Spain became the third Eurozone country to receive a warning from ratings agency Standard & Poor's on Monday (12 January) in a further sign of Europe's economic malaise.

Last Friday, both Ireland and Greece also received warnings from the ratings agency, a development that threatens to make government borrowing for the three states more expensive at a time when governments are increasingly turning to money markets to bolster diminishing tax returns.

Spain became the third Eurozone state Monday to receive a credit warning about it national finances

The Financial Times reports that other countries could also see themselves subject to similar warnings in the coming days or weeks as countries take on record debt levels, in part caused by new spending programmes intended to counteract the ongoing economic crisis.

Italy, with a debt-to-GDP ratio of 104 per cent is seen as particularly vulnerable. So too Portugal, which is currently running a current account deficit of 12 per cent.

Figures announced last week show Spain's industrial output for November to be down 15.1 per cent on the previous year, the biggest fall on record.

The financial crisis has hit the wind power industry hard as credit has dried up. Will government spending provide the needed stimulus?

The green energy sector has a lot riding on 2009. Policymakers from Washington to Beijing have pledged billions of dollars in "cleantech" investment to jump-start the depressed global economy and create millions of new low-carbon jobs.

Wind power is losing steam. That should be a boon to the wind power industry, which is working to harness the world's second-largest source of renewable energy after hydroelectric. As with the solar industry, wind power has been hit by a sudden slowdown in private sector investment as credit has dried up and the price of oil has fallen from its mid-2008 high. The industry hopes public spending will help fill the gap until the global economy gets back on its feet.

The multibillion-dollar stimulus packages are particularly important for Europe, which remains the largest wind energy market worldwide and is home to six of the world's top 10 wind turbine manufacturers. Despite the Continent's dominant position, companies ranging from Denmark's Vestas, the global leader in turbines, to Spain's Iberdrola, the world's largest developer of wind farms, have been forced to cut back to meet the new economic realities.

The German government's partial nationalization of Commerzbank reflects the severity of the financial crisis. Berlin wants to use Commerzbank to jump-start stalled bank lending to companies, but it's paying a high price to do so.

It's a proud building with a height of 259 meters -- 300 meters including the antenna --making it the highest skyscraper in Germany and the third-highest in Europe. It was designed by Sir Norman Foster, the star architect. This building exudes the ambition of a company that wants to display its wealth and its power, and that wants to play in the big league.

 Commerzbank opted to take help from Berlin. But things have gone wrong for Commerzbank. Its proud tower is about to become the tallest branch of the federal government since last week's announcement that it will be partially nationalized.

Berlin is taking a €10 billion stake in Commerzbank, an investment that will it direct influence in the business operations and structure of a major German commercial bank. The government will also become the guarantor of the planned merger between Commerzbank and Dresdner Bank, acquired by Commerzbank in a deal arranged last year.

Germany's governing coalition has agreed on the details of the country's biggest economic stimulus package since World War II, worth a total of 50 billion euros. But critics say it won't be enough to combat recession.

Germany's ruling political parties agreed on a two-year €50 billion stimulus plan, the biggest since World War II, at a meeting on Monday night to help Europe's largest economy weather the financial and economic crisis.

Representatives of Germany's governing coalition met in the Chancellery and consulted late into Monday evening on the new stimulus package. The plan envisages €18 billion of new investment in the construction and repair of roads and the rail network and of schools and universities. Some of the money will also be used for faster Internet communication networks.

Taxes are also being cut, with the tax threshold being raised to €8,004 from €7,664, and the entry rate of tax will be lowered to 14 percent from 15 percent on July 1.

The German system of "cold progression," under which taxpayers are shifted into higher tax brackets even when real incomes have not grown, is also going to be changed, thus bringing tax relief. Under the current system, the tax brackets aren't adjusted for inflation.

Federal Reserve Chairman Ben S. Bernanke warned that a fiscal stimulus won't be enough to spur an economic recovery and that the government may need to buy or guarantee banks' tainted assets to revive growth.

"Fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system," Bernanke said in a speech today at the London School of Economics. "More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets."

Bernanke's remarks indicate he may be seeking to influence deliberations among lawmakers and President-elect Barack Obama's economic aides on how to deploy the next $350 billion of the financial-rescue fund approved in October. While some Democrats have focused on offering aid to troubled homeowners, the Fed chief's comments show he's more concerned about a continued choking off of credit to companies and households.

Hedge funds lost $350 billion globally in 2008, the most on record, as the biggest financial crisis since the Great Depression crippled returns and caused investors to pull money out, according to an industry report.

The hedge-fund industry shrank by about a fifth to $1.5 trillion at the end of the year from a peak of $1.9 trillion, Eurekahedge said. Funds including Citadel Investment Group LLC suffered investment losses and client withdrawals. Some funds were forced to sell assets at fire-sale prices as the credit crisis forced banks that lent money to hedge funds to withdraw their loans.

As Barack Obama looks back to Franklin Roosevelt's first inaugural address -- the only other such address that came smack in the middle of an economic meltdown -- I hope he pays special heed to Roosevelt's words on America's bankers, who then as now had plunged the nation into an economic abyss.

"The money-changers have fled from their high seats in the temple of our civilization," Roosevelt proclaimed. "We may now restore that temple to ancient truths."

British economic confidence has been shattered by the financial crisis, according to a unique international poll published today. It shows that people here are now less likely to trust banks, the stockmarket or the government's economic management than people in comparable nations.

The research, carried out by WIN, an international network of pollsters including ICM in Britain, used professional polling techniques to assess public opinion in 17 countries, including the major G8 economies as well as China and India.

On most measures, British people emerged as among the most pessimistic of the 14,555 people questioned around the world.

Remarkably, confidence in the banking system appears lower in Britain - 4.2 out of 10 - than in bankrupt Iceland, which polled 4.6.

While around a third of citizens in developing economies such as India and China say the economic situation in their countries could improve in coming months, more than three-quarters of people in Britain expect it to worsen.