Portugal’s town halls face default amid 9 billion euros ($12 billion) of debt unless the government provides aid soon, said Fernando Ruas, president of the nation’s association of municipalities, Bloomberg Businessweek reported. “At a company we call it insolvency,” Ruas said in a telephone interview from Lisbon on March 21. “It could happen that some town halls could have to restructure their debt if the government doesn’t intervene.” Ruas blamed a sharp decline in money transfers from the government in Lisbon to municipalities for their growing financial woes.

Treasury Holdings has been given leave to seek a judicial review of Nama's decision to call in its loans and appoint a receiver to various assets, the Irish Times reported. The group has overall debt of some €2.7 billion and Nama acquired some €1.7 billion of its loans in 2010. While granting leave today to Treasury to bring the case, Ms Justice Mary Finlay Geoghegan stressed she was not expressing any definite view on the legal and factual issues raised by the group, other than that it had met the necessary threshold of raising "substantial" issues to be tried.

Germany's 16 states are discussing ways to help the staff of insolvent drugstore chain Schlecker who face redundancy as the retailer is due to close more than 2,000 stores, Reuters reported. Unlisted Schlecker, which competes with privately-held peers Rossmann and dm, filed for insolvency in January after struggling to secure funds against a gloomy economic backdrop.

The European Central Bank is falling behind on a €40bn asset purchase programme launched at the height of eurozone crisis, in a sign it could be dropped as a first step towards unwinding huge emergency support for the region’s financial system, the Financial Times reported. Purchases of “covered bonds” – debt backed by pools of assets favoured by some institutional investors – have so far totalled less than €9bn. The scheme started last November and was originally intended to run until October at the latest.

The British government said Wednesday that it was sticking to its austerity program as it presented a budget of tax and benefit changes intended to spur economic growth. The opposition criticized it as benefiting higher earners, the International Herald Tribune reported. George Osborne, the chancellor of the Exchequer, said that the government’s plan for reducing the budget deficit was on track and that it was the only way for Britain to retain relatively low interest payments on its debt. For now, he said, Britain is expected to avoid falling back into a recession.

Spain has never been so close to default and Greece, Ireland and Portugal may need further bailouts, Citigroup Inc. chief economist Willem Buiter said. “Spain is the key country about which I’m most worried,” Buiter, a former Bank of England policy maker, said in a radio interview today on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt.

The Governor of the Central Bank Patrick Honohan will probably ask the European Central Bank Governing Council tomorrow for permission to delay a cash payment on the Anglo Irish promissory note due at the end of this month, according to the Bloomberg news agency, the Irish Times reported. Mr Honohan will ask for the delay to ease the debt burden on the State. The State is due to make a €3.1 billion payment to the former Anglo Irish Bank, which is then supposed to use the funds to reduce its emergency borrowings from the Central Bank.

German solar project developer solarhybrid AG said on Tuesday it will open insolvency proceedings with a German court, Reuters reported. It said it was filing for insolvency "due to illiquidity" with the court in Arnsberg. No other details were given in a statement issued late on Tuesday. In December, Solar Millennium AG filed for insolvency after running out of cash before it was able to finalize deals to sell large projects in the United States and Spain. German solar module marker Solon SE also filed for insolvency in December.

Germany appears to have accepted defeat in its efforts to convince other European countries to impose a kind of sales tax on financial transactions in the European Union or in the smaller euro zone, possibly putting up an obstacle to ratifying the permanent euro-zone bailout fund in Parliament, The Wall Street Journal reported. "The probability of imposing an EU-wide financial-transaction tax is very slim," German Finance Minister Wolfgang Schäuble told a gathering of conservative lawmakers on Tuesday, according to a person in the meeting.

Nortel Networks Inc, a former telecoms company that is liquidating in bankruptcy, won a dismissal of some claims by European affiliates that were seeking a large chunk of the company's $9 billion cash pile, Reuters reported. Nortel's British, Irish and French affiliates had sought more than $3 billion, claiming Nortel Networks Inc has breached its fiduciary duties to the European businesses by stripping them of cash and leaving them insolvent. A Delaware bankruptcy court dismissed those claims in part because Nortel Networks, or NNI, was not a director of the European affiliates.