EU markets suffer over Greek and Spanish woes

Published:  21 May at 6 PM

European markets experienced a jittery session last Friday as worries raged on over Spain and Greece. Spain's Ibex index was able to recover after losing over 2 percent early on, finishing the day a little higher.

Investors transferred money into German bonds, seen as a low-risk move, while oil prices dropped, indicating global economic concerns. When European markets ended, ratings agency Fitch announced its downgrading of five Greek banks.

Fitch slashed the ratings of Efg Eurobank Ergasias, Agricultural Bank of Greece, National Bank of Greece, Piraeus Bank and Alpha Bank from B-minus to CCC. This came one day after Fitch reduced Greece's sovereign rating.

Last Thursday, ratings agency Moody's hit 16 Spanish banks with downgrades and slashed the debt rating of Santander UK, the Spanish banking giant’s subsidiary.

European banks recovered on Friday after falling a day earlier. Santander was able to reverse early losses and traded 2.8 percent higher at the finish, while Bankia shares went up 23 percent following Thursday's 14 percent decline.

Moody's announced there were numerous reasons behind its decision to downgrade, including Spain's return to recession, bad loans in Spain’s property industry and the financial challenges facing Spain’s government.