German May Ifo business climate index tumbles

The Munich-based Ifo Institute on Thursday said its business climate index dropped to 106.9 in May from 109.9 in April.The index is based on around 7,000 monthly survey responses from German firms in the manufacturing, construction, wholesale and retail sectors.

Euro-zone PMI points to sharper May contraction

Private-sector output across the 17-nation euro zone contracted in May at the sharpest pace since mid-2009. The composite PMI index fell to a 35-month low of 45.9 from 46.7 in April. A reading of less than 50 signals a contraction in activity.

G-8 wants Greece in euro

With the economic crisis in the euro zone among the key point of discussions, the world leaders said they affirm their interest in Greece remaining in the Eurozone while respecting its commitments. The threat of Greece leaving the eurozone is creating worries about Europe’s economic stability and a potential return to global financial crisis.

G8 leaders vow to combat financial turmoil

At the end of their two-day summit here, the leaders of the G-8 -- the exclusive group of top eight economic nations made up of the US, Japan, Britain, Germany, France, Italy, Canada and Russia -- agreed that growth and jobs must be their "top priority." 

With Greece's political and economic upheaval high on the summit's agenda and stoking concerns over instability in Spain and Italy, Group of Eight leaders sought to calm the situation.

Obama, who has pressed Europe for more growth-boosting measures like those he pursued at home, used his closing statement to remind euro-zone leaders that the stakes were high and there could be "enormous" costs if they failed.

Moody's downgrades 16 Spanish banks

Moody's Investor Service carried out a sweeping downgrade of 16 Spanish banks on Thursday, including Banco Santander, the euro zone's largest bank, citing a weak economy and the government's reduced ability to support troubled lenders.

All the banks' long-term debt ratings were downgraded by at least one notch, and some suffered three-notch cuts.

New French govt takes 30% pay cut

French leader Francois Hollande's new Socialist government got down to work today with the first order of business a symbolic 30% pay cut for the president and ministers.

Spain slides back into recession

Spain's gross domestic product shrank by 0.3 percent in the first quarter after contracting at the same rate in the final three months of 2011, confirming a return to recession.

Greece calls new election after coalition talks fail

Greece abandoned a nine-day hunt for a government on Tuesday and called a new election that threatens to hasten the nation's slide towards bankruptcy and a future outside the euro zone.European leaders have said they will halt the aid if promises given in return for the bailout are not kept. If so, Greece could go bankrupt as early as next month. Financial markets, worried that Greece's crisis could spread to bigger euro zone economies such as Spain and Italy, tumbled on the news.

Eurozone avoids recession

A strong export performance from Germany helped the economy of the 17 countries that use the euro narrowly avoid a recession in the first three months of the year. Germany, Europe's biggest economy, was primarily behind the better-than-expected performance as a strong export performance helped it grow by 0.5 percent.

Of the euro's 17 members, seven are in recession: Ireland, Greece, Spain, Italy, Cyprus, the Netherlands, Portugal and Slovenia.

Greece faces exit

Greece could be forced to leave the eurozone if it fails to abide by EU and IMF loan commitments, a government economic advisor warned on Wednesday as Athens raised prospects of renegotiating a bailout deal.

IMF approves 28 billion euro bailout for Greece

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.

($1 = 0.7677 euros)

Fitch upgrades Greece from restricted default

Fitch Ratings on Tuesday upgraded Greece's credit rating from restricted default to B-minus with a stable outlook following the completion of the country's debt swap with private investors.

Immediate default averted

Bondholders with 85.8% of private sector debt have accepted its bond swap offer. Greece will also activate collective action clauses in its bond agreements, which would effectively force all private bondholders to participate in the swap and clear the way for a new international bailout.

Reforms demanded by the EU and IMF along with deep budget cuts have provoked serious violence in Athens. Despite the success, the deal will not solve Greece's deep-seated problems and at best it may buy time for a country facing its biggest economic crisis.

European stocks fall after PMI data

European stock markets declined Monday, led lower by banks and miners as data showed euro-zone business activity contracted more than initially thought in February.The Markit euro-zone composite purchasing managers index fell to 49.3 in February from 50.4 in January, below a preliminary estimate of 49.7. A reading below 50 indicates contraction in private-sector business activity.

Europe agrees to second Greek bailout

European finance ministers and other top European officials said they stand ready to provide up to 130 billion euros ($171.9 billion) of extra financial aid to Greece until 2014. Under latest agreement, European member states will lower interest rates on their loans to Greece retroactively to a margin of 150 basis points from 200 basis points. Also national central banks will pass any profits on Greek government bond holdings in their investment portfolios directly back to Greece. The Eurogroup said that Greece’s debt-to-GDP ratio is expected to fall to 120.5% by 2020, from around 160% in 2011.

The Eurogroup said that Greece’s debt-to-GDP ratio is expected to fall to 120.5% by 2020, from around 160% in 2011.

Moody's cuts ratings

Moody's Investors Service late Monday lowered ratings on Italy, Portugal, Slovakia, Slovenia and Malta by one notch and slashed Spain's sovereign rating by two notches. The ratings agency also cut the outlook on France, the United Kingdom and Austria to negative but kept their ratings at triple-A for the time being. The moves reflect the susceptibility of the countries to the growing financial and macroeconomic risks emanating from the euro-area crisis and how these risks exacerbate the affected countries' own specific challenges.

Greece misses bail-out deadline

Greece missed another deadline to approve conditions for a second €130bn bail-out on Tuesday night, after a meeting with political leaders was postponed until Wednesday because of last-minute haggling with international lenders over emergency spending cuts.

Greece has already missed two deadlines this week because of the politicians’ brinkmanship, further exasperating its European paymasters and jeopardising its second bail-out along with a voluntary restructuring of €200bn of government debt.

Greece takes step closer to default

The Greek premier, failed to make party leaders accept harsh terms in return for a second €130bn bail-out, pushing Athens closer to a disorderly default as early as next month.Markets are likely to react negatively to news of the breakdown in talks on worries that Greece will default on a €14.5bn bond repayment on March 20, and that “contagion” could spread to Portugal & Italy.

Hungary is 'junk', says Moody's

Moody's slashed Hungary's government bond rating to "junk" late on Thursday, citing high debt levels, weak growth prospects and uncertainty about its ability to meet fiscal goals, in what the government called part of "financial attacks" against the country.

Moody's cut Hungary's government bond rating by one notch to Ba1, below investment-grade, with a negative outlook hours after rival Standard & Poor's held fire on a flagged downgrade on news of Budapest's planned talks on getting international aid.

EU Deal

Under the new plan, Greek debt held by private sector creditors will be cut by 50% with investors accepting a "voluntary" haircut. Europe's biggest banks, which have faced questions about their stability, would be required to boost their core capital ratios to 9%.

The leaders also agreed to allow the €440 billion euro-zone bailout fund, the European Financial Stability Facility, guarantee the debt of some member countries.