Greece, Europe Debt | featured news

Greece's new government is to ask lenders for two more years to hit fiscal targets, responding to huge public pressure for a softening of an international bailout but setting up a showdown with its euro zone partners.

Euro zone paymaster Germany, relieved at a narrow election victory for Greece's pro-bailout parties, signaled on Monday it may be willing to grant Athens more time to meet its fiscal targets to avert a catastrophic euro exit.

...Companies around the globe will be on similar high alert this weekend as Greeks prepare to vote in an election on Sunday that could decide the future of the European single currency.

World stock markets rebounded Friday on anticipation that central banks will act to keep any political instability in Greece following weekend elections from destabilizing the global economy.

Greece looks close to bolting from the European Union with national elections this weekend. Spain’s banks were just bailed out, and Italy might be next. And, closer to home, Wall Street is still reeling about May’s crummy jobs report. So you’d think U.S. stocks would be tanking? Nope. Welcome to the bad-news rally: The Dow Jones industrial average shot up more than 160 points on Tuesday.

European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks and introducing euro zone capital controls as a worst-case scenario should Athens decide to leave the euro.

Greece's economy shrank further in the first three months of 2012, shriveling at a yearly rate of 6.5 percent against a backdrop of painful wage cuts, tax hikes and record unemployment.

Greek stock markets rebounded strongly on Monday from a 22-year low on hopes a pro-bailout party will win crucial national elections next month, which would avoid a catastrophic rift with international creditors and keep the struggling country within the euro currency union....

Recall the reasons for the current euro panic: Greece is getting bailed out and, in return, it’s supposed to cut spending and raise taxes even further. But Greek voters don’t enjoy this austerity and are rebelling against politicians who agree to the deal. So Germany’s now hinting that Greece might get booted from the euro. Disaster, right?

Political leaders in Greece need to show the resolve to stay in the euro zone, which will require Athens to stick to the terms of its rescue package, International Monetary Fund Managing Director Christine Lagarde said on Thursday.