German Finance Minister, Wolfgang Schäuble, said Wednesday in an open letter to lawmakers belonging to his Christian Democratic Party that the eurozone debt crisis isn't over and that more discipline is needed.

Also Wednesday, Moody's Investors Service downgraded Cyprus and warned it may cut the country's rating further, citing its weak fiscal position, fractious political climate and the exposure of its banks to Greece. The island's economic troubles have been compounded by rolling blackouts after an explosion destroyed the country's largest power station this month. A government spokesman said President Dimitris Christofias will push ahead with a cabinet shuffle planned for Thursday.

And Standard & Poor's Ratings Services cut its ratings on Greece further into deep junk territory, after the ratings company concluded a proposed restructuring by the nation's government would amount to a selective default. Moody's had cut Greece's rating Monday, warning that the bond exchange that is planned would constitute a default, and Fitch issued a similar warning on Friday.

Mr Schäuble said in his letter that Germany wouldn't write "blank checks" for the European Financial Stability Facility, the EU's bailout fund for distressed governments—again registering German opposition to calls to increase the fund's lending volumes to reassure markets that default risk was being minimised. He also cautioned against putting Spain and Italy in the same boat as Greece, which he described as being at the root of the crisis. "The financial situation in some countries that are now in [the market's] focus, is in itself no cause for serious concern", he wrote.

Late Wednesday, Spanish Finance Minister, Elena Salgado, reached an agreement with the finance chiefs of Spain's powerful regions on budget targets and spending controls, despite escalating tensions in recent weeks over measures needed to slash one of the European Union's largest budget deficits.

Still, the suggestion of more tests to come and of limits on German support for future safety nets put investors on edge, shaking the comparative calm that followed the EU's decision last week on a second bailout package for Greece totaling €109 billion ($158.17 billion), augmented by debt concessions by creditor banks.

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