German exports post steepest drop in nearly 3 years

German exports posted their steepest fall in nearly three years in December, data showed on Wednesday in a sign Europe's largest economy is weakening in the wake of the euro zone debt crisis.

    Data from the Federal Statistics Office showed seasonally-adjusted exports fell 4.3 percent, the steepest decline since the height of the financial crisis in January 2009. The median forecast in a Reuters poll was for a drop of just 1.0 percent.

    The trade surplus narrowed to 13.9 billion euros from a revised 14.9 billion euros the month prior. That compared with a consensus forecast for a dip to 14.0 billion euros in a Reuters poll of economists.

    Imports fell unexpectedly, by 3.9 percent. They had been forecast to rise 0.6 percent.

 

Moody's warns UK, France, Austria over AAA rating; cuts others

Moodys warns UK, France, Austria,  Italy, Spain and Portugal

over

AAA rating; cuts others

 

Rating agency Moody's warned on Monday it may cut the triple-A ratings of France, the United Kingdom and Austria, and it downgraded six other European nations including Italy, Spain and Portugal, citing growing risks from Europe's debt crisis.

    Moving less aggressively than rival agency Standard & Poor’s last month but putting the United Kingdom’s rating in jeopardy for the first time, Moody’s said it was worried about Europe's ability to undertake the kind of reforms needed to address the crisis and the amount of funds available to fight it.

    It also said the region's weak economy could undermine austerity drives by governments to fix their finances.

    The U.S. rating agency said it changed the outlooks for the ratings of France, the UK and Austria to negative due to "a number of specific credit pressures that would exacerbate the susceptibility of these sovereigns' balance sheets."

    Germany's top-tier rating was described as "appropriate" by Moody's And it affirmed the triple-A rating on the euro zone's bailout fund, the European Financial Stability Fund.

    Moody's, which said late last year it was reconsidering its European ratings, cut by one notch the ratings of Italy, Portugal, Slovakia, Slovenia and Malta and downgraded Spain by two notches.

    Moody's said the scope of the downgrades was limited due to "the European authorities' commitment to preserving the monetary union and implementing whatever reforms are needed to restore market confidence."

    The announcement came a day after Greece's parliament approved a deep new round of budget cuts in the hope of securing new bailout funds and avoiding a chaotic default in March. 

    The rating outlooks of the nine countries affected by Moody's action was set to negative, "given the continuing uncertainty over financing conditions over the next few quarters and its corresponding impact on creditworthiness," Moody's said.

BRITAIN, FRANCE UNDER PRESSURE

    Britain's finance minister responded by saying the country must keep its promise to slash its large budget deficit.

    "This is proof that, in the current global situation, Britain cannot waver from dealing with its debts," finance minister George Osborne said. "This is a reality check for anyone who thinks Britain can duck confronting its debts."

    The government in Britain has come under increasing pressure to soften its austerity measures to give a stalling economy room to breathe.

    The French government said it will press ahead with its policies to improve competitiveness and growth while reducing the government deficit.

    "The government is determined to press ahead with its actions to boost growth and competitiveness, notably the reform of the financing of welfare, of employment and the reduction of public deficits," Finance Minister Francois Baroin said in a statement.

    Moody's move on Monday follows one by Standard & Poor's last month, when France and Austria lost their triple-A status, while Italy, Spain, Portugal, Cyprus, Malta, Slovakia and Slovenia were downgraded. S&P also cut the EFSF by one notch.

    Also in January, rating agency Fitch downgraded the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Spain, indicating there was a 1-in-2 chance of further cuts in the next two years.

 

Germany loses patience with Greece

Germany loses patience with Greece 


Germany is running out of patience with throwing money into the "bottomless pit" of Greece's debt crisis and any lingering sympathy in Berlin is being undermined by anti-German slogans on the lips of politicians and austerity protesters in Athens.
    While officially hailing the Greek parliament's approval of the savings package required for a new 130 billion-euro bailout,  Berlin signalled this would not automatically mean more aid, as the feeling grew that Greece should not be saved at any cost.
    With Finance Minister Wolfgang Schaeuble warning "Greek promises aren't enough for us anymore" and Economy Minister Philipp Roesler saying "fear of Day X (a Greek euro exit)" is fading, Germany seems to have tired of issuing threats that it would never follow through.
    "Berlin threatens Greeks with end to aid," read the front page of the Sueddeutsche Zeitung newspaper, while Die Welt wrote: "Schaeuble warns Greeks: no savings, no money."
    The sight of Greek anti-austerity protesters and politicians blaming Chancellor Angela Merkel for their plight provoked anger in the patriotic pages of Germany's best-selling daily, Bild.
    Greeks and other European recipients of aid to which Germany is the biggest single contributor "should put flowers outside our embassies and send the chancellor thank-you notes".
    "Instead the demonstrators insult their German helpers and liken our government to Nazis, which is intolerable," it said.
    Officially, Merkel's government remains committed to enabling another aid package for Greece and doing what it can to avoid the first sovereign default in the euro zone.
    "The chancellor knows her place in history is tied to Greece and she won't want to be remembered as the one responsible for a default," said a conservative lawmaker, asking not to be named.
    But the MP said the Greek parliament's approval of the unpopular savings plan, including a 22 percent cut in the minimum wage, did not arouse much interest in Berlin "because nobody really believes any more that Greece will deliver".
    'NOT THE END OF THE WORLD'
    While Merkel's own Christian Democrats (CDU) remain largely on message with the chancellor and European Commission on the need to keep Greece in the euro, more eurosceptic allies from the Christian Social Union (CSU) and Roesler's Free Democrats (FDP) are taking a more aggressive line with the Greeks.
    "There can be no more concessions. Now only deeds count," said the FDP Foreign Minister Guido Westerwelle while CSU leader Horst Seehofer spoke of German referendums on future bailouts - something Merkel's spokesman Steffen Seibert ruled out.
    Hans Michelbach, an MP on the budget committee in the Bundestag (lower house) which exerts some control over the bailout payments, said Athens should not be under any illusion that its parliament's vote meant the release of fresh aid would be automatic.
    "Even the best agreements are no use without an efficient administration. Unfortunately so far we don't get the impression that the governments in Athens have really made a serious commitment," said Michelbach, a CSU deputy.
    Schaeuble reinforced this impression by telling lawmakers last Friday that even the latest Greek savings plan would not put the country on track to cut public debt to 120 percent of gross domestic product by 2020 - its chief condition for aid.
    Such dogged insistence on strict terms for aid is one of the reasons Merkel has kept a lid on growing scepticism in Germany about how deserving Athens is of such largesse. In one recent opinion poll, two thirds of Germans surveyed said they doubted Greece's determination to make savings.
    For Erik Nielsen, global chief economist for Unicredit, an Italian bank, the chancellor's unmatched success in preventing the rise of a major eurosceptic backlash is down to her heeding the "German public's sensitivities to lending their tax money to a country that does not implement very many of its promises".
    But with her finance minister talking of Greek aid as "a bottomless pit" and growing incredulity about Athens meeting such conditions, Merkel must be worried about the Bundestag's special session on the second Greek bailout due on Feb. 27.
    Merkel narrowly avoided disaster - for the euro and her own political fortunes - in September's vote in the Bundestag on the current bailout mechanism (the European Financial Stability Mechanism). She cannot afford more lawmakers to start thinking like CDU MP Christian von Stetten, who told one paper: "A Greek exit from the euro zone would not be the end of the world."

Spain sees solid demand for 3 medium-term bonds

 Spain saw solid demand for 3 medium-term bonds on Thursday, selling 4.1 billion euros ($5.4 billion) of the paper, just above the targeted range, but with some pressure on yields as support from cheap cash from the European Central Bank waned.

    Investors may have also been pushing for a premium as talks on the second Greek bailout faltered.

    Spain sold 2.3 billion euros of a bond maturing July. 30, 2015 at an average yield of 3.322 percent compared to 2.861 percent paid at the last primary auction on Feb. 2.

    The bond was 2.2 times subscribed, compared to 1.6 times earlier in the month.

    The Treasury shifted 733 million euros of the other 2015 issue, maturing Jan. 31, at an average yield of 2.966 percent and a bid-to-cover ratio of 4.4, and 1.1 billion euros of a bond maturing Oct. 31, 2019 with a 4.832 percent yield and 3.3 times subscribed.

    The Jan. 2015 bond last sold on the primary market August, 2011 and the longer dated issue was last sold in October of last year. Yields were down on both from last year.

    The treasury has benefited from the ECB's long-term refinancing operations (LTRO) which flooded markets with almost a half a trillion euros of cheap three-year cash in December and will provide more of the same at the end of this month.

    Earlier, official data showed Spain's economy shrank for the first time in two years, weighed down by weak domestic demand and faltering exports as its main trading partners own economies stumble.

 Spain saw solid demand for medium- and long-term bonds, paying over 2 percentage points less to issue a 5-year bond than Italy this week, easing concerns it was the euro zone’s weakest link. Italy had to pay a record 6.47 percent on 5-year bonds, offering little relief to investors in the region.

Italy’s main employers’ lobby, Confindustria said Italy is already in recession and will not emerge from it until the third quarter of 2013, Confindustria said.

“There is still a lot of uncertainty surrounding Europe and that is worrying investors,” said Ken Hasegawa, commodity derivatives manager at Newedge Brokerage in Tokyo.

Signs of weakness in the global economy are also upsetting investors. China’s factory output shrank again in December, a preliminary purchasing managers’ survey showed, reinforcing concerns that manufacturers face waning global demand and tight domestic credit.

Greece battles mistrust to target bailout deal

• Acrimony within currency union as mistrust grows
• Talk of delaying all or part of Greek bailout
• Euro hits 3-week low as nerves remain

Greece expressed hope it was within days of finally securing a 130-billion-euro EU/IMF bailout to ease its debt crisis but markets reacted sceptically on Thursday as acrimony grew between Athens and euro zone partners led by Germany.

    Frustrations exploded as Greek President Karolos Papoulias, an 82-year-old veteran of the resistance to Nazi occupation of Greece during World War Two, lashed out at Germany's finance minister for appearing to suggest Greece might go bankrupt.

    Past backsliding on promises by Athens has created a growing mood of mistrust, with German Finance Minister Wolfgang Schaeuble likening Greece to a "a bottomless pit" and asking on Wednesday whether Athens would stick to new promises.

    "I cannot accept Mr Schaeuble insulting my country," Papoulias riposted.

    "Who is Mr Schaeuble to insult Greece? Who are the Dutch? Who are the Finnish?" he asked of critics in two countries which, like Germany, have heaped pressure on Athens.

    Greek officials insisted after late-night talks with euro zone counterparts that they had met the final demands set by the European Union and IMF to seal a second rescue deal needed to avoid chaotic default when debt repayments fall due in March.

    But the euro   slid to a three-week low on the dollar in early Thursday trade as markets focused on a Reuters report that finance officials in the currency union were looking at ways to delay all or part of the rescue deal while avoiding a default. 

    EU sources told Reuters euro zone officials were studying the option of postponing part or all of the rescue deal until after the elections while still avoiding a disorderly default.

    "Confidence has indeed sunk to a low point," Dutch Finance Minister Jan Kees De Jager told Dutch paper Het Financieele Dagblad, suggesting one option was to delay delivering the bailout in full until after a Greek election expected in April.

    "Schaeuble Junta", ran a headline in the conservative Eleftheros Typos newspaper, harking back to Greece's painful spell under military rule during the 1960s and 1970s.

    Greece is pinning its hopes on a fresh meeting of euro zone finance ministers scheduled for Monday after it failed this week to clinch a deal to avert a bankruptcy which could shake financial markets around the globe.

    Finance Minister Evangelos Venizelos said Athens had plugged a 325 million-euro gap in a promised 3.3 billion euros of extra budget savings this year, noting both parties in the government of Prime Minister Lucas Papademos had signed up to austerity measures which already triggered rioting in Athens on Sunday.

    Venizelos said he hoped euro zone officials could tie up all the issues before the ministerial Eurogroup meets on Monday, opening the way for a bond swap deal with Greece's private creditors, known as PSI, which will reduce its debt mountain.

    "These issues will be prepared at a Euro Working Group meeting on Sunday in Brussels so that, with good faith, the final decision for the approval of the (bailout) programme is taken and the public announcement of the PSI is made on Monday," he told reporters after a conference call with euro zone peers.

    Greece had said it must initiate a debt swap deal with private bondholders by Friday to meet a March 20 deadline for the 14.5 billion euros in debt repayments. It was hoping to have the euro zone's backing for its second bailout this week. If that backing now comes on Monday, it is possible the debt swap could start in the middle of next week.

    LINGERING DOUBTS                

    After the three-hour conference call among the 17 euro zone ministers, Eurogroup chairman 

Jean-Claude Juncker said progress had been made but made clear some matters remained open on making sure the bailout plan is carried out in full.    

    "Further considerations are necessary regarding the specific mechanisms to strengthen the surveillance of programme implementation and to ensure that priority is given to debt servicing," he said.

    That was echoed by one government official in Germany, where public opinion is hostile to bailing out Greece.

    "Questions remain that are very important to Germany and other member states about the sustainability of the programme," said the official, who declined to be named.

    Juncker predicted things would fall into place by Monday although any number have deadlines have been set, only to be missed.

    Greek conservative leader Antonis Samaras - tipped to become prime minister after a possible vote in April - gave a written pledge on Wednesday to stick to the austerity package but added that "policy modifications" might be required to boost growth.

    Greece has yet to publicly specify how it will find the remaining 325 million euros worth of budget cuts and the cabinet - which would normally be required to approve such cuts - was not scheduled to meet on Thursday.

    A new survey by the VPRC polling company showed Samaras' New Democracy party getting 27.5 percent, down from its 30.5 percent score in January, but still well ahead of the newly-founded Democratic Left party in second with 16 percent.

    Italian Prime Minister Mario Monti warned on Wednesday that the debt crisis was fuelling resentment within the bloc and rejected the idea of a "goodies and baddies" division between so-called virtuous northern states and profligate southern ones.

 ATHENS, Feb 14 (Reuters) - The Greek government rushed on Tuesday to wring out another 325 million euros in budget cuts to satisfy euro zone finance ministers mulling whether to sign off on a rescue package to save the country from a chaotic default.

    Squeezed between sceptical European capitals and deep anger in Greece, political leaders must also produce written commitments to stick to the terms of the 130 billion euro ($172 billion) bailout before the ministers meet on Wednesday.

    A government official said the cabinet had already a proposal on the table and that Prime Minister Lucas Papademos would chair a session of the government at 3 p.m. (1300 GMT)

    "There is a specific proposal by the government for the 325 million euros to be submitted to the Eurogroup tomorrow," the official, who declined to be named, told Reuters.

    A second government source said: "The government will have a solution before the Eurogroup (meeting of euro zone finance ministers)."

    Greek lawmakers endorsed another 3.3 billion euros in cuts in wages, pensions and jobs on Sunday despite unrest on the streets of the capital, Athens.

    The violence was the worst in years, with dozens of buildings set ablaze, damaged or looted.

    But the bill left unexplained 325 million euros of cuts that the European Union and International Monetary Fund now want clarified before they sign off on the bailout.

    There was no immediate sign that political leaders would put pen to paper to guarantee they will implement the terms of the bailout before and after an election expected in April.

    Antonis Samaras, leader of the conservative New Democracy party and a member of the coalition, has taken a harder line on the austerity measures than others in the coalition.

    He is the frontrunner to become prime minister in April, and while he voted 'Yes' in parliament on Sunday and expelled from the party a quarter of his deputies for rebelling, Samaras indicated he would try to renegotiate the terms of the bailout.

  There is growing doubt among Greece's foreign lenders that the country - threatened by deepening social turmoil – is willing to and capable of seeing through a second round of punishing austerity since 2010.   

   

    LEAVE EURO ZONE?

    Greece needs the funds to avoid a disorderly default when 14.5 billion euros in debt repayments fall due on March 20.

    The bailout provides for a bond swap to ease Greece's debt burden by cutting the real value of private-sector investors' bond holdings by some 70 percent. Officials say the terms of the swap will be announced on Wednesday.

    "The next three weeks will be hellish. The list of actions regarding the PSI (Private Sector Involvement) and the memorandum is extremely pressing," government spokesman Pantelis Kapsis said on Monday.

    Underlining the doubts of Greece's euro zone partners, Luxembourg's finance minister, Luc Frieden, said on Monday that a failure by Greece to meet all the conditions laid down for it would lead to its exit from the euro zone. 

    Greece may decide it is better to leave the euro zone than to go through with such severe budget cuts, he told the Atlantic Council in Washington.

    A sharply devalued currency would give it more flexibility.  "It might be something which would allow Greece also to get a new start ... to create an economy that can create jobs. This however is not a scenario that I would prefer," he said.

    The euro zone was better prepared now than a year ago to cope with a Greek default and exit from the euro zone, Frieden said, a view echoed by German Finance Minister Wolfgang Schaeuble speaking to the ZDF public broadcaster. 

    But U.S. rating agency Moody's, citing growing risks from Europe's debt crisis and worries about its ability to make needed reforms, downgraded the ratings of six European countries late on Monday and put Britain, France and Austria on negative outlook.

    Uncertainty about the resources that will be devoted to tackling the crisis and Europe's "increasingly weak macroeconomic prospects" were other factors behind its action, it said. 

Greeks swept rocks and broken glass from the streets of Athens on Monday after a night of violence that gave lawmakers a taste of the challenge they face in implementing a deeply unpopular austerity bill demanded by the country's foreign lenders.

    Firefighters doused the smouldering remains of several buildings, set ablaze by hooded youths during protests against the package of pay, pension and job cuts adopted by parliament on Sunday after 10 hours of debate.

    The bill was the price of a 130 billion euro ($172 billion) EU/IMF bailout to save Greece from a chaotic default next month.

    The government of Prime Minister Lucas Papademos must come up with a further 325 million euros in budget savings to satisfy euro zone finance ministers, scheduled to meet on Wednesday, and political leaders must commit to implementing the measures even after an election pencilled in for April.

    Papademos' government saw 43 deputies rebel in what may be an indication of the difficulties in ensuring politicians stick to the programme, which include a 22 percent cut in the minimum wage -- a package critics say condemns the economy to an ever-deeper downward spiral.

    Police said 150 shops were looted in the capital and 48 buildings set ablaze. Some 100 people - including 68 police - were wounded and 130 detained, a police official said on Monday.

    There was also violence in cities across the country, including Greece's second-largest city Thessaloniki and the islands of Corfu and Crete, said the official, who declined to be named.

    Greeks were shocked at the burnt buildings that included the neo-classical home to the Attikon cinema dating from 1870.

    "We are all very angry with these measures but this is not the way out," said Dimitris Hatzichristos, 30, a public sector worker surveying the debris.

    Altogether 199 of the 300 lawmakers backed the controversial bill. The 43 who rebelled were immediately expelled by their parties, the socialists and conservatives.

    "Night of terror inside and outside the parliament," conservative daily Eleftheros Typos wrote on its front page.

    Asian shares and the euro gained modestly on Monday and MSCI's broadest index of Asia Pacific shares outside Japan  .MIAPJ0000PUS edged up as much as 0.3 percent. 

 "SHORT-TERM SACRIFICES"       

    Papademos, a technocrat brought in to get a grip on the risis, denounced the worst breakdown of order since 2008, when violence gripped Greece for weeks after police shot a15-year-old schoolboy.     

    "Vandalism, violence and destruction have no place in a democratic country and won't be tolerated," he told parliament on Sunday as it prepared to vote.

    But he said that imposing the austerity on a nation that has already endured several years of cuts would be tough.

    "The full, timely and effective implementation of the programme won't be easy. We are fully aware that the economic programme means short-term sacrifices for the Greek people," Papademos said.

    Greece needs the international funds before March 20 to meet debt repayments of 14.5 billion euros, or suffer a chaotic default that could shake the euro zone.

    "It was just as hard for us to say 'Yes' as it was for fellow members of the parliament to say 'No' ... I said 'Yes', because 'No' would be catastrophic," Yannis Magriotis, Deputy Infrastructure Minister (from PASOK), told Mega TV on Monday.

    Overnight, a Reuters photographer saw buildings engulfed in flames and huge plumes of smoke rose in the night sky outside parliament.

    "We are facing destruction. Our country, our home, has become ripe for burning; the centre of Athens is in flames. We cannot allow populism to burn our country down," conservative lawmaker Costis Hatzidakis told parliament.

    The air in Syntagma Square outside parliament was thick with teargas as riot police fought running battles with youths who smashed marble balustrades and hurled stones and petrol bombs.

    Terrified Greeks and tourists fled the rock-strewn streets and the clouds of stinging gas, cramming into hotel lobbies for shelter as lines of riot police struggled to contain the mayhem.

    On the streets of Athens many businesses were ablaze, including a building housing the Asty, an underground cinema used by the Gestapo as a torture chamber during World War Two.

    ENOUGH

    The EU and IMF say they have had enough of broken promises and that the funds will be released only with the clear commitment of Greek political leaders that they will implement the reforms whoever wins the April election.

    The bill sets out 3.3 billion euros ($4.35 billion) of extra budget cuts for this year alone.

    It also provides for a bond swap to ease Greece's debt burden by cutting the real value of private-sector investors' bond holdings by some 70 percent. Greece would have missed a Feb. 17 deadline to offer a debt "haircut" to private bondholders if the vote had not been passed.

    Many Greeks believe their living standards are collapsing already and the new measures will deepen their misery.

    "Enough is enough!" said 89-year-old Manolis Glezos, one of Greece's most famous leftists. "They have no idea what an uprising by the Greek people means. And the Greek people, regardless of ideology, have risen."

Moody's may downgrade 17 global banks, securities firms

Moody's may downgrade 17 global banks, securities firms

• Cites tougher funding, regulatory and economic environment
• Includes, BofA, Goldman, Citi, JP Morgan, Morgan Stanley.
• Barclays, BNP, Deutsche, HSBC, SocGen also included
• Rating agency puts 114 European institutions on watch
• Cuts ratings on some insurance firms, cut outlook on others

 (Adds detail in paragraph 19)

    By Ian Chua and Soyoung Kim

    Feb 16 (Reuters) - Moody's warned on Thursday it may cut the credit ratings of 17 global and 114 European financial institutions in another sign the impact of the euro zone government debt crisis is spreading throughout the global financial system.

    It was reviewing the long-term ratings and standalone credit assessments of a range of banks, Moody's added. Markets were unaffected by the Moody's announcement.

    "Capital markets firms are confronting evolving challenges, such as more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions," the ratings agency said in a statement.

    It said among 17 banks and securities firms with global capital markets operations, it might cut the long-term credit rating of UBS  , Credit Suisse   and Morgan Stanley  by as much as three notches following the review. It said the guidance was indicative.

    Among the banks that might be downgraded by two notches are Barclays  , BNP Paribas  , Credit Agricole, Deutsche Bank  , HSBC Holdings  ,and Goldman Sachs.

    Bank of America   and Nomura   were included in those that might be downgraded by one notch.

    The U.S. rating agency said in a separate statement its action on 114 financial institutions from 16 European nations reflected the impact of the debt crisis and deteriorating creditworthiness of its governments.

    It cited more fragile funding conditions, increased regulatory burdens and a tougher economic environment for its review of banks and securities firms with global reach.

    Moody's salvo follows rounds of downgrades in European sovereign ratings as the euro zone's struggle to keep its weakest link Greece afloat has been driving up borrowing costs and straining finances of other nations.

    Last Monday, Moody's cut the ratings of six European nations including Italy, Spain and Portugal and warned it could strip France, Britain and Austria of their top-level AAA grade.

    Standard & Poor's cut France's and Austria's top ratings and downgraded seven other euro zone nations last month. It also cut the euro zone's bailout fund by one notch.

    Moody's on Thursday also downgraded the insurance financial strength ratings (IFSR) by one or two notches of several insurance companies, which it said related to their investment and operating exposures to Spain and Italy.

    These included Unipol Assicurazioni SpA, Mapfre Global Risks, Assicurazioni Generali SpA  and Allianz SpA. It affirmed the IFSR of Allianz SE , AXA SA  , Aviva Plc   and their subsidiaries, but cut the outlook on the rating to negative from stable.

    VICIOUS CIRCLE

    Asian shares and the euro were weaker on Thursday on concerns about another delay in cementing a bailout for Greece. Traders said markets didn't not show any specific reaction to the Moody's announcement.

    In its review of European financial institutions, Moody's said that once completed, the ratings would "fully reflect the currently foreseen adverse credit drivers."

    European banks' bond holdings of struggling euro zone nations Greece, Portugal, Ireland, Spain and Italy have trapped Europe in a vicious circle.

    The falling value of the debt puts pressure on banks, which in turn weighs on lending and economic activity, making it tougher to sustain the growth that governments badly need to shore up their finances.

    The biggest single group among the 114 institutions under review were headquartered in Italy, followed by Spain, with more than 20 each. Nine were headquartered in Britain, 10 in France and seven in Germany.

    Moody's said nine of the 17 banks with global reach are included in the list of 114 financial institutions in Europe.

    European Union leaders have been trying to put a financial "firewall" around the nations most afflicted by the euro zone debt crisis.

    But jittery market sentiment suffered a fresh setback on Wednesday when several EU sources told Reuters that the euro zone was considering a delay in parts of a second bailout plan for Greece.

    Moody's said that for 99 European financial institutions, the standalone credit assessments have been placed on review for downgrade. For 109 institutions, the long-term debt and deposit ratings have been placed on review for downgrade.

   For 66 institutions, the short-term ratings have been placed on review for downgrade.