Europe, Europe Debt Crisis | featured news

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.

The demonstrations have overshadowed regional and municipal elections that were expected to result in a defeat for the governing Socialist Party.

Fueling the demonstrators’ anger is the perceived failure by politicians to alleviate the hardships imposed on a struggling population by a jobless rate of 21 percent.

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.

Bleak EU economic forecasts on Friday showed Greece will miss its debt targets this year without further reforms and a senior policymaker said Athens was not meeting the terms of its rescue package.

Speculation is growing that Greece may need a second financial bail-out from the international community

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.

Ratings agency Standard & Poor's downgraded two of the euro zone's most troubled member states, citing fears that the pair may have to restructure their debt after 2013.