Interesting diagram from the New York Times.

Banks and governments in these five shaky economies owe each other many billions of euros -- converted here to dollars -- and have even larger debts to Britain, France and Germany.

Sydney Morning Herald report.

Investors are increasingly concerned that the €110 billion ($A157.5 billion) rescue package for Greece will not work, resulting in a full-blown sovereign debt crisis. Yields on two-year Greek government bonds were running at more than 18 per cent - equivalent to so-called junk bond levels. Yields on Spanish and Portuguese bonds climbed overnight.

Independent report.

The UK was warned yesterday that it is among the European Union states that faces the risk of contagion from the Greek crisis, with "very real, common threats" to its financial systems.

As a stunned Greece, still struggling to come to terms with the deaths of three people in protests on Wednesday, approved cuts to address its financial crisis, one of the leading credit ratings agencies said British banks were "vulnerable" to shocks of the kind now reverberating around the eurozone.

Economist article.

[...] By slashing pay in the public sector, raising taxes and (hesitantly) starting to reform the labour market, the plan aims to reduce the budget deficit from 13.6% of GDP in 2009 to less than 3% by 2014. But it will deepen the recession that is already hitting Greece, with a drop in GDP in 2010 of at least 4%, and a further fall expected in 2011.

Nafeez Ahmed writes.

We're not back in the 1930s, but structurally - systemically - we're in a far worse condition. The problem is that the three main parties on offer today lack a fully-formed understanding of the real structural issues behind the concurrent crisis of world capitalism. They fail to realise that they're in a catch-22. The symptom-led solution to the massive deficit is inevitably massive cuts in spending. The problem is that those cuts, structurally necessary within the given system to stabilise our credit rating and currency value so that the government can keep borrowing, will inevitably contract the real economy massively to such an extent that it will create a serious socio-political crisis in this country in the next 5-10 years. We've heard as much from the Bank of England.

BBC report.

The protest became violent, with petrol bombs thrown at police, who responded with pepper spray and tear gas.

Protesters are angered by spending cuts and tax rises planned in return for a 110bn euro (£95bn) bail-out for Greece.

Vancouver Sun interview with Niall Ferguson.

The situation of the United Kingdom in fiscal terms is in fact worse than the situation of Greece. That may come as a surprise to you, but if you look at the most recent paper on the subject published by the Bank for International Settlements, it is very clear. The trajectory of U.K. public debt over the next 30 years, absent a major change of policy, will take it to a mind-blowing 500% of GDP, which is about 100 percentage points worse than Greece. If Britain had done what many right-thinking people thought it should do and joined the euro, the situation of Britain would be worse than that of Greece today. The only reason that Britain isn't an honourary member of the PIIGS club, along with Portugal, Ireland, Italy and Spain, is that it stayed outside the eurozone and therefore reserves the right to debase the currency as an exit strategy. I don't know about you, but I don't find that very cheery as a prospect

Guardian report.

Global stock markets have fallen sharply on fears that the proposed €110bn (£95bn) rescue package hammered out over the weekend for Greece will not be enough to solve its financial crisis, as well as concern that the problems could spread to other European countries.

Spanish prime minister José Luis Rodríguez Zapatero was forced to deny market rumours his country would ask for €280bn from the European Union, something he described as "complete madness".

Reuters report.

Greece reacted with a mix of resignation and outrage on Monday to a painful new austerity package from the government that newspaper editorials said would force a long-delayed "violent modernization" on the country.

Julian Knight in the Independent.

Well, let's get one thing straight: Greece's debt mountain may be huge but our total debts are actually worse. Why? Unlike us, the Greek population isn't loaded down with credit card debts, personal loans, mortgages, remortgages, consolidation loans and individual voluntary arrangements to the tune of £1.4 trillion. If you add personal debt to the national government debt then our debt-to-GDP ratio soars from about 60-70 per cent to about 200 per cent.

Times report.

Prime Minister George Papandreou is due to hold a cabinet meeting later this morning to announce the deal.

The EU has insisted on tough austerity measures in return for a bailout worth an estimated € 45 billion (£39 billion) this year alone, and up to €120 billion (£104 billion) over three years.

Guardian report.

Greek riot police have used tear gas to disperse angry protesters in Athens, during a march against government cuts to tackle the country's crippling debt. Clashes erupted at the finance ministry and a state TV truck was petrol bombed. A tense stand-off continues, with protesters hurling bottles and rocks.

Guardian report.

Leading the field is the tabloid Bild, hammering home the alarming message that: "The Greeks want even more of our billions!" The headline is crowned by the ominous figure: "25,000,000,000 euro!", the proportion of the bailout package Germany can expect to pay.

"Will Greece become a bottomless pit for German taxpayers?" the paper asks.

Guardian report.

Fears of a fresh banking crisis stalked the markets today as the risk of Greece defaulting on its debt repayments raised concerns about the exposure of major banks to indebted countries in Europe.

BBC report.

Greece's debt has been downgraded to junk status by ratings agency Standard & Poor's amid mounting fears its debt crisis is getting out of control.

Guardian report.

Rescuing the Greek economy could require a €150bn (£130bn) bailout over the next three years, according to Goldman Sachs, but this would be politically impossible for European leaders to swallow.

In a note to clients this morning, Goldman's chief European economist, Erik Nielsen, said that the €45bn bailout currently on the table is not large enough to cover Greece's borrowing needs.