Greece

Greece’s finance minister says his government’s shrinking parliamentary majority has made it increasingly difficult to pass tough economic reform measures and called on the “troika” of international bailout lenders to be more realistic in its demands of Athens. Yannis Stournaras, who has been waging a four-month battle with bailout monitors over whether Greece is living up to the terms of its €172bn international rescue, said while Athens can continue to implement existing reforms – including better tax collection – ambitions for major legislative measures may need to be scaled back.

The head of the eurozone's bailout fund, Klaus Regling has ruled out the possibility of a restructuring of Greek debt, media outlet EU Observer reported on Tuesday. Speaking to Germany's Spiegel magazine, Regling - who heads the European Stability Mechanism (ESM), Greece's largest creditor with 133 billion euros in 30-year loans already disbursed at an interest rate of 1.5 percent - is quoted as saying "there will be no debt restructuring." "The interest on these loans was deferred for the next 10 years.

It's been a good year for the eurozone crisis in the sense that flare-ups have been few and minor. But here comes thinktank Capital Economics with the gloomy diagnosis that Greece's public debt (currently at 170% of GDP) is still unsustainably high and "the country's crisis is not yet over". That is despite the clear improvement in the public finances since the second bailout in 2012, The Guardian reported in a commentary. The problem is not the short-term one of plugging a funding gap (of maybe €11bn) for 2014 and 2015 that will appear next year.

For a year and a half, Antonis Samaras has kept Greece’s bailout programme broadly on track despite his coalition government’s shrunken parliamentary majority and resistance within his cabinet to implementing tough structural reforms, the Financial Times reported. For the Greek premier, stern admonitions from Angela Merkel, German chancellor, and other EU leaders that Athens must work harder to fulfil its obligations to international lenders have given way to recognition of the “sacrifices made by the Greek people” as fiscal targets are finally met.

Greece on Thursday outlined a 2014 budget that predicts a return to economic growth after six straight years of recession, putting the country’s prospects in an optimistic light, the International New York Times reported. But it came just two days after the Organization for Economic Cooperation and Development forecast that the Greek economy would shrink again next year. And the budget, which was presented to Parliament, has not received the necessary approval of the country’s trio of international creditors.

Public services ground to a halt across Greece on Wednesday as the country's two largest labor unions called a nationwide general strike to protest the government's ongoing austerity program and as international inspectors arrived in Athens to review Greece's reform program, The Wall Street Journal reported. Central and local government offices were shut by the strike, schools and courts closed, while public hospitals were operating on skeleton staff.

International budget inspectors began meetings with Greek officials Tuesday in a second round of talks aimed at bridging a contentious divide over what more Athens needs to do to secure its next tranche of aid, The Wall Street Journal reported. The review comes amid heightened political tensions in Greece. Labor unions have called a nationwide general strike for Wednesday to protest further austerity measures, while the two parties in the coalition government are divided over a new property tax.

Greece faces tough negotiations with international lenders over a looming fiscal gap in the 2014 budget that could undermine its chances of emerging from a six-year recession, the Financial Times reported. The “troika” – the European Commission, European Central Bank and International Monetary Fund – wants the government to adopt further austerity measures after identifying a potential shortfall of €2bn in the latest budget draft submitted by Athens.

Greece will need to pass fresh budget cuts next year to hit the targets set by its international creditors, a senior European Central Bank official said Monday, setting the stage for another clash with Athens over how much austerity the country can bear, The Wall Street Journal reported. ECB executive board member Jörg Asmussen, appointed last year from the German Finance Ministry, also said Greece's international creditors will need to do more to cover the country's financing needs, starting from mid-2014.

The International Monetary Fund proceeded with its record 2010 bailout of Greece despite deep internal divisions over whether it would work, according to confidential documents that contradict the fund's public statements, The Wall Street Journal reported. The new details of the rift come as the crisis lender is now pressing European governments to forgive some of the country's debt in a fresh round of difficult talks. The idea is unpopular with Germany and other European nations because their taxpayers would take the hit.