Greece Bailout, Greece Debt Crisis | featured news

Greek voters are returning to the establishment parties that negotiated its bailout, a poll showed on Thursday, offering potential salvation for European leaders who say a snap Greek election next month will decide whether it must quit the euro.

Let Greece go: It's a possibility that's being considered more and more publicly in Europe. There have been two and a half years of bailouts, on top of broken promises by Greece to reform. The result: a fifth year of recession and, this week, political chaos. Voters on Sunday favored parties that either oppose the terms of the country's international bailout or want to renegotiate them. If it cannot get more rescue loans, Greece will go bankrupt and likely have to leave the eurozone, the currency union of 17 countries.

The leaders of Greece's once-dominant political parties made a last push on Friday to avert a new election, which a poll showed would give victory to a radical leftist and doom an EU bailout.

Greece’s next government may hold a trump card worth more than $510 billion if it heeds voters’ demands to renegotiate its bailout with the European Union. The nation owes about 400 billion euros ($517 billion) to private bondholders, public bodies such as the International Monetary Fund and European Central Bank, and other creditors, according to data compiled by Bloomberg. About 252 billion euros of that’s due to official organizations that used their status to avoid the losses suffered by ordinary bondholders when Greece restructured its debt two months ago.

The International Monetary Fund on Thursday approved a 28 billion euro ($36.7 billion) bailout for Greece, part of a broader international rescue package for the debt-strapped euro zone member.

Greece has successfully pushed through a deal to lower its debt burden and avoid defaulting on its outstanding bonds in the near future.

Stocks rose meekly Wednesday morning after their biggest loss this year as reassuring reports on productivity and hiring overshadowed jitters about the Greek debt crisis.

Decision day for the Greek debt crisis is drawing near, and insiders are predicting that if things go awry it could cost the world economy $1 trillion.

The German parliament approved a second, euro130 billion ($173 billion) loan package for Greece on Monday after Chancellor Angela Merkel warned lawmakers that it would be irresponsible to abandon the country to bankruptcy.

Debate over Greece’s rescue plan now shifts to the International Monetary Fund, which must decide if it is willing to risk more on a bailout effort that the fund’s own analysis shows has a strong probability of failing.