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| Investor fears grow over Greece | |
| (40 minutes later) | |
| Investor confidence in Greece has continued to be hit amid speculation over the future of the Greek economy. | |
| The cost of borrowing has risen sharply with interest rate for two-year Greek bonds hitting a new high of almost 19%. | |
| Meanwhile Portugal moved to reassure investors as concerns grew that the Greek crisis could spread to other vulnerable eurozone economies. | |
| Germany's chancellor will later host talks on the crisis as she decides whether to contribute to a bailout. | |
| However, Angela Merkel knows that agreeing to support Greece would be deeply unpopular with voters - many of whom argue that the struggling nation should never have been allowed to join the euro. | |
| European stocks had fallen sharply on Wednesday morning, following the downgrading of Greece's debt to "junk" status, though pulled back losses by afternoon trading. | |
| Meanwhile the euro fell to a fresh one-year low against the dollar before recovering slightly. | Meanwhile the euro fell to a fresh one-year low against the dollar before recovering slightly. |
| Overnight Japan's leading share index, the Nikkei 225, closed down more than 2.5% after steep falls in European stocks on Tuesday. | Overnight Japan's leading share index, the Nikkei 225, closed down more than 2.5% after steep falls in European stocks on Tuesday. |
| Greece's stock market regulators have also been forced to impose a ban on short-selling, amid concerns that Greek bank shares are being undermined by speculators. | Greece's stock market regulators have also been forced to impose a ban on short-selling, amid concerns that Greek bank shares are being undermined by speculators. |
| Contagion fears | Contagion fears |
| Global shares have tumbled after the credit rating agency Standard and Poor's downgraded Greek debt to "junk" on Tuesday. | Global shares have tumbled after the credit rating agency Standard and Poor's downgraded Greek debt to "junk" on Tuesday. |
| The market is now looking at every country with a lot of curiosity Gilles Moec, senior European economist at Deutsche Bank Q&A: Greece's economic woes Greece crisis: What can be done? | The market is now looking at every country with a lot of curiosity Gilles Moec, senior European economist at Deutsche Bank Q&A: Greece's economic woes Greece crisis: What can be done? |
| That means the rating agency views Greece as a much riskier place to invest, and increases the interest rate investors will charge the Greek government to borrow much-needed money on the open market. | That means the rating agency views Greece as a much riskier place to invest, and increases the interest rate investors will charge the Greek government to borrow much-needed money on the open market. |
| On Wednesday, that interest rate hit 11.3% for 10-year Greek bonds - another all-time high for a eurozone country. | On Wednesday, that interest rate hit 11.3% for 10-year Greek bonds - another all-time high for a eurozone country. |
| Concerns have intensified among some investors that the Greek crisis could spread to other vulnerable eurozone economies. | Concerns have intensified among some investors that the Greek crisis could spread to other vulnerable eurozone economies. |
| Yields on Spanish 10-year bonds have also reached their highest level - 4.27% - since the euro was launched. | Yields on Spanish 10-year bonds have also reached their highest level - 4.27% - since the euro was launched. |
| Meanwhile investors are demanding an interest rate of close to 6% from Portugal - another relatively weak European economy. | Meanwhile investors are demanding an interest rate of close to 6% from Portugal - another relatively weak European economy. |
| "If yields rise much further Portugal may, like Greece, be in a position where [borrowing] on the open market becomes just too expensive," warned Jane Foley, research director at currency trader Forex.com. | "If yields rise much further Portugal may, like Greece, be in a position where [borrowing] on the open market becomes just too expensive," warned Jane Foley, research director at currency trader Forex.com. |
| Investors may worry a lot more about Britain's public finances than they did a few years ago. But they worry half as much about it as they worry about Greece Stephanie Flanders Stephanomics: Is UK safe? | Investors may worry a lot more about Britain's public finances than they did a few years ago. But they worry half as much about it as they worry about Greece Stephanie Flanders Stephanomics: Is UK safe? |
| Portugal's Prime Minister Jose Socrates spoke of "a speculative attack on the euro and Portuguese debt". | Portugal's Prime Minister Jose Socrates spoke of "a speculative attack on the euro and Portuguese debt". |
| He said he would work with the opposition party to restore economic confidence in the country which also had its credit rating downgraded on Tuesday. | He said he would work with the opposition party to restore economic confidence in the country which also had its credit rating downgraded on Tuesday. |
| Gilles Moec, senior European economist at Deutsche Bank, said: "The market is now looking at every country with a lot of curiosity." | Gilles Moec, senior European economist at Deutsche Bank, said: "The market is now looking at every country with a lot of curiosity." |
| But he said other countries were not in the same dire straits as Greece. | But he said other countries were not in the same dire straits as Greece. |
| "Portugal is clearly the most fragile country after Greece, but even so there is quite a lot of distance between [the two countries]," he told the BBC. | "Portugal is clearly the most fragile country after Greece, but even so there is quite a lot of distance between [the two countries]," he told the BBC. |
| "The level of debt before the recession began was much higher in Greece. The immediate pressure on funding needs in Portugal is [therefore] not as dire." | "The level of debt before the recession began was much higher in Greece. The immediate pressure on funding needs in Portugal is [therefore] not as dire." |
| Proposed rescue | Proposed rescue |
| Meanwhile, the International Monetary Fund's (IMF) chief is in Berlin to urge German MPs to agree to a rescue deal, giving Greece billions of euros in loans. | |
| Public sector workers protest in Athens | Public sector workers protest in Athens |
| Dominique Strauss-Kahn is in Germany along with the president of the European Central Bank, Jean-Claude Trichet, to face politicians who have so far expressed their doubts over the bail-out. | |
| Mr Strauss-Kahn has been meeting opposition members of Germany's parliament. | |
| As Europe's largest economy, Germany's involvement in any rescue deal is crucial, while the government is wrestling with public and political opposition to a bail-out. | As Europe's largest economy, Germany's involvement in any rescue deal is crucial, while the government is wrestling with public and political opposition to a bail-out. |
| German Chancellor Angela Merkel has insisted that Greece needs to show tougher measures to cut spending. | German Chancellor Angela Merkel has insisted that Greece needs to show tougher measures to cut spending. |
| "You have to economise, you have to become fair, you have to be honest; if not, nobody can help you," she warned on Tuesday. | "You have to economise, you have to become fair, you have to be honest; if not, nobody can help you," she warned on Tuesday. |
| In Berlin, the BBC's correspondent Steve Rosenberg said senior politicians were still insisting it was "too early to say" whether a rescue deal would be agreed. | In Berlin, the BBC's correspondent Steve Rosenberg said senior politicians were still insisting it was "too early to say" whether a rescue deal would be agreed. |
| According to Simon Derrick, from Bank of New York Mellon, time is now running out for Greece to secure a deal. | According to Simon Derrick, from Bank of New York Mellon, time is now running out for Greece to secure a deal. |
| HAVE YOUR SAY The Greeks need to accept the pain that is the inevitable and foreseeable consequence MarkGE Send us your comments | HAVE YOUR SAY The Greeks need to accept the pain that is the inevitable and foreseeable consequence MarkGE Send us your comments |
| "The message that has been emerging from the markets this week is that a resolution to the Greek crisis needs to be found in the next few days," he said, warning that delays risk "sparking contagion through southern Europe". | "The message that has been emerging from the markets this week is that a resolution to the Greek crisis needs to be found in the next few days," he said, warning that delays risk "sparking contagion through southern Europe". |
| On Tuesday, European Council President Herman Van Rompuy announced a meeting of eurozone heads of state and government would be held on 10 May to discuss the Greek crisis. | On Tuesday, European Council President Herman Van Rompuy announced a meeting of eurozone heads of state and government would be held on 10 May to discuss the Greek crisis. |
| He insisted negotiations on the aid were "well on track" and that there was "no question about restructuring" Greek debt. | He insisted negotiations on the aid were "well on track" and that there was "no question about restructuring" Greek debt. |
| Greece also needs to secure at least some funding by mid-May, when it is due to repay investors about 8.5bn euros of debt. | Greece also needs to secure at least some funding by mid-May, when it is due to repay investors about 8.5bn euros of debt. |
| There is significant opposition to the handling of the crisis in Greece itself, with some demonstrators calling for the country to default on its debts so that foreign banks would pay the price for the crisis. | There is significant opposition to the handling of the crisis in Greece itself, with some demonstrators calling for the country to default on its debts so that foreign banks would pay the price for the crisis. |
| Are you in Greece or the wider EU? What is your reaction to the Greek debt crisis? You can send us your comments using the form below. | Are you in Greece or the wider EU? What is your reaction to the Greek debt crisis? You can send us your comments using the form below. |
| A selection of your comments may be published, displaying your name and location unless you state otherwise in the box below. | A selection of your comments may be published, displaying your name and location unless you state otherwise in the box below. |
| The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions | The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions |