That the Greek economy is in a downward spiral from a relentless program of austerity is well known. Greek manufacturing saw one of its sharpest falls ever in October, and this year overall production is expected to contract by more than 6 percent. What has not yet shown up in the official figures, though, is the extent to which the crisis atmosphere has brought the economy to a virtual standstill, the International Herald Tribune reported. Auto sales have essentially halted and are at their lowest level since 1993. People who do have cars have trouble paying to operate them.

In a tumultuous day of political gamesmanship, Prime Minister George A. Papandreou on Thursday called off a referendum on Greece’s new debt deal with the euro zone after winning a measure of support from his opposition and managed to repair, at least for a day, a major rupture in relations with Europe, the International Herald Tribune reported. The decision to abandon his idea of holding a popular vote on the European debt deal did not end the political turmoil here; Mr.

The leaders of Germany and France told Greece on Wednesday it would not receive another cent in European aid until it decides whether it wants to stay in the euro zone, Reuters reported. They also made clear that saving the euro was ultimately more important to them than rescuing Greece.

The Greek government teetered and stock markets around the world plummeted Tuesday after a hard-won European plan to save the Greek economy was suddenly thrown into doubt by the prospect of a public vote, the Associated Press reported. One day after Prime Minister George Papandreou stunned Europe by calling for a referendum, the ripples reached from Athens, where some of his own lawmakers rebelled against him, to Wall Street, where the Dow Jones industrial average plunged almost 300 points.

European negotiators have asked Greek debt holders to accept a 60 per cent cut in the face value of their bonds, a hardline stance that far exceeds losses agreed in a deal between private investors and eurozone authorities three months ago, the Financial Times reported. The stance, delivered to a consortium of international banks at the weekend by Vittorio Grilli, Italian treasury chief and lead eurozone negotiator, is a victory for German-led northern creditor countries who have been pushing for Greek bondholders to accept far more of the burden for a second bail-out.

By now, it almost feels like a ritual: a strike and large demonstration disrupted by skirmishes and tear gas ahead of a parliamentary vote on new austerity measures that Greece needs to take to qualify for the next installment of aid the country needs to fend off default, the International Herald Tribune reported. But what was different on Wednesday, the first day of a two-day general strike before Parliament voted in the evening to approve new austerity measures, was the scale of the protest — tens of thousands of people — and the range of the demonstrators.

Disagreement between France and Germany may prevent eurozone leaders from reaching a crucial deal on a second rescue package for Greece this weekend, a person familiar with the negotiations said Tuesday, The Washington Post reported on an Associated Press story. A common position of the two biggest eurozone economies is seen as a precondition for reaching agreement between all 17 countries in the currency union at a crisis summit on Sunday.

Some euro zone countries want a European Commission task force to be given extra powers to oversee the sale of Greek state assets and the country's civil service under a far-reaching plan to tighten supervision of Athens, EU sources told Reuters. The radical proposal, dismissed by some officials as a form of colonialism and which may be shot down in the face of such criticism, underscores mounting pressure for stricter policing of Athens, with some ready to demand its sovereignty be clipped. The European Commission said no such plan was in the works.

The prospect of a hefty Greek government debt restructuring and writeoff has sent the bonds into a twilight zone that's attracting specialist distressed-debt traders more used to dealing with defaulted emerging sovereigns like Argentina. Greece was ditched last year from developed country government bond indices that are typically tracked by the big, often conservative, global institutional funds.

Losses for private investors on Greek debt in the second financing package for Athens are likely to be between 30 and 50 percent, rather than the earlier agreed 21 percent, euro zone officials said on Wednesday, Reuters reported. The euro zone is reviewing the terms of its second financing package for Greece, including the private sector contribution, because Greece is in a deeper than expected recession and market interest rates have changed since then.