There will be no bail-out of Greece by other European Union countries, a top European Central Bank official has said, according to the Financial Times Money Supply blog. “The markets are deluding themselves when they think at a certain point the other member states will put their hands on their wallets to save Greece,” Jürgen Stark, an executive board member, told Italian newspaper Il Sole 24 Ore.

Greece rejected speculation that it will need a bailout to tackle the European Union’s biggest budget deficit as officials fly in from Brussels to scrutinize tax and spending plans. “We don’t expect to be bailed out by anybody as, I think, is perfectly clear we’re doing what needs to be done to bring the deficit down and control the public debt,” Finance Minister George Papaconstantinou said in an interview with Bloomberg Television today.

Britain is in danger of succumbing to a budgetary crisis this year, with the economy likely to stay in the doldrums until at least the end of 2010, a Financial Times survey of economists warns. Asked to name the three biggest risks to the economy, 37 of the 79 economists polled said the UK was threatened by a fiscal crisis that could derail any revival. The economists said the government must make its plans to improve the public finances more transparent and credible if Britain was to avoid the fiscal crises that have engulfed Greece and Ireland.

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.

Never before has Europe’s monetary union seemed so fragile, The New York Times reported in an analysis. Day by day, fears are growing that Greece or another weak country may default on its sovereign debt obligations, forcing the richer countries in Europe to ride to the rescue or risk having one or more of its most vulnerable members leave the 16-nation euro zone. Many European economists discount such a fracture as a remote possibility. But that doesn’t mean Europe has safely emerged from crisis.

Moody's Investors Service on Tuesday became the third ratings agency to downgrade Greece's sovereign debt rating, saying that the Greek government's long-term credit strength was "eroding materially," The Wall Street Journal reported. The ratings agency cut the country's government bond ratings to A2 from A1. Moody's also gave Greece a negative outlook and said future ratings decisions will hinge on the government following through with deficit-reduction plans. But Greek stock and bond markets rallied after the Moody's downgrade.

Europe’s leading healthcare companies have complained to Brussels over the non-payment of debts on drugs and other medical products they say total almost €7 billion by the Greek public health system, the Financial Times reported. The moves come as Greece struggles to raise funds on international markets to finance its swollen budget deficit and public debt in the face of credit rating downgrades.

Greece suffered its second debt-rating downgrade in a week, undermining the country's efforts to reassure markets that it can repair its battered finances, The Wall Street Journal reported. Standard & Poor's Corp. cut its rating one notch to triple-B-plus and warned of future downgrades. The euro slipped slightly against the U.S. dollar on the downgrade, adding to recent declines that have pushed the common currency to its lowest level against the greenback since early October.

The euro tumbled as debt woes spread around the euro zone from Greece, where pledges of austerity and fiscal rigor failed to stem growing fears that the Continent's economic recovery could be derailed, The Wall Street Journal reported. The euro fell as low as $1.4505 on Tuesday, its lowest level since early October. New worries about Austrian banking also roiled markets, with rumors of trouble at an Austrian lender with shaky investments in Eastern Europe following Monday's surprise nationalization of another Austrian bank at the behest of the European Central Bank.

Greece will attempt today to claw back some of its lost credibility with the EU and other international financial institutions by outlining drastic cost-cutting measures to reduce its runaway deficit, The Guardian reported. In a no-holds-barred interview, the finance minister, Giorgos Papaconstantinou, has pledged to resuscitate the economy – even if he believes its creditworthiness has been "unjustly" questioned. Greece is embroiled in the most serious fiscal emergency to hit the eurozone since the single currency was launched 10 years ago.