Reply #5: Spain downgraded as Europe debt crisis widens

[ozymandius]

BERLIN – Europe's debt crisis spread its contagion to another country Wednesday when a major agency downgraded Spain's credit rating, even as Germany grudgingly moved closer to bailing out Greece from imminent collapse.

Greece and Portugal — up to now the focus of alarm — are relative economic minnows. But Spain's economy, at four times the size of Greece, is considered by many too big to rescue.

Chancellor Angela Merkel said Germany would speed up approval of its share of a nearly $60 billion (euro45 billion) joint bailout with the International Monetary Fund and other euro countries, rushing it through parliament by May 7.

That would beat a May 19 deadline when Greece has debt coming due — and which it can't pay without a bailout.

But the Spain downgrade and a lack of clarity about how much money Greece will really need unsettled investors. Major European markets closed down after the Spain announcement, which came in the final two minutes of trading.

http://news.yahoo.com/s/ap/20100428/ap_on_bi_ge/eu_europe_financial_crisis