European Markets Fall on Moody’s Downgrade of Spain and Cyprus

“The European debt crisis deepened as the credit ratings of Spain and Cyprus were downgraded by Moody’s Investors Service.

Moody’s yesterday cut Spain’s rating three steps to Baa3, one level above junk, from A3, citing the nation’s increased debt burden, weakening economy and limited access to capital markets. Moody’s also lowered Cyprus’s bond rating to Ba3 from Ba1, attributing the downgrade to the material increase in the likelihood of a Greek exit from the euro area, and the resulting increase in the probable amount of support that the government may have to extend to Cypriot banks”

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