Germany refuses to rush into rescue fund increase

GERMANY has refused to be rushed into boosting the eurozone’s rescue fund after Moody’s cut Spain’s credit rating yesterday and markets piled pressure on Portugal.

The euro fell to a one-week low as the risk premium on Spanish bonds widened and the cost of insuring Spanish, Greek and Portuguese debt against default rose as a fresh wave of eurozone jitters hit financial markets.

Leaders of the 17-nation currency area are expected to back a watered-down version of a German-French plan to boost economic competitiveness at today’s Brussels summit but are unlikely to overcome sharp differences over the size and scope of the rescue fund.