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.

Ireland will have to deal with mortgage debt as it overhauls bankruptcy laws and introduces a personal insolvency regime, Brian Hayes, a junior government minister, said, Bloomberg Businessweek reported. The government wants to shorten bankruptcy terms and introduce out-of-court debt settlements. Finance Minister Michael Noonan said Thursday the government had agreed with the country’s bailout partners that publication of “the very technically difficult bill” be delayed until the end-April.

Germany's biggest drugstore chain Schlecker said it is filing for insolvency after failing to secure funds to keep it afloat while it restructures its business, Reuters reported. "Necessary restructuring measures cannot be implemented as quickly as they would need to be, especially as planned bridge financing did not come through," the company said in a statement on Friday. It said its operations would continue and its employees would continue to be paid as part of the insolvency process.

Former billionaire Sean Quinn has been declared bankrupt in a Dublin court after his bankruptcy declaration was annulled by a Belfast court, InsolvencyJournal.ie reported. Quinn, who famously claimed to have just £11,000 in the bank, failed to have his bankruptcy declared North of the Border, after the Irish Banking Resolution Corporation successfully argued that his centre of main interest was in Ireland. The bank claimed that a European Directive that applies in insolvency cases stipulates that a person’s centre of main interest has to be ascertainable to third parties, such as creditors.

France and Spain have cleared major funding tests, steadying volatile markets and giving some much-needed cheer to the embattled eurozone, The Guardian reported. Paris and Madrid secured €13bn (£10.8bn) of funding between them in bond auctions at significantly lower interest rates than last year, despite a downgrade by the ratings agency Standard & Poor's last week that sparked fears of a run on the euro and the collapse of several banks. Stock markets rose on the news, with the FTSE 100 finishing the day up 38 points at 5741.15, while the German Dax rose 1%.

The Greek government and its private-sector creditors appeared to be closing in on a debt-restructuring deal on the basis of new proposals, raising hopes it would pave the way for another multibillion-euro bailout for the country, The Wall Street Journal reported. That optimism helped fuel a rally in financial markets across Europe, with the Athens stock exchange rising 2.9% and Greek banking stocks gaining 5%. Greece's efforts to get relief from its private-sector creditors recently have faltered.

The British arm of children's clothing retailer Pumpkin Patch has appointed administrators, the latest in a string of store groups to run into trouble as cash-strapped shoppers cut back spending, Reuters reported. Business advisory firm Deloitte said on Thursday it had been appointed to oversee the administration, a form of protection from creditors. It has closed five stores, making 60 staff redundant, but hopes to continue trading others while strategic options are explored. Pumpkin Patch Ltd, based in Reading, southern England, has 36 UK stores, employing about 400 staff.

European companies are less likely to default on debt in 2012 than during the global recession in 2009 because they have built up financial buffers and are relying less on bank lending, Standard & Poor’s said, Bloomberg reported. Moves to increase free cash flow to ensure payments to creditors should protect companies in any economic decline in the region this year, Tobias Mock, S&P’s lead analytical manager of European, Middle Eastern and African corporate ratings, said at a news conference yesterday in Frankfurt.

Greece is due to continue on Thursday talks with banking representatives aimed at agreeing a haircut for private investors holding Greek debt, Ekathimerini.com reported. Charles Dallara, head of the International Institute of Finance representing private creditors, and Greece's prime minister Lucas Papademos met on Wednesday to pick up discussions from where they had left off last week, when the two sides failed to agree on the interest rate Greece will offer on new bonds and a plan to enforce investor losses. No statements were made after Wednesday’s meeting.

Hedge funds have been known to use hardball tactics to make money. Now they have come up with a new one: suing Greece in a human rights court to make good on its bond payments, The New York Times reported. The novel approach would have the funds arguing in the European Court of Human Rights that Greece had violated bondholder rights, though that could be a multiyear project with no guarantee of a payoff. And it would not be likely to produce sympathy for these funds, which many blame for the lack of progress so far in the negotiations over restructuring Greece’s debts.