The European Union’s proposal that senior note holders share the burden of future government bailouts is driving the cost of insuring the debt of rescued lenders to record highs, Bloomberg BusinessWeek reported. Credit-default swaps protecting bonds sold by Commerzbank AG, which has received 18.2 billion euros ($24 billion) from the German government, almost doubled this year, while contracts on Italy’s Banca Monte dei Paschi di Siena SpA jumped 35 percent to the highest ever as of yesterday, according to CMA.

The number of Scottish business failures in 2010 was up by a quarter, according to the accountants KPMG, the BBC reported. The firm said there were 1,109 corporate insolvency appointments in 2010, compared to 883 in 2009. However KPMG said there were signs the market was starting to level out with a fall in the number of appointments between October and December. At the end of 2010, appointments were down 10% compared with the previous three months. The figure was 3% lower than the same period in 2009.

Yesterday’s High Court decision dealt what may prove a fatal blow to McInerney’s bid to stave off receivership, but the warning bells have been ringing for the homebuilding firm for some time, the Irish Times reported in an analysis. At the height of the boom in 2007, McInerney, one of the country’s oldest homebuilders, had revenues in excess of €200 million and was expanding quickly. However, the collapse in the Irish property and construction sector hit its business hard. By 2008 it was in the red, posting a loss of €47 million. In 2009 it lost another €25 million.

The turmoil in the euro currency zone is intensifying ahead of a key Portuguese debt auction, The Wall Street Journal reported. A selloff in Portuguese debt Monday prompted the European Central Bank to intervene by buying the country's bonds, traders said. The ECB's move stabilized the bond prices of Portugal and other highly indebted countries on the euro zone's fringe.

The Byrne Hotel Group, which owns three hotels in Galway, is in talks with its banks over debts of more than €43.5 million, The Irish Times reported. The company does not expect to be able to make any capital repayments over the coming years and is in discussions to put all loans on an interest-only basis for five years, according to recently filed accounts for its group holding company R Byrne Concrete Ltd. The group owns the Victoria Hotel, the Eyre Square Hotel and the Salthill Hotel, all in Galway, as well as the Metro Hotel in Leicestershire, England, and other property.

The euro zone's debt crisis is entering a new phase after a brief Christmas lull as Portugal struggles to persuade investors to buy its bonds and other European governments step up pressure on the country to seek an international bailout, The Wall Street Journal reported. Portugal hopes to raise new funds in a bond auction on Wednesday, despite a market sell-off in recent days that pushed the interest yield on Portuguese 10-year bonds above 7% Friday, the highest level since the euro's creation.

The EU authorities and the International Monetary Fund (IMF) have relaxed a tight deadline set in the bailout deal for the Government to establish “ambitious” new loan-to-deposit ratio targets for Ireland’s struggling banks, the Irish Times reported. The high loan-to-deposit ratios of Ireland’s banks, a legacy of imprudent property lending and declining deposits, are a key measure of their weakness.

Greece's prime minister sought to allay investor concerns over the country's staggering debt burden Thursday, saying the country isn't in talks to restructure government debt held by private bondholders and will return to the bond markets this year if conditions allow. Speaking in an interview with Dow Jones Newswires, Prime Minister George Papandreou said Greece's program of tough structural reforms and harsh fiscal austerity -- as demanded by its international lenders -- would ensure that Athens could repay its private creditors. "We have no such [restructuring] talks going on.

The four main creditors in German cable provider Primacom have agreed to cancel 250 million euros ($328.6 million) worth of loans in return for equity, two sources familiar with the restructuring told Reuters on Thursday, sending Primacom's share price soaring. The shares leapt more than ninefold to 1.99 euros at 1545 GMT after the sources revealed that creditors Alcentra, Tennenbaum Capital, Avenue Capital and the Dutch bank ING finalised the deal that would give them full control of Primacom.

The European Union is proposing an area-wide framework for confronting bank and investment-firm failures that urges bondholders to share the burden, Dow Jones Daily Bankruptcy Review reported. The EU executive arm, the European Commission, Thursday released a 100-plus page consultation paper that aims to abolish the excuse that a bank is too big to fail.