PORTUGAL ''The winter of living dangerously''

''AFTER Ireland and Greece, financial markets have lined up Portugal as the next domino to be toppled in the euro area’s sovereign-debt crisis. A tense start to the year, as Portuguese bond yields rose, was followed by only a brief period of calm. Investors now seem less and less willing to give the government of José Sócrates the benefit of the doubt.

Since early February yields on Portuguese ten-year government bonds have been hitting euro-era highs above 7%. That level of borrowing cost is unsustainable for anything other than a short period; indeed, analysts at Barclays Capital think the threshold is 6%. Spreads between these distended borrowing costs and those on German bunds have widened to more than 4%; a year ago they were around ..''
THE ECONOMIST
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