Countries using the Euro de jure Countries and territories using the Euro de facto Countries in the EU not using the Euro (Photo credit: Wikipedia) |
The market turmoil also spread to Italy, the euro-zone's third largest economy, where bond yields leapt higher ahead of a crucial bond sale later this week and weekend elections in Greece that could decide the country's fate in the common-currency region.
The deepening gloom surrounding Spain's credit-worthiness could have grave implications. A sovereign bailout for Spain will severely test the firepower of the euro area's rescue funds, hardly leaving any money in the pot if Italy were to be shut out of bond markets.
"It is quite likely that Spain needs a full bailout in the near future although policymakers will try all possible options to avoid this outcome, including a revival of bond purchases by the ECB as well as another three-year liquidity operation," said Pavan Wadhwa, global head of interest rate strategy at JPMorgan. "The concern is that the more peripheral debt the official sector holds, worries over subordination mean that the private sector will be less willing to lend to these countries," he said. Read more >>
No comments:
Post a Comment