Greece

Greece's election on Sunday is expected to usher in such political instability that officials from the country's major parties are planning another possible election within months. That, in turn, could threaten the viability of Greece's latest bailout package from the European Union and the International Monetary Fund and aggravate the euro zone's financial woes. A nation eager to punish its political establishment for Greece's financial and economic meltdown is set to give the country's two major established parties a drubbing this weekend.

Greece will have to cope with an even deeper recession than expected in 2012, according to the country’s central bank. In a revision to its previous estimate a month ago, it suggests Athens will find it even harder to meet its fiscal targets, meaning yet more pain for the population, the Financial Times reported. The Bank of Greece forecast the economy will shrink by about 5 per cent this year – the fifth consecutive year of contraction – compared with its previous estimate of 4.5 per cent just a few weeks ago.

The Netherlands' ABN Amro Bank NV said Wednesday it won't participate in Greece's debt restructuring, making it one of the few major creditors to back out of the deal, Dow Jones reported. ABN Amro won't participate because it is still unclear why it was put on a list of banks that had to take part in the debt restructuring, a spokesman said. The deadline to participate in the deal was Wednesday. The bank, which holds EUR1.3 billion of corporate bonds that are backed by the Greek government, has argued that the list was inconsistent because peers that hold similar debt weren't put on the list.

A 77-year-old Greek man took his life in Athens's central Syntagma Square early Wednesday, police said, in what appeared to be a protest against a deepening economic crisis that has coincided with a rising national suicide rate, The Wall Street Journal reported.

The overall participation rate in an unprecedented Greek debt restructuring deal has exceeded Greece's expectations, a senior finance ministry official said Monday, despite some holders of Greek foreign law bonds still refusing to take part in the offer, Dow Jones reported. The official said 97% of the bonds involved in Greece's debt restructuring agreement, which cleared the way for its EUR130 billion bailout, have been tendered in the swap, beating the 95% target the country was aiming for under the plan.

A panel of dealers determined in an auction Monday that holders of Greek credit-default swaps would be paid 78.5 cents on the dollar after Greece's giant debt restructuring, a smooth result in line with expectations for a large payout to swapholders, The Wall Street Journal reported. Credit-default swaps, or CDS, are insurance-like contracts designed to pay off if creditors suffer losses. The auction's outcome means that sellers of the $3.2 billion in outstanding swaps will pay $2.5 billion in compensation to buyers.

A group of financial-market players on Monday will determine that holders of $3.2 billion in Greek credit-default swaps will receive around $2.5 billion in compensation for Greece's debt restructuring—a payout that mirrors the loss that creditors suffered, The Wall Street Journal reported. But the happy outcome owes much to mere chance. It masks flaws in the contracts, say some market participants and legal experts, that have rattled investors and are leading to calls to revamp how the swaps are handled for defaulting sovereign nations.

The euro-zone countries Wednesday signed off on Greece's second bailout program, ending a protracted and dramatic negotiating process that started last July. Their hope is that the €130 billion (roughly $169 billion) package—funded mostly by euro-zone countries and the International Monetary Fund—will be enough to keep Greece funded until 2014-15. But talk of a third Greek bailout has already begun, even as the ink is still drying on the second package.

Greece will have to slash a further 5.5 percent of GDP in government spending in 2013 and 2014 to meet agreed fiscal targets underpinning the second international bailout for Athens, a European Commission report said. The Compliance Report by the European Union's executive describes the progress of Greek reforms necessary for the release of new euro zone money to Athens and recommends the first disbursement be made as soon as possible.

The Greek government might have been on course on Thursday night to conclude a €206bn debt restructuring but not before meeting some embarrassing opposition to the deal, the Financial Times reported. Hours before the deadline Thursday night for offers six Greek state-controlled pension funds, which together own €3.3bn of government bonds, were still holding out. Nine other state-controlled funds with another €3bn of bonds had agreed to participate in the debt swap.