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Markets Tumble, European Financial Officials Promise Support for Greek Debt Restructuring


European financial officials say they are moving as quickly as possible to prevent the debt crisis engulfing Greece and Portugal from growing even worse. Those words of support came ahead of a scheduled meeting between the heads of the European Central Bank and the International Monetary Fund with German Chancellor Angela Merkel in Berlin.
Tuesday, ratings agency Standard and Poor downgraded Greek bonds to "junk" status, causing stocks worldwide to tumble.

Asian stock markets tumbled in early trading Wednesday following new fears about Greece's debt problems.

Investors were anxiously watching developments in Germany, where Berlin's response to the crisis has met political opposition.

But Germany's ambassador to Greece, Wolfgang Schultheiss, pledged his nation's support. "We have now to concretize [make firm] the measure which have been agreed upon 11 April and we have to send a clear signal that we will not let down Greece, and I think that is the bottom line of everything," he stated. "Germany will help Greece and it will not let it down."

Greece has already asked to access a joint European Union-IMF aid package worth as much as $60 billion.

However, concerns about the stability of Greece , and other financially-troubled European countries, increased after the Standard and Poor's credit rating agency downgraded Greek bonds to speculative or "junk" status Tuesday.

The agency also slashed Portugal's sovereign debt by two notches. Analysts are keeping a close eye on Wednesday's trading.

"I think that today we will have a lot of pressure as well because there is this fear of contagion. I think that Greece and Portugal are very small countries," Nicholas Skourias, with Pegasus Securities said. "But the crisis could spread to Spain which is a more important player in Europe."

Greece's financial woes have already caused the value of the euro to slide. Investors fear European Union countries could eventually see significant economic losses if Greece fails to pay back its massive debt.

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