Worries about Greece’s fiscal woes may be spreading outward to other highly-indebted nations on Europe’s periphery.
One sign of trouble: Investors are demanding higher yields to compensate for the increased risk of holding Portuguese, Spanish, Irish and Italian government bonds.
On Wednesday, the “spread,†or difference, between yields on such bonds and safer German debt — a gauge of market fear — has jumped higher. The gap between 10-year Portuguese bonds and German debt has widened to 0.95 percentage point from 0.92 percentage point Tuesday evening, while that between Irish and German bonds stands at 1.57 percentage points from 1.48 percentage points.
Source: WSJ
