Europe Debt Crisis | featured news

Spain’s borrowing costs rose to record levels for a third consecutive trading day on Monday on concerns that a deepening recession and the financing problems of its regions would force the government to seek a full-fledged bailout.

The European meltdown is weighing heavily on the U.S. economy, with states that rely heavily on exports most at risk from the deepening crisis overseas. An analysis by Wells Fargo estimates that Utah and West Virginia economies face the biggest risk from the problems in the eurozone, while many Western states including Wyoming and Colorado are unlikely to see much impact.

German leaders have a message for their anxious neighbors: Perhaps the euro crisis isn’t so dire after all. A growing chorus of German policymakers say they have years to resolve the euro zone’s problems, even as Italy and Spain press for urgent action to bring down their borrowing costs, which are approaching new heights.

Ten-year bond yields rose above 7 percent and shorter-term issues also sold at higher cost, raising fears that recent European accords were not enough to stem the debt crisis.

BERLIN —Greece’s new leaders have had only a month to confront their country’s dismal tangle of economic problems, but some in Europe think the troubled Mediterranean country is up against a hopeless task.

American companies are scaling back plans to hire workers and a rising share of firms feel the European debt crisis is taking a bite out of their sales, a survey showed on Monday.

The Spanish government's most recent reforms will slash 56.4 billion euros ($69 billion) from the public deficit in the next two and a half years, an official document showed on Saturday, leaving a gap to be filled by taxes on energy.

Credit rating agency Moody's cuts Italy's standing and warns the country is likely to see a sharp rise in borrowing costs.

Italy said on Tuesday it may want to tap euro zone aid to ease its borrowing costs as finance ministers struggled to convince markets they are getting a grip on the bloc's debt crisis, which a top European Central Banker said could escalate.

Irene Fernandez lost her job with Spain's postal service five months ago, a victim of government spending cuts. Since then, she's been getting by on spending money from her mother and the $530 a month she earns grooming dogs for neighbors.