Greece

The Greek government warned dissenters in the ruling party on Wednesday against rejecting an austerity plan agreed under a new international bailout deal, after data showed the depth of the nation's economic crisis. Prime Minister George Papandreou met senior members of his socialist party to try to stem an outbreak of unrest over the social cost of the bailout before it turns into a full-scale parliamentary rebellion. Tens of thousands of Greeks are protesting regularly against waves of austerity demanded by the European Union and IMF, as well as against corruption and state mismanagement.

When it comes to Greek bonds, Europe is trying to have its cake and eat it, too, The Wall Street Journal reported. Germany and other strong euro-zone countries, trying to fashion a second bailout for Greece, want the country's private-sector creditors to bear some of the burden in exchange for granting new taxpayer money to Athens. The European Central Bank, however, backed by France, doesn't want to do anything that would cast Greece into default or trigger losses for banks that hold its government bonds.

In a related story, The Wall Street Journal reported that Greece is for sale—cheap—and Germany is buying. German companies are hunting for bargains in Greece as the debt-stricken government moves to sell state-owned assets to stabilize the country's finances. Deutsche Telekom AG on Monday said it would purchase an additional 10% stake in Greece's Hellenic Telecommunications Organization SA for about €400 million, or roughly $590 million, increasing the German company's ownership to 40%.

Thousands of Greeks protested outside parliament on Sunday against a fresh austerity package agreed in return for the country’s second bail-out in 13 months by the European Union and International Monetary Fund, the Financial Times reported. “Thieves, thieves….Where did our money go?” the protestors shouted, blowing whistles and waving Greek flags as riot police thickened ranks around the parliament building on Syntagma square in the centre of the capital.

European finance officials met late Wednesday in Vienna to prepare a fresh aid package for Greece, people close to the matter said, but the talks must first bridge a crucial gap between Germany and the European Central Bank over whether private investors should share the pain of propping up the indebted nation, The Wall Street Journal reported. Plucked from the brink of default in May 2010 by other euro-zone countries and the International Monetary Fund, Greece is again verging on a critical cash shortage.

The European Union is racing to draft a second bailout package for Greece to release vital loans next month and avert the risk of the euro zone country defaulting, EU officials said on Monday, Reuters reported. A total restructuring of Greece's massive debt was not an option, he said, leaving the door open to some tweaking of Greece's debt profile that might involve the private sector, as Sarkozy advocated last week.

A top euro-zone policy maker suggested the International Monetary Fund may withhold its next payment on Greece's €110 billion ($155 billion) bailout, rattling financial markets with questions about whether a new Greek payments crisis is imminent, The Wall Street Journal reported. Luxembourg Premier Jean-Claude Juncker, who heads the conclave of euro-zone finance ministers, suggested Thursday that an important review of the bailout program might conclude that Greece doesn't have enough loan commitments to carry it through the next 12 months.

European banks remain saddled with almost €100bn of Greek government debt they can’t sell, hedge or ignore, after a number of recent deals to offload the exposure to reduce the impact of a possible default ended in failure, according to bankers involved, International Financing Review reported. The deals have been thwarted by a lack of willing buyers for the debt – even at record low prices – and that exposed lenders have been unable to buy protection because of the high costs, with top bankers advising their clients all they can now do is cross their fingers and hope for the best.

Fissures among Europe’s currency partners are becoming even deeper and more widespread than was previously evident, raising new doubts about whether the group can resolve the regional debt crisis that has simmered for more than a year, the International Herald Tribune reported. The markets seem to reflect the growing discord within the 17-member euro zone currency union, barely a year after European governments came together with a 750 billion euro ($1 trillion) safety net for debtor-nation members.

A senior International Monetary Fund official said Thursday that debt restructuring would provide no miracle cure for Greece's debt crisis, as a delegation of European and IMF officials continued to pore over the Greek government's finances in Athens, The Wall Street Journal reported. The delegation is in the Greek capital to examine whether the country's tough economic program is still on track and whether its financing plan is sustainable.