Spain and Italy will be downgraded by Moody’s Investors Service and Standard & Poor’s this year as the recession and debt crisis worsen, economists and strategists at Citigroup said.

GERMAN Chancellor Angela Merkel will seek backing from German lawmakers to bolster the euro bailout fund on the same day she heads to a European summit as banks joust with leaders over the size of losses they take on Greek bonds.

Frankfurt: The European Central Bank is still on track to raise interest rates in July as Greece’s worsening debt crisis clouds the economic outlook in the run-up to next week’s policy meeting, a Bloomberg survey showed.

EU and German officials assured markets they were working quickly to approve a bail-out for Greece as they tried to keep the country's debt crisis from dragging others into a continent-wide financial meltdown.

THE Organisation for Economic Co-operation and Development plans to cut its growth estimates for this year and next because of weaker-than-expected economies in Japan and Europe, a draft of its half-yearly forecast showed.