Greece | featured news

Greece's embattled prime minister and main opposition leader agreed Sunday to form an interim government to ensure the country's new European debt deal and oversee early elections, capping a week of political turmoil that saw Greece facing a catastrophic default and threatening its euro membership.

THE warning was clear: Greece was spiraling out of control. But the alarm, sounded in mid-2009, in a draft report from the International Monetary Fund, never reached the outside world. Greek officials saw the draft and complained to the I.M.F. So the final report, while critical, played down the risks that Athens might one day default, with disastrous consequences for all of Europe.

Prime Minister George Papandreou survived a crucial confidence vote in Parliament and pledged to form a unity government with a broader consensus, regardless of whether he would lead it.

The next tranche of rescue loans for Greece will be withheld until after a bailout referendum, expected in early December, European leaders warn.

NEW YORK (Reuters) - Stocks tumbled on Tuesday after investors were blindsided by a surprise call for a Greek referendum on an EU bailout plan, casting doubt on the sustainability of the recent market rally.

The Obama administration won a reprieve this week from some particularly scary economic news that had been projected to occur around around Halloween. The news: The ever-escalating national debt will hit and then surpass the size of the entire U.S. economy -- an ignominious distinction previously achieved by the likes of Japan, Italy and Greece.

It is up to Silvio Berlusconi to keep Italy from becoming another Greece and plunging the world into an even more devastating financial crisis.

The country that seems to crop up more and more in the current eurozone discussions is Italy, but why should it be affected by the Greek crisis?

A top bank lobbyist insisted Saturday that banks and the eurozone are far from reaching a deal to cut Greece's debt, despite claims by eurozone finance ministers that they will ask banks to take steeper losses on their Greek bonds.

Workers walk off the job with anger over country's financial crisis.