The possible involvement of the European Central Bank in Greece's second bailout package continues to be under discussion among senior euro-zone and International Monetary Fund officials, who see a need for more resources to provide Athens with sufficient debt relief, The Wall Street Journal reported. The ECB's role is being actively discussed this week, said people with direct knowledge of the matter.

All is not lost for small, struggling companies around Milan. The local chamber of commerce’s “Fondo Sbloccacrediti Milano” – literally, “Milan’s fund to Free up Credit” – is a sign of the gloomy times across parts of Italy’s business community, the Financial Times reported. Set up by UniCredit, the country’s largest bank, and the local business lobby, the credit line offers a last ditch chance for small viable businesses with nowhere else to turn. With just €15m available, however, the fund may quickly prove inadequate.

The leader of the rightwing Laos party, junior partner in the Greek coalition government, has appealed to the European Union to ease the terms of the country’s second €130bn bail-out, or risk triggering a “social explosion”, the Financial Times reported. The passionate plea from George Karatzaferis came as Greek officials are scrambling to meet a deadline on Friday to restructure €200bn of debt controlled by private bondholders, an essential condition for the next rescue plan.

Four companies each day went out of business in January, new data showed today, the Irish Times reported. The report from InsolvencyJournal.ie showed a total of 135 companies went bust last month, a rise of 39 per cent compared with 2011. The majority of the failed companies were in the services sector, accounting for 32 per cent of the overall total, while the construction industry accounted for 26 per cent. The retail industry, hit by falling consumer demand amid the current economic fragility, saw the number of insolvencies rise by 66 per cent in the month.

Credit card and other unsecured lending to British consumers posted its sharpest drop in nearly two decades in December, supporting expectations that the Bank of England will soon inject more cash into the economy to prevent a deep recession, Reuters reported. A steep decline in money supply also added to views that 75 billion pounds in quantitative easing, or asset purchasing, launched in October are not enough to boost the economy, which may have already entered a mild recession at the end of last year.

Unemployment figures have highlighted the widening gap between Germany and many fellow eurozone members, a day after Angela Merkel secured a new treaty enshrining Berlin’s vision for tough fiscal discipline, the Financial Times reported. Unemployment in the 17 euro countries climbed to 10.4 per cent in December, with the November rate revised upwards to the same rate, setting a fresh record since the introduction of the single currency in 1999. So-called “peripheral” members such as Spain and Greece recorded the highest rates, of 22.9 per cent and 19.2 per cent respectively.

Greece must make "difficult" decisions in the coming days to clinch a debt swap agreement and a 130 billion euro ($170 billion) bailout package needed to avoid an unruly default, the government said on Tuesday, Reuters reported. Near-bankrupt Greece is struggling to convince skeptical lenders it can ram through spending cuts and labor reform to help bridge a funding shortfall driven by a worsening economic climate and its previous reform plan having veered off track. With a long-awaited debt swap deal largely almost secured, Athens' focus is now squarely on the reform front.

Banco Santander of Spain announced on Tuesday that its net profit fell nearly 98 percent, to 47 million euros, during the final three months of last year, as the bank dealt with the downturn in the Spanish real estate market and the European debt crisis, The New York Times DealBook blog reported. The drop in quarterly profit weighed on the bank’s annual earnings, which fell 35 percent, to 5.35 billion euros ($7 billion), in 2011.

Investors participating in a deal to slash Greece's massive debt would face an overall loss on their bond holdings of more than 70 percent, a person involved in with the negotiations said early Tuesday, the Associated Press reported. European leaders at a summit in Brussels said a final debt deal could be signed off in the coming days, together with a second multibillion-euro bailout packaged designed to save the country from a potentially disastrous bankruptcy.

The U.K. government's proposed reforms to public sector pensions are unlikely to save any money over the long-term, a report from an influential think tank said Tuesday, casting doubt on the government's claim that the changes will save "tens of billions of pounds" over the next few decades, The Wall Street Journal reported. The government and unions have been locked in protracted negotiations for more than a year over the plans to make public sector workers retire later and contribute more towards their pensions.