Europe, Euro Zone | featured news

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

Inflation in the euro zone fell to its lowest level in more than a year in May, giving the European Central Bank more leeway to stimulate the flagging 17-nation economy as the intensifying debt crisis takes its toll on confidence.

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.

European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks and introducing euro zone capital controls as a worst-case scenario should Athens decide to leave the euro.

Spain could decide this month to ask for a bailout for its troubled banking sector, a step that would make it the fourth country in the 17-member eurozone to seek help since the EU debt crisis broke out....

Ireland was poised to announce a "yes" vote to a European budget discipline treaty on Friday, but the referendum result brings little respite to a euro zone tormented by doubts over Greece's future in the currency bloc and Spain's wobbly banks.

The European Central Bank stepped up pressure on Thursday for a joint fund to guarantee bank deposits in the euro zone, saying Europe needed news tools to fight bank runs as the bloc's debt crisis drives investors to flee risk.

Greece's conservative New Democracy party has regained an opinion poll lead that would allow the formation of a pro-bailout government committed to keeping the country in the euro zone, a batch of new surveys showed on Saturday.

Angry Greek voters head to the polls on Sunday for an election shrouded in uncertainty that could reignite Europe's debt crisis and renew doubts about the country's future in the euro zone.