Greece

Crédit Agricole SA is making contingency plans to abandon its Greek bank or merge it with a conglomerate of domestic banks in the event of Greece leaving the euro zone, according to a person with direct knowledge of the plans, The Wall Street Journal reported. The admission offers the starkest evidence yet of international companies preparing for the worst in Greece, just days ahead of elections that could set it on a path to leave the currency union.

Massive Spain was forced to ask for a bailout to keep its banks afloat this weekend. But it was tiny Greece that pushed Spain over the brink, The Washington Post reported. This Mediterranean nation’s 11 million people head to the polls next Sunday with a stark choice between leaders who accept the harsh terms of the bailouts that have kept their country afloat and those who reject them, potentially at the cost of Greece’s future on the euro. Fears that a Greek rejection would panic markets about the euro zone’s future pushed Spain to seek the aid ahead of Greece’s election.

The UK could be called upon to underwrite up to €6bn towards a bailout of Greece if it exited the euro, according to the Open Europe think-tank, the Financial Times reported. David Cameron would face vocal calls for large concessions – including a referendum on EU membership – if a Greek exit prompted full treaty change, the group says in a report published on Monday. Ahead of the Greek general elections on June 17 there are growing concerns about the consequences should Athens leave the single currency in a so-called “Grexit”.

Today, Greece is convulsing ahead of its most critical election in at least a generation. One of the flash points is the new property tax—a window into what has gone wrong with Greece, and with Europe's plan to rescue it, The Wall Street Journal reported. For many in the euro zone, Greece's sluggish tax receipts are a perennial frustration. For many in Greece, however, the new taxes—which fall particularly hard on those lower on the income scale—are only compounding the country's woes and stifling its economy.

Its membership in the euro currency union hanging in the balance, Greece continues to receive billions of euros in emergency assistance from a so-called troika of lenders overseeing its bailout. But almost none of the money is going to the Greek government to pay for vital public services. Instead, it is flowing directly back into the troika’s pockets, the International Herald Tribune reported.

Greece handed 18 billion euros (14.39 billion pounds) to its four biggest banks on Monday, the finance ministry said, allowing the stricken lenders to regain access to European Central Bank funding. The long-awaited injection - via bonds from the European Financial Stability Facility rescue fund - will boost the nearly depleted capital base of National Bank, Alpha, Eurobank and Piraeus Bank.

Greece's radical left party has upended the country's politics with an idea as simple as it is seductive: Athens can renege on the deals it made in exchange for a bailout, and still remain in the euro. Greece's future, and possibly that of Europe's monetary union, may depend on how many Greeks buy into the idea, The Wall Street Journal reported. The Coalition of the Radical Left, known as Syriza, is competing with Greece's conservative New Democracy to become the biggest party in Parliament in June 17 elections that could send further shock waves through Europe.

European officials are stepping up contingency planning for a possible Greek exit from the euro zone, even as Europe's leaders struggled to overcome differences on how to resolve the currency bloc's crisis at a summit meeting, The Wall Street Journal reported. Emerging from Wednesday night's informal European Union summit, Italian Prime Minister Mario Monti said most leaders had backed issuing common debt, or euro-zone bonds, to help support troubled members. But Germany and others opposed them and demanded Greece do more.

Worries that Greece might default on its debts or even leave Europe’s currency union have deepened since May 6, when Greeks voted in shocking numbers for a left-wing party willing to tear up Greece’s $170 billion international bailout agreement, the International Herald Tribune reported. These days, even though 80 percent of Greeks say they want to stay with the euro, talk of “drachmageddon” can be heard in conversations all around Athens — in executive suites, at mom-and-pop shops and even in nightclubs.

There has been no official announcement. No terms or conditions have been disclosed. But Greece’s banking system is being propped up by an estimated €100bn or so of emergency liquidity provided by the country’s central bank – approved secretly by the European Central Bank in Frankfurt. If Greece were to leave the eurozone, the immediate cause might be an ECB decision to pull the plug. Extensive use of “emergency liquidity assistance” (ELA) to help banks in the weakest economies has been one of the less-noticed features of the eurozone crisis.