Greece

Greece still faces a “substantial” default risk as insolvency prevents the nation from repaying its debt when its bailout program expires in three years, Pacific Investment Management Co. fund manager Andrew Bosomworth said, Bloomberg reported. “Greece is insolvent,” Bosomworth, Munich-based head of portfolio management at Pimco, which oversees the world’s largest bond fund, said in a telephone interview today.

Greece's deepening recession is driving joblessness steadily higher, feeding discontent with the government's austerity program and dragging on the broader economy, The Wall Street Journal reported. Greece's gross domestic product contracted by 3.5% in the second quarter from a year earlier, hitting retailers hard and sending unemployment rates to above 12% of the work force, according to data released last week. Forecasts vary on just how bad unemployment could get. The International Monetary Fund predicts the jobless rate will reach 14.8% by 2012.

Greece's recession deepened in the second quarter, according to official estimates released Thursday, as the country felt the painful consequences of the government's drive to reduce its debt load with aggressive austerity cuts, the Associated Press reported. Gross domestic product declined by 1.5 percent from the previous quarter as the government reduced spending. The unemployment rate, meanwhile, rose to 12 percent in May from 11.9 percent, the statistics agency said.

Greece met all its targets under an austerity plan mapped out by the European Union and International Monetary Fund, according to the external agencies monitoring the program, but they warned that overspending by local governments, hospitals and social-security funds were offsetting a better-than-planned fiscal performance by central government, The Wall Street Journal reported.

Wind Hellas is reviewing initial offers for the group as it restructures its debt for the second time in eight months, Dow Jones Daily Bankruptcy Review reported. The troubled Greek telecommunications company has received preliminary expressions of interest in the group, it said in a statement released late Monday. The company, suffering under the Greek government's austerity measures, said it would consider a sale or investment offer as part of its restructuring. Potential investors have until Sept. 15 to make a binding offer for the company.

This is the new reality of the Greek economy, post-crash: The tax-inspector squads and mandatory receipts for corner stores, taxicabs and other traditionally cash-only businesses are among the new austerity measures introduced by Prime Minister George Papandreou in an effort to rescue his country from Europe’s fiscal crisis – in part by reducing the size of the untaxed “shadow” economy, estimated to account for 25 per cent of Greece’s GDP, The Globe and Mail reported.

The International Monetary Fund began inspecting Greece's public finances on Monday to make sure the government is implementing promised austerity measures before it gains access to a second rescue loan installment in mid-September, the Associated Press reported. The inspectors arrived as strikes continued against the painful spending cuts and an overhaul of labor rules. A walkout by fuel-tanker drivers caused supply shortages in Athens, while serious departure delays were reported at Athens International Airport as air traffic controllers continued a work-to-rule protest started last week.

Greece raised €1.95 billion ($2.53 billion) in a debt auction Tuesday, passing its second market test in a week ahead of a key fiscal checkup by the European Union and International Monetary Fund, the Associated Press reported. The sale came a week after Greece tapped the market for the first time since receiving joint EU and IMF rescue loans, selling €1.625 billion in 26-week bills at a 4.65 percent yield. Debt-ridden Greece narrowly avoided bankruptcy in May and was pledged up to €110 billion in rescue loans from the IMF and the 15 other EU countries using the euro.

Three subsidiaries of struggling Greek telecommunications company Wind Hellas have shifted their addresses and principal place of business to London from Luxembourg, in a move that could aid a potential debt restructuring, the company said Tuesday, Dow Jones Daily Bankruptcy Review reported. News of the relocation comes as Wind Hellas conducts a strategic review, which includes the potential sale of the business and a capital restructuring, after the company's performance continues to suffer in the wake of the Greek government's austerity measures.

Greece on Thursday sealed a deal with the European Investment Bank for €2 billion ($2.45 billion) in financing to turn around the country's contracting economy, as the ruling Socialist Party implemented tax increases to help slash budget deficits, The Wall Street Journal reported. Greek Finance Minister George Papaconstantinou, Economy Minister Louka Katseli and EIB Vice President Ploutarchos Sakellaris signed the finance agreement as part of a program known as the National Strategic Reference Framework.