[...] public anger over austerity measures and unemployment is spreading, and a key court ruling on the eurozone's crucial new bailout fund is due in Germany.
Debt inspectors from the organizations that oversee Greece's bailout program — the "troika" of the International Monetary Fund, European Union and European Central Bank — are set to return to Athens in early September to finalize yet another round of austerity measures.
Spanish banks are sitting on an estimated €200 billion in toxic assets following the collapse of the country's real estate boom.
There have also been public protests at the government's €65 billion package of tax hikes and spending cuts.
The country is finding fewer and fewer buyers for its debt, with investors charging the country increasingly higher rates so that it can borrow the money it needs to keep the economy and public services working.
Earlier this month, European Central Bank President Mario Draghi said the ECB was ready to unleash its financial might and buy government bonds to help drive down borrowing costs in debt-ridden countries such as Spain — on the condition that governments approach the eurozone's emergency bailout funds for assistance first.
Mariano Rajoy's government has so far tried hard to avoid the political indignity of asking for financial help, which usually implies surrendering some degree of sovereignty over a country's financial affairs.
Italy's unelected premier and his technocratic government, appointed by Parliament last November to put the eurozone's third-largest economy back on a path to fiscal health, have until next spring to conclude their task.
After a short period of calm at the beginning of the year — when Monti took over and the ECB flooded the market with €1 trillion in cheap loans that banks used to buy government debt — Italian borrowing rates have been climbing amid market uncertainty about the wider eurozone and Italy's high debt load.
The government says its priority immediately after the summer break is reducing the stock of public debt and pruning public sector waste.
Germany — the eurozone's biggest economy and therefore the biggest contributor to the fund — was one of the main architects of the new fund and the fiscal stability pact, a treaty that lays down strict budget rules.
"A significant postponement of the setup of the ESM ... could mean a serious unsettling of markets far beyond Germany and a serious loss of confidence in the eurozone," Finance Minister Wolfgang Schaeuble warned the court's panel of eight judges.
The coalition government has won praise for sticking to the terms of the financial rescue agreement signed in May 2011.
[...] the government has decided not to cut spending to reach the deficit goal — opting instead to raises taxes on the higher earners and rolling back some of the labor reforms of the previous Sarkozy administration.
Debt inspectors from the organizations that oversee Greece's bailout program — the "troika" of the International Monetary Fund, European Union and European Central Bank — are set to return to Athens in early September to finalize yet another round of austerity measures.
Spanish banks are sitting on an estimated €200 billion in toxic assets following the collapse of the country's real estate boom.
There have also been public protests at the government's €65 billion package of tax hikes and spending cuts.
The country is finding fewer and fewer buyers for its debt, with investors charging the country increasingly higher rates so that it can borrow the money it needs to keep the economy and public services working.
Earlier this month, European Central Bank President Mario Draghi said the ECB was ready to unleash its financial might and buy government bonds to help drive down borrowing costs in debt-ridden countries such as Spain — on the condition that governments approach the eurozone's emergency bailout funds for assistance first.
Mariano Rajoy's government has so far tried hard to avoid the political indignity of asking for financial help, which usually implies surrendering some degree of sovereignty over a country's financial affairs.
Italy's unelected premier and his technocratic government, appointed by Parliament last November to put the eurozone's third-largest economy back on a path to fiscal health, have until next spring to conclude their task.
After a short period of calm at the beginning of the year — when Monti took over and the ECB flooded the market with €1 trillion in cheap loans that banks used to buy government debt — Italian borrowing rates have been climbing amid market uncertainty about the wider eurozone and Italy's high debt load.
The government says its priority immediately after the summer break is reducing the stock of public debt and pruning public sector waste.
Germany — the eurozone's biggest economy and therefore the biggest contributor to the fund — was one of the main architects of the new fund and the fiscal stability pact, a treaty that lays down strict budget rules.
"A significant postponement of the setup of the ESM ... could mean a serious unsettling of markets far beyond Germany and a serious loss of confidence in the eurozone," Finance Minister Wolfgang Schaeuble warned the court's panel of eight judges.
The coalition government has won praise for sticking to the terms of the financial rescue agreement signed in May 2011.
[...] the government has decided not to cut spending to reach the deficit goal — opting instead to raises taxes on the higher earners and rolling back some of the labor reforms of the previous Sarkozy administration.
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