Europe Debt | featured news

If the U.S. economic slowdown weren't enough to deal with, the Federal Reserve this week must consider a new threat: a resurgent European debt crisis that could imperil the global economy.

Hours of talks between eurozone finance ministers on the imploding finances of Greece broke up early Monday morning without the ministers signing off on a vital installment of rescue loans needed to avoid bankruptcy next month.

Eurozone finance ministers meet in Luxembourg, where they are expected to approve a 12bn-euro (£10bn) loan to debt-stricken Greece.

Greek Prime Minister George Papandreou sacrificed his finance minister on Friday and put his main socialist party rival into the job in a bid to force through an unpopular austerity plan and avert bankruptcy.

Prime Minister George Papandreou has vowed to stay on and fight to pull his country out of a crippling debt crisis, facing down a revolt in his Socialist party over new but widely unpopular austerity measures....

Worry about lack of substantive progress towards a blueprint for tackling the euro zone debt crisis kept investors on edge, traders said. In the United States, consumer inflation rose more than expected in May.

Standard & Poor's cut its ratings on Greece three notches on its expectations of the likelihood of one or more defaults over the next 12 months.

The European Central Bank said on Thursday it opposed forcing private creditors to take part in debt relief for Greece, pushing back against Germany, which has demanded a bond swap to lengthen Greek debt maturities.

President Barack Obama said on Tuesday that he and German Chancellor Angela Merkel agreed that Europe's debt crisis must be contained.

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.