Spain debt gets downgraded by Standard & Poor’s amid subdued economic growth

Spain debt downgraded by Standard & Poor’s

LONDON — Credit ratings agency Standard & Poor’s has downgraded Spain in another widening of Europe’s government debt crisis.

The move Wednesday follows its reductions of Portugal and Greece, which sent shock waves through world markets.

The agency says its decision to downgrade Spain’s credit rating by one notch to AA from AA+ is due to its expectation that the country will suffer an “extended” period of subdued economic growth.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

BERLIN (AP) — Chancellor Angela Merkel says Germany “will make its contribution” to bailing Greece out of its financial crisis — but only if its government agrees to new austerity measures in the next few days.

Greece says it can’t pay debts coming due May 19 without €45 billion ($59.8 billion) in loans from the countries that use the euro as well as the International Monetary Fund.

Markets are worried that Germany’s demand for strict conditions will prevent Greece from getting the money.

Germany would be the biggest single contributor with some €8.4 billion.

Merkel said after meetings with IMF chief Dominique Strauss-Kahn on Wednesday that “Germany will make its contribution but Greece has to make its contribution.”