Dutch clothing brand Oilily says it’s bounced back from bankruptcy, pointing to the debut of its new kids’ clothing collection and its plans to launch a retail website geared toward U.S. shoppers, The Wall Street Journal Bankruptcy Beat blog reported. Oilily’s latest line of kids’ clothing is called the “Gypsy Tales of Freedom” collection. Shoppers at various retailers in 40 countries–including the U.S., China and Japan–can pick up brightly colored coats, striped stockings, dresses and slacks featuring handmade folk-style embroidery.

The European Commission wants to give regulators the power to convert debt issued by ailing banks into equity as they try to avert the collapse of failing institutions without leaning on taxpayers, The Irish Times reported. In the latest in a long line of far-reaching reform proposals from internal markets commissioner Michel Barnier, the EU executive also wants to give regulators the power to depose the management of vulnerable institutions, suspend dividend payments, force asset sales and compel an institution to implement a recovery programme.

President Nicolas Sarkozy vowed Tuesday “to guarantee order,” restore fuel supplies and crack down on “troublemakers,” as a quarter of France’s gas stations ran dry and other disruptions built from nationwide protests and strikes, the International Herald Tribune reported. His comments marked a hardening of the government’s resolve to hold to its program of reforming the indebted pension system despite the job actions by public workers at refineries and railways and in other key sectors. The final parliamentary vote on the plan may not come until early next week.

Creditors of Aer Arann are set to receive €2.2 million from the airline’s new investors in settlement for their debts, The Irish Times reported. This is part of a scheme of arrangement that has been put together by Aer Arann’s examiner, Michael McAteer of Grant Thornton. Some creditors – notably the Dublin Airport Authority – are set to receive all of the money they are owed under the terms of the scheme, but others will get back just 2 per cent. It is understood that AIB’s exposure of €5.2 million would be rolled over into the new entity.

The debt-strapped U.K. government announced an 8% cut in its military budget, undertaking a delicate attempt at cutting personnel and military hardware without jeopardizing the country's place among the world's biggest military powers, The Wall Street Journal reported. The cuts announced Tuesday by British Prime Minister David Cameron mark the Ministry of Defence's biggest one-off reduction since the dawn of the Cold War.

Anglo Irish Bank has secured a temporary court injunction restraining the wife of its former chief executive David Drumm from transferring the couple’s former home in Co Dublin from her sole ownership back to the joint ownership of her husband and herself, The Irish Times reported.

Italy’s debt costs more to insure against default than that of the Philippines or Indonesia, as Europe’s debt woes overshadow a credit rating six levels higher than either of the emerging-market nation, Bloomberg reported. Credit-default swaps on Italy, the only borrower among Europe’s so-called peripheral nations not to suffer a cut in its credit rating since last year, trade at 166.5 basis points. That’s more than the 127 basis points for Indonesia, or the 126 basis points for the Philippines.

French President Nicolas Sarkozy has aligned himself with German chancellor Angela Merkel in her push for changes to the European treaties to fortify the EU’s economic system, The Irish Times reported. In a joint declaration issued in Deauville last night, the two leaders said they had reached a new consensus on measures to strengthen Europe’s system of economic governance.

Here are some interesting questions from an Irish MEP which boil down to this: How come Allied Irish Banks passed the European bank stress test in July and three months later the Irish authorities stepped in to announce a €3 billion capital injection? Alan Kelly, an opposition Labour MEP, has written to European competition commissioner Joaquín Almunia, who oversees state aid programs, posing three questions, The Wall Street Journal Real Time Brussels blog reported. Was the bank giving a truly accurate assessments of its projected losses?

More than 50,000 Spanish solar entrepreneurs face financial disaster as policy makers contemplate cutting the price guarantees that attracted their investment in the first place, Bloomberg reported. Prime Minister Jose Luis Rodriguez Zapatero introduced the subsidies three years ago as part of an effort to cut his country’s dependence on fossil fuels. At the time, he promised that the investment in renewable energy would create manufacturing jobs and that Spain could sell its panels to nations seeking to reduce carbon emissions.