Greece

Greece's international creditors reached a deal to end an impasse over the country's rescue program and unlock long-delayed loan payments, though the plan left officials with a host of challenges to cut the government's debt burden, The Wall Street Journal reported. Finance ministers from the 17-country euro zone and the International Monetary Fund struck a deal in Brussels to cut Greece's debt to a level below 124% of gross domestic product by 2020, officials said.

Call it Greece vs. the bondholders, Round 2. Almost nine months after forcing private sector investors to stomach a 75 percent loss on their Greek bonds, the Greek government — with the support of Germany, its largest creditor — is weighing a plan to repurchase some debt at today’s market price of 25 to 27 cents, according to bankers and lawyers involved in the talks, The New York Times DealBook blog reported. The bid would be considerably below the 35 cent level that many large hedge fund that own the bonds have set as a minimum for getting a deal done.

Germany is standing firm in its opposition to another major write-down of Greece's debt ahead of a meeting Tuesday that aims to clear the way for the next disbursement of aid to Athens. "A haircut remains unimaginable," Finance Ministry spokeswoman Marianne Kothe said at a regular government news conference Monday, as euro-zone finance ministers work to thrash out a deal.

Greece’s eurozone lenders are in a bind: how can they further trim the country’s unsustainable debt pile, but not take any losses themselves? the Financial Times reported. One proposal floating around European policy circles is a voluntary debt buyback of Greek bonds held by the private sector. A painful restructuring of more than €200bn of debt has still left about €62bn of bonds of varying maturities held by investors.

Eight months after he lobbied on behalf of Greece's creditors during the biggest debt restructuring in the history of world finance, Charles Dallara launched a withering attack on the policies of austerity, saying a "new course" was needed to stop Greece's economic death spiral, The Guardian reported. As thousands marched through the streets of Athens on a day of co-ordinated pan-European protests against measures that have seen Greek wages drop by an average of 35%, the American head of the Institute of International Finance said a new strategy was vital.

The International Monetary Fund, criticized for decades for prescribing harsh medicine to heavily indebted governments, is pressing reluctant euro-zone governments to go easy on Greece, The Wall Street Journal Brussels Beat blog reported. It is a fight the IMF will be hard-pressed to win. It is scaling down the money it lends to Greece, and, as it does so, its influence weakens. It has lent Greece about €22 billion ($28 billion), and has set aside another €26 billion to lend until 2016.

Euro-area finance ministers gave Greece two extra years to wrestle down its budget deficit, pledging to plug the resulting financing gaps in order to keep the country in the single currency and prevent a renewed flareup of the debt crisis, Bloomberg reported. Finance ministers granted Greece until 2016 to cut the deficit to 2 percent of gross domestic product. They put off until Nov. 20 a decision on how to cover additional Greek needs of as much as 32.6 billion euros ($41 billion) and left unclear whether the International Monetary Fund will continue to contribute.

Greece is battling to raise funds to avoid defaulting on a €5bn debt repayment this week as international lenders remained deadlocked over how to reduce its overall debt even as Athens won parliamentary approval for its 2013 austerity budget, the Financial Times reported. The country’s debt management office has announced plans to cover the €5bn debt through a treasury bill auction on Tuesday, but Greek banks expected to buy the issue can only raise about €3.5bn of collateral acceptable to the European Central Bank, according to two senior Athens bankers.

Eurozone leaders face a new round of brinkmanship over Greece’s €174bn bailout after international lenders failed to bridge differences on how to reduce Athens’ burgeoning debt levels, pushing the country perilously close to defaulting on a €5bn debt payment due next week, the Financial Times reported. Officials had hoped to finalise the new programme, which extends Greece’s rescue two years to 2016, at a meeting of eurozone finance ministers in Brussels on Monday. That would free up a long-delayed €31.3bn aid payment desperately sought by Athens.

Greece’s Parliament narrowly passed a crucial austerity bill early Thursday, in a vote that left the coalition government reeling from dissent as it struggles to secure vital bailout funds, The Washington Post reported. The bill, which will further slash pensions and salaries, passed 153-128 in the 300-member Parliament. It came hours after rioters rampaged outside Parliament during an 80,000-strong anti-austerity demonstration, clashing with riot police who responded with tear gas, stun grenades and water cannon.