Europe, Europe Debt | featured news

The demonstrations have overshadowed regional and municipal elections that were expected to result in a defeat for the governing Socialist Party.

Fueling the demonstrators’ anger is the perceived failure by politicians to alleviate the hardships imposed on a struggling population by a jobless rate of 21 percent.

Euro zone finance ministers are ready to back an EU/IMF bailout of Portugal at a Monday meeting overshadowed by the arrest of International Monetary Fund chief Dominique Strauss-Kahn on sexual assault charges.

Bleak EU economic forecasts on Friday showed Greece will miss its debt targets this year without further reforms and a senior policymaker said Athens was not meeting the terms of its rescue package.

Speculation is growing that Greece may need a second financial bail-out from the international community

A Moody's downgrade and growing speculation Greece may eventually restructure its debt took the shine off Ireland's thumbs-up from the EU and the IMF on Friday for its efforts to claw its way back from crisis.

Ratings agency Standard & Poor's downgraded two of the euro zone's most troubled member states, citing fears that the pair may have to restructure their debt after 2013.

Stress tests on Ireland's four main lenders will reveal a capital hole of around 20 billion euros ($28.2 billion), The Sunday Business Post reported, without citing any sources.

More than 250,000 people took to London's streets to protest the toughest spending cuts since World War II - one of the largest demonstrations since the Iraq war - as riot police clashed with a small groups. More than 200 people were arrested.

Portuguese Prime Minister Jose Socrates resigned Wednesday and warned of grave consequences for the country after parliament rejected his government's latest austerity measures aimed at avoiding a bailout.