Greece has reached a tentative agreement on new austerity cuts demanded by creditors to release a 130-billion-euro ($173 billion) bailout, hours before a crucial meeting of finance ministers in Brussels, Prime Minister Lucas Papademos' office said Thursday.
Spain and Italy gave financial markets a boost Thursday as they successfully raised nearly euro22 billion ($27.98 billion) in two keenly watched debt auctions that showed renewed investor confidence in the countries' attempts to get a grip on their debt problems.
The European Central Bank increased the bond purchases that have helped ease pressure on indebted governments from the eurozone debt crisis last week.
European Central Bank President Mario Draghi warned Thursday that there's "no external savior" for heavily indebted governments in the 17-nation eurozone and gave no indication the bank is ready to step in and support their finances.
The European Union's president said Friday that 26 of its 27 member countries are open to joining a new treaty tying their finances together to solve the euro crisis. Only Britain remains opposed, creating a deep rift in the union.
The leaders of Germany and France are pushing their European counterparts to save the ambitious project of Continental unity that grew from the ashes of World War II.
German Chancellor Angela Merkel pushed forward Friday with what markets see as an emerging plan for more effective action to contain the European financial crisis, urging tougher rules against government overspending.
News that Greece will scrap a referendum on unpopular budget cuts and an unexpected interest rate cut in Europe sent the Dow Jones industrial average up nearly 210 points Thursday, the second day in a row of big gains.
Jean-Claude Trichet, the euro's chief guardian, this month will leave the European Central Bank (ECB) in a very different place from when he took the helm in 2003, with a dramatically expanded role to fight the government debt crisis.
