Country Bailout | featured news

The finance minister of the island nation, Vassos Shiarly, criticized international lenders on Friday for imposing losses on banks with exposure to Greece.

Italy and Spain, battling searing market pressure in the euro zone's widening debt crisis, blocked agreement on measures to promote growth at a European Union summit on Thursday to demand urgent action to bring down their borrowing costs.

Cyprus, the fifth euro zone country to seek emergency funding from Europe, may need a bailout of up to 10 billion euros — over half the size of its economy — officials said.

Spain's government said Friday it plans to make its official request for EU aid for its banking sector Monday, as discussions continue on ways to inject European aid funds directly into ailing Spanish banks.

Greece's new government promised on Thursday to renegotiate the terms of the country's bailout without endangering its future in the euro, responding to intense pressure to ease mounting social tensions but also risking a showdown with European powers.

Spain's banks would need 51-62 billion euros ($64-78 billion) in extra capital to weather a serious downturn in the economy, less than a 100-billion-euro aid package offered by the euro zone, independent audits showed on Thursday.

Fears of an imminent Greek exit from Europe's joint currency receded Sunday after the conservative New Democracy party came first in a critical election and pro-bailout parties won enough seats to form a joint government.

The euro-zone's bailout funds can't handle another big bailout, the world's biggest private financial institutions said.

European leaders faced increasing pressure on Thursday to respond to the euro crisis, as Spanish bond yields hit a level that has triggered full bailouts of other nations.

Investors fled from Spanish government debt on Monday, an immediate rejection of the country's planned bank bailout by the constituency it most desperately needs to impress: the buyers of its own government bonds.