Portugal

Greece has one apparently simple option for reining in a budget deficit that has roiled financial markets: Clamp down on widespread tax evasion, which costs the country an estimated €15 billion ($20.5 billion) a year, an amount that would pay off a big chunk of the budget deficit. The trouble is, tax evasion in this Mediterranean country is extremely difficult to eradicate, The Wall Street Journal reported.

The problems facing Greece are just the beginning, Spiegel Online reported. The countries belonging to Europe's common currency zone are drifting further and further apart, and national bankruptcies are a distinct possibility. Brussels is faced with a number of choices, none of them good. Accruing debt is becoming increasingly expensive for other countries in the euro zone as well, among them Portugal and Spain. The southern members of the euro zone are especially being eyed with mistrust.

Jean-Claude Trichet, the European Central Bank president, is returning early from a conference in Australia to take part in a summit meeting of European leaders this week, amid speculation over possible action to ease the debt crisis several countries are facing, The New York Times reported. Mr. Trichet will attend the meeting Thursday of the European Council called by Herman Van Rompuy, the bloc’s first full-time president, an E.C.B. spokesman said Tuesday. He said Mr. Trichet was only invited to the meeting on Monday. The E.C.B.

European Central Bank President Jean-Claude Trichet delivered an impassioned defense of Europe's common currency as the market continued to cast doubt on the ability of Greece and other debt-ridden euro zone countries to get their deficits under control, The Wall Street Journal reported. Mr. Trichet's remarks came as worries spread through financial markets that Greece's fiscal woes will extend to other countries including Portugal and Spain. The cost of insuring the sovereign debt of those countries against default soared Thursday, putting downward pressure on the euro.

The Australian sharemarket fell to a five-month low today, taking the market's loss this week to $30.83 billion, The Australian reported. The surprise 268 point plunge on the Dow Jones Index on Wall Street overnight created an instant negative lead for equities markets across the Asia Pacific region. In Australia, the benchmark S&P/ASX200 dropped 107.3 points to 4514.3 while the All Ordinaries was down 111.4 points to 4532.7.

Greece's debt problems have boosted interest in Portugal's 2010 budget plan coming Tuesday, which international investors will study for signs of similar fiscal frailty, The Wall Street Journal reported. Portuguese stocks and bonds have sold off sharply recently because of Portugal's high long-term deficits and low growth prospects.

Nearly 35 years after winning independence from Portugal, Angola is being populated by its former colonizer once again -- this time by professionals and scores of workers laid off amid the economic slump, The Wall Street Journal reported. Portugal has been hard hit by the global downturn. Unemployment in the second quarter was 9.2% and the economy is expected to shrink by 3.7% this year. Temporary and seasonal construction work in other European Union countries -- a mainstay for Portuguese laborers -- have been drying up.

Qimonda, the insolvent German memory-chip maker, yesterday entered formal bankruptcy proceedings as its search for an investor dragged on, the Financial Times reported. The company said 915 of just under 3,400 employees would keep their jobs as it shuttered more sites--including its main plant in Dresden. Michael Jaffé, the insolvency administrator, said he remained in talks with "potential interested parties", and with governments in Germany and Portugal about supporting any new owner.

Inspur International Ltd., a Hong Kong-listed computer and information technology company, said it’s not interested in acquiring a stake in Qimonda AG, the memory-chipmaker that filed for insolvency in January, Bloomberg reported. Inspur Group Co., the parent of Inspur International Ltd., ended talks to buy a stake in Qimonda, Liu Xueheng, Hong Kong- based spokesman at the unit, said by phone today. Negotiations ended after Qimonda’s insolvency filing, Liu said.

European countries still deal with insolvent firms far more harshly than America does, and most such firms end up in liquidation, a recent Economist analysis found. They often treat creditors badly too, meaning that neither side ends up satisfied. Observers worry that Europe will cope with the coming flood of defaults far less effectively than America, meaning a slower recovery. In recent years several European countries have tried to change their systems so that companies have a better chance of survival.