The Irish economy is in bad shape, but the decline has been slowing in recent months. The real issue is what to do now, The Wall Street Journal reported. Ireland has models galore. It could follow Greece, whose Prime Minister George Papandreou stunned observers by responding to the downgrading of his nation's sovereign debt with a plan to increase public-sector pay.

Russia's state development bank VEB may resume giving out subordinated loans to banks as lending remains flat even after the government disbursed nearly $13 billion of the rescue package to the banking system, Reuters reported. "I concede that we may have to return to this instrument," the central bank's first deputy chairman, Gennady Melikyan, told the Russian Union of Industrialists and Entrepreneurs' (RSPP) banking committee meeting on Thursday.

Europe’s leading healthcare companies have complained to Brussels over the non-payment of debts on drugs and other medical products they say total almost €7 billion by the Greek public health system, the Financial Times reported. The moves come as Greece struggles to raise funds on international markets to finance its swollen budget deficit and public debt in the face of credit rating downgrades.

Greece suffered its second debt-rating downgrade in a week, undermining the country's efforts to reassure markets that it can repair its battered finances, The Wall Street Journal reported. Standard & Poor's Corp. cut its rating one notch to triple-B-plus and warned of future downgrades. The euro slipped slightly against the U.S. dollar on the downgrade, adding to recent declines that have pushed the common currency to its lowest level against the greenback since early October.

The euro tumbled as debt woes spread around the euro zone from Greece, where pledges of austerity and fiscal rigor failed to stem growing fears that the Continent's economic recovery could be derailed, The Wall Street Journal reported. The euro fell as low as $1.4505 on Tuesday, its lowest level since early October. New worries about Austrian banking also roiled markets, with rumors of trouble at an Austrian lender with shaky investments in Eastern Europe following Monday's surprise nationalization of another Austrian bank at the behest of the European Central Bank.

Austria's justice ministry says an investigation has been launched to clarify the circumstances surrounding the near demise of troubled financial institution Hypo Alpe Adria, The Associated Press reported. Austria on Monday nationalized Hypo Alpe Adria, a unit of German public-sector bank BayernLB, to prevent it from sliding into a bankruptcy fueled in part by bad loans - most of them in Eastern Europe. The ministry says prosecutors in the southern city of Klagenfurt are probing whether those responsible for the bank committed breach of trust and fraud.

Greece will attempt today to claw back some of its lost credibility with the EU and other international financial institutions by outlining drastic cost-cutting measures to reduce its runaway deficit, The Guardian reported. In a no-holds-barred interview, the finance minister, Giorgos Papaconstantinou, has pledged to resuscitate the economy – even if he believes its creditworthiness has been "unjustly" questioned. Greece is embroiled in the most serious fiscal emergency to hit the eurozone since the single currency was launched 10 years ago.

Greek Prime Minister George Papandreou said that European Central Bank President Jean-Claude Trichet and Luxembourg Prime Minister Jean-Claude Juncker see “no possibility” of a Greek default. Papandreou was speaking to reporters at a European Union summit in Brussels, Bloomberg reported. “There is no possibility of a default for Greece,” Papandreou said today. He also said there was no possibility of Greece leaving the euro area.

German Chancellor Angela Merkel indicated Thursday that healthier members of the euro zone aren't prepared to abandon Greece and other heavily indebted countries in the currency bloc, The Wall Street Journal reported. Ms. Merkel's comments were the first by a senior European figure in recent days to focus on shared obligations among members of Europe's monetary union, after a flurry of statements by European politicians and ECB officials emphasizing Greece's need to act.

The Dutch financial services group ING, which came close to collapse last year, said Friday that this month it would repay half of the €10 billion provided by the government during the height of the financial crisis, The New York Times reported. The bank joins other lenders in Europe and the United States, like UBS of Switzerland and Bank of America, in repaying at least some government funds earlier than anticipated. The Dutch state injected the funds into ING in October 2008 by purchasing nonvoting preferred shares.