LONDON - Europe debt crisis returns to haunt markets Monday as investors line venerate yet on a possible failure of Greek and the impact of the huge gains for a nationalist party in Finland.
Portugal has also started discussions on a financial rescue plan and Spain had to pay an interest rate much higher than to exploit bond investors.
Although the costs of countries such as the Greece, the Ireland and Portugal have increased significantly more high in recent weeks of borrowing, the euro managed to brush off the coast of concerns of the debt crisis, hitting a maximum of 15 months week last over $1.45. The currency was supported by predictions that the European Central Bank will follow first interest rate for April increased to almost three years with the tightening of policy more.
Benefiting the euro if investors do not provide others, such as the fed to do the same.
However, there is little respite for the currency Monday in a stream of negative developments, who sent the euro down 1.3% to $1.4222. Previously, it had declined to $1.4157, its lowest level since April 5.
In addition to the trac of debt has emerged with the news that the Spain had to pay sharply higher interest rates raise of euro4.7 billion ($6.7 billion) debt in the short term, then that performance on the Greece 10 years almost doped obligations a percentage as a whole at a time point given to 14.59%. This is the first time, it is passed over 14 percent since the country took the euro in 2001.
The end of the day, the performance was slightly relaxed 14,55%, but the difference with German bunds of reference was more than 11% - a differential reversing since the two countries use the same currency.
The renewed interest on the debt of the Greece came after suggestions that the country would be preferable for a way to renegotiate its debts.
Costas Simitis, Prime Minister from 1996 to 2004, Socialist the Greece supported calls for the country to deal with its mountain of debt, arguing that a prolonged austerity program may not work. A negotiated restructuring would be better, allowing the Greece to rebuild its economy over the next 15 to 20 years, he argued.
It is is not the only one in a restructuring, but the Greek Government insists that is not in the order of the day, as it would make it more difficult to exploit bond markets in the future.
The Governor of the Central Bank of the Greece, arguing that a restructuring weighed in Monday is "unnecessary and undesirable." "" However, central banker George Provopoulos admitted that the reforms of reduced spending by the Socialist Government of the Greece were shows signs of fatigue,"" and that it required "powerful restart" to keep the program on the runway.
If the Greece can actually withstand pressure is another question - after all, he spent the first part of 2010 insisting he did not need a rescue plan. In may, he had to accept a package ($159 billion) billion of European loans from relief of its partners in the European Union and the Monetary Fund International.
"Despite the public protestations to the contrary, the bottom chat has reached such intensity these days that the real issues seem to be rather more when a Greek"restructuring"will be finally announced and quite what details will be rather than if there will be a" said Simon Derricka senior analyst at the Bank of New York Mellon.
Although a restructuring would reduce the debt pile and possibly bring a quicker end for painful austerity measures, restructuring would be easy and would result in enormous costs in the future capacity of the Greece to borrow money as well as risking a massive blow to the banks in the countrywhich are large holders of Greek bonds.
Many French and German banks are also large holders of Greek debt.
A Greek default may also trigger fears that Ireland or the Portugal may seek a similar way to their stranglehold of debt. There had been hope that Europe had finally done enough to frame the three weakest members, but the economic prospects look immediate of these nations dark as they try to meet their obligations to international financial support.
Portugal begins its quest for funding Monday with the Minister of Finance of delegations meeting of the Governments of the European Commission, the Central Bank acting country European and Monetary Fund International. A key topic is expected to focus on the rate of interest charged for the expected euro80 Portugal billion ($116 billion) rescue.
During this time, news Eurosceptic party made big gains in the election of the Finland fueled fears Sunday that "comprehensive plan" EU to deal with the debt crisis may not work as smoothly as hoped.
Finnish leader Timo Soini suggested Monday that Finland should withdraw from future bailout packages, decisions which require unanimity in the eurozone 17 members.
A rescue without Finland rescue would severely undermine the pledge of the euro area to do everything to defend the common currency and could create panic in financial markets.
"The EU currently requires unanimous approval for each use of the eurozone Rescue Fund, so it is now being forced to examine ways to move the Portuguese package without Finnish support," said Jane FoleyRabobank International analyst. "There is no time to lose because the Portugal faces a takeover of heavy bond in June."
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Derek Gatopoulos in Athens, Daniel Woolls in Madrid and John Matti in Helsinki contributed to this story.
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