MARKETS Here we go again. The stability of the eurozone is once again in question as punters bet heavily in the credit default swaps market on an Italian sovereign default, while the yields on government debt in peripheral countries such as Greece move out further against the German benchmark. Is this a blip or a reflection of deteriorating fundamentals?
Note, first, that this worry was supposed to have been looked after by the German U-turn on bail-outs back in February. Then, you will recall, German policymakers declared that widening eurozone government bond spreads should not be a worry because fiscally distressed eurozone members would be granted financial support on the basis of solidarity within the European Union.
