Europe Debt | featured news

ATHENS (Reuters) - Greek and foreign bondholders offered about 30 billion euros ($38.8 billion) in a buyback plan that is key to the country's international bailout, a Greek government official said on Saturday.

Greek pension funds will not take part in a debt buy-back that is a key part of the country's international bailout, Greek Prime Minister Antonis Samaras said in a newspaper interview.

Germany's chancellor says she understands the frustration felt by many Germans over the repeated bailout programs for Greece.

The euro zone economy is on course for its weakest quarter since the dark days of early 2009, according to business surveys that showed companies toiling against shrinking order books in November.

The 17-country eurozone has fallen back into recession for the first time in three years as the fallout from the region's financial crisis was felt from Amsterdam to Athens. And with surveys pointing to increasingly depressed conditions across the 17-member group at a time of austerity and high unemployment, the recession is forecast to deepen, and make the debt crisis — which has been calmer of late — even more difficult to handle.

Pockets of violence broke out as public demonstrations and strikes over rising unemployment and austerity measures took place in many parts of Europe Wednesday. Spanish and Portuguese workers staged a coordinated general strike across the Iberian Peninsula, shutting transport, grounding flights and closing schools to protest against spending cuts and tax hikes.

Over the course of five days, the Greek government -- led by the understated conservative Prime Minister Antonis Samaras -- overcame two high hurdles in a dash to qualify for the austerity program set out by the so-called troika, made up of the European Central Bank, the International Monetary Fund and the European Commission.

German Chancellor Angela Merkel praises Portugal's resolve in tackling its debt crisis, but faces angry anti-austerity protesters in Lisbon.

The worst of Europe's financial crisis appears to be over. European leaders have taken steps to ease the panic that has plagued the region for three turbulent years. Financial markets are no longer in a state of emergency over Europe's high government debts and weak banks. And this gives politicians from the 17 countries that use the euro breathing room to fix their remaining problems.

Euro zone finance ministers are unlikely to release a new tranche of loans to Greece on Monday as there is no agreement yet on how to make its debt sustainable but Athens is set to get two more years to cut debt, officials said.