Aerospace giant Airbus says it’s confused as to why Mexicana continues to order replacement parts even though the Mexican airline hasn’t operated flights for the past month, The Wall Street Journal Bankruptcy Beat blog reported. Airbus is asking the U.S. Bankruptcy Court in Manhattan for vendor protections, such as assurance that it will be paid within seven days of delivering parts, after it received several unexpected orders from Mexicana in the past two weeks.

Draft proposals to tighten the rules for countries using the euro will demand earlier action and near-automatic sanctions against countries that breach debt and deficit limits, The New York Times reported. The proposals from the European Commission, scheduled to be presented Wednesday, stem from the recent fiscal crisis in Europe. While they are an attempt to prevent euro zone countries from sliding into unsustainable deficits, they might also increase tensions among countries in the European Union, which are divided over how tough a new regime should be.

Spanish unions have called a national strike Wednesday, the first in eight years, to challenge Prime Minister José Luis Rodríguez Zapatero's austerity push and labor-market overhaul, but they seem to have scant prospect of rolling back changes widely seen as necessary to combat a deep fiscal and economic crisis, The Wall Street Journal reported. Nevertheless, against the backdrop of a flare up in the sovereign-debt crisis, nervous investors will be watching for any signs of a popular backlash that could derail the austerity push in Spain, the euro zone's fourth-largest economy.

Concerns over the financial stability of countries on the euro-zone's fringe mounted Monday as one of Ireland's largest banks had its credit rating cut and political tensions fueled doubts about Portugal's deficit-cutting plans, The Wall Street Journal reported. Moody's Investors Service downgraded the senior debt of Anglo Irish Bank Corp. by three notches to Baa3. Ireland's property-market collapse has crippled its banks, and the government has so far spent €33 billion ($44.5 billion), about one-fifth of its gross domestic product, rescuing them.

The Romanian government was in an uproar Monday over austerity protests - the interior minister resigned, the opposition demanded the prime minister go as well and top police officials held emergency talks with the president, the Associated Press reported. The chaos reflected social fallout from the sharp wage cuts, tax hikes and other austerity measures the government has taken to fight its budget deficit amid a deep recession.

Two creditors of German retail firm Karstadt have appealed against the insolvency plan forming the basis of the planned takeover by investor Nicolas Berggruen, the mass circulation newspaper Bild am Sonntag (BamS) wrote on Sunday, Reuters reported. Although the two suppliers, according to BamS information, were owed only around 70,000 euros ($93,410), the move could in theory delay a planned handover at the end of the week starting Sept. 27, by insolvency administrator Klaus Hubert Goerg to billionaire businessman Berggruen.

The liquidator of the well known legal search company, Brennans Law Searchers Limited, has confirmed he has entered into a license agreement with Brady & Co. (Law Searchers) Limited as part of the creditors’ voluntary liquidation process, InsolvencyJournal.ie reported. Ken Fennell of kavanaghfennell has been appointed liquidator to the company. “The licence agreement offers the opportunity to safeguard the business and jobs while we undergo the sales process”, said Mícheál Leydon of kavanaghfennell, who is also involved in the liquidation.

U.K. business failures are forecast to fall by 18% this year but insolvencies are set to remain above pre-recession levels until 2013 or beyond, according to a survey by accountants BDO International, Dow Jones Daily Bankruptcy Review reported. The quarterly Industry Watch survey, done with the Centre for Economics and Business Research, expects the number of failures, including liquidations, administrative receiverships and orders, and voluntary arrangements, to fall to 21,600 from 26,196 last year.

It is unthinkable that Ireland or its banks would default on senior debt, Finance Minister Brian Lenihan said on Wednesday. Opposition politicians and some media commentators have called on Lenihan to force bondholders in Anglo Irish Bank to take some of the hit for the nationalised lender's massive losses, which are a major burden on the exchequer. "It's unthinkable that Ireland would default on senior debt or that Ireland's banks would default on senior debt," Lenihan told Reuters in parliament.

Former Anglo Irish Bank chairman Seán FitzPatrick has a net income of just €188 per month, according to documents furnished to the High Court, The Irish Times reported. A statement of affairs, provided to the court as part of Mr FitzPatrick’s bankruptcy proceedings, disclosed that the former bank chief has debts of more than €145 million, compared to assets of just over €47 million. During a brief hearing yesterday, the court was told State-owned Anglo Irish Bank was withdrawing its application to have its own trustee appointed to replace official assignee Chris Lehane.