Italy called Friday for emergency G7 talks and the EU worked "night and day" to ready new rescue funding as eurozone lending costs soared and stocks plunged amid fears of a renewed global recession, Agence France-Presse reported. As Europe scrambled to head off pressure on the single currency zone, Prime Minister Silvio Berlusconi said after telephone talks with President Nicolas Sarkozy that G7 finance ministers would meet "in a few days". "The situation is very difficult and requires coordinated action.

eircom’s new business plan projections leaves little doubt as to what the Irish telecom group’s subordinated debt holders would face in a planned debt restructuring, the Financial Times reported on a Debtwire story. The plan, presented last Friday (29 July) to senior lenders, put the writing on the wall -- over EUR 1bn of debt could be written off, with severe losses for investors in the company’s junior debt tranches.

The European Central Bank resumed a crisis-management role on Thursday, stepping in after a four-month pause to buy government bonds in response to a debt crisis that started nearly two years ago in Greece and now threatens to engulf Spain and Italy, The Wall Street Journal reported. Officials also said they would extend generous bank lending programs into next year and warned that economic uncertainties are "particularly high," suggesting a lengthy pause in the ECB's monetary tightening cycle after just two interest-rate increases.

The number of people signing on the Live Register rose slightly last month, according to new figures from the Central Statistics Office (CSO), the Irish Times reported. The standardised unemployment rate rose by 0.1 per cent to 14.3 per cent in July as an additional 1,500 people signed on to the Live Register. Overall, there were 470,284 people on the Live Register last month, up by 0.7 per cent or 34,600 individuals over the year. This increase is 1.1 per cent less than that recorded in June and 8 per cent lower than in July 2010.

Just a few months ago, European policymakers were scrambling to erect barricades protecting Spain from the marauding sovereign-debt crisis. But now, suddenly, it is Italy in the crosshairs—deeply transforming Europe's problem and putting policymakers in full retreat, The Wall Street Journal reported. What was a battle to avoid a costly bailout has now become a push to avoid a doomsday scenario. "The line has shifted from Spain to after Spain," said Carsten Brzeski, senior economist at ING in Brussels.

Shares in Swedish Automobile NV soared more than 40% Thursday, following a report in Swedish media that the company's Saab Automobile unit is looking to close a long-term funding deal with a U.S. investor, Dow Jones Daily Bankruptcy Review reported. Saab Automobile's chief executive and major shareholder, Victor Muller, declined to comment on the reports. Read more.

The forces of contagion in the eurozone appear unstoppable. On Thursday investors drove yields on both Italian and Spanish debt to new highs, as fears grew that last month’s Greek rescue deal would prove insufficient to stop Europe’s financial rot, the Financial Times reported in a commentary. Without swift action from the European Central Bank, this will prove to be a contagion process with a disastrous end. Why do we face these problems? Government bond markets in a monetary union are inherently fragile.

Denmark's banking sector needs to consolidate in coming years to better withstand tougher international market conditions, the Danish Finance Minister said in an interview, The Wall Street Journal reported. "A structural adjustment needs to take place in the Danish banking sector, we have many small banks," Finance Minister Claus Hjort Frederiksen said. The country's banking sector is highly fragmented, counting more than 100 banks—many of which are tiny, local lenders—serving a population of just 5.6 million.

UK holidays firm Holidays4u, which specialises in budget holidays and flights to Turkey, has gone into administration during the peak summer holiday season, leaving around 12,000 passengers to be repatriated by the UK airline authority, Reuters reported. The websites of Holidays4u and related Augeanflights on Wednesday said only that joint administrators had been appointed and that more information would follow.

After weeks of uncharacteristic and increasingly unsettling silence, Prime Minister Silvio Berlusconi is expected to address Parliament about the economy on Wednesday. On Tuesday, the financial markets pummeled Italy, sending interest rates on its benchmark 10-year bond well above 6 percent, the International Herald Tribune reported. Most alarming to economists is that Italy’s position in the markets is deteriorating even though the Parliament passed austerity measures last month.