News / Europe

European Debt Crisis Deepens, Sparking Fears of New Bailouts

A Portuguese broker talks on the phone in Lisbon, 30 Nov 2010
A Portuguese broker talks on the phone in Lisbon, 30 Nov 2010

The debt crisis in Europe deepened on Tuesday as the cost of governmental borrowing for debt-ridden countries continued to rise amid fears Portugal and Spain would be the next countries forced to seek international bailouts.

Investors sold off government bonds from Portugal, Spain and Italy as their borrowing costs increased against the benchmark bonds of Germany, one of Europe's strongest economies.

The interest rates on bonds sold by Portugal, Spain and Belgium all reached their highest disparity against German bonds since the 1999 birth of the euro, the common currency used by 16 European nations.

With the growing financial crisis, the euro dipped below $1.30 and has now shed 7 percent of its value against the U.S. dollar since early November.

The increased borrowing costs for some European governments stem from fears that the debt contagion sparked by the bailout of Greece earlier this year and the $112 billion Ireland bailout last weekend will spread to other countries.

Both the Portuguese and Spanish governments have embarked on austerity programs, cutting spending on numerous government programs. They say they do not need financial help from their European counterparts and the International Monetary Fund.

But Greek and Irish officials made similar promises before seeking  assistance, leaving investors and policymakers worried that the debt crisis has yet to run its course.

While any further bailouts would not be welcomed, the most pronounced immediate fear appears to center on Spain. Its economy accounts for nearly 12 percent of the eurozone's economic production and is about twice the size of Greece, Ireland and Portugal combined.

On Tuesday, Spain's borrowing costs jumped to as high as 5.7 percent, more than 3 percentage points higher than that for German bonds. Just a week ago, the difference was two percentage points.

You May Like

Video On The Scene: In Gaza, Darkness Brings Dread and Death

Palestinians fear nighttime bombardment, VOA correspondent finds More

African Small Farmers Could Be Key to Ending Food Insecurity

Experts say providing access to microloans, crop insurance, better storage facilities, irrigation, road systems and market information could enable greater production More

University of Michigan Wins Solar Car Race

Squad guided its student-designed solar-powered vehicle to fifth consecutive time victory in eight-day bi-annual American Solar Challenge More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Vietnamese Staging Chinese Product Boycott After Oil Rig Spati
X
Reasey Poch
July 28, 2014 7:18 PM
China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video ESA Spacecraft to Land on a Comet

After a long flight through deep space, a European Space Agency probe is finally approaching its target -- a comet millions of kilometers away from earth. Scientists say the mission may lead to some startling discoveries about the origins of the water on earth. VOA’s George Putic has more.
Video

Video Young Africans Arrive in US for Leadership Program

President Barack Obama's Young African Leadership Initiative has brought hundreds of young Africans to the United States for a six-week program aimed at building their knowledge and skills in fields such as public administration and business. Out of the 50,000 young Africans who applied for the program, just one percent was accepted. VOA's Laurel Bowman caught up with some of those who made the cut and has this report.
Video

Video In Honduras, Amnesty Rumors Fuel US Migration Surges

False rumors in Central America are fueling the current surge of undocumented young people being apprehended at the U.S. border. The inaccurate claims suggest the U.S. will give amnesty to young migrants from the region. As VOA's Brian Padden reports from Honduras, these rumors trace back to President Obama's 2012 executive order to halt deportations for some young undocumented immigrants already living in the United States.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.

AppleAndroid