Greece's borrowing costs fell on Thursday and the euro was off its one-year low on optimism that a bailout plan for Athens would be finalized soon, though Spain's risk premium rose after S&P's debt rating downgrade.
The international bailout of Greece is likely to total up to 120 billion euros, a German lawmaker said on Wednesday after International Monetary Fund chief Dominique Strauss-Kahn held talks in Berlin.
German politicians came under pressure Wednesday to cast aside their doubts over a bailout for Greece, with markets increasingly alarmed that Athens may default on its debt and trigger a meltdown elsewhere in Europe.
The cost of insuring Greece's debt against default hit a record high and its borrowing costs soared on Tuesday after Germany's junior coalition party said Berlin was not certain to put its weight behind a financial rescue.
Germany said on Monday it could offer aid for Greece within days if it agreed to painful new austerity measures, but rescue jitters pushed the cost of insuring against a Greek debt default to a record high.
Debt-stricken Greece appealed to its European partners and the IMF for emergency loans on Friday, yielding to overwhelming market pressure to set in motion the first financial rescue of a member of the euro zone.
European shares rose on Tuesday, buoyed by corporate earnings optimism, while concerns over Greece's parlous fiscal situation weighed on the euro.
Necessary reform of the international financial system will mean banks make smaller profits in future, Financial Stability Board President Mario Draghi said on Saturday.
Germany will not need a supplementary budget to pay for an aid package to Greece, Finance Minister Wolfgang Schaeuble was quoted as saying on Saturday, adding he did not expect German taxpayers to suffer.
Finance ministers agreed in principle on Friday to create a permanent mechanism to handle economic crises in the euro zone, as preparations continued on an unprecedented aid package for debt-stricken Greece.
Global shares edged off 16-month highs on Friday as an unexpected jump in U.S. jobless claims and persistent uncertainty over a solution to Greece's debt crisis tempered optimism over the global economic recovery.
Greece asked on Thursday for official talks with European authorities and the International Monetary Fund, a step toward Athens obtaining billions of euros in emergency loans.
The Greek aid deal is a turning point in the crisis that shows suggestions of a euro zone break up and Greek default are absurd, a top European Central Bank policymaker said on Thursday.
The European Union may have to establish a mechanism to help out countries with financing difficulties after a 30 billion euro aid package agreed for Greece last weekend, Jean-Claude Juncker, chairman of the Eurogroup of finance ministers, said in a newspaper interview on Thursday.
Euro zone finance ministers agreed unanimously at a Eurogroup teleconference on Sunday on how to help Greece if needed, Cyprus' finance minister told reporters.
Euro zone finance ministers, the European Central Bank and the European Commission will hold a teleconference on Greece on Sunday, a spokesman for Eurogroup President Jean-Claude Juncker said on Saturday.
Greece is not at the point where it needs a financial bailout and is in no danger of defaulting, European Central Bank president Jean-Claude Trichet said in an interview on Friday.
Markets pushed Greece's risk premium to a euro lifetime high on Tuesday amid growing doubts over the country's capacity to resolve its debt crisis and fresh skepticism about a European Union-International Monetary Fund aid mechanism.
Greece is not seeking to amend an EU-IMF safety net agreement, a top finance ministry official said, trying to calm markets that ditched Greek assets and the euro after a flurry of news suggesting Athens' debt crisis was worsening.
European Central Bank President Jean-Claude Trichet said on Wednesday he expected markets to reward Greece for its fiscal consolidation measures.
World equities ticked down on Wednesday though they were headed for their fourth consecutive quarterly rise, while the dollar hit a three-month high against the yen and the Australian dollar fell.
Greece on Monday sold 5 billion euros ($6.7 billion) of 7-year bonds with a looming Easter holiday and a subdued European market dampening demand in the first test of investor appetite since last week's EU-backed debt support deal.
