Standard & Poor's agency has cut the Netherlands' credit rating, thus reducing the euro zone club of full triple-A nations to just three, while rewarding Spain for efforts to reform its public finances.
The euro zone recession has deepened in the current quarter after the bloc's private sector contracted for the 11th straight month in December, a purchasing managers' index suggested on Friday.
While the index rose from No
European finance ministers clashed over plans for a banking union at a crucial meeting on Saturday, with Germany criticising the proposals to introduce a new region-wide banking supervisor by January.
Germany, which is keen to ret
German government bond yields hit record lows on Friday, the US dollar rose and shares fell as the escalating bank crisis in Spain, a ratings downgrade for Greece and sluggish US data spurred investor demand for safe-haven assets.
Britain is stepping up its contingency plans in case the euro zone breaks up, even though analysts believe that only Greece is currently at risk of departing the 17-nation bloc over the debt crisis.
A senior official at Britain's Finan