Imf, Europe Debt | featured news

The International Monetary Fund is sharply downgrading its outlook for the U.S. economy through 2012 because of weak growth and concern that Europe won't be able to solve its debt crisis.

The International Monetary Fund's executive board on Friday said it approved a disbursement of about 3.2 billion euros to help Greece pay debts due this month.

Greece has secured a second bailout from the European Union and the International Monetary Fund, and it too will be on the order of €110 billion, Prime Minister George Papandreou said.

Portugal will elect a new government on Sunday which will lead the country through a period of deep austerity and recession after it received a 78-billion-euro ($114 billion) bailout from the European Union and IMF.

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.

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.

Portugal launched talks on Tuesday with European authorities and the IMF on a bailout the caretaker government said it needs to pay the country's dues from June, as politicians jostled ahead of a general election.

Ireland's parliament approved a multi-billion euro EU/IMF bailout package on Wednesday in the face of opposition threats to renegotiate the deal to force losses on some senior bondholders in Irish banks.

The Belgian finance minister and International Monetary Fund suggested that the scope of measures to stabilize the euro should be strengthened.

The EU and IMF extends 85bn euros of emergency loans to the Republic of Ireland, according to reports on Irish state television.