The euro zone's debt crisis is entering a new phase after a brief Christmas lull as Portugal struggles to persuade investors to buy its bonds and other European governments step up pressure on the country to seek an international bailout.
Portugal hopes to raise new funds in a bond auction on Wednesday, despite a market sell-off in recent days that pushed the interest yield on Portuguese 10-year bonds above 7% Friday, the highest level since the euro's creation. Economists said such high borrowing costs are unsustainable for the country, which is struggling to rein in its high debts amid chronically low economic growth.
Among Lisbon's challenges in selling bonds this week is a heavy debt-issuance calendar in which many other governments are also offering safer euro-denominated investments. Failure to attract enough investor interest would signal that Portugal has effectively lost access to capital markets, forcing the country to seek aid.
For more: Portugal's Test of Debt Market Looms This Week - WSJ.com
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