Europe, Europe Debt Crisis | featured news

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.

The euro-zone's bailout funds can't handle another big bailout, the world's biggest private financial institutions said.

Tens of thousands of Italian workers rallied in Rome on Saturday to protest pension cuts, tax hikes and labor reforms imposed by the government of Mario Monti and to demand more stable work, particularly for the young. The demonstration organized by Italy's main labor unions came a day after Monti's latest effort to stave off contagion from Europe's debt crisis. His Cabinet on Friday approved measures worth (EURO)80 billion ($100 billion) to spur economic growth, streamline the notoriously bloated public sector and lower the national debt.

The plan will include measures to prevent bank runs and push for the repeal of regulations that hinder competition, keep young people out of the work force or make it difficult to start businesses.

...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.

A collapse of the euro could derail America’s fragile recovery and doom Mr. Obama’s re-election hopes. He may be running out of time to sway the German chancellor.

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.

European leaders faced increasing pressure on Thursday to respond to the euro crisis, as Spanish bond yields hit a level that has triggered full bailouts of other nations.

Credit ratings agency Moody's Investors Service cut its rating on Spanish government debt on Wednesday by three notches to Baa3 from A3, saying the newly approved euro zone plan to help Spain's banks will increase the country's debt burden.

Spain’s borrowing costs soared Tuesday to levels that have sent other euro members into the arms of international lenders, calling into question the viability of a bailout deal for Spain’s banking sector even as other troubled countries were weighing whether they could make similar rescue arrangements.