Greece

Across Europe, from profligate Greece to newly strait-laced Ireland, countries are promising deep, painful cuts in public spending even as they face the likelihood of a new recession, The New York Times reported. To protect the value of the euro, satisfy investors and appease Europe’s economic taskmaster, Germany, the region’s most heavily indebted nations consider that they have no choice but to slim down. Reviving economic growth and reducing unemployment must wait until countries put their fiscal houses in better order, the thinking goes.

The cash-strapped Greek government is putting a host of state assets on the block, but has drawn the line at off loading islands in a bid to reduce its crushing debt burden, The Wall Street Journal reported. Officials plan to sell some of the country's eclectic holdings, which include jumbo jets and stakes in banks and a famed casino.

Providing aid to Greece shouldn't be a "rash decision," and expulsion from the euro zone must be a possible consequence for countries that threaten the bloc's stability in the future, German Chancellor Angela Merkel said Wednesday, The Wall Street Journal reported. Ms. Merkel said that the crisis in Greece, where a budget deficit above 12% has prompted fears about the government's ability to pay its debts and the euro zone's power to stabilize a struggling member, presented the greatest challenge yet to face the common currency and exposed a need for broad new regulations.

Credible efforts by Greece's government to clean up its finances have so far negated the need for any bailout from the European Union, French Finance Minister Christine Lagarde said Friday. In offering a strong vote of confidence in the new Greek government, Ms. Lagarde said in a Wall Street Journal interview that Greece had "for once, over-delivered from what was expected" in terms of legislation intended to cut spending. Whereas she had expected cuts worth 1.5% of gross domestic product, the government had come up with 2%, she said.

As a consequence of decades of bargains struck between strong unions and weak governments, Greece has promised early retirement to about 700,000 employees, or 14 percent of its work force, giving it one the lowest average retirement ages in Europe at 61, The New York Times reported. Greece’s patchwork system of early retirement has contributed to the out-of-control state spending that has led to Europe’s sovereign debt crisis.

The high interest rates Greece must pay to borrow money are threatening the county's ambitions to cut its deficit, raising again the specter it may need external aid, The Wall Street Journal reported. Many in Europe breathed a sigh of relief last week when Greece successfully sold €5 billion ($6.85 billion) in government bonds in an auction that saw investors clamoring for the debt. The sale was seen as a key test: The country needs to borrow about €54 billion this year.

Europe moved ahead of the United States on Tuesday in advocating new measures to ban certain types of financial speculation after concerns surfaced that traders used complex financial instruments to push Greece deeper into a fiscal crisis and threaten the European economy, The Washington Post reported. The European Commission said it would back a proposal to restrict trading in a type of financial instrument, known as a credit default swap, that is linked to the prices of government and corporate debt.

Debt-laden Ireland is winning applause from financial markets for quickly taking the kind of harsh economic medicine that countries around the world are putting off, The Wall Street Journal reported. Late last year, Ireland looked a lot like Greece. The financial crisis coincided with a housing bust that left Ireland's banks in terrible shape, requiring a government rescue. Ireland's fiscal deficit rose to almost 12% of gross domestic product—a shade under Greece's 12.7%.

EU Commission chief José Manuel Barroso has said the union’s executive would be able to give special fiscal support to Greece without breaching the “no bailout” rule that prohibits overdraft facilities for distressed governments, The Irish Times reported. Mr Barroso also said the commission would examine closely the relevance of banning “purely speculative naked sales” of insurance against the risk of sovereign default, a market widely held to have intensified pressure on Greece amid anxiety about its budget deficit.

A day before he meets with President Obama, Greek Prime Minister George Papandreou on Monday called for "decisive and collective action" between Europe and the United States to curb the financial speculation believed by many to have exacerbated the debt crisis now hitting Greece and other financially troubled nations in Europe, The Washington Post reported. "Together with my European partners, we have taken a common initiative to strengthen financial regulation, particularly vis-a-vis speculation," Papandreou said, according to a copy of his speech.