Does this sound familiar? Central bankers who are so concerned about the threat to their currency that they demand that austerity be imposed upon angry citizens. Political leaders who, facing a deep recession that has led to large-scale unemployment, insist that the only route to recovery is to cut public spending, pay off national debt and impose higher taxes. How about this? Economists, doubting the wisdom of bankers and lawmakers, argue that the best way to avoid a decade of lost jobs and economic stagnation is to borrow and spend to promote economic growth.

Finnish unemployment rose to the highest in six months at the end of last year, increasing more than economists estimated, as Europe's debt crisis sapped economic growth in the northernmost euro member, the Irish Times reported on a Bloomberg story. The jobless rate, which isn't adjusted for seasonal variations, rose to 7.4 per cent in December from 6.2 per cent in November, Statistics Finland said Tuesday. The rate topped all four economist estimates in a survey by Bloomberg.

Switzerland-based refiner Petroplus Holdings AG plans to file for insolvency, after talks with its lenders failed to unblock credit lines and the company succumbed to the weak profit margins that have dogged the sector in Europe during the past year, The Wall Street Journal reported.

Germany is open to boosting the firepower of the eurozone’s rescue funds to €750bn in exchange for strict budget rules favoured by Berlin in a new fiscal compact for all members of the currency union, the Financial Times reported. Berlin appeared to soften its longstanding resistance to increasing the funds only hours after the International Monetary Fund warned that the eurozone needed more money to build “a larger firewall” to prevent the crisis from spreading to its core economies.

Investors, economists and politicians are increasingly concerned that Portugal will need a second bailout as fears mount that it won't be able to return to markets for financing next year, The Wall Street Journal reported. While the Portuguese government's finances are covered this year as long as it abides by its bailout agreement, Portugal must regain full access to capital markets next year to help repay €9 billion ($11.64 billion) in debt coming due in September 2013.

Greece came under heavy pressure at a meeting of eurozone finance ministers on Monday to revamp a stalled debt restructuring deal with private bondholders and accelerate structural reforms in order to avert a disorderly default, the Financial Times reported. Ministers from Germany and the Netherlands rounded on their Greek counterpart and urged him to deliver on promised reforms to the economy, in a sign that patience with Athens is wearing thin just as eurozone members begin to finalise the details of a second bail-out package.

Debt-crippled Greece has named some 4,000 alleged tax dodgers, including a former media magnate and a prominent entertainer, with the worst offender owing the state nearly euro1 billion ($1.3 billion), the Associated Press reported. But much of that money might never be reclaimed, as some of the top offenders are in prison or their companies are bankrupt.

The complex issue of how to deal with unsustainable mortgages in out-of-court debt settlements may be concluded in three months’ time – but the operation of the new system could prove as difficult as its construction, the Irish Times reported in an analysis. Under the proposed changes, the Government aims to introduce non-judicial debt settlements, allowing people an alternative to the costly and protracted court system of resolving debts. But the changes are fraught with difficulties.

There are two basic models for a successful financial center. One is to be the onshore center for a large domestic market, as New York is for the U.S. The alternative is to be an offshore haven, touting for business around the world by offering favors such as regulatory arbitrage, tax advantages or, in Switzerland's case, secrecy, The Wall Street Journal Agenda blog reported. Over the years, London's model has evolved. In the 19th century, it was the onshore center for the British Empire.

The International Monetary Fund has earmarked 91 per cent of its definitive commitments to programmes in Europe. There is now a proposal on the table that suggests this is not enough and should be significantly increased, the Financial Times reported in a commentary. Would an increase in IMF funds to bail out the eurozone be justified? In particular, should non-eurozone countries participate in raising this new capital? I think not. The IMF is right, of course, to conclude that the eurozone crisis is the main risk facing the global economy right now.