Greece

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.

A standoff between Greece and its euro-zone partners over the timing and terms of a potential rescue is nearing a crucial juncture as the cash-strapped country faces a key test of investor willingness to keep funding its ballooning deficit, The Wall Street Journal reported. The haggling over possible European aid for Greece has become a game of chicken between Athens and the core economies of the euro zone, led by Germany and France.

As speculators attack the euro, Europe is facing a growing threat of national bankruptcies, Spiegel Online reported. The consequences would be dramatic for the whole of the continent, especially German banks, which are highly exposed to risky debt. EU politicians are willing to pay almost any price to help the beleaguered countries. There has never been this much uncertainty.

Concerns that Greece and other struggling European nations may not be able to repay their debts are focusing investor attention on another big worry: Economies across the Continent have used complex financial transactions—sometimes in secret—to hide the true size of their debts and deficits, The Wall Street Journal reported. Investors long turned a blind eye to European governments' aggressive bookkeeping, aimed at meeting the euro zone's fiscal ceilings.

Greece, which joined the euro two years after its inception, has concealed the dodgy state of its finances. Now it is under attack from speculators. A default could spread panic to other deficit-plagued economies, including those of Spain and Portugal, with scary consequences for Europe’s already shaky banking system. But if Greece’s partners bail it out, defying the euro’s founding treaty, the currency will suffer. Either way, the euro is in trouble, The Economist reported. This dilemma is felt especially keenly in Germany.

Greece replaced its debt management chief as declines in the country’s bonds roil European markets, Bloomberg reported. Petros Christodoulou, general manager of treasury and global markets at National Bank of Greece SA, the country’s biggest lender, will take over from Spyros Papanicolaou as head of the Athens-based Public Debt Management Agency, the country’s Finance Ministry said yesterday in an e-mailed statement.

Minister for Finance Brian Lenihan has made the case to the EU’s new economics commissioner, Olli Rehn, that Ireland is now at a “different stage” to Greece and other weak euro-zone members thanks to stringent austerity measures he has taken, The Irish Times reported. Before euro group finance ministers discussed moves to bail out Greece last night, Mr Lenihan said at a meeting with Mr Rehn that he was cautiously optimistic that Ireland was turning the corner with an expansion of the economy in prospect later this year.