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Here is an article from Yahoo.

“Greece was pushed to the brink of a financial abyss and started dragging another eurozone country — Portugal — down with it, fueling fears of a continent-wide debt meltdown.

Stocks around the world tanked after ratings agency Standard & Poor’s on Tuesday downgraded Greek bonds to junk status and downgraded Portugese bonds two notches, showing investors that Greece’s financial contagion is spreading.

Major European exchanges fell more than 2.5 percent, and on Wall Street, the Dow Jones industrial average finished down 213 points, or 1.9 percent. The euro slid more than 1 percent to nearly an eight-month low.

Asian stock markets tumbled in early trading Wednesday. Japan’s Nikkei 225 stock average shed 2.8 percent to 10,897.72, and South Korea’s Kospi lost 1.6 percent to 1,722.03. Australia’s benchmark retreated 1.8 percent to 4,792.90.

“We have the makings of a market crisis here,” said Neil Mackinnon, global macro strategist at VTB Capital.

Greece is struggling with massive debt, and with prospects for economic growth weak it could end up in default. Its 15 eurozone partners and the International Monetary Fund have tried to calm the markets with a euro45 billion rescue package, but it hasn’t worked.

Standard & Poor’s warned that holders of Greek debt could take large losses in any restructuring, but a greater worry is that Greece’s debt crisis is mushrooming to other debt-laden members of the eurozone.

One bailout can be dealt with but two will be stretching it, and there are fears that other weak economies could be pulled down in the Greek spiral — including Europe’s fifth-largest, Spain. Can Germany, Europe’s effective paymaster, continue to bail out the weaker members of the eurozone?

The crisis threatens to undermine the euro and make it harder and more expensive for all eurozone governments to borrow money.

It has also disrupted cooperation between eurozone governments, with Germany resisting the idea of bailing out Greece unless strict conditions are met.

Many investors think Greece will have enough money to avoid default in the coming weeks, but the future is cloudier.

Both Standard & Poor’s and the Greek finance ministry insisted that the country will have enough money to make the euro8.5 billion bond payments due on May 19.

Even if it does, Greece faces years of austerity with living standards sharply reduced. Standard & Poor’s warned that the Greek economy was unlikely to be as big as it was in 2008 for another decade.

Junk status sinks Greece’s hopes even deeper. Losing investment-grade status for its bonds means that Greece will have to pay higher costs to borrow if it taps debt markets again, and increases the chances that existing debt will have to be restructured.

“The latest developments mean that the chances of Greece solving this situation without restructuring its debts are now dim,” said Diego Iscaro, senior economist at IHS Global Insight.

German Chancellor Angela Merkel reiterated her position that Greece should first conclude the current negotiations with the IMF and the European Union about austerity measures for the coming years before receiving the international loan package.”

Read the full article here.