Europe, Global Economy | featured news

Italy's sovereign debt rating cut by Standard & Poor's, the latest move in a deepening and continuing European debt crisis.

Stocks are tumbling as investors worry that Greece won't qualify for a new installment of emergency funds in time to avoid defaulting on its debt.

The head of the World Bank said Wednesday the world had entered a new economic danger zone and that Europe, Japan and the United States all need to make hard decisions to avoid dragging down the global economy.

France is ready to do whatever it takes to rescue Greece, the government said, and urged the debt-laden euro-zone member to swiftly implement the July 21 plan to prevent bankruptcy.

After a series of positive announcement from Greek FinMin Venizelos, rumors that Moody's would downgrade French banks and Germany was preparing for a Greece to default send equities tanking, particularly French banks.

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

The Portuguese government is planning the country's biggest spending cuts in 50 years, a move it described as "unprecedented".

U.S. President Barack Obama and German Chancellor Angela Merkel discussed the eurozone crisis and financial-market turbulence on Saturday and vowed action to bolster the global economy, the White House said in a statement.

French economic growth ground to a halt in the second quarter, raising pressure on the government to cut spending and abolish tax breaks to convince turbulent financial markets it will deliver on debt reduction targets.

As markets continued to hammer Italy, Prime Minister Silvio Berlusconi rebutted calls for his resignation, saying Italy’s economic fundamentals were strong.