Negotiators for banks and governments are working to complete a promised debt restructuring for Greece that will slice in half what the nation owes its private bondholders, The Wall Street Journal reported. But the deal sets up other governments in the euro zone to bear any additional burden if—many analysts say when—Greece needs more help to get out of its deep fiscal rut. The concerns about additional costs have made some European capitals wary of consummating the deal, said people familiar with the talks, and are among the reasons they have dragged on for months.

Germany and France on Monday pressed Greece and its bondholders to agree on a reduction of Athens's debt burden, warning that Greece's bailout loans from the euro zone and the International Monetary Fund are on hold until a deal is reached with private investors, The Wall Street Journal reported.

Greek Prime Minister Lucas Papademos told a group of labor-union leaders Wednesday that he expected that a deal on a 50% haircut on Greek government bonds would be sealed within two weeks, The Wall Street Journal reported. A day earlier, a government spokesman had warned that without a deal, Greece would be forced out of the euro and into a hard default. The trouble for Athens is that the prime minister's statement looks increasingly doubtful, and avoiding default may no longer be possible. Of Greece's €350 billion or so in debt, only about €206 billion is still held by investors.

Greece will have to leave the euro zone if it fails to clinch a deal on a second, 130 billion euro (108 billion pound) bailout with its international lenders, a government spokesman said on Tuesday, Reuters reported. It was an unusually public stark warning from the embattled country, aimed at shoring up domestic support for tough measures and possibly also at the lenders themselves. Greece is racing against the clock to agree with the EU, the IMF and private bondholders on the details of the rescue plan before a major bond redemption in March.

Greece's creditors are resisting pressure from the International Monetary Fund to accept bigger losses on holdings of the indebted nation's government bonds, Bloomberg News reported yesterday. Lenders want the 70 billion euros ($91 billion) of new bonds the government will issue in return for existing securities to carry a coupon of about 5 percent. The IMF is pushing for creditors to accept a smaller coupon in order to reduce Greece's debt-to-gross domestic product ratio to 120 percent by 2020, a key element of the Oct. 27 agreement by European Union leaders.

Private creditors are balking in talks about forgiving €100 billion ($130 billion) in Greek debts, European officials warned Friday, just as negotiations heated up on the debt restructuring that aims to save Athens from bankruptcy, The Washington Post reported on an Associated Press story. European and Greek negotiators met with representatives from banks and investment funds Friday in Paris, after holding talks earlier this week in Athens.

Nikos Lekkas' team of tax investigators knew they were on to something when they found that a humble Greek farmer on the island of Thasos owned a red Ferrari and a Porsche, Reuters reported. Intrigued by how a farmer who had declared just 100,000 euros (84,000 pounds) in income over the past decade could afford such luxuries, Lekkas dispatched an undercover tax agent to the north Aegean island. The agent was back soon -- not only was the Thasos "farmer" earning far more than he had disclosed to the state, he was in an entirely different line of business: loan sharking.

Greece’s international rescue program continues to slip as the nation’s leaders shirk promised changes, investors flee a beleaguered banking system and concern that Europe will fall into recession adds to the pressure, the International Monetary Fund said Tuesday in its latest report on the country, the International Herald Tribune reported.

It would be Europe’s worst nightmare: after weeks of rumors, the Greek prime minister announces late on a Saturday night that the country will abandon the euro currency and return to the drachma, the International Herald Tribune reported. Instead of business as usual on Monday morning, lines of angry Greeks form at the shuttered doors of the country’s banks, trying to get at their frozen deposits. The drachma’s value plummets more than 60 percent against the euro, and prices soar at the few shops willing to open.

Inspectors for Greece's international lenders and private creditors kick off a round of meetings with the government on Monday to prepare for a new 130-billion euro (£111 billion) bailout plan and bond swap scheme to keep the country afloat, Reuters reported. Greece narrowly averted bankruptcy this month after foreign lenders agreed to release an 8-billion euro tranche of aid, but remains at risk of ending the year with a deeper-than-expected hole in its finances as a recession hits targeted tax revenue.