from economists and political leaders that the strategy is hurting the region's fragile economy, The Wall Street Journal reported. The argument is entering a decisive phase as Europe teeters on the brink of a new recession. Manufacturing contractions in March extended from the Mediterranean periphery to powerhouses including Germany and the Netherlands, according to business surveys. Euro-zone unemployment climbed to 10.8% in February, the European Union's statistics agency said this week, a euro-era high.

Spain’s government, grappling with €57bn in combined annual costs for debt servicing and jobless benefits, will tolerate “no excuses or pretexts” from wayward autonomous regions in its drive to cut the public deficit, according to the budget minister, the Financial Times reported. Cristóbal Montoro described the situation as “extreme, at the limit and exceptional” as he presented parliament on Tuesday with the harshest budget since the death of dictator General Francisco Franco, comprising central government spending cuts and tax rises worth €27.3bn.

The banking industry has urged the Government to limit the mortgage debt eligible to be written off in out-of-court debt settlements at €1 million, fearing that the proposed €3 million limit would include too much property investment debt, the Irish Times reported. The group representing mortgage lenders has lobbied Governments officials to reduce the debt cap to €1 million for individuals applying for personal insolvency arrangements to prevent too many buy-to-let mortgages and property investors being included.

Lucchini group has sold its key foundry, Bari Fonderie Meridionali (BFM), to the Czech DT - Vyhybkarna a Strojirna AS, as part of Lucchini's debt restructuring plan, the Italian steelmaker said on Tuesday, Reuters reported. Lucchini, owned by Russia's Severstal and Severstal's owner Alexei Mordashov, reached a deal with shareholders and creditor banks in December, to restructure Lucchini's 720 million euro ($960.41 million) debt pile. The debt agreement is widely seen as paving the way for a potential sale of the debt-burdened Italian steelmaker to a third party.

Unemployment in the euro zone reached its highest level in almost 15 years in February, with more than 17 million people out of work, and economists said they expected job office queues to grow even longer later this year, Reuters reported. Joblessness in the 17-nation currency zone rose to 10.8 percent - in line with a Reuters poll of economists - and 0.1 points worse than in January, Eurostat said on Monday.

Q-Cells SE, once the world’s largest solar-cell maker, fell to a record low in Frankfurt trading before the German company said it will file for insolvency as soon as tomorrow, Bloomberg Businessweek reported. Q-Cells tumbled 41 percent to 13 euro cents as of the close of trading in Frankfurt. The manufacturer held its initial public offering in October 2005, when the shares sold at 38 euros apiece. The stock has plunged 77 percent this year as Q-Cells worked to reorganize debt while Germany’s government reduces solar subsidies and the industry fights overcapacity.

The overall participation rate in an unprecedented Greek debt restructuring deal has exceeded Greece's expectations, a senior finance ministry official said Monday, despite some holders of Greek foreign law bonds still refusing to take part in the offer, Dow Jones reported. The official said 97% of the bonds involved in Greece's debt restructuring agreement, which cleared the way for its EUR130 billion bailout, have been tendered in the swap, beating the 95% target the country was aiming for under the plan.