Tuesday, June 15, 2010

Spain sees credit squeeze, denies EU rescue bid

Spain admitted on Monday that the European financial crisis is taking a toll on the country's banks, with foreign banks refusing to lend to some, while Germany said the EU stands ready to help if Madrid needs a Greek-style rescue.

Highlighting persistent doubts about Greece's ability to repay its debt mountain despite last month's 110 billion euro multilateral bailout, credit ratings agency Moody's slashed Greek sovereign debt by four notches to junk status.

Moody's, in a statement explaining the unusually steep cut, cited the "macroeconomic and implementation risks" in Athens' draconian austerity program agreed with its 15 euro-zone partners and the International Monetary Fund. (more)

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