Europe on the brink

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With Greece inching closer to the brink of financial collapse, fear that the debt crisis will spread rattled global markets for a second day Wednesday as they awaited a signal from financial leaders gathering in Berlin…

Investors have grown increasingly nervous about the fate of Greece, and other economies that use the euro. A recent proposal by European governments to extend 45 billion euros worth of loans, together with a smaller pledge by the International Monetary Fund, to help Greece meet its bills, has done little to calm the markets, and Germany’s statement this week that it must first see more deficit reduction from Greece before fulfilling its pledge has only increased concerns that Europe is not united behind Greece…

Stock markets in Europe began to tumble Tuesday after Standard & Poor’s cut Greece’s debt to junk level, warning that bondholders could face losses of up to half of their holdings in a restructuring. The agency also downgraded Portugal’s debt by two notches. On Wednesday, Greece’s securities market regulator banned all stock short-selling on the Athens Stock exchange for the next two months as investors sold off Greek assets following the downgrade.