Greek PM: Talks On New Bailout Package Under Way

Greek Prime Minister George Papandreou speaking on TV last week

Greece's prime minister has confirmed that his country is now in talks over a second bailout package "roughly equal" to the first $157 billion rescue it accepted a year ago.

Opening a three-day parliamentary debate, George Papandreou also blamed Greece's bloated and inefficient state sector for bringing the country to its knees and vowed to effect deep changes with a fall referendum on the constitution that would make it easier to get rid of inept officials or workers.

He dismissed any calls for default, saying this would be "a catastrophe for households and banks alike," and made it clear he would not back off from efforts to reduce Greece's debt.

Riots erupted on the streets of Athens last week as protesters rallied against a new round of spending cuts and tax hikes demanded by international creditors.

Meanwhile, demonstrations against corrupt politics and unemployment were held throughout Spain as part of a mass movement that began on May 15.

The country has the highest unemployment rate in the eurozone, at over 21 percent, despite being the zone's fourth-largest economy.

Marchers in Madrid waved banners that read, "Let's march together against the crisis."

The demonstrations seen in the debt-strapped country have raised concerns about the impact of the crisis on the broader European economy in light of the rescue packages recently arranged for Greece, Ireland, and Portugal.

compiled from agency reports