When Chancellor of the Exchequer George Osborne presents his budget to the House of Commons on Wednesday, he will seek to make the point that while the U.K. is ardently sticking to the course of eliminating the budget deficit, there won't be additional pain for squeezed households, The Wall Street Journal reported. The first part of this message—reasserting his commitment to the ambitious austerity measures that will result in £111 billion of fiscal tightening by 2015—leaves Mr.

EU finance ministers opened the door to debt restructuring in the euro zone with a deal to force bailout losses on private investors if aid recipients “cannot realistically” restore debt to a sustainable path, the Irish Times reported. The agreement on the scope and scale of the new European Stability Mechanism (ESM), which ends months of difficult talks, will be put to EU leaders at a summit on Thursday and Friday for final approval.

Ratings agency Standard & Poors has withdrawn its "D" long-term corporate credit rating on Czech gaming company Sazka after the indebted company's assets were placed under preliminary insolvency administration, Reuters reported. S&P said it also withdrew its "D" rating on Sazka's 215 million euros ($303.7 million) secured notes due in 2021. The indebted national lottery operator is facing insolvency claims by two major creditors who, along with another group of investors, are battling to take control over the firm.

European Union finance ministers will attempt again Monday to map out the details for a planned bailout fund to replace an existing temporary facility, amid ongoing discord on just how the fund should be financed, the Real Time Brussels blog reported. High-level officials continued to struggle to find agreement this week in preparatory meetings, according to someone close to the talks.

The world’s most powerful central banks joined forces to sell billions of dollars worth of yen, battling speculators – described as “sneaky thieves” by one Japanese official – who have driven the currency to record highs, the Irish Times reported. The intervention by banks including the Federal Reserve, European Central Bank, Bank of Japan and Bank of England began early yesterday, after ministers from the Group of Seven most industrialised nations approved the first such co-ordinated action in more than a decade.

The U.K.'s financial regulator broke ranks with its colleagues in Europe Thursday, urging banks to include the risk of a sovereign-debt restructuring in the euro zone in their stress tests, The Wall Street Journal reported. "In their stress testing, firms should consider a range of policy options in the euro-area peripheral countries, including a prolonged period of austerity and possible restructuring of bank and sovereign debt," the Financial Services Authority said in an annual survey that assesses the main risks facing the U.K.'s financial sector.

Germany is bracing itself for the loss of 5 million workers over the next 15 years as it becomes Europe's first and biggest test of the problems caused by an ageing and declining population. Having used generous job subsidies to steer the labour market through the country's worst downturn since the 1930s, labour and social affairs minister Ralf Brauksiepe told the Guardian on Thursday that a longer working life and an influx of skilled workers from overseas were the answer to the demographic time bomb.

The U.K.'s new financial regulator will focus on how to solve the problem of large banks taking on excessive risk because they are too important to be allowed to fail, a top official said Thursday, Dow Jones Daily Bankruptcy Review reported. Andrew Bailey, who will be deputy chief executive of the Prudential Regulation Authority, said the reliance of banks on public funds was "the most unacceptable aspect" of the financial crisis that erupted in 2007. Solving that problem "will be the objective" of the PRA, he said in a speech in Manchester, England. The U.K.

The Czech Finance Minister Miroslav Kalousek ordered a probe in the dominant Czech lottery firm Sazka after it failed to pay out a record jackpot, Reuters reported on an idnes.cz story. The indebted national lottery operator is facing insolvency claims by two major creditors who, along with another group of investors, are battling to take control over the firm. The investigation is expected to determine whether Sazka's lottery licence should be removed, the website said. Kalousek said it was preliminary to say whether Sazka would lose its licence, idnes.cz reported.

New data suggests Germany’s tough stance with Ireland may have its drawbacks — for German banks, the Real Time Brussels blog reported. Irish Prime Minister Enda Kenny clashed at a Brussels summit on Friday with German Chancellor Angela Merkel over her demands to raise Ireland’s low 12.5% corporate tax rate. European diplomats say this showdown is unlikely to end with Germany just giving up. However, another battle could be brewing, which could lead to a different result. Ireland was back in Brussels Monday.