Slovenia's first mosque opens after 50 years

Yahoo – AFP, Bojan KAVCIC, February 3, 2020

Mufti of the Islamic Community of Slovenia Nedzad Grabus addresses the media
on February 3, 2020 (AFP Photo/Jure Makovec)

Ljubljana (AFP) - Slovenia's first mosque opened in the capital Ljubljana on Monday after surmounting financial hurdles and right-wing opposition, 50 years after the initial request to build was made.

Opponents of the project -- including those who criticised its Qatari financing -- have repeatedly tried to halt it, and pig heads and blood have also been left on the site.

Islamic community head Mufti Nedzad Grabus said the mosque's opening was "a turning point in our lives".

"Slovenia is the last former Yugoslav state to get a mosque, making Ljubljana a capital rather than a provincial town on the edge of the world," he told a press conference.

Muslims in the predominantly Catholic Alpine country first filed a request to build a mosque in the late 1960s while Slovenia was still part of the former Communist Yugoslavia.

The community finally received permission 15 years ago, but ran into opposition from right-wing politicians and groups, as well as financial troubles.

Construction, which began in 2013, cost some 34 million euros ($39 million), out of which 28 million euros were Qatari donations, according to Grabus.

Situated in a semi-industrial area of Ljubljana, the mosque, which can hold up to 1,400 people, constitutes the core of the six-building Islamic Cultural Centre.

The centre also comprises the community's offices; an education centre, which includes a library; a restaurant; a basketball court; housing for the Muslim clerisy; and a 40-metre (131 feet) high minaret.

All the buildings are made from white concrete combined with steel, glass and wood. A large blue textile-made dome dominates the mosque's interior, referring to heaven and reminiscent of famous mosques like Istanbul's Blue Mosque.

Aiming to show openness

"We wanted to link traditional Islamic architecture values with contemporary architecture," architect Matej Bevk told AFP adding the centre's glass facades were meant to show its transparence and openness.

Until now, Muslims have been worshipping and holding ceremonies in rented sports halls or buildings.

They make up 2.5 precent of the country's two million people, constituting the second biggest religious group, according to the last 2002 census. Grabus estimated there were around 80,000 Muslims currently.

Opponents of the project have twice tried to halt it, once in 2004 and again in 2009, by asking for a referendum. The constitutional court denied the requests both times.

Critics claim Qatar is one of the main financiers of terrorism.

Pig heads and blood were also tossed on the site in two incidents in 2016. Pigs are considered to be unclean and pork and its by-products forbidden under Islam.

Ljubljana's long-time mayor Zoran Jankovic has supported the project.

Azra Lekovic, a Slovenian Muslim in her late 40s, described the mosque as "crucial", saying her children, 22 and 24, had distanced themselves from the religion over the years.

"I hope it will allow my children to get in touch with the Islamic community again, to meet progressive people and find friends that share their religion," the entrepreneur from Sezana in western Slovenia told AFP.

Leaders lay the first stone of what will be the first mosque in Ljubljana, 

Slovenia on September 14, 2013 (AFP, Jure Makovec)

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Slovenia PM lays stone on country's first mosque

Judges award Slovenia high seas access in row with Croatia

Yahoo - AFP, Jo Biddle, June 29, 2017

In a complex 300-page judgement, the judges ruled Slovenia should have 

"a junction area" with international waters, allowing "freedom of communication" to

all ships, civilian and military, seeking access to Slovenia (AFP Photo/Jure Makovec)

The Hague (AFP) - International judges on Thursday awarded Slovenia key access to international waters off the Croatian coast, sparking a furious reaction from Zagreb which said it would refuse to implement the ruling.

In a complex 300-page judgement, the judges ruled Slovenia should have "a junction area" with international waters, allowing "freedom of communication" to all ships, civilian and military, seeking access to Slovenia.

They determined that the "junction between the Slovenian territorial sea and the 'High Sea' is an area in which ships and aircraft enjoy essentially the same rights of access to and from Slovenia as they enjoy on the high seas," presiding judge Gilbert Guillaume said, in a two-hour long judgement.

In Ljubljana, Slovenian Prime Minister Miro Cerar hailed the ruling as a "historic moment for Slovenia," saying the judgement "is definitive and must be applied on both countries, Slovenia and Croatia".

The Slovenian leader said he would call his Croatian counterpart during the day to "begin dialogue on implementing the decision".

"Slovenia will do nothing to harm relations between our countries or our citizens," he said.

But Croatian Prime Minister Andrej Plenkovic said his country will refuse to implement the ruling, saying it was "not obliging us in any way".

Poisoned relations

The sea corridor will be about 2.5 nautical miles wide, and lies about 12 nautical miles beyond the territorial limits of both Croatia and Italy.

But in the case which was first lodged with the Permanent Court of Arbitration in 2009, the court rejected Ljubljana's claim that the whole of the southwestern Piran bay was Slovenian territory.

Instead they determined the maritime border "shall be a straight line joining a point in the middle of the channel of the St Odoric Canal" heading straight into the bay from the mouth of the Dragonja River.

The area under dispute is a tranquil bay on the northern Adriatic Sea, where the medieval buildings of the southwestern Slovenian town of Piran tumble down to a sleepy port.

But the bay is also shared by Croatia, and the dispute over where the sea borders should be drawn has poisoned relations between the neighbours since they both declared independence from Yugoslavia in 1991.

In 2009, the two countries signed an EU-backed deal to allow the Permanent Court of Arbitration in The Hague to solve the long-standing dispute over the 13 square kilometres (five square miles) of largely uninhabited land and Piran Bay.

Slovenia, which has just 46 kilometres (29 miles) of coastline, had argued its access to international waters was at stake because Croatia, whose coast stretches for 1,700 kilometres, wanted the border to be drawn down the middle of the disputed bay.

'Freedom of the seas'

The judges stressed that the aim of the corridor was to "guarantee both the integrity of Croatia's territorial sea and Slovenia's freedoms of communication between its territory and the high seas."

Zagreb had only agreed to join the proceedings after Ljubljana lifted its veto in 2009 to Croatia's accession to the European Union. But it pulled out again in 2014 following a phone tapping scandal.

A Slovenian judge from the tribunal and a Ljubljana official were recorded discussing tactics for a ruling favourable to Slovenia.

Observers have warned that if Zagreb does not comply with the ruling it could further strain already tense relations with Slovenia, which is Croatia's key entry point into the passport-free Schengen zone.

Preliminary results: Slovenians reject same-sex marriage law in referendum

Slovenians have voted against granting equal rights to same-sex marriages, according to near-complete results. While Slovenia is among the most liberal ex-socialist countries, gay rights remain a controversial issue.

Deutsche Welle, 20 December 2015

Preliminary results show that 63 percent voted against the government's bid to redefine marriage as a union of two adults, while 37 percent were in favor, the country's electoral commission said on Sunday.

Only 35.6 percent of registered voters turned out at the polls in the predominantly Catholic nation of two million people.

Slovenia's parliament had approved legislation in March defining marriage as a "union of two" instead of being a "union of a man and a woman," effectively granting homosexual couples equal rights to marry and the right to adopt children.

Following the decision, a Catholic Church-backed movement calling itself "Children Are At Stake" quickly gathered the 40,000 signatures necessary to put the question to the public in a referendum for the second time since 2012. The previous effort to allow same-sex marriage was also rejected.

If the "no" camp prevails in the final count, then the civil code would be changed back, although existing legislation, which allows registered civil partnerships but not the adoption of children, would remain in force.

President Borut Pahor and Prime Minister Miro Cerar's ruling Modern Center Party (SMC) support the "yes" camp, saying gay marriage would eliminate discrimination and grant equal rights to all Slovenians.

Janez Jansa, the former center-right prime minister from the opposition Slovenian Democratic Party (SDS), came out against the move.

"Erasing the gender from the marriage (definition) gives ground to human rights' violations against our most precious -- our children."

Same sex marriage has already been legalized in 18 countries around the world, 13 of them in Europe.

dj/jlw (Reuters, AFP, AP, dpa)

Pope Francis marks 100 years since start of World War I

The head of the Catholic Church has used a ceremony to mark the outbreak of World War I 100 years ago to warn about a kind of "third war" being fought today. Pope Francis also denounced those who profit from conflict.

Deutsche Welle, 13 Sep 2014

Pope Francis on Saturday called for stronger collective action by the international community to prevent war and terrorism. Speaking at a cemetery in Redipuglia, near Italy's border with Slovenia, the pope didn't point to any single nation or leader, but warned that less visible forces created the conditions for military conflict.

"In today's world, behind the scenes, there are interests, geopolitical strategies, lust for money and power, and there is the manufacture and sale of arms," he told a crowd of thousands at the graveyard, where more than 100,000 Italian soldiers who died in World War I are buried.

"Even today, after the second failure of another world war, perhaps one can speak of a third war: one fought piecemeal, with crimes, massacres, destruction," the pontiff said.

"The shadow of Cain hangs over us today in this cemetery. It is seen here. It is seen from 1914 right up to our own time. It is seen even in the present," he added.

The trip to the cemetery was thought to be infused with personal meaning for the pope, whose grandfather fought for Italy in nearby battlefields in the last two years of World War I.

An estimated 200,000 Roman Catholics, mainly from Italy, Slovenia and Croatia attended Saturday's ceremony, according to Vatican Radio.

pfd/nm (AFP, AP, epd)

Thousands flee floods in Bosnia and Serbia as death toll rises

At least 25 dead and fears that landmines will be exposed after torrential rain causes 'horrible catastrophe'

theguardian.com, Associated Press in Maglaj, Bosnia, Sunday 18 May 2014

People evacuate in boats from Obrenovac, south-west of Belgrade, on
Saturday. Photograph: Marko Djurica/Reuters

Packed into buses, boats and helicopters, carrying nothing but a handful of belongings, tens of thousands of people have fled their homes in Bosnia and Serbia to escape the worst flooding in a century.

Rapidly rising rivers surged into homes, sometimes reaching up to the second floors, sending people climbing to rooftops for rescue. Hundreds were also evacuated in Croatia.

Authorities said on Saturday 25 people had died, but warned the toll could rise. Tens of thousands of homes were left without electricity or drinking water.

Landslides triggered by the floods also raised the risk of injury or death from land mines left over from Bosnia's 1992-95 war. The landslides swept away many of the carefully placed warning signs around the minefields.

Three months' worth of rain fell on the region in three days last week, creating the worst floods since records began 120 years ago.

From the air almost a third of Bosnia, mostly its north-east corner, resembled a huge muddy lake, with houses, roads and rail lines submerged. Admir Malagic, a spokesman for Bosnia's security ministry, said about a million people – more than a quarter of the country's population – lived in the affected area.

"Bosnia is facing a horrible catastrophe," said Bakir Izetbegovic, the chairman of the Bosnian three-man presidency. "We are still not fully aware of actual dimensions of the catastrophe ... we will have to take care of hundreds, thousands of people."

Izetbegovic was touring Maglaj, hard hit by the floods. As the waters mostly withdrew on Saturday, Maglaj was covered in mud and debris, with residents checking damage and bringing furniture out in the streets to dry.

"Everything is destroyed, but we are happy to be alive," said Maglaj resident Zijad Omerovic.

In the eastern Bosnian town of Bijeljina, some 10,000 people were being evacuated on Saturday after the rain-swollen Sava river pushed through flood defences, endangering four villages outside the town.

"We need everything, we are underwater," mayor Mico Micic exclaimed.

In eastern Croatia, the overflowing Sava spread over villages and farm land, sending hundreds fleeing.

Officials in Bosnia said 17 people haddied and more bodies could be found as water receded from dozens of cities. In some places, people had to be rescued by helicopter from their roofs.

Many in Bosnia lost homes they had only just rebuilt after the war, which claimed 100,000 lives and devastated the impoverished country.

In Serbia, eight deaths were reported and emergency crews and soldiers were using boats and helicopters to rescue thousands trapped in the town of Obrenovac, near Belgrade. Authorities also ordered residents of another nearby small town, Baric, to leave immediately on Saturday afternoon. Many hurriedly climbed into buses and military trucks to get away.

Officials said more than 16,000 people have been evacuated from flood-hit regions in Serbia, many finding shelter in schools and sports halls. Lines of mattresses covered the floors of Belgrade schools, with frightened survivors describing unstoppable torrents that surged in a matter of minutes.

Mirjana Senic, who lives in the centre of Obrenovac, said that "we thought we had it pretty bad ... [but] only when they evacuated us and when we actually saw the amount of water in other parts of town did we realise that we were lucky."

The flooding in Obrenovac is threatening the Nikola Tesla power plant, Serbia's biggest. Plant capacity had already been cut after a nearby coal mine was flooded and authorities urged residents to save energy to avoid brown-outs.

Prime minister Aleksandar Vucic told a press conference a new wave of flooding on the Sava would hit on Sunday evening.

"Our primary concern is to protect the power plant," Vucic said. "We are doing all we can."

International help poured into the two nations to support thousands of volunteers. A Russian team joined the rescue efforts in Serbia. Rescue teams from Luxembourg, Slovenia and Croatia were already in Bosnia, and others from the UK, Austria and Macedonia were expected.

Aerial footage showed flooding near Serbia Tesla power plant

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Prime Minister Bratusek resigns in Slovenia, seeking early elections

Deutsche Welle, 4 May 2014

Alenka Bratusek has announced her resignation as Slovenian prime minister, pressing parliament to call elections next month. Bratusek said she could not govern after being ousted as leader of the Positive Slovenia party.

The 44-year-old financial expert Alenka Bratusek on Saturday announced her resignation, just 13 months after taking the reins as Slovenian prime minister. She was expected to formally submit her resignation to President Borut Pahor on Monday.

Bratusek held emergency meetings with her coalition partners on Saturday, after being voted out as leader of her Positive Slovenia party one week ago. The mayor of the capital Ljubljana, party founder Zoran Jankovic, initiated the coup within the center-left party, saying Bratusek's austerity policies in Slovenia went against the party's election promises.

The change of leadership in the country's largest party in turn unsettled coalition partners, not least because of outstanding corruption charges against the 61-year-old mayor. Jankovic allowing Bratusek to take the party leadership and prime minister's post had been a key condition in the initial talks to form a four-party coalition government.

The outgoing prime minister said on Saturday that snap elections could be held as soon as June 22, provided that none of the major parties presented a different prime ministerial candidate. That development, Bratusek said, could slow the process.

Parliamentarians would also have the option to start negotiations on forming a new coalition government after Bratusek leaves office.

Bratusek's government cut public spending, privatized some industries and poured money into the country's troubled banks in its first months in office, doing enough to stave off outside financial assistance from the European Union.

Roughly half of Positive Slovenia's parliamentarians quit the party in support of Bratusek when she was dethroned, prompting domestic media speculation that she might seek to establish a new party with these politicians.

msh/lw (AFP, AP, dpa)

Slovenia PM lays stone on country's first mosque

Google – AFP, 14 Sep 2013

Leaders lay the first stone of what will be the first mosque in Ljubljana, 

Slovenia on September 14, 2013 (AFP, Jure Makovec)

LJUBLJANA — Slovenia's prime minister, Alenka Bratusek, on Saturday laid the foundation stone for what will be the country's first mosque -- 44 years after the initial request to build it was made.

The laying of the stone, in the presence of a government minister from Qatar which is helping to fund the project, was a "symbolic victory against all forms of religious intolerance", said Bratusek, adding that Europe would not be as culturally rich without Islam.

About 10,000 attended the ceremony in Ljubljana, according to an AFP photographer at the event.

Building will begin in November and should be finished by the end of autumn 2016. The cost of the project, which includes a Muslim cultural centre, is 12 million euros ($16 million), 70 percent of which will be met by the Qataris.

The first request to build a mosque in Slovenia was filed in 1969. In recent years the project has run into difficulty over the issue of land, but was eventually solved when the council in Ljubljana sold an area ready for construction to the Muslim community.

However, opponents of the mosque have twice tried to halt the project, once in 2004 and again in 2009, by asking for a referendum. The requests were denied each time by the constitutional court.

Some 47,000 Slovenians declare themselves Muslim, in a country of two million people. A 2002 census found that it was the second largest religion in the country behind Catholicism, which has 1.1 million followers. Muslim groups claim there are around 80,000 Muslims in the country.

There was a previous mosque in Slovenia, before it was an independent country, but it was abandoned and destroyed after World War One.

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Slovenia unveils reforms as it seeks to avoid EU bailout

BBC News, 9 May 2013

Related Stories 

• Slovenia rebuffs Cyprus comparison
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• Cyprus bailout 'rises to 23bn euros'

Slovenia's new Prime Minister, Alenka
 Bratusek, is hoping to avoid an EU
bailout

The government of Slovenia has announced a package of measures it hopes will help avoid an EU bailout.

The measures include a tax increase, a major restructuring of Slovenia's ailing banking sector, and a programme of mass privatisation.

Slovenia's mostly state-owned banking sector is suffering from mounting bad debts and the government has struggled to borrow money.

The European Commission will now consider the plan.

It is expected to deliver its verdict by the end of the month.

Slovenia has been in recession since 2011, and analysts have cited it as the most likely country to seek help from the EU following the bailout of Cyprus earlier this year.

European officials have expressed concern over the stability of the country's banking sector, which is struggling under billions of euros of bad debts.

Meanwhile the government's ability to borrow money was dealt a blow last week when Moody's, a ratings agency, cut Slovenia's bonds to "junk" status.

Despite this, the government was able to raise 3.5bn euros (£3bn; $4.6bn) from international bond markets last week, which has bought it some time.

The package of measures was announced by Slovenia's recently installed Prime Minister, Alenka Bratusek, and her Finance Minister, Uros Cufer.

The measures include a 2% increase in VAT to shore up government finances.

A "bad bank" will also be created to allow the banking sector to offload its bad debts.

Meanwhile a total of 15 publicly-owned businesses will be sold off, including the second biggest bank, Nova KBM, and the flag-carrying airline, Adria Airways.

The biggest bank, NLB, has already announced plans to downsize.

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No easy way out for Slovenia

Former Yugoslav banks fail to honor deposits

Deutsche Welle, 24 November 2012

After working for years in Germany, hundreds of thousands of people from the former Yugoslavia have seen their savings go up in smoke. Despite a European court's ruling, banks aren't willing to pay out the old deposits.

Safet Alimehaj is not alone. He has passbooks from savings accounts he inherited from his parents but a slim chance of ever seeing the money deposited into them.

Alimehaj's parents were Yugoslav "guest workers" who traveled to Germany in the 1970s as part of a program to bring non-German workers to the country temporarily. They transferred their savings from a bank in the southern German city of Neu-Ulm to Ljubljanska Banka (LB) in what is now Slovenia. After the break-up of Yugoslavia, the bank's assets were taken over by the Nova Ljubljanska Banka (NLB), which does not regard itself as LB's legal successor.

Thousands affected

Mattil said billions of euros could
potentially be paid out

In Germany alone there are about 300,000 people with ties to the former Yugoslavia suffering the same fate as Alimehaj, according to Munich lawyer Peter Mattil, whose firm represents people in such circumstances who have become German citizens.

"These people made deposits into their savings accounts for years - or even decades," he said. "Then in 1994, the successor bank was founded and it took over all the assets, but none of the liabilities associated with the accounts created outside of the country."

That the bank was able to do so with the blessing of the Slovenian state, despite the government guaranteeing savings accounts, was a crime that needs redress, Mattil added.

In the 1970s, there were about 600,000 Yugoslav guest workers in Germany, and they were a sought-after clientele.

"Ljubljanska Bank actively targeted them with interest rates of up to 12 percent," Mattil said.

Five other banks acted in a similar manner, leaving the so-called guest workers in Germany as well as Austria, France, Switzerland and Sweden holding worthless papers after changes to the banking system in the former Yugoslavia. Many of the workers saw their cases rejected by courts at home.

European court rules for workers

A small group of those affected brought their case to the European Court of Human Rights (ECHR) in 2008 after exhausting the appeal processes in their home countries. Earlier this month, Judges at the Strasbourg-based court ruled in favor of three people affected and said their savings should be returned along with that of "everyone else in the same situation." The court also said those affected should receive interest on their savings and 4,000 euros ($5,200) per person in compensation for personal suffering.

The ECHR's ruling will influence future
judgments, Mattil said

That would add up to tens of billions of euros that banks or states would have to pay out in returns and compensation as many guest workers had saved sums of 100,000 euros or more, according to Mattil.

But several hurdles remain for Alimehaj and others like him as the ECHR ruling had no direct effect. While the court can establish that a person's human rights were abused, it cannot force a state to take action to address the wrong, according to law professor Peter Baumeister of the SRH University in Heidelberg. Even if a German court were to rule in favor of Alimehaj or another holder of a savings account based on the ECHR's ruling, it would not ensure the judgment is enforced, he added.

Slovenia can also appeal the ECHR's decision, which the country has already announced it will do, according to Mattil.

Still, Mattil said he remains optimistic that the court's decision will help his clients' cases.

"This is not just some theoretical or philosophical ruling," he said. "It needs to be heeded and will form the basis of future judgments."

Baumeister, however, took a less optimistic view of the situation, saying, "I think that this ruling can be a source of hope but not of euphoria."

While there will certainly be additional court cases and rulings, whether the guest workers or their children ever get the money they saved in the certificates of deposits remains an open question.

Ratings agency Fitch downgrades five eurozone nations

Deutsche Welle, 27 January 2012 

Fitch said it had considered
both positives and negatives

The credit ratings agency Fitch has downgraded five eurozone countries, with a double-drop for the major economies of Italy and Spain. The move, ahead of an EU summit on Monday, comes soon after another mass downgrade.

Credit ratings agency Fitch on Friday downgraded its credit outlook for five eurozone countries, citing financing and growth fears as its reasons.

The ratings of major economies Italy and Spain dropped by two notches; Italy from A+ to A- and Spain from A to AA- status.

There was also a downgrade of two points for Slovenia, with Belgium and Cyprus both falling by one. The agency said that although governments had taken action on a national level to dispel market fears, it also had to take a poor economic outlook into account.

"Today's rating actions balance the marked deterioration in the economic outlook with both the substantive policy initiatives at the national level to address macro-financial and fiscal imbalances," said a statement on the website of US-based Fitch.

The agency also highlighted a collective failure to reach agreement on the wider eurozone crisis as a further motivation for the downgrade. 

A poor economic outlook for the
 eurozone was given as just one reason

"The intensification of the eurozone crisis in the latter half of last year undermined the effectiveness of ECB monetary policy and highlighted the financing risks faced by eurozone."

Narrow escape for Ireland

Ireland maintained its triple-B rating, but was placed on Fitch's "negative outlook" list - indicating the likelihood of a future downgrade.

The announcement comes ahead of a European Union summit on Monday, aimed at finding a solution to mounting debt and poor growth.

Earlier this month, ratings agency Standard & Poor's (S&P) downgraded nine European countries, with France and Austria losing their top-notch triple-A ratings.

Italy, Spain, Portugal and Cyprus went down by two levels on the S&P scale, while Malta, Slovakia, and Slovenia each fell by one.

Author: Richard Connor (AFP, AP, dpa)

Editor: Nancy Isenson

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Eurozone in new crisis as credit agency downgrades nine countries

S&P action leads to fall in euro and share prices while European Central Bank forced to buy Italian bonds

guardian.co.uk, Larry Elliott and Phillip Inman, Friday 13 January 2012

France’s loss of its top-rated status leaves Germany as the only other major
 economy inside the eurozone with a AAA credit rating.
Photograph: Scott E Barbour/Getty Images

Europe has been plunged into a fresh crisis after France admitted it had been stripped of its coveted AAA rating in a mass downgrade of nine eurozone countries by the credit ratings agency S&P.

The agency downgraded the ratings of Cyprus, Italy, Portugal and Spain by two notches. It also lowered Austria, France, Malta, Slovakia and Slovenia by one notch.

The agency said that its actions on eurozone ratings were "primarily driven by insufficient policy measures by EU leaders to fully address systemic stresses".

Ahead of the announcement share prices plunged, the euro dropped to a 16-month low against the dollar and the European Central Bank was forced to step in to buy Italian bonds after European sources admitted action by the credit ratings agencies was imminent.

Bringing an abrupt end to the uneasy calm that has existed in the eurozone since the turn of the year, the heavily-trailed S&P move rekindled financial market anxiety about a Greek default and possible break-up of the single currency.

Nicolas Sarkozy was due to go on national TV to explain the humiliating loss of France's top-rated status, leaving Germany as the only other major economy inside the eurozone with a AAA rating. French finance minister François Baroin downplayed the move, saying it was "not a catastrophe".

The moves followed a warning from S&P last month that it was looking hard at the credit ratings of 15 of the eurozone's 17 members. Germany and the Netherlands were quick to make it clear they were not on the list of targeted countries circulated by S&P to European capitals ahead of an announcement that was expected to be made after the close of business on Wall Street. Investors piled into safe haven assets such as the dollar, while the UK was rewarded with even lower borrowing costs as 10-year bonds slipped below 2%.

Britain is not at imminent risk of a downgrade, but Berlin sought to soften the blow to French pride when a senior German politician close to Angela Merkel said the UK should have been first in line for a cut in its AAA status on the grounds that its collective private and public sector debts are the largest in Europe.

Michael Fuchs, deputy leader of the Christian Democrats, said: "This step is out of order. Standard and Poor's must stop playing politics. Why doesn't it act on the highly indebted United States or highly indebted Britain?"

He added: "If the agency downgrades France, it should also downgrade Britain in order to be consistent."

The FTSE 100 dropped 100 points before recovering late in the day to finish down 26 points at 5636 while the Dow Jones in New York fell 120 points to 12350 by afternoon trading.

S&P was expected to blame the escalating costs of supporting indebted euro nations for the downgrade. The vulnerability of banks in the currency club to bad loans in Greece, Portugal and Ireland is also believed to be a key reason for the downgrades.

The new technocratic government in Athens added to the gloom after talks over a second major bailout to rescue the country's finances broke up without an agreement. Officials from the International Monetary Fund, the European Union and the ECB arrive in Athens on Tuesday for talks on a new €130bn bailout package, which will be impossible unless Greece first strikes a deal with the banks, insurance companies and hedge funds that have lent it money.

The Greek government said talks with its creditors would resume on Wednesday, but analysts voiced concerns that hedge funds were blocking a deal that involves them writing off 50% of their loans.

Germany considers Greece to be the main faultline in the euro crisis and is urgently seeking a resolution to talks over a deal, but has insisted Brussels holds out for a private sector deal. Officials hinted on Friday night that Greece could default on 100% of its loans if the private sector refuses to come back to the negotiating table and accept a voluntary agreement.

A spokesman for the troika said: "We very much hope, however, that Greece, with the support of the euro area, will be in a position to re-engage constructively with the private sector with a view to finalising a mutually acceptable agreement on a voluntary debt exchange consistent with the October 26/27 agreement, in the best interest of both Greece and the euro area."

Unprecedented action by the European Central Bank in recent weeks had reassured many investors that policymakers were getting on top of the crisis. The ECB has lent more than €400bn to eurozone banks to bolster their reserves and prevent a repeat of the 2008 credit crunch.

But the S&P downgrades are likely to undermine these efforts and make foreign banks wary of lending to their counterparts in Europe.

Graham Neilson, chief investment strategist at Cairn Capital, warned: "This is just the start. There will be more to come and not just in Europe – there is simply still too much debt and not enough growth in developed economies."

France has already shown its anger at the prospect of a downgrade. Central Bank chief Christian Noyer raised eyebrows in London before Christmas when he said Britain "has more deficits, as much debt, more inflation, less growth than us".

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