Talk of a European bail-out for Greece

• JUDGMENT will be passed on the Greek government’s budget-cutting plans by the European Commission on Wednesday February 3rd. The country’s public finances are in a parlous state and fears that the markets may lose faith in Greece altogether were only partly allayed when it recently raised €8 billion ($11 billion) in the bond market. Amid fears that Greece may not present a credible plan for fiscal austerity, talk is circulating of a bail-out, perhaps through a big fund underwritten by the commission or France and Germany, that could offer loans, albeit at punitive rates, to see Greece past this tight spot. And Greece is not the only member of the euro-zone with wobbly public finances.

• AN EXTENDED period of belt-tightening is likely to be the theme when Barack Obama presents his fiscal budget for 2011 on Monday February 1st. To cope with a growing deficit the president is set to propose a three-year freeze on some domestic spending programmes, as he trues to save some $20 billion in 2011. Spending on national security, Social Security, Medicare and Medicaid will be excluded from any freeze. Mr Obama is also poised to stop tax cuts for oil companies, investment-fund managers and anyone earning over $250,000 a year, although families earning less than that will have tax cuts extended. Mr Obama has threatened to veto spending that would increase the deficit. …