Stories Report on Business is following today:

Europe's troubles mount

The euro sank and global stock markets tumbled today as investors remained skeptical that the joint EU-IMF bailout of Greece will solve Europe's ever-widening debt crisis.

European stocks closed at a two-month low, with the troubles spreading to North American markets. There was also renewed pressure on Greek, Portuguese and Spanish debts.

"Concern about EU peripheral risk (now dubbed swiine flu to avoid an overused barnyard acronym for Portugal, Ireland, Italy, Greece and Spain) rampaged through markets like gorillas coming out of a cage," said David Watt, senior fixed income and currency strategist at RBC Dominion Securities. "[The euro]was flattened (a clear thumbs down from the market on the EU/IMF bailout package for Greece) and remaining outposts of resistance in risk sentiment waved the white flag and surrendered."

If investors wanted assurances today that the Greek austerity measures accompanying the €110-billion bailout would sail through, they didn't get it. Public sector workers, who will bear the brunt of the cutbacks, began a two-day national walkout, closing schools, hospitals and government offices, and storming the Acropolis.

Anxiety continued despite the efforts of the EU to assure markets the support package will be in place in time for a key payment on a 10-year Greek bond. Along with concerns that Greece will not be able to push through the austerity measures, markets are also closely watching the German government's efforts to get the public on side as it heads into regional elections.

"The agreement still needs to be ratified in the parliaments of each EU contributor, which presents German Chancellor Angela Merkel with a particularly tricky problem, being that Germany is by far the biggest contributor at 28 per cent, and plans to debate the package on [May 7] two days before the polls in North Rhineland Westphalia, where voters are vehemently opposed to any type of bailout," said CMC Markets analyst Michael Hewson.

Mr. Hewson today also noted the broader issue for the currency union as a whole: "What this crisis has done is underline the severe fault lines in the euro as a reserve currency, and the weaknesses of the European Central Bank as an arbiter of fiscal responsibility. As such it has cost the single currency a lot of credibility which it will struggle to regain, and there is a risk all this bailout has done is postpone the inevitable, and shift the focus to other euro zone countries with similar debt problems."

Read

David Berman's Market Blog: Dow, TSX bloodied and bruised

Markets slide on Greek debt woes

Greek protesters storm Acropolis

Europe's economic woes hitting home in Canada

Gwyn Morgan on bailouts of the dysfunctional and corrupt

Audio

Brian Milner explains the Greek debt crisis

Rating agencies under scrutiny

The world's major credit rating agencies could in time face a European competitor amid growing concerns over how they have treated the sovereign debt issue. Still recovering from criticism over their role in the finance crisis, they are now under intense scrutiny after several downgrades of European debt that roiled financial markets.

Michel Barnier, the European Internal Markets Commissioner, told the European Parliament today that he will probe the work of the ratings agencies and could even establish a European version.

""The power of these agencies is quite considerable not only for companies but also for states," Mr. Barnier said. "That's why I asked for responsibility to be assumed in the work they are doing." Read the story

Related: U.S. credit raters under the microscope

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Australian rates rise again

Australia's central bank hiked its key lending rate again today, the sixth move since last October. The Reserve Bank of Australia's overnight cash rate now stands at 4.5 per cent after rising a further quarter of a percentage point. "This is one of the difficult consequences of an economy that is recovering better than other advanced economies," Australia's Treasurer Wayne Swan told reporters.

Scotia Capital economists Derek Holt and Karen Cordes Woods noted that central bank Governor Glenn Stevens was on heightened alert for inflation. "Of greater note is that Stevens observed that rates have returned to levels that 'would be consistent with interest rates to borrowers being close to the average experience over the past decade or more,' thereby inciting debate over whether the RBA is done hiking. That may a premature judgment. Prior guidance had suggested an upper bound on rates as high as 5 per cent. Regardless, the central is in the fine-tuning stages of tightening while others dither about starting."