Italy in spotlight as euro zone debt crisis fears continue
European stock markets have lost ground today as the euro zone debt crisis continues and Italy becomes the latest nation to come under scrutiny.
European stock markets were down earlier today with London’s FTSE, Germany’s Dax and France’s Cac 40 all losing between 1.6% and 1.9%, following falls in Asia earlier.
Meanwhile, the euro slipped below the $1.40 mark – hitting a two-month low against the US dollar.
Furthermore, the Swiss franc (a currency regarded as safe from the debt crisis) hit a fresh low of 1.2324 francs against the euro.
Over the weekend, rating agency Standard & Poor’s cut Italy’s outlook from “stable” to “negative”. There are fresh fears for the debt-laden country, which has the euro zone’s largest debt pile in absolute terms.
Greece, Ireland and Portugal have all been forced to seek a bailout and it looks as if the crisis is set to continue as weaker nations may also be forced to seek financial aid.
Finally, Greece’s borrowing costs continue to rise due to expectations of an eventual default rise.
The yield on Greek 10-year bonds rose a further half a percentage point to 16.8% today – up from 15.3% this time last week.