[an error occurred while processing this directive] The euro has risen against the dollar as Greece unveiled a new series of austerity measures to cut its debt. The euro rose 0.6% to $1.3698, but was slightly lower against the pound at 90.70 pence. On Tuesday, the currency fell to its lowest level against the dollar for 10 months amid continuing concerns over Greece's debt crisis. Persistent worries over Greece's 300bn euro ($419bn; £259bn) debt have weighed on the European single currency. The pound rose against the dollar, trading at $1.512. Protests The Greek government approved an austerity package of tax rises and spending cuts worth 4.8bn euros, hoping to convince financial markets that it can pay off its debts and persuade European leaders it is doing enough. The Greeks have three cards up their sleeve [and] behind the scenes they are playing them for all they are worth

Stephanie Flanders, BBC economics editor

Flanders: Advantage Greece Q&A: Greece's economic woes Why Greece's problems matter Greece has pledged to reduce its deficit from 12.7% - more than four times eurozone rules - to 8.7% during 2010. The measures include raising VAT to 21% from the current rate of 19%, and cutting civil servant bonus payments during holidays - which has annoyed union leaders. But the austerity measures already proposed - such as freezing public sector pay, raising taxes and changing the pension system - have provoked huge street protests. "The fiscal measures announced by Greece today should allow the government to ease the short-term pressure on its finances with a bond issue and may lead to firmer support from other countries," said Ben May, European economist at Capital Economics. Greece needs to sell bonds in the coming weeks. It has to raise 20bn euros in order to pay off maturing debt in April and May. Greece's Prime Minister George Papandreou is due to visit German Chancellor Angela Merkel in Berlin on Friday, in what could be a key meeting to decide what, if any, European assistance Greece receives. He will visit France to meet President Nicolas Sarkozy soon afterwards. European investigation The European Commission announced that it intends to question banks and regulators over the role played by credit-default swaps in the Greek debt crisis, and how these financial instruments might be regulated in future. Credit-default swaps are similar to insurance contracts, and allow banks and other institutions to buy financial protection against the risk that a borrower is unable to repay its debts. However, the swaps have also been used by hedge funds to speculate against Greek debt, and make money if Greece's standing in the markets deteriorates. Despite the Commission's concerns, the chairman of the Financial Services Authority, the UK's financial watchdog, played down the importance of speculators. Adair Turner said it is more important to keep the confidence of long-term buyers of Greek government bonds. "It is important that even if we look at this issue we don't overstate it," added Mr Turner, who said that swaps speculators only comprised around 3% to 4% of outstanding Greek debt. "A fundamental issue that can drive volatility on spreads on Greek bonds is a whole load of long investors not being willing to buy."



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