Europe, Eurozone Bailout | featured news

Italy and Spain, battling searing market pressure in the euro zone's widening debt crisis, blocked agreement on measures to promote growth at a European Union summit on Thursday to demand urgent action to bring down their borrowing costs.

Cyprus, the fifth euro zone country to seek emergency funding from Europe, may need a bailout of up to 10 billion euros — over half the size of its economy — officials said.

Greece's new government promised on Thursday to renegotiate the terms of the country's bailout without endangering its future in the euro, responding to intense pressure to ease mounting social tensions but also risking a showdown with European powers.

Greece's new government is to ask lenders for two more years to hit fiscal targets, responding to huge public pressure for a softening of an international bailout but setting up a showdown with its euro zone partners.

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

China is keen to contribute to a fund to bail out the euro zone, its trade minister said, underscoring the Asian powerhouse's growing interest in playing a bigger role in the global economy as its financial strength grows.

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.

Greece's cabinet agreed on Saturday to launch a debt swap for private creditors on March 8 with the aim of completing it by March 11, a government official said.

U.S. stocks closed in on the psychologically important mark of 13,000 for the Dow Jones industrial average as optimism about the Greek bailout and the European financial situation sent stocks up in early trading.