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| Version 6 | Version 7 |
|---|---|
| Euro bonds come under new attack | Euro bonds come under new attack |
| (about 1 hour later) | |
| The cost of borrowing for Spain, Italy and Belgium has continued to increase as worries over the eurozone debt crisis intensified. | |
| The difference between the yield on German government bonds - considered the safest - and yields for those three countries has reached the highest in the euro's 12-year history. | The difference between the yield on German government bonds - considered the safest - and yields for those three countries has reached the highest in the euro's 12-year history. |
| Nerves remain frayed following the bail-out of the Irish government. | Nerves remain frayed following the bail-out of the Irish government. |
| And Portugal has added to worries by warning of the risks facing its banks. | And Portugal has added to worries by warning of the risks facing its banks. |
| The country's central bank said Portugal's banks faced an "intolerable risk" if the government in Lisbon failed to consolidate public finances. | The country's central bank said Portugal's banks faced an "intolerable risk" if the government in Lisbon failed to consolidate public finances. |
| Tomasso Padoa-Schioppa, a former Italian finance minister and European Central Bank (ECB) member who is advising Greece's government, admitted that markets were "very nervous". | Tomasso Padoa-Schioppa, a former Italian finance minister and European Central Bank (ECB) member who is advising Greece's government, admitted that markets were "very nervous". |
| But he described worries about Spain and other large euro members as "excessive". | But he described worries about Spain and other large euro members as "excessive". |
| 'Lost their shirts' | 'Lost their shirts' |
| Christine Lagarde, France's finance minister, said that her country and Germany would stand by Portugal and Spain if they needed financial help. | Christine Lagarde, France's finance minister, said that her country and Germany would stand by Portugal and Spain if they needed financial help. |
| In an interview with the BBC's Hardtalk programme, she declined to speculate on the likelihood that Portugal and Spain would need a bail-out. | In an interview with the BBC's Hardtalk programme, she declined to speculate on the likelihood that Portugal and Spain would need a bail-out. |
| But Ms Lagarde said: "It is correct to put in place the type of [bail-out] arrangements needed... We did it for Greece and Ireland, and it has to be continued." | But Ms Lagarde said: "It is correct to put in place the type of [bail-out] arrangements needed... We did it for Greece and Ireland, and it has to be continued." |
| Asked if Germany's Chancellor Angela Merkel was right to complain that European taxpayers, rather than investors, were taking all the bail-out risks, Ms Lagarde pointed out that "shareholders in Irish banks have lost their shirts". | Asked if Germany's Chancellor Angela Merkel was right to complain that European taxpayers, rather than investors, were taking all the bail-out risks, Ms Lagarde pointed out that "shareholders in Irish banks have lost their shirts". |
| However, during the same BBC programme, Dick Roche, Irish minister for European affairs, warned against upsetting the financial markets. | However, during the same BBC programme, Dick Roche, Irish minister for European affairs, warned against upsetting the financial markets. |
| The Republic of Ireland needed to raise money from the bond market to pay for its public services, he said. "If you burn the market, the market will come back and hit you in the face," he said. | The Republic of Ireland needed to raise money from the bond market to pay for its public services, he said. "If you burn the market, the market will come back and hit you in the face," he said. |
| Finance officials in France and Germany on Monday accused investors of acting irrationally about the threat of financial contagion, in an attempt to calm fears. | Finance officials in France and Germany on Monday accused investors of acting irrationally about the threat of financial contagion, in an attempt to calm fears. |
| 'Determination' | |
| Investors' attitude to Portugal and Spain will come under the spotlight later this week as both countries are set to ask the markets for fresh finance. | Investors' attitude to Portugal and Spain will come under the spotlight later this week as both countries are set to ask the markets for fresh finance. |
| Portugal will auction 500m euros of government bonds on Wednesday with Spain asking for funds on Thursday. | Portugal will auction 500m euros of government bonds on Wednesday with Spain asking for funds on Thursday. |
| Jean-Claude Trichet, president of the European Central Bank, tried to calm nerves in comments to the European Union's parliamentary committee on economic and monetary affairs. | |
| He said that both Greece and Ireland were solvent, insisting that the eurozone economy was "functioning" and had grown by more than expected this year. | |
| Mr Trichet said that "observers are tending to underestimate the determination of the (eurozone) governments and the EU as a whole." | |
| Euro falls | Euro falls |
| The rate of return - or yield - on Spain's 10-year bonds jumped as high as 5.7% on Tuesday, a record difference of 3.05 percentage points compared with the benchmark Germany 10-year bond. It later fell back to 5.53%. | The rate of return - or yield - on Spain's 10-year bonds jumped as high as 5.7% on Tuesday, a record difference of 3.05 percentage points compared with the benchmark Germany 10-year bond. It later fell back to 5.53%. |
| Yields on Italian government debt were 2.1 percentage points higher than that on German debt. | Yields on Italian government debt were 2.1 percentage points higher than that on German debt. |
| Ten-year Irish yields stood at 9.53%, and Portuguese bond yields were at 7.05%. | Ten-year Irish yields stood at 9.53%, and Portuguese bond yields were at 7.05%. |
| Meanwhile the euro continued its decline against the dollar to touch an 11-week low. | Meanwhile the euro continued its decline against the dollar to touch an 11-week low. |
| The euro dropped to $1.2969, its lowest since 15 September, before recovering to $1.2979, down 1.1%. And against sterling one euro was worth 84 pence. | The euro dropped to $1.2969, its lowest since 15 September, before recovering to $1.2979, down 1.1%. And against sterling one euro was worth 84 pence. |
| Worries remain about the strength of the weaker members of the 16-country eurozone currency bloc with Spain and Portugal - long seen as the most likely candidates to need outside financial help - joined by Italy and Belgium on the less-favoured list. | Worries remain about the strength of the weaker members of the 16-country eurozone currency bloc with Spain and Portugal - long seen as the most likely candidates to need outside financial help - joined by Italy and Belgium on the less-favoured list. |
| Portugal's central bank warned overnight that the country's banks faced an "intolerable risk" if the government in Lisbon failed to consolidate public finances and urged financial institutions to reinforce their capital in the coming years. | Portugal's central bank warned overnight that the country's banks faced an "intolerable risk" if the government in Lisbon failed to consolidate public finances and urged financial institutions to reinforce their capital in the coming years. |
| Portugal, which approved an austerity budget for 2011 last week, is struggling to meet its targets for deficit reduction. | Portugal, which approved an austerity budget for 2011 last week, is struggling to meet its targets for deficit reduction. |
| The German economy, on the other hand, has been very strong this year, with strong demand for exports and falling unemployment. | The German economy, on the other hand, has been very strong this year, with strong demand for exports and falling unemployment. |
| Hardtalk will be broadcast on Tuesday on the News Channel at 2330 GMT in the UK and on BBC World News at 2130 GMT. | Hardtalk will be broadcast on Tuesday on the News Channel at 2330 GMT in the UK and on BBC World News at 2130 GMT. |