Spain, Europe Debt | featured news

The European Union has no plans to activate its emergency funds to recapitalize Spanish bank and Spain had no need to appeal for funds to do so, the European Commission said on Thursday.

Just when we thought the euro crisis had subsided for a bit, Spain is bursting back up as a trouble spot. On Wednesday, Prime Minister Mariano Rajoy said the country is “facing an economic situation of extreme difficulty.” Spain is struggling to borrow money and can’t hit its deficit targets.

Spain's new government said on Friday the public deficit for 2011 would come in at 8 percent of gross domestic product, well above a target of 6 percent, and announced income and property tax hikes and a civil servant wage freeze in response.

Italy and Spain have not asked to be rescued by the International Monetary Fund, the head of the lender said on Monday as she urged European leaders to quickly solve the region's festering debt crisis.

Asian stocks slumped Friday after a spike in Spanish government borrowing costs added to the uncertainty over Europe's debt crisis and investors braced themselves for China.

Moody’s Investors Service downgraded Spain’s credit rating Tuesday and warned that France’s rating could also be at risk, citing both nations’ vulnerability as Europe struggles to manage its persistent debt crisis.

Fitch on Friday cut Spain's credit ratings by two notches, just a few minutes after downgrading Italy, saying the intensification of the euro zone debt crisis has had a negative impact in the entire region.

Italy and Spain pass new measures as they battle to control their debts while Greece steps up its austerity plans.

Several European countries that banned short-selling have extended the prohibition until the end of September. When concerns about European banks’ exposure to Greek debt sent their stocks plummeting two weeks ago, market regulators in Belgium, France, Greece, Italy and Spain stepped in to prohibit traders from betting on the decline in a share’s price.

The demonstrations have overshadowed regional and municipal elections that were expected to result in a defeat for the governing Socialist Party.