Eurozone: Portugal's borrowing costs soar

Portugal's borrowing costs soar as France passes first bond auction test - Telegraph: "Yields on benchmark 10-year government bonds rose nearly 2.3pc, or 228 basis points, to 14.198pc in afternoon trade. The difference between Germany and Portugal's borrowing costs also widened to record highs of 1,243 basis points, following S&P's downgrade of Portugal to below investment grade. . . .The Bank of Portugal has forecast GDP growth to shrink by 3.1pc in 2012, compared with previous estimates of a 2.2pc contraction."

So we have escalating borrowing costs, austerity policy, and economic contraction.  Sounds like a recipe for disaster.

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