Europe's debt crisis is set to claim its first political scalp on Friday in an Irish election dominated by the trauma of economic collapse and the harsh path back to financial stability, the International Herald Tribune reported. Irish voters are in a vicious mood over the bursting of a property bubble that has left them steeped in debt and facing years of austerity to repay the European Union and the International Monetary Fund for an 85 billion euros bailout.

Holders of Eircom’s senior debt have appointed restructuring experts Houlihan Lokey as advisers as they prepare to negotiate with the troubled telecommunications company about billions of euro of outstanding debt, the Irish Times reported. The mounting pressure on Eircom to find a solution to its debt crisis comes as crunch talks on the future of the former State company take place in Dublin this week.

The Sunday Tribune, the Irish quality newspaper partly owned by Independent Newspapers, has closed, less than a month after a receiver was appointed, The Guardian reported. Jim Luby, the receiver, wrote to the 43 staff on Tuesday telling them they would be made redundant at the end of the month. It brings to an end a chequered 31-year history for a paper that attempted to inject new life into a newspaper sector dominated by two traditional Irish papers, the Sunday Independent and the Sunday Press.

Defaults among Irish mortgage holders more than doubled over the course of last year and were still growing in December, according to the latest analysis from Moody’s, the Irish Times reported. The ratings agency found that 1.65 per cent of the residential mortgages it studied had not been repaid for 360 days or more in December, up from 1.62 per cent in November. This compared to 0.7 per cent a year earlier, marking growth of almost 140 per cent over the course of 2010.

Euro zone finance ministers have eliminated the prospect of any move to impose losses on senior bondholders in Ireland’s banks, economics commissioner Olli Rehn said, the Irish Times reported. Although Fine Gael and Labour each say they would compel the highest-ranked bank bondholders to bear “haircuts” on their investment if they won the election, the commissioner said Ireland’s European sponsors see no possibility to pursue that path.

Anglo Irish Bank has told David Drumm’s bankruptcy proceedings in the US that it intends to sue him for his role in the treatment of Seán FitzPatrick’s loans and other controversial matters at the bank, the Irish Times reported. The bank has said it is going to pursue a claim for breach of fiduciary duty against its former chief executive arising from alleged misconduct and deception.

Growing uncertainty over State banking policy and a greater chance that burden-sharing will be forced on bondholders have led Moody’s to downgrade the senior unsecured debt of the six domestic banks, the Irish Times reported. The rating agency said the move had stemmed from “statements from both the leading Opposition party and the incumbent finance minister”. The existing “supportive” policy in relation to Irish banks has been called into question, Moody’s said.

Barely two months old, Ireland's €67.5 billion ($91.76 billion) deal for an international bailout is showing signs of strain, and the party expected to take power in this month's elections is maneuvering to renegotiate its terms, The Wall Street Journal reported. European finance ministers meeting in Brussels this coming week are expected to discuss how the plan could be modified amid Irish concern that it is too burdensome. Ireland has griped about the interest rate and the fact that taxpayers are bearing the brunt of the losses of the Irish banks.

A third rate of income tax, a wealth tax on assets worth over €1 million, restructuring bank debts and capping the salaries of TDs and ministers are among the proposals in the Sinn Féin election manifesto launched in Dublin yesterday, the Irish Times reported. Launching the 40-page bilingual document, There is a Better Way – Tá Bealach Níos Fearr Ann, Sinn Féin leader Gerry Adams told a news conference that it aimed to create “an Ireland of equals”.

The man likely to be Ireland's next prime minister said the government should wait until a round of stress tests on the country's banks has been completed before recapitalizing them, expressing concern that they may still have a "black hole" on their balance sheets, The Wall Street Journal reported. In an interview, Enda Kenny said it would be "prudent and realistic" to wait until the stress tests had been completed "to see if there is another black hole in the banks" before they receive any new capital injections. Mr.