Turmoil returns to the eurozone

Following a few weeks of calm, the eurozone debt crisis is once again making the headlines.

After a few weeks of calm, the eurozone debt crisis is back in the spotlight. Comments by German officials apparently admitting that Greece will eventually need to restructure its debts in other words, default have propelled the Greek ten-year yield to a new crisis high of over 14%. Ratings agency Moody's has downgraded Irish bank debt to junk, and Irish sovereign paper to the verge of junk.

The Finnish election last weekend casts "significant doubt" over Portugal's bail-out package, which is currently being negotiated, says Richard McGuire of Rabobank. The anti-euro party True Finns looks likely to be included in coalition negotiations. It opposes a Portuguese bail-out and could stymie the expansion of the eurozone rescue fund. Also "surprising and very troubling", adds The Economist, is that jitters have extended to Spain, which appeared to have shaken them off over the past few weeks. Its ten-year yields are at a decade-high.

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