Forgotten the euro zone debt crisis?

Financial markets -- and oil in particular -- will doubtless be in thrall in the coming week to Libya and whatever the wave of Middle East and North Africa popular uprisings throws up next.

But the radical change in the Arab world is not the only question mark hanging over investors. Does anyone remember the euro zone debt crisis?

Euro Slips As Irish Elections Revive Debt Worries

The euro weakened sharply Friday, as impending elections in Ireland revived concerns about the euro zone's unresolved debt crisis, which momentarily overwhelmed nervousness about slower U.S. growth and geopolitical instability.

Ireland, one of the 17-nation currency bloc's most troubled economies, has pledged to adhere to an austerity program designed to cut the country's debt load. The conditions are also part of EUR67.5 billion in loans from the European Union and the International Monetary Fund.

EU Official Blasts Crisis Response

BRUSSELS—The European Commission's response to the economic crisis has focused too much on pushing government deficit cuts and not enough on policies to promote job creation and economic growth, a European commissioner said Wednesday.

In a rare public show of internal dissent over the commission's economic policies, Maria Damanaki, the commissioner for maritime affairs and fisheries, also said the European Union should consider restructuring the debt of the euro zone's weakest governments in exchange for accepting the drastic budget cuts and far-reaching economic reforms that Germany and France have sought as part of an overhaul of the bloc's economic policies.

Depth of euro crisis may push bailout down agenda

ANALYSIS: Fixing the currency’s problems will be a very complex task, with many conflicting interests. Giving Ireland a better deal might not be a shared priority, writes DAN O'BRIEN

THE TERMS of Ireland’s engagement with the European Union could conceivably change as much in the coming weeks and months as they have since the State hitched its wagon to the European integration train almost 40 years ago. If this happens it will do so in the context of the continuing talks to redesign the euro’s institutional architecture.

ECB, EU Visit Portugal Under Measures Agreed on Debt Crisis

European Central Bank and European Commission officials are visiting Portugal as part of measures agreed earlier this month to fight the debt crisis.

The visit is in accordance with a Feb. 4 statement by the heads of state and government of the euro area and European Union institutions, said an official at Portugal’s Finance Ministry in Lisbon, declining to provide further information.

European leaders said in the statement they had agreed steps including “assessment by the commission, in liaison with the ECB, of progress made in euro area member states in the implementation of measures taken to strengthen fiscal positions and growth prospects.”

G-20 Reach Compromise Deal On Imbalances

The world's dominant economies have reached a compromise deal on how to track imbalances in the global economy that have been blamed for exacerbating the financial crisis, French Finance Minister Christine Lagarde said Saturday.

Finance ministers and central bank governors from the Group of 20 rich and developing countries managed to get China to agree on a list of yardsticks for imbalances, by softening the criteria for measuring current account surpluses.

ECB Emergency Lending Shows Crisis Not Over

By Simon Nixon

The news that emergency lending by the European Central Bank skyrocketed this week to its highest level in 19 months is an alarming reminder that the euro crisis is far from over. In my Agenda column in the European edition of the WSJ this week I cautioned that amid all the optimism at the prospects of a European “Grand Bargain”, there will be no end to the crisis unless E.U. leasers find a way to restore confidence in the banking system too. That means action on both bank solvency and liquidity.

EU’s Barroso Calls Permanent Debt-Crisis Plan ‘Indispensable’

European Commission President Jose Barroso called the euro area’s plan to create a permanent debt- crisis mechanism “indispensable” for financial stability in Europe.

He commented after the commission, the European Union’s executive arm, issued a favorable opinion of the decision by EU government leaders in December to amend the bloc’s treaty to establish a European Stability Mechanism in 2013 for countries that share the euro.

EU finance ministers meet over comprehensive solution to debt crisis

European Union (EU) finance ministers Monday continued at their monthly meeting discussion of a comprehensive solution to the sovereign debt crisis, but no final decisions are expected.

"Today with the euro group we will push forward with our discussion to arrive at a comprehensive package that causes the euro zone to be more stable and solves our problems," Greek Finance Minister George Papaconstantinou said after on arrival for the meeting.

ECB's Draghi - some sovereign spreads overshooting

Portuguese bond spreads over benchmark German Bunds soared to a euro-era high last week as a perceived lack of progress on reforms to tackle the euro zone debt crisis unnerved investors.

"There is an 'overshooting' effect now, an upwards exaggeration, just as there was an understatement before," Draghi told the German daily Frankfurter Allgemeine Zeitung.

Dollar Strengthens Amid Egypt Turmoil & Euro Debt Crisis

The dollar strengthened against the euro for the 3rd week in a row and rose against the majority of its major counterparts as concern grew over the ongoing Egyptian unrest and the debt crisis in Europe.

Investors sought the relative safety of the dollar as speculation increased over Portugal’s funding costs rising to an unsustainable level along with Egyptian President Hosni Mubarak stepping aside and handing power over to the military. Investors were further encouraged to seek out greenbacks with positive U.S.jobs data recently released along with a forecast increase in January retail sales.

Hopes raised, punches pulled

European leaders look set to fudge the latest test of their resolve.

EVER since the sovereign-debt crisis erupted a year ago bond markets have repeatedly tested the resolve of European leaders to avoid government defaults. On each occasion euro-zone members have done something—but not quite enough to quell the crisis. This year looks like following the same pattern.

Forex focus: sterling turns the corner

It’s up against the US dollar and the euro, as well as against last year's strongest currencies - the Swiss franc, Japanese yen and Aussie dollar.

This is great news for pensioners and those living off savings held in sterling. You could be getting the best rates for two years.

BOI Chief Sees Debt Crisis in Spain, Italy as ‘Highly Unlikely’

The euro-region rescue fund should be empowered to bail out banks and buy bonds on the market even though it’s “highly unlikely” that the debt crisis will spread to either Spain or Italy, according to Bank of Italy Director General Fabrizio Saccomanni.

“It would be useful to increase the effective size of the EFSF, which is less than its nominal value, and especially to raise its operative potential,” according to a transcript of a speech Saccomanni delivered today in Berlin. These steps should be taken even in the improbable scenario that the debt crisis extends to bigger countries such as Spain and Italy, he said.

Base metals ends higher on Euro debt crisis

The base metals complex delivered a good performance on the LME last week. Prices were driven by favorable economic data from the US and the Euro Zone released in the last week.

But, prices also took cues from developments on the crisis in Egypt. This led to major concern in the global financial markets and sharp gains further were capped on the back of these worries. The US Dollar Index (DX) closed on a flat note in the last week.