Germany and France have suggested in recent days that rescuing Greece may be necessary to safeguard the euro zone, but both countries may have a more pressing motivation in the move—protecting their own banks, The Wall Street Journal reported. German and French banks carry a combined $119 billion in exposure to Greek borrowers alone and more than $900 billion to Greece and other countries on the euro-zone's vulnerable periphery: Portugal, Ireland and Spain. Together, France and Germany's banking sectors account for roughly half of all European banks' exposure to those countries.

Bank of Scotland Ireland is to cut 750 jobs from its Irish workforce of 1,600, with most of the redundancies due to take effect by July. The bank plans to close down the retail network which it operates under the Halifax brand. But it is expected that 850 jobs will remain in the corporate and commercial banking sections, Finfacts reported. The bank which operates 44 retail branches in Ireland under the Halifax brand, unexpectedly announced its decision to staff this afternoon.

Outgoing EU economics commissioner Joaquin Almunia has warned that Greece will have to adopt new austerity measures if it fails to meet targets set out in an already tough emergency budget, The Irish Times reported. Mr Almunia said the budget programme was achievable but prone to risk. By mid-March, Greece will have to submit its first special report to Brussels on the implementation of the measures, with a follow-up due in mid-May.

The state’s main banks have pressed developers to take advantage of an uplift in the UK property market to sell land and investment assets to recoup loans before they are sold to the National Asset Management Agency (Nama) over the coming months, The Irish Times reported. A number of developers have been encouraged to put land in the UK, including some prime sites in London, on the market as the banks believe they will receive a better deal than if they were to sell the loans at a discount to Nama.

The seasonally adjusted Live register rose to by 3,300 to 426,700 in December the highest level in almost 15 years, new figures from the Central Statistics Office (CSO) showed today, The Irish Times reported. Unemployment rose to 12.5 per cent in December, a 0.1 per cent rise on the 12.4 per cent recorded in the third quarter of the year by the Quarterly National Household Survey. Labour leader Eamon Gilmore said the increase cast "serious doubts" on Taoiseach Brian Cowen's claims that the recession has bottomed out and accused the Government of indifference.

Some hedge funds are starting to wager on painful times ahead for Japan, the world's second-largest economy, The Wall Street Journal reported. These investors, including some who made successful bets against risky mortgages and financial companies in recent years, anticipate trouble for Japan's financial system. Their concern: Government borrowing continues to climb while demand for the nation's debt could taper off.

Youth fashion chain D2 has become the first post-Christmas casualty, collapsing into administration and putting more than 1,000 jobs at risk, the Guardian reported. The retailer, which specialised in brands such as Wrangler, Levis and Kickers, is based in Scotland and had 79 shops, including three in Dublin. Insolvency specialists James Stephen and Dermot Power from BDO Stoy Hayward have been appointed to take control of the business. The D2 website has been taken offline and two Irish stores have closed.

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.

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.

AIB, Ireland's biggest bank, said in a trading update today that it is expecting 2009 bad debt charges to rise to €5.3 billion, up from a previous forecast of €4.3 billion, Finfacts reported. The bank said in an interim management statement, that the charges were weighted towards the €24 billion loan portfolio, that may potentially be transferred to the State "bad bank," the National Asset Management Agency (NAMA). The loans mainly related to the Republic of Ireland division, with some in the UK divisions.