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Allied Irish Banks has been forced to ditch plans to pay staff €40m in bonuses after the Irish government threatened to withdraw its financial support.

The Irish government has announced plans to save €15bn over the next few years to tackle the country's debt crisis.

Ireland became the second country this year to accept billions in EU funding after last night conceding its banking and budget crisis was too big to handle on its own.

A team of EU and IMF inspectors will arrive in Ireland today to take a closer look at the nation's banking system and prepare for a possible €80bn bailout.

European Council president Herman van Rompuy warns the euro and wider EU face a "survival crisis" as the continent's sovereign debt crisis escalates.

Despite unprecedented cash injections by governments in March 2009, the 12 months to September 2010 have seen increased levels of volatility.

Germany has agreed to give the EU's €440bn (£383bn) bail-out fund permanent status rather than letting it expire in 2013 as planned.

French MEPs may veto the Alternative Fund Managers Directive (AIFMD) including a key provision for passporting of investment products, which would allow fund managers to sell products across Europe.

A group of countries including Germany and the UK have thrown their weight behind an EU proposal to fine member states for failing to cut their budget deficits.

The European Commission has revised GDP forecasts for the UK slightly upwards, while the EU as a whole has also seen its figure boosted.