The euro zone debt crisis will dominate the weekend's summit of G20 finance ministers and central bank heads in Paris.
The meeting comes as Slovakia's parliament approved the expansion of Europe's bailout fund in its second vote on the matter.
The tiny country was the last of 17 euro zone members left to ratify the European Financial Stability Fund, the EFSF - which is designed to give Europe more ability to tackle the debt crisis.
But the latest downgrade of Spain's credit rating, this time by rating agency Standard and Poor's to AA-, highlighted how economies which are much larger than Greece are also coming under threat.
Rob Carnell is Chief Economist at ING.
SOUNDBITE: Rob Carnell, Chief Economist at ING, saying (English):
"S&P actually cite a number of positive things for Spain, the central government deficit reduction is going along nicely and the things that they cite as reasons for the downgrade, it's the very high unemployment rate, it's the problem of private sector credit and also the external problems of Europe, the lack of demand for Spain's exports."
Like many other European countries, Spain is in the middle of unpopular austerity measures.
There are doubts it can meet its deficit target of 6 percent of GDP this year and many Spaniards feel the cuts aren't working.
SOUNDBITE: Salvador, Worker , saying (Spanish):
"I think it's very tough for us. There should be bigger cuts for the people that have money than for workers like us."
SOUNDBITE: Vanessa, Madrid resident, saying (Spanish):
"I work in a pharmaceutical lab and things are bad. Lower prices, redundancies."
Neighbouring Portugal has just promised a tough new budget for 2012 as it tries to meet the terms of its EU/IMF bailout and regain credibility amid a deepening recession.
Portuguese newspapers called the plans, which include extending working hours and getting rid of civil servants' bonuses too harsh and said they would crush the middle classes.
But the budget should be approved as the government has a large majority.
European leaders are now promising a "comprehensive strategy" will emerge from an upcoming summit on how to fight the debt crisis.
It's expected to include action to reduce Greece's debt burden, a plan to strengthen European banks and measures to stop contagion spreading.
Joanna Partridge, Reuters
