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Has Greek austerity finally gone too far?

Just as this crisis-stricken country appeared to be turning around, Antonis Samaras shot himself in the foot.
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Athens' firemen continue to douse down flames following last night's riots in protest against further massive austerity cuts (ANGELOS TZORTZINIS/AFP/Getty Images)

The Greek parliament voted to bite down harder on the austerity bullet and passed a further 3.3 billion euros ($4.4 billion) cuts to government spending. The headline measures were a 22 percent reduction in the minimum wage and another 15,000 government employees being laid off,

On top of that euro zone finance ministers are saying the Greek government must find another 325 million euros in savings if it is to receive an EU funded 130 billion euro bail-out ($172 billion).

No wonder there were violent demonstrations last night.


Portugal: the new Greece

Unsustainable bond yields being used to finance unpayable debts.
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Things are really rough all over the Iberian peninsula as Portugal's Prime Minister Pedro Passos Coelho (R) seems to be telling his Spanish counterpart Mariano Rajoy. (PATRICIA DE MELO MOREIRA/AFP/Getty Images)

In Portugal the numbers are all bad:

The deficit is 9.1 percent of GDP. The economy is expected to contract by anywhere between 3.1 and 5 percent this year. It took a bailout from the EU, ECB, IMF "troika" of 78 billion euros ($102.6 billion) and will have a hard time paying it back because its credit rating is now "junk." Five year bond yields yesterday broke a record: 18.9 percent. Three year bond yields hit 21 percent.

Oh, and unemployment stands at a record 13.2 percent.


Euro zone debt crisis: focus returns to Greece

Negotiators head to Athens to try and nail down agreement on bail-out
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The rioting has calmed down in Athens but negotiations on the Greek bail-out aren't going so well. This week is crunch time and depnding on what's decided the streets may catch fire again. (LOUISA GOULIAMAKI/AFP/Getty Images)

You may have thought the Greek crisis was pretty much over. After all the headlines from last November were: Greek bondholders agree to take a haircut and the country's Prime Minister George Papandreou resigns to be replaced by a technocrat named Lucas Papademos, who is more congenial to the needs of the EU's leadership in Brussels, and more important, to German Chancellor Angela Merkel.

But as focus shifted to Italy and now to France, the Greek situation has remained bogged down in details. This week Greece's creditors in banks and hedge funds (not necessarily interested in the same outcome) plus representatives of the "Troika" (EU, IMF and European Central Bank) descend on Athens for an intensive round of negotiations with the Greek government.

Larry Elliott at The Guardian has the best line of the day on the event. "It is international finance's version of Sartre's Huis Clos, a vision of hell where three people who loathe each other are stuck in a room for eternity."

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