European shares fall as Spanish crisis deepens


31/05/2012 07:48 AST  Reuters

European shares fell sharply on Wednesday and looked poised for further jitters amid signs Spain's economic and banking crisis was deepening and on renewed concerns Greece may fall out of the euro zone.

Spain's Ibex 35 index fell 2.6 percent to fresh 9-year low as investors worried that soaring borrowing costs may force the country, engaged in an expensive recapitalisation of its banking sector, to seek an international bailout. .

The European Commission offered Madrid more time to reduce its budget deficit and direct aid to recapitalise distressed banks, two measures that had so far been opposed by Europe's paymaster, Germany.

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