European leaders are quietly considering whether to come to the aid of their troubled neighbor Greece amid fears that the nation might default on its debts and unleash another round of financial crisis, The New York Times reported. Only a month after Dubai was rescued by its neighboring emirate Abu Dhabi, Germany, France and other European powers are discussing whether Greece might need a bailout too. After a decade of debt-fueled profligacy, Greece is confronting what amounts to a run on the bank.

As speculative pressure intensified against Greece in European financial markets on Thursday, senior figures in the Greek government sought to bolster confidence that it will repay its debts on time, The Wall Street Journal reported. The message: Their government, which took office in October, has embarked on an austerity plan that will rebuild the country's shattered credibility and start bringing its debt burden down by 2012.

Greece’s debt crisis returned to financial markets with a vengeance as agitated investors demanded the highest premiums to buy its government bonds since the launch of European monetary union over a decade ago. The yield spread between 10-year Greek bonds and benchmark German Bunds widened dramatically on Wednesday, by almost 0.7 percentage points at one point, in what one trader called a “capitulation” to sellers worried about Greece’s ability to refinance its debt.

Greece is wooing China to buy up to €25 billion of government bonds, a move that underlines Beijing’s growing financial power, as Athens struggles to fund soaring public debt, The Irish Times reported. Goldman Sachs, the US investment bank, has been promoting a Greek bond sale to Beijing and the State Administration of Foreign Exchange (Safe), which manages China’s $2,400 billion foreign exchange reserves, said people familiar with the issue.

Renewed worries over Greece's fiscal problems weighed on the country's financial markets Thursday even as the government reaffirmed that it isn't seeking outside support to meet its borrowing needs, The Wall Street Journal reported. Analysts said that the government is moving too slowly to address Greece's fiscal problems and that investors are showing their disbelief by selling down Greek stocks and bonds. "We are being penalized for each and every day we don't do anything about our problems," said Nicholas Douzinas, head of foreign markets at Intersec Securities.

The euro fell to the lowest level in five months against the dollar on concern Greece’s deteriorating finances will weigh on the region’s economic recovery, Bloomberg reported. The 16-nation currency also approached the lowest level in more than nine years against the Australian dollar on speculation European Central Bank Executive Board member Juergen Stark will reiterate his bearish outlook for the region’s economy and the budget deficit in Greece when he speaks today.

Worries over Greece's swelling debt will dominate two days of talks between European Union finance ministers that started Monday, as the euro fell to a ten-day low against the dollar, The Canadian Press reported. Greece is trying to assure financial markets - and other EU governments - that it will reduce debt with a program of deep spending cuts and higher taxes. It is aiming to bring its massive deficit down to the EU limits intended to underpin the stability of the euro.

European Central Bank President Jean-Claude Trichet said the ECB isn't willing to grant Greece special treatment to alleviate the country's economic turmoil even as Athens's latest plan to deal with the crisis was met with skepticism by investors, The Wall Street Journal reported. "No government or state can expect from us any special treatment," Mr. Trichet said following the European Central Bank's monthly meeting. The comments, which came as the ECB kept its key lending rate unchanged at 1%, helped push the cost of insuring Greek sovereign debt against default to a record.

Greece was condemned by the European Commission on Tuesday for falsifying data about its public finances and allowing political pressures to obstruct the collection of accurate statistics, the Financial Times reported. In a damning report published as the eurozone grapples with its worst financial crisis since the euro’s launch in 1999, the Commission said figures from Greece’s were so unreliable that its budget deficit and public debt might be even higher than government had claimed last October.

The incoming EU economic and monetary affairs commissioner Olli Rehn has dismissed suggestions that Greece could be thrown out of the euro zone if Athens fails to correct the crisis in its public finances, The Irish Times reported. Mr Rehn was speaking in a confirmation hearing at the European Parliament. Greek finance minister George Papaconstantinou has said that a new plan to cut the budget deficit will be submitted to the European Commission early next week and should sail through without problems.