Greece

A new front in the euro crisis is opening up: what to do if Greece's second bailout package, worth €109 billion ($147.8 billion) and agreed to in July, isn't enough, The Wall Street Journal reported. That risk is real. But with Greece reaching the limits of austerity, at least in the near-term, there are only two options for filling any shortfall. Either euro-zone governments and the International Monetary Fund must dig deeper into their pockets, or Greece has to unpick its deal with bondholders to secure more debt relief.

Greek lawmakers approved a controversial new property tax Tuesday that aims to boost revenue as the country struggles to obtain a critical installment of international bailout loans that will prevent it from default, The Associated Press reported. The new tax passed 154 votes to 143 against in the 300-member parliament. It was announced earlier this month after international debt inspectors suspended their review of Greek reforms amid talk of missed revenue targets and delayed implementation of austerity measures. The inspectors are expected to return to Athens this week.

The German government is pushing a plan to restructure Greece's debt that would include up to a 50% loss to bond holders and new draconian budget measures imposed on the Greek government, local media report Sunday. According to the center-right Kathimerini newspaper, the German plan would involve a forced, non-voluntary restructuring of Greece's public debt, that would include slashing the value of that debt by between 40% and 50%, Dow Jones reported.

Greek workers staged a 24-hour strike today, forcing the transport system to a standstill in protest against the government's intensified austerity drive to secure aid to save the country from bankruptcy, RTÉ News reported. Striking taxi drivers and bus, metro and rail workers meant commuters had to use their own cars, triggering long traffic jams and stranding tourists at hotels in Athens city centre for several hours. Unions said more strikes were planned. In his first public comments on yet more austerity moves, Greek Prime Minister George Papandreou said they were vital.

In the continuing drama over whether Greece will get the next slice of rescue funds from its official creditors, another critical financial test has been temporarily forgotten: the country's plan to exchange old government bonds for new, The Wall Street Journal Brussels Beat blog reported. As Greece's disputes with its lenders have intensified, the bond exchange has looked a better and better deal for investors. The exchange, the terms of which could be announced next month, was the price of securing German government support for the second bailout of Greece in July.

Greece adopted yet more austerity measures on Wednesday to secure a bailout instalment crucial to avoid running out of money next month, as the IMF warned that Europe's sovereign debt crisis risks tearing a giant hole in banks' capital, Reuters reported. The Greek cabinet agreed to cut high pensions by 20 percent, put 30,000 civil servants in a "labour reserve" on a road to redundancy, lower the income threshold for paying tax and extend a real estate tax, a government spokesman said.

Greece said it had "a productive and substantive discussion" with its official creditors on Monday in talks aimed at releasing a new slice of bailout aid, and a Greek finance ministry official said an agreement was close, The Wall Street Journal reported. U.S. stocks, which had initially declined on Greek-induced gloom, recovered some of their losses late in the trading day after the Greek statement.

Greece's government was meeting over the weekend after receiving fresh warnings from its euro-zone partners that future aid will be withheld unless it can produce conclusive steps to bring its unruly budget deficit into line, Dow Jones reported. Prime Minister George Papandreou aborted a planned trip to New York and Washington this week to preside over emergency meetings in Athens to identify new savings that will convince other euro-zone governments that targets can be met.

Christine Lagarde, head of the International Monetary Fund, on Thursday raised the spectre of her organisation withholding its portion of an €8bn ($11bn) aid payment Greece needs by the end of this month, saying Athens had implemented requisite economic reforms “in parts”, the Financial Times reported. Speaking ahead of a highly anticipated meeting of IMF, US and European finance officials in Poland, Ms Lagarde said Athens had to re-ignite “the urge to deliver on commitments” made by its government after a period during which “momentum had slowed down”.

Athens’s inability to get a grip on the debt problem is rattling markets and giving rise to talk of a notion that until recently has been considered taboo: a eurozone without Greece, The Christian Science Monitor reported. Greece's introduction last weekend of a new real estate tax and reduction in elected officials' pay are being called too little, too late to address its deep debt.