The sovereign debt troubles faced by countries on the periphery of the eurozone could still lead to more than one default as borrowing costs continue to rise, says a Harvard University professor according to Bloomberg. At a conference of the Confederation of Norwegian Enterprise, Kenneth Rogoff said that given the debt burdens of Ireland, Greece, Portugal, and even Spain, “The most likely scenario is that we are going to see a few of the countries end up restructuring their debt.”
The bleak outlook comes despite the fact that already Greece and Ireland have received €110 billion and €85 billion euros, respectively, in joint bailouts from the European Union and International Monetary Fund. The latest signal that debt troubles will continue to weigh on peripheral economies was the €500 million debt sale by Portugal, which were issued at a yield of 3.686% on Tuesday. The latest figure represents nearly double the level of an auction in September. The spread for Greek bonds compared to German bunds also hit a record.
