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President Obama’s proposal for a direct tax on banks to pay for future bailouts is gaining momentum in Europe.

Chancellor Angela Merkel of Germany said that Greece should solve its own problems, ahead of a summit meeting scheduled for Thursday.

French President Nicolas Sarkozy's center-right bloc suffered a comprehensive defeat in Sunday's local elections, but managed to cling on to power in one mainland region to avoid a whitewash, exit polls said.

Iceland's civil protection agency says a volcano has erupted in the southern part of country.

Web browser Opera says its downloads in Europe have doubled since Microsoft began offering a choice.

Authorities in Europe and the U.S. are turning to “stealth taxes” to avoid drawing attention to the tightening fiscal noose.

Icelanders are set to reject the terms for repaying Anglo-Dutch debts in a referendum on Saturday, forcing new negotiations with creditors and delaying financial aid the country needs to fix its shattered economy.

Greece's cabinet approved a sweeping new austerity program on Wednesday, the third in as many months, intended to rein in a bulging budget deficit and secure European financial support.

Icelanders are sure to vote against repaying $5 billion in "Icesave" debts if a referendum goes ahead on Saturday, but conditions are good for reaching a revised deal with Britain and the Netherlands, Iceland's Foreign Minister was quoted on Wednesday as saying.

BRUSSELS (Reuters) - Greece must take additional measures to reach its deficit-cut target of 4 percent of GDP in 2010 but it is not yet clear how far short Athens is with steps announced so far, the European Commission said on Tuesday.