Topic: Greece

Investors have little choice now but to cling to low-yielding U.S. government debt as European leaders ponder a messy Greek exit from the euro zone, Pimco's Bill Gross told CNBC.

Italy's Mario Monti said he believed Greece would remain in the euro zone but it was impossible to say with certainty. So, just in case, euro leaders agreed to have a "Grexit" plan in place.

The European Central Bank wants Greece to stay in the euro zone and is working under that assumption, Joerg Asmussen, member of the Executive Board of the ECB, told TVN/CNBC in an interview on Thursday.

Four years of economic crisis and market turmoil that have sent German bund yields to record lows now have half of the top bond strategists and economists polled by Reuters fearing a Japan-style "Lost Decade".

Greece's four largest banks will get an 18 billion euro capital injection by Friday or Monday, the country's central bank chief said.

Any Greek exit from the euro zone would pose a huge disruption with unforeseeable consequences, European Central Bank policymaker Ewald Nowotny said on Thursday.

Joint bonds issued by the euro zone, also known as Eurobonds, are one of the possible solutions to Europe’s debt crisis, Joaquin Almunia, vice president of the European Commission told CNBC, “but many conditions would have to be met” before they were introduced.

Greece will leave the euro zone next year and the country's new currency will "immediately fall by 60 percent," according to Citi chief economist Willem Buiter.

Ever wondered why European politicians appear so calm when attending summits in Brussels or G8 meetings despite all the talk of a “Grexit” and economic Armageddon?

Germany's manufacturing sector has been shrinking at the fastest rate in three years in May, renewing concerns about the stamina of Europe's largest economy, which likely propped up the euro zone in the first quarter but is beginning to show signs of strain.

The prospect of a Greek exit from the euro zone, rising losses at Spanish banks, and a failure of labor reform in Italy will force the European Central Bank to inject more liquidity into the banking system through a long-term refinancing operation, according to the chief economist at German banking giant Commerzbank.

"He is not in a confrontational mindset. He didn't arrive brandishing a
Kalashnikov and saying 'you must accept euro bonds'," one aide said. "It's a
different approach."

While money pours out of Greek banks and Europe debates whether or not Greece deserves its next handout, the people potentially in the best position to help shore up the nation’s finances are mainly keeping their heads down, the New York Times reports.

European shares are called to open the trading day higher despite a lackluster European Union summit that found Greece being urged to stay in the euro zone but to honor commitments to its bailout agreement.

European Union leaders, advised by senior officials to prepare contingency plans in case Greece decides to quit the single currency, urged the country to stay the course on austerity and complete the reforms demanded under its bailout programme.