Pain in Spain: rating down 2 notches

A double-notch downgrade of Spain's credit rating has piled pressure on European leaders to make decisive progress on solving the region's debt crisis at an Oct. 23 summit.

A double-notch downgrade of Spain's credit rating has piled pressure on European leaders to make decisive progress on solving the region's debt crisis at an Oct. 23 summit.

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Moody's cut Spain's bond rating to A1, from Aa2, the third of the major agencies to act in recent weeks and taking it a notch below the ratings of Standard & Poor's and Fitch.

The blow came just a day after Greeks began their biggest strike in years in protest at a painful austerity drive.

Markets are counting down to a summit of EU leaders on Sunday which Paris has said will deliver a decisive outcome while Berlin has been more cautious.

The Spanish rating cut, which highlighted the threat of contagion from debt-stricken Greece, tempered a sharp rally in shares on Wall Street late on Tuesday.

German Chancellor Angela Merkel warned that leaders would not solve the debt crisis at a single meeting. "These sovereign debts have been built up over decades and therefore one cannot resolve them with one summit but it will take difficult, long-term work. Nonetheless, I do think we will also be able to take relevant, important decisions," she said.