Greece

Europe’s creditor countries struggled to bridge divisions over aid for debt-plagued Greece, while welcoming commitments from Athens for budget cuts as the clock ticked toward a possible default next month, Bloomberg reported. In a replay of the brinkmanship that marked the early stages of the Greek crisis two years ago, finance ministers extracted concessions from Greece intended to pave the way for the endorsement of a 130 billion-euro ($171 billion) aid package next week.

The European Central Bank is preparing to pass profits on its Greek bond holdings to eurozone governments for use in funding Greece’s second bail-out, senior policymakers have indicated. Comments by ECB’s governing council members suggest a deal is possible, which could help reduce Greece’s public debt mountain – although possibly only over a period of years, the Financial Times reported.

Greek bailout talks entered a new round of brinkmanship on Tuesday, as euro-zone finance ministers delayed a meeting to approve a new bailout and debt restructuring for Athens, which worked to assure them it is committed to new austerity measures as a debt-redemption deadline looms, The Wall Street Journal reported. The ministers put off the talks in Brussels, which they had scheduled for Wednesday, and replaced them with a teleconference, saying Greek political leaders haven't given clear pledges on the implementation of fresh austerity measures.

Economic output in Greece and Portugal plunged last year, according to figures released on Tuesday, challenging the prevailing European view that fiscal belt-tightening will foster growth, The Wall Street Journal reported. Greek gross domestic product fell 7% in the fourth quarter from the year-earlier span, the country's statistics agency said, bringing the total GDP drop since the end of 2007 to more than 16%. Greece's statistics service hasn't issued quarter-to-quarter data for the past several quarters because of methodological problems adjusting for seasonal swings in activity.

European officials rushed to finalise details of a €130bn Greek bail-out on Monday amid signs Germany and its eurozone allies may not be prepared to approve the deal at a finance minsters’ meeting on Wednesday, despite Athens backing new austerity measures, the Financial Times reported. Senior European Union officials said they believed Greece had met the demands of the troika of international creditors – the European Commission, International Monetary Fund, and European Central Bank – after a parliamentary vote on Sunday, including an extra €325m in budget cuts.

Greek Prime Minister Lucas Papademos won parliamentary approval for austerity measures to secure an international bailout after rioters protesting the measures battled police and set fire to buildings in downtown Athens, Bloomberg reported. A total of 199 lawmakers voted in favor and 74 against, Parliament Speaker Filippos Petsalnikos said in remarks carried live on state-run Vouli TV. When, on Nov.

Sceptical eurozone finance ministers refused Thursday to release a second bailout for Greece, despite a last-minute deal in Athens on austerity measures demanded by creditors, Agence France-Presse reported. After rival Greek parties agreed more deep cuts, triggering another general strike, Luxembourg Prime Minister Jean-Claude Juncker said the Eurogroup of finance ministers could wait until next week. The Greek government had hoped to unlock a bailout package worth 130 billion euros ($171 billion) that would banish the spectre of a devastating default.

Taxes go uncollected, deficit targets are routinely missed, job cuts from the state payroll are postponed, privatisations have barely begun and pharmacies still shut in the middle of the day, Reuters reported. Nearly two years into Greece's bailout, so many promises have been broken that international lenders have largely lost faith in the country's will to reform itself and are torn between imposing stricter outside control and cutting Athens loose.

Greek parties will try yet again on Wednesday to strike a reform deal in return for a new international rescue to avoid a chaotic default, after a string of delays which have prompted some EU leaders to warn that the euro zone can live without Athens, Reuters reported. As one deadline after another has come and gone, leaders of the three parties in the coalition of Prime Minister Lucas Papademos postponed what was supposed to have been a crunch meeting on Tuesday until the following day.

German chancellor Angela Merkel told Greece today to make up its mind fast on accepting the painful terms for a new EU-IMF bailout, but the country's political leaders responded by delaying their decision for yet another day, the Irish Times reported. Failure to strike a deal to secure the €130 billion rescue - much of which Germany will fund - risks pushing Athens into a chaotic debt default which could threaten its future in the euro zone.