European Central Bank President Jean-Claude Trichet pressed Greece to halt its flirtation with International Monetary Fund aid and work with European allies to tame its record budget deficit, Bloomberg reported. As protesters besieged the Greek Finance Ministry to denounce €4.8 billion ($6.5 billion) of tax increases and spending cuts, the Athens government said the absence of European support might force it into the hands of the IMF.

The Greek government's new austerity measures drew a positive response from European credit and currency markets, further allaying fears that Greece might default on its debt obligations, The Wall Street Journal reported. The measures, which will save the Greek state €4.8 billion ($6.5 billion) a year, include steep cuts in civil-service salaries and entitlements, as well as a rise in Greece's sales tax by two percentage points.

The Greek government on Wednesday approved additional tax increases and a 30 percent cut in holiday bonuses for public employees as part of a new raft of austerity measures aimed at narrowing its gaping budget deficit, a government official said, The New York Times reported. The measures aim to generate at least €4 billion, or $5.5 billion, in revenue and savings this year, according to the official, who was briefed on the Cabinet discussions but not authorized to speak publicly ahead of an official announcement.

Fears of a Greek debt default are subsiding -– at least for now -– as the crisis-racked nation prepares to outline hefty new austerity measures aimed at closing its yawning fiscal deficit. But such plans may not be enough to turn around the struggling euro’s fortunes, The Wall Street Journal Market Beat blog reported.

The commissioner for monetary affairs at the European Union, Olli Rehn, said on Monday that austerity measures announced by the Greek government to stave off a mounting fiscal crisis were “in the right direction” but not adequate to reduce a bloated budget deficit by 4 percent this year and tackle a debt crisis threatening the euro zone, The New York Times reported. After talks with government and central bank officials in Athens, Mr.

A plan led by Germany and France to bail out Greece with as much as €30 billion ($41 billion) in aid began to take shape amid intense and risky jockeying between Athens and Berlin over timing and terms, The Wall Street Journal reported. Greek officials said they expected to seal a deal by Friday, when Greek Prime Minister George Papandreou meets in Berlin with German Chancellor Angela Merkel, but senior German officials insisted a bailout wasn't imminent.

Standard & Poor's Ratings Services weighed in on increasing concerns about financial distress in the euro zone, with the ratings agency saying it doesn't see a nation defaulting, The Wall Street Journal reported. All euro-zone nations are currently rated investment grade, and S&P said Thursday it believes their creditworthiness is at least adequate to meet their financial commitments. The comments stem from recent tension over Greece, which has prompted warnings downgrades from ratings agencies.

Bets by some of the same banks that helped Greece shroud its mounting debts may actually now be pushing the nation closer to the brink of financial ruin, The New York Times reported. Echoing the kind of trades that nearly toppled the American International Group, the increasingly popular insurance against the risk of a Greek default is making it harder for Athens to raise the money it needs to pay its bills, according to traders and money managers.

Tens of thousands of Greeks took to the streets Wednesday as much of the country went on a 24-hour strike against government austerity measures, The Wall Street Journal reported. Public- and private-sector unions called the strike to protest a range of measures aimed at reducing Greece's budget deficit. The government has announced a freeze on civil-service wages, cuts in public-sector entitlements and the closing of tax loopholes for certain professions, including some civil servants. It has also announced a fuel-tax increase.

The Greek government is moving closer to choosing new austerity measures in discussions with a visiting delegation of European Union and International Monetary Fund officials over how to tame its deficit, according to people familiar with the government's thinking, The Wall Street Journal reported. According to these people, the new package is likely to include an increase in the current value-added tax rate of 19%, more cuts in civil-service entitlements and higher duties on luxury items such as boats and expensive cars. Greece is also mulling a further increase in fuel taxes.