Jeremy Hobson: Now let’s turn to the debt crisis in Europe. It has not been a pretty 24 hours in the bond markets, which determine the borrowing costs for eurozone governments. Investors have been dumping bonds — and not from the usual suspects like Italy and Greece.
Marketplace’s Stephen Beard reports from London.
Stephen Beard: The sell-off spread to some of the stalwart economies that we don’t often hear about, like Finland, Austria and the Netherlands. These countries have a AAA credit rating. But investors now seem to fear that rating is at risk. These countries, along with Germany, may have to bear the additional crushing burden of trying to bail out Italy — so their creditworthiness is in now in jeopardy.
Steve Barrow is a currency strategist with Standard Bank.
Steve Barrow: The more this crisis eats into the core of the eurozone — countries like France, Belgium and the Netherlands — then the more difficult it will be for policymakers to solve the crisis.
One paradox remains: the euro itself is still fairly stable. Barrow believes that investors may reckon that some weaker countries could drop out of the euro, leaving the currency in the hands of Europe’s strongest economies.
In London, I’m Stephen Beard, for Marketplace.