By yesterday afternoon the price of borrowing ten year money for Portugal had risen to 7.24%, up from 6.75% at the end of last year. The Spanish borrowing rate rose too, to 5.53%. The Irish one is still at 9.28%, post the “rescue”.
Given the large sums these countries need to borrow it is going to prove expensive. They will get into that vicious circle where interest costs take an ever rising proportion of the budget, and make controlling total public spending that much more difficult.
I wonder how much longer, before Euroland politicians want to talk about this, and end up with another “bail out” to try to lower the costs of borrowing for a distressed country or two?