Europe, Europe Debt Crisis | featured news

When King Juan Carlos appeared at a recent basketball game in front of thousands of subjects, he was greeted by persistent heckling and whistling. It was an unprecedented spectacle in a nearly four-decade reign over which the monarch has basked in the nation's love and respect.

Even as the euro zone periphery starts to spy some glimmers of hope, concern is mounting that Germany is drifting apart from other countries at the core of the single currency bloc, notably France.

Tens of thousands of anti-austerity demonstrators took to the streets of Athens on Wednesday as unions staged a general strike to protest government spending cuts and tax hikes, which some predict will push unemployment to an alarming 30 percent. Police said up to 40,000 people were participating in two separate marches in central Athens that were so far peaceful.

The Greek government says its painful austerity drive is paying off, with the budget deficit reduced to 6.6 percent of annual output in 2012 from 9.4 percent a year earlier. A finance ministry statement Monday said that, not counting the cost of servicing Greece's debt mountain, the government posted a modest budget surplus of €434 million ($588 million) last year.

Local governments across Spain have been paying their suppliers' bills months behind schedule, forcing companies to help shoulder the financial woes of the Spanish government.

Standard & Poor's ratings agency on Tuesday upgraded Greece's credit grade by 6 notches, yanking the debt-heavy country out of default but still keeping its devalued bonds in junk status.

ATHENS (Reuters) - Greek and foreign bondholders offered about 30 billion euros ($38.8 billion) in a buyback plan that is key to the country's international bailout, a Greek government official said on Saturday.

Greek pension funds will not take part in a debt buy-back that is a key part of the country's international bailout, Greek Prime Minister Antonis Samaras said in a newspaper interview.

The euro zone economy is on course for its weakest quarter since the dark days of early 2009, according to business surveys that showed companies toiling against shrinking order books in November.

Moody's Investors Service has downgraded France's government bond rating, citing the country's weak economic growth outlook and its exposure to Europe's economic crisis.