Greece

The long-awaited deal on a rescue plan for Greece still leaves Athens with a huge debt burden and implementation challenges that threaten to derail the program and prevent the country's return to growth after several years of a devastating recession that has spurred social upheaval and political uncertainty, The Wall Street Journal reported.

After months of tense negotiations, euro zone finance ministers worked deep into the night Monday to try to agree on a second giant bailout to bring Greece back from the brink of default, subject to strict conditions and in exchange for yet more severe austerity measures, the International Herald Tribune reported. Under the bailout terms, Greece is supposed to reduce its debt to 120 percent of gross domestic product by 2020, from about 160 percent now.

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.