Topic: European Central Bank

"The distinction between Greece and Italy from the point of view of markets is massively different" than a few years ago, Italian Prime Minister Mario Monti told CNBC.

The Greek cabinet approved a draft bill spelling out reforms required by the EU and the IMF on Friday, taking Athens closer to getting a new 130 billion-euro bailout after the prime minister warned the alternative was "catastrophe."

The credit rating agency Standard & Poors has downgraded 34 out of 37 Italian banks it reviewed, citing the italian banking industry and the country's general economic risk  as reasons for the downgrade.

After appearing to be resolved, Greece's bailout is unraveling again. Renewed fears of a Greek default sparked a broad selloff in financial markets Friday.

The danger of disaster in the financial markets has receded since the start of the year, after additional liquidity injections, one strategist told CNBC Friday.

Greece's largest police union has threatened to issue arrest warrants for officials from the country's European Union and International Monetary Fund lenders for demanding deeply unpopular austerity measures.

Striking Greek workers denounced a new wave of austerity on Friday as an imposition too far by Europe and the IMF.

For all the struggles that Greece has gone through to satisfy its demanding lenders, Europe’s troubles are not going away, the New York Times reports.

Greek political leaders said they had clinched a deal on economic reforms and spending cuts needed to secure a second bailout, but euro zone finance ministers demanded more measures and a parliamentary seal of approval before providing the aid.

Greek leaders clinched a long-stalled deal on reforms and austerity measures needed to secure a bailout and avoid a messy default just hours before the country's financial backers were to meet in Brussels on Thursday.

ECB President Mario Draghi pledged relaxed rules for banks taking part in a long-term refinancing operation, boosting hopes that additional liquidity will be injected but played his cards close to his chest on the issue of Greek debt.

The European Central Bank’s injection of cheap money into the European banking system last December has taken the pressure off the euro zone politicians for the moment, but they still have to take further action, a German economist told CNBC.

Germany expects the Eurogroup to take no decision on a Greek bailout and accompanying bond swap at a meeting later on Thursday, a government official said, as the ground had not yet been laid for a deal.

Spanish government bond yields rose on Thursday as an unexpected issue of debt the previous day tempered investor demand, though any progress towards Greece receiving bailout funds was likely to spur fresh appetite for risk.

The European Central Bank’s second injection of long-term liquidity into markets could reach as much as 1 trillion euros ($1.33 trillion), analysts predict.